Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Easy Does It
(1) The bullish season. (2) Time to come back for those who went away in May. (3) Jumping the gun this year. (4) Bull is maturing more than aging. (5) Fed officials feeling good about economy. (6) Countdown to liftoff. (7) Shallow trajectory. (8) Real interest rates are of interest at the Fed. (9) Price and wage inflation moving in the right direction. (10) The dollar is mentioned less in latest FOMC minutes. (11) The strong dollar could mean that “one-and-done” in 2015 will lead to “none-and-done” in 2016. (12) ECB and PBOC considering more stimulus. (13) BOJ is on hold.
Thanksgiving
(1) A happy-go-lucky bull market. (2) Don’t fight the central banks. (3) Much obliged to central bankers and corporate finance managers. (4) Cornucopia: No shortage of bonds for yield-hungry investors. (5) Record corporate borrowing despite record cash flow. (6) Adding buyback yield to dividend yield. (7) Financial engineering isn’t a moral issue for investors: It’s bullish. (8) Why have Death Crosses and other bearish patterns been misleading? (9) Sentiment is still cautious, which is bullish. (10) Breadth showing large caps may have some catching up to do. (11) “Spotlight” (+ + +).
Playing Defense
(1) Tech moves up a notch. (2) Tech gets boost from M&A, Buffett, and Goldman. (3) Retailers mostly disappoint. (4) Profit margins declining for Hypermarkets while rising for Home Improvement Retail. (5) Politicians still on drugs’ pricing. (6) Industrials mostly ignoring strong dollar and weak energy capital spending. (7) Conglomerates have lots of ways to restructure. (8) Aerospace & Defense revenues and earnings have plenty of upside. (9) Weak West Coast port traffic could weigh on Transportation stocks.
Shoppers Dropping?
(1) US Consumers: Bet on them, not against them. (2) Blaming the weather, particularly El Niño. (3) Macy’s vs Nordstrom. (4) Is there something wrong with consumers? (5) Thumbs up for income, confidence, and GAFO. (6) Shopping online outpacing GAFO. (7) Putting more miles on the SUV. (8) A closer look at the “warm patch.” (9) Snow is a no-show this year. (10) Nesting: 33 million Millennials living with mom and dad. (11) Profile of “Delayers.” (12) They weren’t born to shop in department stores. (13) New jeans and a slice of pizza. (14) Focus on S&P 500 Retail industry.
The Mighty Dollar
(1) Dollar matters. (2) Fed heads talking about the dollar. (3) Fischer says strong dollar’s impact on inflation is transitory. (4) Fischer says dollar is depressing economy, which is why liftoff was postponed. (5) Missing from the Fed’s analysis: Strong dollar cuts profits. (6) US exporters at a competitive disadvantage as slow global growth heightens competition. (7) Strong dollar depressing commodity prices and global growth, which boosts the dollar. (8) Time to cut earnings estimates again? Maybe early next year. (9) None-anddone in 2016 no matter what happens in December. (10) Educated guess: 20% dollar appreciation = 5075bps rate hike
Sleepless in Cincinnati & Minneapolis
(1) A terrible week. (2) Will “act of war” trigger NATO response? (3) Stock market troubled by falling commodity prices and currencies. (4) Worrying in the Heartland about a stall-out for the US and global economies. (5) Consumers not buying winter coats during warm patch. (6) Fed Vice Chair Fischer may be too laid-back about strong dollar. (7) None-and-done in 2016 is a likely scenario after one-and-done this year. (8) Still looks more like muddling than stalling. (9) Slicing-and-dicing S&P 500 revenues and earnings for Q3. (10) Ex-Energy, there’s no profits recession.
Heavy Weights
(1) Taking a well-deserved breather. (2) Some Financials getting a boost from likely Fed rate hike. (3) Banks facing major challenges, including Elizabeth Warren. (4) IT is taking the lead. (5) Tech & Financials account for 37% of S&P 500 market cap. (6) Consumers buying homes and cars, but department stores are stuffed with inventories. (7) Seeking reasonable valuation relative to projected earnings growth. (8) The brief case for Internet Retail, Home Improvement Retail, General Merchandise Stores, Homebuilding, and Automobile Manufacturers.
Moody Season
(1) A hawkish dove. (2) Everything is improving according to Rosengren. (3) There’s still time for a tightening tantrum. (4) A mostly happy time of the year. (5) Mood has changed among interest-rate-sensitive investors. (6) The maturing vs. aging debate. (7) Another earnings season ending with another hook. (8) Why are stocks rising with earnings estimates falling through next year? (9) Is the stock market rally breadth-less? (10) Does it matter?
Counting Shares
(1) Full plate. (2) Piecing the EPS puzzle with the share count. (3) Big bucks spent on buybacks. (4) Fed data on net equity issuance confirm buyback story. (5) Joe’s slice-and-dice. (6) Over past 10 years, S&P 500 share count flat, but down 7.8% excluding Financials. (7) Positive EPS impact of buybacks easier to see at the sector and company levels. (8) Stock count is down most sharply for Consumer Discretionary and IT. (9) OECD shaves some growth from global outlook. (10) Eurozone giving mixed signals.
Maturing Bull
(1) No tantrum in stocks on Friday. (2) Maturing vs. aging. (3) A good day for some Financials, not so good for others. (4) More jobs sending bond yields and the dollar higher. (5) Good news might be good news. (6) Counting on US consumers. (7) YRI Earned Income Proxy at record high. (8) Employers raising wages a bit faster to retain and attract workers. (9) PMIs: Services boosting global economic growth as manufacturing slows. (10) More robots are coming. (11) “Spectre” (- - -).
Sector Slant
(1) Treats for bulls. Tricks for bears. (2) Bulls charging out of the correction camp. (3) Anatomy of the latest relief rally. (4) Cyclicals had a great October. (5) Momentum favors mojo stocks for yearend rally. (6) Back to the malls for the holidays. (7) No speed bumps for auto sales. (8) Wages starting to squeeze some retailers. (9) Internet Retail P/E is in the Cloud. (10) Energy seeking a bottom. (11) Financials regrouping. (12) Winners and losers in China.
Post-Traumatic Stress Disorder
(1) Seeing a pattern. (2) Investors, business managers, and central bankers were all traumatized by the trauma of 2008. (3) More panic attacks than usual during the current bull market. (4) Industry analysts showing no signs of stress as their revenues and earnings estimates remain on uptrends, excluding Energy. (5) Profit margin: It’s been different this time, so far. (6) By one measure, business costs remain below past three cyclical troughs. (7) Central banks fighting their PTSD with their WIT (whatever it takes). (8) Consumers showing less and less PTSD. (9) Focus on market-weight-rated S&P 500 auto-related industries.
Urge to Merge
(1) Global revenues growth has been hard to find. (2) New and improved Global Index Briefings. (3) Lost and found in currency translation. (4) “Stay Home” working better in dollars than in local currency earlier this year. (5) More revenues out there in aggregate than on a per-share basis. (6) Revenues at record high exEnergy. (7) Global economic indicators: Still neither boom nor bust. (8) Some good news in global M-PMIs. (9) M&A driven by slowing growing revenues, cost cutting, industry consolidation, and other considerations.
The Grand Delusion
(1) Can they fix it? (2) Macroeconomists vs. Microeconomics. (3) Mother Nature is a microeconomist. (4) Tolstoy, Turing, Bismarck, and Bernanke. (5) War is inflationary, peace deflationary. (6) Consumers of the world unite! (7) Entrepreneurial capitalism and the IT revolution. (8) Is demography deflationary? (9) Bernanke is the Great Moderator. (10) Three blind mice: Fed, ECB, and BoJ.
Fork in the Road
(1) Yogi was our Yoda. (2) Google Maps and Yahoo Finance can help prepare us for the forks in the road. (3) A few themes dividing the winners from the losers. (4) Yield curve, Greenback, crude oil, and the Cloud. (5) Mets, Yankees, & Astros. (6) Tech’s heavyweights lifted by the Cloud, while middle-weights get acquired. (7) Best Consumer Staples boost performance, not health. (8) Energy stocks are down a lot, but not cheap.
Soggy
(1) Two days in Boston. (2) Time to set up a recession dashboard? (3) Wet blanket. (4) End of QE, soaring dollar, and widening high-yield spread may be equivalent to a couple of rate hikes. (5) Exports losing their mojo. (6) Trade and energy weighing on capital goods orders. (7) Regional business surveys suggest M-PMI might drop below 50.0. (8) Home sales are just alright. (9) Consumer confidence remains steady at cyclical high. (10) Fed likely to postpone liftoff again. (11) Is bad news still good news for stocks? (12) Earnings are missing their seasonal hook so far. (13) Focus on market-weight-rated S&P 500 Industrials.
Below the “Lower Bound”
(1) Last week’s central bank lesson. (2) When all else fails, do more of all else. (3) ECB isn’t bound by zero. (4) Welcome to the Twilight Zone, Mr. Draghi. (5) Inflation remains MIA in Eurozone, China, and Japan. (6) Weaker currencies not boosting inflation in Eurozone and Japan. (7) Even Japanese exports are falling. (8) Easy money prompting corporations to buy back shares, merge, and acquire rather than to expand. (9) Easy money isn’t what it used to be for the economy. (10) Easy money remains bullish for stocks for now. (11) Running low on good ammo.
Silver Linings
(1) Bulls, bears, and clouds. (2) John Milton’s silver linings. (3) Head-fake or head in the clouds? (4) The consequences of negative interest rates. (5) Markit reports better PMIs for the Eurozone, Japan, and the US. (6) Cyclicals, particularly IT stocks, are leading the rally. (7) Some companies are finding lots of silver in the Cloud. (8) YRI has been floating in the Cloud for several years. (9) The Chinese ease again, providing more lift to stocks. (10) “Steve Jobs” (+ +).
Tug of War
(1) Filling our bench at YRI. (2) Tug of war still a stalemate. (3) Sector neutrality looking like a good option. (4) Not too many friends for trend followers. (5) Analysts still lowering earnings estimates for Energy, inflating sector’s P/E. (6) Some Financials prosper when yield curve is low and flat. (7) Health Care has turned into a political football. (8) Hillary says: “Just say no to high drug prices.” (9) Techs have the urge to merge. (10) Worst may be over for Industrials if oil is bottoming and dollar has peaked. (11) If all else fails, there are always buybacks. (12) Focus on market-weight-rated S&P 500 Energy.
China Matters
(1) Greenspan and Bernanke blame the Chinese for saving too much. (2) The global savings glut may be a bigger problem today. (3) Chinese capital outflows topped $500 billion ytd. (4) Adjusting China’s reserves for strong dollar. (5) China’s missing data just as troublesome as questionable reported data. (6) Buiter vs. Krugman on China. (7) The Great Stall of China. (8) A painful transition as industry slows while services rev up. (9) China’s “Deflategate.”
Recession Spotting
(1) Bull fighters. (2) Does the market know it all? (3) Selloffs put investors on the lookout for recessions. (4) Rounding up the usual and unusual suspects. (5) Sources of agita. (6) Achuthan’s warnings and secrets. (7) Beware of “stall speed.” (8) Dueling leading indicators. (9) Boom-Bust Barometer signaling one big bagel. (10) CEI model suggests no recession until March 2019.
Faith-Based Investing
(1) True believers. (2) Bulls (bears) tend to have bullish (bearish) dispositions. (3) Investing can be like a religious experience. (4) Fundamentalists tend to be more open minded as investors than church-goers. (5) Another heaven-sent relief rally. (6) From last to first. (7) US economy remains mostly blessed. (8) Regional business surveys are dismaying. (9) The ruling class is unruly. (10) Losing faith in the Curve. (11) None & Done. (12) “Bridge of Spies” (+ +).
Stress Tests
(1) Lots of stresses on US economy. (2) Global economy more coupled than ever. (3) Still betting on US consumers. (4) Labor shortages are a problem. (5) Big banks are big punching bags for Democrats. (6) A 10-fold increase in Dodd-Frank page count, and 34 times bigger than Moby Dick. (7) JPM and GE slim down. (8) No sympathy for the banks from us. (9) Bank loans at record high, though margins are thin. (10) Most banks minimally exposed to oil crash. (11) Valuation reflects that banks have become regulated utilities. (12) Focus on market-weight-rated S&P 500 Retail industry.
Revising Earnings Down
(1) Cutting EPS by $3 for 2016 and 2017. (2) Hanging onto secular bull targets for S&P 500. (3) Oil and dollar clobbered 2015 earnings. (4) Worst may be over, but oil and dollar won’t give back what was lost. (5) The problem looking forward is weak revenues growth caused by weak global growth. (6) Why is profit margin at record high, and can it go higher? (7) Financial engineering likely to continue boosting EPS. (8) Sorkin says booming M&A may be sign of trouble and a market top. (9) On the ramparts watching for a recession. (10) Ben Bernanke is the Great Moderator. (11) Central monetary planners favor a kinder, gentler capitalism.
Accentuate the Positive
(1) The key to happiness. (2) In tune with a bullish or bearish perspective? (3) Grim headlines accentuating the negatives. (4) China’s consumers had a Golden Week. (5) Chinese have lots of money in M2. (6) Chinese buying oil. (7) Production growing faster in India than in China. (8) US consumers spending their gasoline windfalls. (9) Mortgage applications soar for one week. (10) Dell buying lots of storage. (11) GE restructuring. (12) Relief that nothing terrible has happened so far. (13) Mixed signal: Corporate insiders are bullish, but not buying yet.