Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
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.
Crab Cakes
(1) Fort Meade and Maryland’s culinary delight. (2) A crab cake a day keeps the bears away. (3) Nice gains since Black & Blue Monday and Tuesday. (4) Bull/Bear Ratio still bearish, which is bullish. (5) MEI stocks leading the latest relief rally. (6) Investors may be relieved to see dollar peaking and commodity prices bottoming. (7) Global economy is still crummy. (8) Zinc sink may be over. (9) Capital markets, not banks, absorbing bad stuff this time. (10) Yellen’s Felons. (11) Fed Chair wants to gun the labor market. (12) Fed conference: Don’t bet on macroprudential policy to save the day. (13) “Everest” (+ +).
Putin’s Game
(1) Bret Stephens is no fan of Obama. (2) Obama’s one great call. (3) Putin’s “quagmire” is actually a lowcost gambit to stop oil prices from falling. (4) Russia and Iran both need higher oil prices. (5) Energy may stop weighing on earnings and stock prices. (6) Low oil prices starting to depress supply and boost demand in US and around the world. (7) Politicians making Health Care sick. (8) Industry analysts still upbeat about Health Care revenues and earnings prospects. (9) Corporations are keeping calm and carrying on by repurchasing their shares, merging, acquiring, and restructuring.
Square Pegs, Round Holes
(1) Dudley’s staff studying market liquidity. (2) Comforting conclusions for comfortable times. (3) Remarkable (unbelievable?) finding: Corporate bond market is liquid! (4) SEC is here to help. (5) US & German data confirm known known: Global economy is weak. (6) Pockets of strength in latest data. (7) Recent weak payroll gains don’t square with record job openings. (8) Skills mismatch: Not enough round pegs to fill round holes. (9) Hiring is hard, while dropping out is easy. (10) Shortages of skilled workers in health care, construction, and trucking.
Yearning for Next Year’s Earnings
(1) Sentiment is so bearish that it’s bullish. (2) Financial headlines mostly bearish. (3) Bull/Bear Ratio much more depressed than P/E. (4) Taking some comfort: Elevated consumer confidence propping up P/E. (5) Same old, same old: Bad news is bullish again for now. (6) Warning for revenues: Global M-PMIs weaken some more. (7) US economic surprise index turning more negative. (8) Counting on another season of upside earnings surprises. (9) S&P 500 earnings have more energy without Energy. (10) Next year is always better than this year, barring a recession, of course.
When Liquidity Evaporates
(1) Worrying about illiquidity. (2) Blaming the government. (3) Liquidity can evaporate. (4) ETFs can be like the roach motel. (5) New SEC rules may have unintended consequences on markets. (6) Bulls and bears fighting over junk. (7) Fischer doesn’t see bubbles. (8) To find bubbles, call Ghost Busters. (9) Boston Fed says FOMC acts as though financial stability is third mandate. (10) An artist’s perspective on US economy. (11) Downward revisions are the most unsettling story in employment report. (12) Mixed picture for capital spending. (13) Trade picture getting darker. (14) “The Martian” (+ +).
Dow Theory & Reality
(1) More bad news, which should be bullish. (2) Correction camp still more populated than bearish one. (3) P/Es relatively high given all the bearishness. (4) Another batch of crummy global economic indicators. (5) A recession in Japan despite Abenomics, or because of it? (6) Deflation revisits the Eurozone. (7) US exports dropping. (8) IMF warns about submerging economies. (9) Is Dow Theory’s grim economic forecast off track? (10) Industry-specific problems for railroads, airlines, truckers, and air freight. (11) Fundamental transportation indicators are mostly upbeat. (12) Margins boosted by lower fuel costs.
Commodity Bubble Pops
(1) Not so superlative. (2) When bubbles burst, bad things happen. (3) Is it different this time? (4) A bubble pops with more winners than losers, maybe. (5) A brief (and proud) review of our commodity bubble forecast. (6) Still falling. (7) CAT & GLEN marked the top in commodities during 2010 & 2011. (8) Marking the bottom now? (9) EME stock prices still tied more to commodity prices than to their emerging middle classes. (10) The best cure for low commodity prices. (11) World oil demand growth is picking up! (12) No recession in US and Europe confidence measures. (13) Focus on market-weight-rated S&P 500 Energy.
What Will It Take?
(1) The fourth FAQ. (2) No bull with stocks basically flat y/y. (3) No bull since end of QE. (4) Fed is transparently clueless. (5) Hawkish doves. (6) A sensible message from the trenches. (7) “Doing pretty well.” (8) Glencore’s meltdown. (9) China’s profits are MIA. (10) Seeking growth in a world of stagnation. (11) Forward revenues and earnings remain on bull market’s uptrends. (12) Buybacks and M&A will likely continue to shrink supply of equities. (13) Stocks are cheaper. (14) Consumers of last resort.
What’s the Matter?
(1) Just another normal correction? (2) An ugly technical picture. (3) More Death Crosses. (4) Dow Theory looking bearish. (5) Fallen leaders. (6) Advance/decline lines in retreat. (7) Bearish sentiment, volatility, and junk spreads all elevated. (8) Three FAQs while waiting for Godot. (9) China’s canaries may be Brazil, Taiwan, and Singapore. (10) Draghi is waiting for lenders to lend more. (11) Abenomics 2.0 has three new darts. (12) US looking good, regional business surveys aside. (13) Resigned to more congressional partisanship. (14) “Pawn Sacrifice” (+ + +).
Homebodies
(1) Home sweet home. (2) Avoiding cabin fever. (3) Major global equity markets giveth and taketh away. (4) It’s all relative: US outperforming again. (5) “Go Global” was a great theme for previous bull market, not this one. (6) Currency depreciation hasn’t done much for economies of EMU and Japan. (7) Emerging Markets MSCI is just a commodities proxy. (8) Losses for commodity producers provide some material gains for homebuilders. (9) Will Millennials ever leave the nest (or dorm room)? (10) Getting tougher to rent. (11) Some wet blankets. (12) A positive feedback loop if homebuilders can find construction workers.
Sand Castle
(1) Sand on sale. (2) Some things are different about latest bubble. (3) Circle of Life: Bubbles inflate and burst, triggering financial calamity and recession. (4) Endgame beginning or nearing an end? (5) Lower depths? (6) Supply and demand in the oil market. (7) Currencies on the run. (8) Lots of demand for autos. (9) Can stocks decouple from commodities? (10) Some 200-dmas are rolling over, others are not.
NZIRP Forever
(1) Stock investors facing conundrum. (2) Fed upgrades Global Secular Stagnation scenario. (3) Long-term earnings growth (LTEG) forecasts remain remarkably high and stable. (4) STEG forecasts more volatile. (5) PEG ratio may be misleading now. (6) Investors curbing enthusiasm for growth, for now. (7) Flash crashes come and go. (8) Do Q3 and Q4 earnings matter? (9) Heady earnings estimates for 2016 and 2017. (10) Revenues growth rebound expected for next year. (11) Back to the future: The recession of 2019. (12) Yellen’s like-minded friends. (13) Yellen says that Fed doesn’t need to tighten if markets do so. (14) Bounded to the zero bound.
Coming Home to Roost
(1) Not suitable for a family publication. (2) Fearing a measly 25bps. (3) Strutting around the yard. (4) Giving more weight to foreign developments. (5) Central Bank of the World. (6) Yellen’s fairy dust losing its magic. (7) Losing touch. (8) It all depends on everything and nothing. (9) Transparency reveals cluelessness. (10) More chapters to the buyback story. (11) Foreigners are big issuers of stocks in US. (12) Record corporate bond crop. (13) “Black Mass” and “Narcos” (+ + +).
North of the Border
(1) 100% sure thing. (2) The Fed will do nothing or something. (3) Sentiment remains very bearish, which is bullish. (4) Misery Index is depressed. (5) Urban legend in Toronto. (6) Canada is in a recession, technically speaking. (7) Canadian dollar is a commodity currency. (8) Canada is rich with less valuable resources.
A Fine Mess
(1) A mess is a mess. (2) The Fed’s bad joke. (3) Ultra-easy policies aimed at increasing financial stability have decreased it. (4) Hard to normalize monetary policy without causing financial instability. (5) Capital markets taking the hits rather than the banks this time. (6) Lots of headlines warning Fed not to do it. (7) Liftoff for stocks, if not for interest rates? (8) US consumers doing what they do best. (9) Gasoline windfall boosting vehicle miles traveled. (10) Forward revenues and forward earnings providing support to S&P 500. (11) Q3 earnings season should result in small gain for earnings.
China: Warning Label
(1) International reserves data: Use with caution. (2) Soaring dollar depressing dollar value of international reserves, exports, and lots of other global indicators. (3) Practice what you preach. (4) Capital flow proxy for China, adjusted for strong dollar, still showing big net outflows. (5) The Great Stall of China. (6) China’s exports have lost their mojo. (7) Foreigners see less reason to invest in China, while Chinese see more opportunities abroad. (8) China is getting much less bang per yuan of social financing as a result of capital outflows.
Towers of Babel
(1) Kenny Rogers’ advice to investors. (2) Updating the case for a correction in a secular bull market. (3) Valuation is more reasonable and sustainable given low inflation. (4) Revenues and earnings remain on 7% uptrend line. (5) S&P 500 Transportation index is down big, while transportation indicators are up big. (6) Americans are driving more, probably to go shopping. (7) Temporary factors depressing inflation might not be so temporary. (8) Import prices are deflationary. (9) New towers reaching for the sky tend to be bearish. (10) Tower of Basel. (11) Lots of babel about stock market outlook, FOMC vote this week, and oil prices. (12) “Straight Outta Compton” (+ +).
Big Jolt
(1) A wild festival in the desert. (2) Stock market has also gone wild, but without the festivities. (3) From tight range to wide-open range. (4) Buy signal: Bull/Bear Ratio drops under 1.00. (5) Lots of known unknowns could be setting stage for yet another relief rally. (6) Small businesses are big employers in the US. (7) Upbeat trends in NFIB survey data. (8) Buddy, can you spare a worker? (9) In the past, rising job openings tended to boost wages. (10) It has been and may continue to be different this time. (11) Known known: US economy doing just fine.
Global Liquidity Drying Up?
(1) Short and long answers to liquidity question. (2) International reserves falling since July 2014. (3) Dollar remains the major international reserve currency, though less so than a few years ago. (4) Strong dollar depressing dollar value of euro and yen reserves. (5) Drop in reserves is a two-way street reflecting drying liquidity and secular stagnation. (6) Tiny tightening prospects already triggering tightening tantrum and unwinding of carry trades. (7) Bad for EMEs, but maybe good for USA. (8) China has a little less of lots of cash. (9) US labor market revisited and revised.
Quant Guys: Fair-Weather Friends?
(1) The Omega Man. (2) Risk-parity strategy didn’t pare losses for All Weather Fund. (3) Blaming “priceinsensitive” traders. (4) Flash crashes now and then. (5) Spike peaks in VIX. (6) September curse played out in August? (7) Bull/Bear Ratio so bearish, it’s bullish. (8) Five fears on the Bear List. (9) The bulls need the US to do well--so far, so good. (10) Earned Income Proxy at another record high. (11) Roubini says China is okay. (12) “No Escape” (- -).
Breaking China
(1) Looking for support. (2) “Dudley Bounce” has petered out. (3) Good times for pessimists and bears. (4) The decoupling question. (5) No question that commodity producers can’t decouple from China. (6) China is weighing down global M-PMI. (7) Manufacturers in Canada, Brazil, Indonesia, and South Korea are in a world of pain. (8) China’s service economy isn’t serving as well as it should. (9) US and Eurozone M-PMIs remain solid, with just a few tiny cracks. (10) Let’s go home to the USA. (11) Construction spending on factories, lodging, amusement & recreation is booming. (12) Pickup trucks are on the fast track.
Back to Basics
(1) Neither boom nor bust. (2) Secular stagnation caused by several structural problems. (3) Why secular stagnation might be ideal for a secular bull market. (4) The correction camp is crowded with former bulls. (5) Basically another flash crash. (6) Lots of S&P 500 sectors showing good earnings performances. (7) Pockets of strength in Europe. (8) China is a black box with lots of zombies crawling around. (9) India’s PM Modi isn’t delivering on his reform promises. (10) Global oil demand confirms that lower prices are boosting usage and stimulating economic activity. (11) The Fed is confused and confusing.