Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
To Have & Have Not
(1) Capital blessing or capital punishment? (2) Industries review: S&P 500 Banks, Restaurants, and Media. (3) Banks are lean and mean, but could use a steeper yield curve. (4) Among banks, bigger are cheaper and may get better, with a couple of notable exceptions. (5) Restaurants have indigestion. (6) Jackie interviews an industry pro. (7) Carve out 1,000 hours next year to watch all the new content from Netflix. (8) Media companies proving that eyeballs can be monetized.
Listless List
(1) After the elections: meltdown or melt-up, or none of the above? (2) No Sept/Oct meltdown so far. (3) Who is the least scary of the two scariest clowns of them all? (4) Reiterating 2300-2400 S&P 500 target for 2017. (5) With the Fed’s help, bull market overcame Obama’s care of the economy. (6) Waiting on the next oneand-done per year. (7) Our Weekly Leading Index is at a record high, and bullish for stocks. (8) No valuation bargains mean earnings will have to do heavy lifting. (9) Bull-Bear Ratio is neither bullish nor bearish. (10) Breadth narrowing again.
Where in the World?
(1) Onslaught of alarmist stories about globalization. (2) The global elite meet and fret. (3) Less income inequality globally, but more at home provides fertile ground for populist rebel rousers. (4) If status quo wins on Nov. 8, Trump TV will go live. (5) Globalization likely to survive populist backlash. (6) Global economy doing more of the same. (7) Forward revenues at record high in the US, not so high elsewhere. (8) Emerging markets have emerged in manufacturing and exports. (9) Output remains stalled among advanced economies, but climbing to record highs elsewhere.
Some Like It Hot
(1) Chinese exports fall more in dollars than in yuan. (2) Is China coming out of deflationary trap? (3) Pressing harder on the accelerator than the brakes. (4) Yellen’s new mantra: “Hysteresis.” (5) Yet another reason why the doves might duck a rate hike. (6) Goldilocks isn’t hot enough. (7) Federal tax receipts have stopped growing. (8) Is the Treasury cooking the books? (9) Federal deficit much wider based on change in debt. (10) Central banks are monetizing lots of US debt. (11) Call a forensic accountant. (12) “The Accountant” (+).
‘Room To Run’
(1) Sharks vs. the Jets at the Fed? (2) Yellen, Kashkari, and Dudley reading from same hymn book. (3) Gentle Bill aiming for another 5-10 years without a recession. (4) Won’t take too many positive surprises to show earnings recession ended in Q3. (5) Oil exporters agree to cut output as they increase it. (6) Brainard talks about blockchain. (7) Virtual ledgers will need passcode protection and erasers for fat fingers.
A Star Is Born
(1) Get a dog. (2) Barking at the mirror. (3) Fed officials perplexed that real rate is zero. (4) Gloria Swanson and r*. (5) Is there such a thing as the equilibrium, neutral, or natural interest rate? (6) What if it changes all the time? (7) Dudley tells Yellen and Brainard that the headwinds may not be transient. (8) Williams says low real rates here to stay. (9) Round up the usual suspects: Weak productivity, too much saving, old people, shortage of innovations, the financial crisis of 2008. (10) Maybe it’s just too much government and policy meddling. (11) Who’s afraid of the big bad woof?
CAPE Fear
(1) The CAPE caper. (2) Valuation, like beauty, is in the eye of the beholder. (3) Does the market look one year in the future or 10 years into the past? (4) WSJ’s version of CAPE ratio less alarming than original. (5) 20% of US equity portfolios in foreign issues. (6) Shiller’s ratio tracks Tobin and Buffett ratios. (7) On balance, most valuation measures show market is fairly valued to overvalued. (8) Recessions, not overvalued stocks, cause bears markets. (9) S&P 500 and 600 forward earnings at record highs.
For the Birds
(1) Dragging her feet. (2) One-and-done per year? (3) Why good news is a good reason not to tighten. (4) Wage gains not yet in Yellen’s 3%-4% range. (5) Real hourly pay at record high. (6) Long-dovish Rosengren is a hawk now. (7) Fischer is confused and confusing. (8) “Economy has room to run.” (9) Dudley is a man for all seasons all the time. (10) Lots of dissonant cooing, chirping, and squawking from the FOMC. (11) “Girl on the Train” (-).
‘Existential Threat’?
(1) Mounting hysteria. (2) Global elites meeting in Washington. (3) A good trade: slower but longer growth. (4) The Forrest Gump of expansions. (5) Happy US indicators include employment, job openings, truck tonnage, and NM-PMI. (6) Eurozone showing surprisingly strong retail sales and passenger car registrations. (7) Chinese railways freight traffic more positive and PPI less negative. (8) UK M-PMI and US NM-PMI soared last month. (9) What about protectionism? (10) What about TPP?
Government Buybacks
(1) Two flawed characters in search of the Oval Office. (2) Conservatives and liberals: principles vs. practices. (3) Summers and Yellen floating same trial balloon about Fed buying equities. (4) Summers concedes that Fed equity purchases seems like socialism. (5) It’s certainly not capitalism. (6) S&P 500 companies continue to buy back their shares with excess cash. (7) What else can cash-rich corporations do with it? (8) Buybacks plus dividends exceed profits, but ample cash flow is financing capital spending.
Janet, Please Stop!
(1) Social scientists and central planning. (2) Macroeconomists are meddlers. (3) There is an alternative counterfactual. (4) Central banks now and then. (5) Yellen exposes her true self. (6) If they (BOJ & ECB) can do it (buy corporate bonds and stocks), why can’t we (the Fed) do it? (7) Yale’s Portfolio Balance Model in real time. (8) Central bankers need to have more tools in their toolkit so they can tinker more. (9) Destroying capitalism’s process of creative-destruction. (10) The un-redacted Yellen transcript. (11) Yellen’s 1999 Yale reunion speech.
Banksters
(1) Full disclosure. (2) Why do bankers get into trouble on a regular basis? (3) OPM (other people’s money) is their opium. (4) Dodd-Frank hasn’t solved too-big-to-fail or too-big-to-manage. (5) Deutsche Bank is #1. (6) FDIC man says European banks are riskier than US banks. (7) ECB is concerned that NPLs are weighing on bank lending. (8) Wells Fargo CEO gets clawed. (9) Big known unknown: Is Deutsche Bank the next Lehman? (10) All the power to her: Yellen thinks Fed should be allowed to buy corporate bonds and stocks.
Drama Queens
(1) Deutsche Bank gets a part in Wagnerian opera. (2) Merkel in no rush to rescue the boys in Frankfurt. (3) DB drama helps governments sell more tickets, as their bond yields fall. (4) Stumpf is stumped, and gets a big haircut. (5) Harder to be a fat-cat banker. (6) New Real Estate sector beats Financials. (7) Peak Internet? (8) Monetizing eyeballs again.
Fairy Tales
(1) Profits recession over or not? (2) Was that the bottom in earnings during Q1? (3) Then again, Q3 S&P 500 consensus earnings growth estimate turns slightly negative. (4) Counting on the hook in the hockey stick to yield positive Q3 growth. (5) Meanwhile, forward earnings almost at record high. (6) No recession in consensus earnings for 2017 and 2018. (7) Unintended consequences of the Trump Wall. (8) Is Kuroda the Wizard of Oz or Peter Pan?
Debatable
(1) Split down the middle with you. (2) HRC has a long rap sheet, but no jail time. (3) Both candidates are deplorable and insulting. (4) The greatest reality show of all times. (5) Channeling Reagan. (6) A fine bromance. (7) Do presidents matter as much as Fed chairs? (8) Please don’t bully our godmother. (9) Does anyone care about the federal deficit anymore? (10) Catch-22 and Catch-72. (11) Supporting AARP.
The Magnificent Samaritans
(1) Thanks again, Fairy Godmother! (2) Yellen takes reasons to tighten and turns them upside down. (3) Trump sees a Yellen-Brainard-Clinton conspiracy. (4) Fed officials back off to one-and-done this year, and maybe two in 2017. (5) New normal outlook for slow GDP gaining ground at Fed. (6) BOJ’s Kuroda is playing on both sides of tug of war. (7) Pegging the yield curve is the latest experiment by the BOJ’s central monetary planners. (8) “The Magnificent Seven” (- - -).
Taking It to the Banks
(1) Bank stew. (2) Deutsche and Wells in the hot seat. (3) BOJ playing TOW with itself. (4) Fed isn’t playing. (5) European banks struggling with ghosts of excesses past. (6) The riskiest bank in the world. (7) Check your bank statements for hidden accounts and fees set up by your friendly banker. (8) BOJ’s twisted yield curve operation. (9) Gluts of offshore rigs, heavy equipment, and ships. (10) Robots may soon complain about paying taxes to support glut of useless humans.
Forward Ho!
(1) Yellen is the master of the wagon train. (2) Hurry up and wait? (3) Why good news might support doing nothing, or not much. (4) Depending on Fed officials’ interpretation of the data. (5) Forward guidance is confusing when different Fed officials point in different directions. (6) Two possible versions of FOMC statement followed by Yellen’s spin. (7) Fed-ATL measure showing higher wage inflation. (8) Trump’s world. (9) Blame technology, not globalization, for job losses, low pay, and income inequality.
What About Inflation?
(1) Bob Wiley and Neil Diamond. (2) Good deflation stimulates consumer spending. (3) Blame zombies for bad deflation. (4) Seven countries showing deflation in consumer durables consumer prices. (5) China is the epicenter of bad deflation with too much debt. (6) Many years ago, inflation boosted consumption by stoking buy-in-advance attitudes (7) Why does the Fed want higher inflation if it is led by rents and health care costs? (8) Was Obamacare designed to fail? You decide. (9) Message to Fed: Beware of what you wish for.
Urban Legends: Data vs. Facts
(1) Hillary’s “grossly generalistic” aspersion. (2) Meet the deplorables, despicables, miserables, unmentionables, notables, commendables, comfortables, untouchables, and irresponsibles. (3) Census income data are counterfactual. (4) Real personal income and consumption per household both at record highs, confirming solid increase in standard of living. (5) Shopping online keeps setting records. (6) Consumer optimism at cyclical high, countering misery story. (7) The ruling class is deplorably out of touch with the common folk. (8) Trump’s Reaganomics speech: tax cuts, less regulation & tougher trade. No specifics on infrastructure. (9) Is Corporate America really shirking its duty? (10) “Snowden” (+).
Rotating Sectors
(1) S&P 500 Financials discounting Fed rate hike. (2) Dividend payers hit by profit-taking. (3) Reversal of fortune for sectors since August 15 peak in S&P 500. (4) Investors starting to focus on earnings growth forecasts for 2017. (5) Not much froth in IPO market. (6) 3D printing is a great technology, though not a great investment. (7) 3D could boost manufacturing productivity.
Slippery Oil Patch
(1) China’s latest economic indicators show more of the same. (2) Professor Copper is still bearish on China. (3) IEA and OPEC both see oil glut through 2017. (4) US DOE recommends cutting SPR by 100mb. (5) US oil production still has further to fall according to rig count. (6) Apache finds lots of oil and gas in Alpine High. (7) FOMC: Rounding up the usual suspects.
Talking Feds
(1) Shorter anxiety attacks? (2) Tightening tantrums usually followed by soothing words from a Fed head. (3) Rosengren scares them on Friday. Brainard reassures them on Monday. (4) Trump sees a conspiracy at the Fed. (5) The Joe Biden scenario. (6) Phillips Curve has flattened. (7) Still more slack in labor market. (8) WOW! 20% increase in the dollar = 200bps rate hike according to Fed model, says Brainard. (9) Neutral real rate near zero. (10) So what’s the rush to hike? (11) Yellen now has her talking points for doing nothing at next FOMC meeting!
Home on the Range
(1) Back in the range. (2) Bond King’s big moment. (3) Is the US “shovel ready” for helicopter money? (4) Deutsche strategists are depressed. (5) Dudley believes that 150,000 jobs per month is good enough. (6) Rosengren has a vote and is ready for a rate hike. (7) ECB and BOJ disappoint and confuse bond bulls. (8) Lots of weak inflation and economic indicators for data-dependent central banks. (9) Getting harder to find bonds. (10) ECB and BOJ official rates likely to stay negative for a while. (11) S&P 1500 forward revenues and earnings climb to record highs. (12) “Sully” (+ + +).
Post-Op: Obamacare, Hanjin, & Brexit
(1) Relapse for Health Care. (2) Drug Store Hall of Shame. (3) A few healthy pharmas. (4) Obamacare is a hot mashed potato. (5) Biotech is relatively cheap again. (6) Repeat 10 times: Too many ship-shape ships. (7) Get your Xmas present on the high seas. (8) Brexit: Much ado about nothing much.