Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Entrepreneurial Capitalism at Work
(1) Who actually creates jobs? (2) ADP data show that small and medium-sized companies do most of the hiring. (3) Be nice to small business owners. (4) NFIB survey data show profits drive employment and capacity cycles. (5) National unemployment rate closely correlated with NFIB indicators. (6) Wage inflation should be higher given all the job openings. (7) Barack, Elizabeth, and Hillary spout the party line. (8) Entrepreneurial vs. crony capitalism. (9) SMidCaps have led the bullish charge. (10) Morgan Stanley warns that China could cause next global recession. (11) Still muddling along. (12) Focus on market-weight-rated S&P 500 Information Technology.
United Shoppers of America (USA!)
(1) USA women rule soccer! (2) A patriotic happening. (3) Crowd chants “USA! USA! USA!” (4) Soccer unites, politics divides. (5) The standard of living and income inequality debate. (6) Flawed income measures used to gauge inequality and poverty. (7) Key items missing. (8) What about the Earned Income Tax Credit? (9) What about government support programs? (10) Real consumer spending per household at record high. (11) Consumer stocks confirm strength of consumer. (12) Another weak earnings season for revenues, led by plunge in Energy. (13) The Greek deal is to make a deal. (14) Tsipras as Sisyphus. (15) Focus on marketweight-rated S&P 500 Retail industries.
Playing the Averages
(1) Bearish technical signals have been buying opportunities in this bull market. (2) Central planners and central bankers intervening in financial markets. (3) Chinese officials buying ETFs, just as Japanese officials have been doing for a while. (4) Draghi still buying bonds, while Yellen magically boosts stocks. (5) “Agreekment” more likely than “Grexit” until further notice. (6) S&P 500 sectors mostly showing rising 200dmas. (7) Forward earnings still driving sector performances. (8) China’s trade data show weak domestic economy and subdued global economy.
Bull in a China Shop
(1) Best-laid plans of mice and men, and central planners. (2) Central bankers are central planners too. (3) Pain in China’s master plans. (4) Government cheerleaders held pep rallies to rally stocks. (5) The biggest winner and loser in China. (6) “Silk Road” has a slippery slope. (7) Falling PPI and auto sales. (8) Command economies don’t do markets very well. (9) Xi’s dream turning into a nightmare. (10) Obamacare is a nightmare. (11) Yellen does it again and says it again. (12) Record job openings. (13) Taylor Swift gets + + + for best capitalist of the year.
The Confidence Game
(1) The first and second mandates. (2) The third mandate. (3) The credibility challenge. (4) Chinese set a record in the history of bubbles. (5) Roundtrip. (6) Banning selling is a dumb desperate measure. (7) Marketboosting measures failing to boost market. (8) Draghi running out of W-I-T. (9) Japanese exports are weak. (10) Fed needs to reload its gun. (11) “Stay Home” outperforming “Go Global.”
Ban Buybacks?
(1) Who’s on first? (2) Financial engineering in one easy lesson. (3) Strategists shouldn’t be preachers. (4) Elizabeth Warren: The Fairy Godmother of the Bears. (5) Are buybacks sugar highs for corporations? (6) Meet Senator Baldwin. (7) Professor Lazonick explains how buybacks worsen income inequality. (8) Goldman prefers M&A to buybacks. (9) Depressions, recessions, secular stagnation, and bananas. (10) Mostly ho-hum indicators around the world. (11) Focus on overweight-rated S&P 500 Health Care industries.
Pass the Ouzo
(1) Greek in one lesson. (2) Ouzo is good pain medicine. (3) First two Greek bailouts were comparable to QE. (4) Weinberg’s Lehman-style scenario for Greece. (5) ECB could make pain in the periphery go away with more QE. (6) Scams as a way of life. (7) Is paying taxes really austerity? (8) Strengthening dollar is depressing commodity prices including oil prices, which is strengthening the dollar, again. (9) The commotions across the oceans in Eurozone and China raising risk of weaker global growth. (10) Focus on market-weight-rated S&P 500 auto-related industries.
Ye Shall Merge & Acquire
(1) Greece: This too shall pass? (2) Greeks invented mythology and mathematics. (3) Be fruitful and multiply. (4) M&A and buybacks are shrinking supply of stocks. (5) The Wilshire 3,666. (6) Jump-starting growth with M&A. (7) America is still the Promised Land for most Americans. (8) Janet and Moses. (9) Wages: Are we there yet? (10) More evidence of US industrial renaissance. (11) Pedal to the metal. (12) “Terminator Genisys” (+).
Land of the Free, Home of the Brave
(1) Fireworks on July 4 in US, July 5 in Greece, and July 6 in the markets. (2) Another panic attack followed by another relief rally? (3) Greece will either be kicked out or kicked down the road. (4) US fundamentals improving relative to rest of world, but valuation is a problem. (5) S&P 1500 forward earnings bottoming and turning up. (6) Consumers are in a spending mood as labor market continues to improve. (7) Housing sales looking up, although all new households are renting. (8) Trading up and down. (9) Regional business surveys still show a few soft spots. (10) Focus on market-weight-rated S&P 500 housing-related industries.
Central Bank Credit & Credibility
(1) Are central banks losing control? (2) Given global turmoil, US stocks may be more attractive again. (3) BOJ pumps up liquidity, but fails to ramp up production. (4) Japan’s forward earnings still rising to record highs. (5) Chinese savings glut. (6) As China’s margin debt regulators step on brakes, PBOC steps on monetary accelerator. (7) Wealth management products may be China’s weapons of mass financial destruction. (8) ECB stimulates bank lending a little bit. (9) How much does Greece owe ECB? (10) Not cool: Dudley compares Greece to Lehman. (11) Liftoff or back off? (12) Fist fight between IMF and BIS.
Standard of Living at Record High!
(1) The last act of the Greek drama? (2) Dopamine and consumer spending. (3) Winter’s cabin fever set stage for spring spending splurge. (4) Real pay per worker at record high. (5) Real consumption per household is at record high. (6) Corporations prefer to buy back shares, pay dividends, acquire competitors, and cut expenses. (7) The logic of deals. (8) Not much inflation. (9) Why is PCED inflation lower than CPI version? (10) Yet another Chinese fire drill. .
Everyday Low Price
(1) EDLP. (2) Walmart stuffing labor costs down supply chain. (3) Is the Phillips Curve right about wage inflation, but wrong about price inflation? (4) S&P 500 Hypermarkets & Super Centers are getting squeezed. (5) Other retailers still showing upbeat metrics. (6) Is there something wrong with the productivity stats? (7) Productivity ratio falling recently in services. (8) Global economy muddling along in the mud. (9) US economy still has some soft spots. (10) Eurozone’s M-PMIs more upbeat than actual production. (11) Submerging economies.
Household Formation
(1) Narrowing bull market. (2) Three outperforming sectors. (3) Health Care way ahead of the pack. (4) Seeking earnings growth. (5) No bargains. (6) Dollar and oil weighing less on earnings revisions. (7) More households, but they are all renting. (8) Housing starts and new home sales still well below previous cyclical peaks. (9) Existing home sales rising, but who is buying? (10) Focus on market-weight-rated S&P 500 Industrials.
Inflation Still MIA
(1) Diminishing inflation. (2) Un-COLA. (3) The forces of disinflation remain intact. (4) Lots of liquidity, yet not much inflation. (5) Unit labor cost inflation remains subdued. (6) Weak productivity growth doesn’t jibe with record profit margin. (7) Is Yellen waiting for Godot? (8) Fed study says cost-push inflation is a myth. (9) Inflationary expectations trending downwards with commodity prices. (10) Is gold really an inflation hedge or just another commodity? (11) Inflation is obviously key to bond and stock valuations.
‘Gradually’ Is the Word
(1) Yellen waves her magic wand again. (2) Fed’s tightening will be below normal. (3) Kansas City discussions focused on secular bull. (4) Secular stagnation is bullish. (5) Kicking the can down the road beats the alternatives. (6) So what could go wrong? (7) Tightening tantrum ahead? (8) Contrary indicator: the front cover of The Economist. (9) Updating the long expansion story. (10) Wage inflation may be heating up finally, but is that inflationary?
Leading Sectors
(1) Three outperforming sectors: Health Care, Consumer Discretionary, and IT. (2) They aren’t cheap, but they can grow earnings. (3) Overall outlook for revenues and earnings growth is lackluster. (4) Industry analysts tend to be overly bullish about prospects for long-term growth. (5) Is the trend growth rate 10%, 7%, or 5%? (6) Investors are also optimistic given record-high PEG. (7) More upside for profit margins of some sectors. (8) Financial engineering can also boost earnings per share. (9) Why Goldman hates buybacks. (10) Lower prices boosting oil demand, but supply increasing faster. (11) Focus on market-weight-rated S&P 500 Energy.
Zigzag
(1) Another earnings season is around the corner. (2) Why do industry analysts cut their estimates? (3) We count 58 “earnings hooks” over the past 85 quarters. (4) The longest streak is the current one. (5) Will Q2 be as surprisingly strong as Q1, excluding Energy? (6) Joe slices and dices earnings. (7) With P/Es stretched, earnings matter more. (8) Health Care leads the pack. (9) US consumer indicators are mostly upbeat, while business indicators are mixed. (10) Focus on market-weight-rated S&P 500 housing-related industries.
Dead Reckoning
(1) Deduced reckoning. (2) Are investors in the same boat with Nicole Kidman? (3) Is the Greek play a tragedy or comedy? (4) In praise of kicking the can down the road. (5) Angela vs. Wolfgang. (6) Earnings finally recovering in Eurozone. (7) No wind in the sails of commodity, currency, and S&P 500 traders. (8) Eurozone’s economic recovery remains uninspiring. (9) China’s economy continues to struggle with excess capacity and PPI deflation. (10) Focus on market-weight-rated S&P 500 IT industries.
Slice & Dice
(1) The valuation question again. (2) Waiting for the answer while stocks meander. (3) Earnings-led target of 2300 for the S&P 500 next year. (4) Reversion-to-the-mean model is bearish. (5) A 20 P/E isn’t irrational according to inflation models. (6) Fed model says either stocks are too cheap or bonds are too expensive. (7) Does revenues growth matter to valuation? (8) Price-to-sales models are bearish. (9) Retail sales data suggest soft patch is over. (10) Our in-house Gen Xer slices and dices generational demographics from A to Z. (11) “Love & Mercy” (+ + +).
Bond Bath
(1) Blondes vs. bonds. (2) Bonds vs. bunds. (3) Where do we go from here? (4) From abnormal to less abnormal. (5) Deflation fears ebbing. (6) A simple bond model. (7) Draghi deserves credit and blame. (8) Dudley says Fed policy is market dependent. (9) Tranquility in the commodity pits. (10) Riding the Age Wave.
Small Business Is Big
(1) Jury is out on soft-patch verdict. (2) No soft patch for small business owners. (3) Businesses create jobs, not governments. (4) Small businesses lead the way. (5) Corporate profits lead employment and capital spending. (6) Hard to find qualified workers. (7) Capital spending improving, but lagging. (8) A real jolt in JOLTS. (9) SMidCaps vs. LargeCaps. (10) Falling oil prices have had bigger impact on earnings than rising dollar. (11) Margins getting squeezed among SMidCaps as they ramp up hiring.
Which Way Is the Wind Blowing?
(1) Jefferson, Einstein, and Twain. (2) The weather will change. (3) Neither boom nor bust. (4) OECD paints a picture with some shades of grey. (5) China’s trade data confirm domestic weakness. (6) Eurozone on recovery road, as Greece can gets kicked down the road. (7) Japan isn’t getting much bang for all those yen. (8) Waiting for Thursday’s retail sales report. (9) Real exports are really OK. (10) Dead calm for US stocks. (11) Revenues growth outlook is neither hot nor cold. (12) Valuation vs. reversion to the mean, inflation and interest rates, and earnings growth.
Peter Pan
(1) By the shores of Lake Winnipesaukee. (2) Seven strategists and economists with seven opinions. (3) Consensus vs. contrary scenarios. (4) Kuroda says we can fly if we believe we can. (5) Japanese inflation close to zero again despite all the pixie dust. (6) Draghi plays Captain Hook. (7) Less deflation, more growth in Eurozone. (8) Dudley: On your mark, get set, wait. (9) Fed policy is market dependent too. (10) Is the US soft patch over?
What’s the Trend in Profits?
(1) Why profits can’t grow faster (or slower) than GDP. (2) Profits’ share of national income may be peaking. (3) Profits are very pro-cyclical because so are revenues and profit margins. (4) Record high for S&P 500 profit margin. Can it go higher? (5) Two ways to squeeze margins: Higher costs vs. lower revenues. (6) The OECD cuts its estimate for world growth. (7) Profits cycle driving the business cycle. (8) Using the value of world exports as a proxy for global GDP. (9) Beware of false slowdown in world economic indicators measured in dollars. (10) Is 5% rather than 7% the new normal?
Blaming China
(1) No shortage of gluts thanks to China. (2) The epicenter of deflation. (3) Not so super super-cycle. (4) “China Price” remains deflationary as robots replace humans. (5) Deal or no deal? (6) Lots of big deals in healthcare, IT, and telecom. (7) Fed financing M&A mega-boom. (8) The fastest and easiest way to grow. (9) Challenging time for active managers. (10) Dividend-yielding stocks underperforming. (11) Focus on marketweight-rated S&P 500 auto-related industries.