Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Accentuating Some Positives
(1) S&P 500 remains near record high despite drop in Energy stock prices. (2) Small business owners are feeling very good. (3) Lots of job openings. (4) FOMC voters Williams and Lockhart are patient men. (5) Nine reasons why bond yields are falling in US. (6) Bond yields falling worldwide. (7) China’s exports showing more life than China’s imports.
Commodity & Wage Deflation
(1) Goldman’s oil forecast. (2) Are commodities an asset class? (3) Goldman’s commodity index is drowning in oil. (4) CRB raw industrials spot price index is on edge. (5) Global Growth Barometer indicating stormy weather. (6) More PPI deflation in China. (7) A real prince. (8) Saudi’s shale game. (9) Why did wages fall during December? (10) Slicing and dicing average hourly earnings. (11) Another curve ball for the Fed.
Averting a “Catastrophe”
(1) Fairy Godmother and Godfather. (2) Charles Evans is an influential and patient member of the FOMC. (3) Is the Fed more or less patient than Evans? (4) Normalization looking less likely this year to us. (5) See you after April 28-29 FOMC meeting. (6) Stronger dollar could hurt. (7) Wage inflation heading in the wrong direction. (8) Wage weakness: Noise or signal? (9) Despite solid job gains, workers continue to drop out of labor force. (10) “Wild” (+ + +).
Job Machine
(1) ADP payroll data augur well for BLS measure. (2) Humming along. (3) Oil still gushing in Texas and N. Dakota. (4) No sign of trouble in jobless claims yet. (5) Direct impact of oil plunge on US employment and capital spending is very small. (6) ADP data should get more respect. (7) Small firms turning into larger firms account for lots of employment gains. (8) Oil windfall for advanced economies is almost $1 trillion. (9) Ditto for emerging economies. (10) Industry analysts raising profit margin and earnings forecasts for S&P 500 Transportation stocks. (11) Focus on overweight-rated S&P 500 Transportation sector.
The World According to Gross
(1) Gross warning. (2) A bungee scenario for oil price. (3) The debt super-cycle is rolling over. (4) So is the commodity super-cycle. (5) Easy money has been stimulating supply more than demand lately. (6) Party is over for zombies. (7) Can US decouple from global secular stagnation? (8) Consumers’ windfall from lower fuel costs is over $200 billion. (9) Raising the odds of the Endgame, while lowering the odds of Irrational Exuberance. (10) Getting harder to see Fed raising rates this year under any scenario. (11) Focus on market-weight-rated S&P 500 Industrials.
Here We Go Again
(1) Déjà vu all over again. (2) Fear making a comeback? (3) Euro Mess is back with talk of “Grexit.” (4) Is QE the answer to “whatever it takes” for the Eurozone? (5) German bond yield just north of zero. (6) Drowning in oil. (7) Saudi oil minister gets the prize for lowest oil price target at $20. (8) Will hedges keep US frackers pumping longer than expected? (9) Oil industry is slashing budgets. (10) Plunging oil prices should trigger plunge in oil production. (11) Energy sector is weighing on S&P 500 forward earnings, which is at a record high excluding the sector. (12) Focus on market-weight-rated S&P 500 auto-related industries.
Another Happy Year?
(1) Santa was early last year. (2) Dow Theory is bullish. (3) Still targeting 2300 for S&P 500. (4) Bond Kings remain bullish on bonds, and we are inclined to agree. (5) Hard to argue against stronger dollar. (6) Oil could retest 2008 low before bouncing back to around $60. (7) US GDP should gain from lower oil prices. (8) US MSCI should continue to outperform. (9) Eurozone is a mess again. (10) China’s zombies. (11) Consumer confidence is soaring, according to weekly measure. (12) “The Imitation Game” (+ + +).
Melt-Up for the Holidays?
(1) Santa’s little helper. (2) From lump of coal to lump of sugar. (3) Transportation stocks on a roller coaster. (4) Yellen’s fairy dust full of good cheer. (5) Yellen claims FOMC members not worried about plunging oil prices, jumping junk yields, or imploding Russian ruble. Or are they? (6) Fed-Speak: Inflationary expectations vs. inflationary compensation. (7) December often stuffs goodies in socks and stocks. (8) A bull market for all seasons. (9) Dr. Ed’s Movie Reviews: 2014. (10) See you next year.
Grand Central 24/7
(1) Fairy Godmother. (2) The FOMC will be even more dovish and patient next year. (3) Evans will get a vote next year, and two hawks are retiring. (4) FOMC clearly concerned about financial instability related to dropping oil prices, soaring dollar, and and rising junk yields. (5) Central banks succeeding in inflating wealth. (6) Their transmission mechanisms to their economies aren’t working so well. (7) Weak data stimulate PBOC to ease and Chinese stocks to soar. (8) ECB’s Coeuré pushing for QE. (9) November crude oil demand drowned in sea of oil. (10) Focus on market-weight-rated S&P 500 Energy.
Two Shades of Grey
(1) Frackers: America’s patriots. (2) “Drill, baby, drill!” (3) Hurting our natural-born adversaries. (4) Assessing the odds of a new financial crisis. (5) Some German exports hit by sanctions on Russia. (6) Russia has reserves to service its debt. (7) Venezuela is an accident waiting to happen. (8) Stressed-out high-yield bond funds and CLOs. (9) Fed to the rescue again? (10) Flash PMIs mostly muddling around 50.0. (11) Focus on market-weight-rated S&P 500 housing-related industries.
Slipping in the Oil Patch?
(1) The global growth question. (2) A new financial crisis? (3) Financial jitters could delay dropping “considerable time.” (4) Is Yellen still the “Fairy Godmother of the Bull Market?” (5) CRB raw industrials spot price index still consistent with muddling global economy. (6) US still stands out. (7) Eurozone stagnating, especially in Italy and France. (8) Japanese live in small places. (9) Chinese bank loans producing less bang per yuan. (10) India and Brazil production numbers are weak. (11) Energy analysts depressing S&P 500 estimates for revenues and earnings.
The Energy Bubble
(1) Worrying about the Middle East in the Midwest. (2) Too much of a good thing? (3) US consumers are happy shoppers. (4) Widespread shopping spree. (5) Consumers of last resort. (6) Definition of a bubble fits oil’s boom/bust. (7) High-yield market highly stressed. (8) Capital is drying up for drillers. (9) Submerging oil economies. (10) Fed in 2015: None and done? (11) Can US offset all the rest? (12) Iranian surrogates threatening Saudis. (13) Still bullish. (14) Focus on market-weight-rated S&P 500 Retailers.
China’s Zombies
(1) Many small winners and a few big losers. (2) Strong dollar partially offsetting lower oil prices overseas. (3) OPEC losing market share. (4) OPEC budgets getting squeezed. (5) Capital spending will get slashed in oil patch. (6) Energy analysts slashing estimates. (7) US oil stockpiles at seasonal high. (8) Saudis live in a dangerous neighborhood. (9) China’s zombies deflating PPI. (10) PBOC keeping zombies alive. (11) China’s latest purge is depressing economy. (12) OECD leading indicators continue to muddle along.
Downsides In 2015
(1) From the upbeat scenario to the downbeat risks. (2) The bull is still prone to mood swings. (3) “Considerable time” is running out of time. (4) Yellen’s 6-month horizon. (5) More upbeat labor market indicators. (6) Next Fed QE in corporate bonds? (7) Is China’s mini-bubble bursting already? (8) China’s imports showing no growth all year. (9) Draghi renews his vows to do whatever it takes. (10) Greeks breaking plates again. (11) Will there be blood in the oil patch? (12) Oil majors vs. frackers. (13) The Russian bear is wounded. (14) The jury is still out on Abenomics.
2015 Is Coming
(1) Reassessing 2015. (2) Lower oil prices widely deemed to be a net positive for growth. (3) $1.5 trillion windfall. (4) Winners and losers by countries. (5) IMF raising US growth for 2015. (6) Better growth with lower inflation. (7) Bond yields and crude oil should stabilize, but the dollar could soar some more. (8) Fed’s “lift off” may be delayed or downsized. (9) Still targeting 2300 for S&P 500 in 2015. (10) Net earnings revisions down for Energy, up for Transportation. (11) Focus on overweight-rated S&P 500 Transportation.
Sheik Out
(1) Sheiks vs shale. (2) The world’s lowest-cost producer. (3) Offshore drillers tend to have highest costs. (4) Shale drillers are more nimble and tech savvy. (5) No bust for frackers. (6) Saudis facing Iranian surrogates in Yemen. (7) Saudis draw $60 line in the sand. (8) Frackers still pumping. (9) Weak oil price boosting dollar. (10) EM oil consumers are winners. (11) Back to the old normal in the labor market? (12) “The Theory of Everything” (+ +).
Inflating Inflation
(1) Dudley expects Fed to hit inflation target next year. (2) It all depends on resource utilization. (3) What if demand-side models are flawed? (4) Supply-side models explain persistence of deflationary pressures. (5) Inflationary expectations falling in TIPS market. (6) Bond market has gone global. (7) Valuation and beauty contests. (8) Rule of 20 says stocks still cheap. (9) Other valuation models find no bargains. (10) Cheaper stocks abroad, but for lots of good reasons. (11) US economy humming along.
China’s Soft Landing
(1) US oil production still going strong. (2) Saudis’ game of chicken. (3) Secular stagnation in Eurozone weighing on global economic growth. (4) Chinese imports suggest growth weaker than shown by GDP. (5) Emerging markets hard hit by China slowdown. (6) China still dependent on export-led growth. (7) Chinese crude oil demand and railway freight traffic also weak. (8) S&P 500 earnings and revenues remain on bullish trends. (9) Dudley's upbeat outlook. (10) Focus on market-weight-rated S&P 500 auto-related industries.
Slippery Slope
(1) Too much supply, or weakening demand? (2) Negative and positive knock-on effects. (3) Clash of the Titans in the oil patch. (4) US frackers could be more resourceful than Saudis expect. (5) From peak oil to cheap oil. (6) Yergin’s upbeat story for lower oil prices. (7) Getting more cash to drill into the ground will be challenging. (8) Other global economic indicators suggest oil plunge is a supply issue rather than a demand one. (9) Survey of global economies is a mixed bag, with US standing out.
Cheap Oil
(1) OPEC agrees to do nothing. (2) 40% discount just in time for the holidays. (3) Winners and losers. (4) Big wipeout for producers equals big windfall for consumers. (5) US drivers could save more than $200 billion. (6) Dow Theory suggests melt-up in Transports could spread to broad market. (7) Big windfall for many EMs. (8) Oil price plunge adding to deflation and prolonging NZIRPs. (9) Bonanza for bond investors. (10) The latest round of central bank puts. (11) Performance since October 15. (12) The Hunger Games: Mockingjay, Part 1 (- - -).
Thanksgiving
(1) Counting our blessings. (2) The Ackerman bull market. (3) From 666 to 2068. (4) Da Vinci Code. (5) EMU hasn’t disintegrated so far. (6) Fully invested bears and the Endgame. (7) Muddling along beats the alternatives. (8) The importance of stock buybacks. (9) No double-dips or fiscal cliffs for the US. (10) Secular bull vs. melt-up. (11) OPEC’s holiday gift to consumers. (12) Global oil supply soars as demand growth weakens. (13) Focus on market-weight-rated S&P 500 Energy.
London Days
(1) Tour of London. (2) Taxi vs. limo drivers. (3) “The Knowledge.” (4) Attack of the socialized students. (5) Worrying about both high P/Es and a melt-up in the US. (6) The new consensus on bonds. (7) Secular stagnation overseas, and no global recession in sight. (8) PMIs flashing global slowdown. (9) Waiting for wage inflation and Fed normalization. (10) Putin needs higher oil prices. (11) Is a strong dollar bearish or bullish for US stocks?
The New Abnormal
(1) Tower of London. (2) From London to Zurich. (3) Is the normal business cycle dead? (4) Volcker was never in the put business. (5) Greenspan and Bernanke Puts. (6) The consequences of minimizing pain. (7) Abnormalities in this cycle. (8) Waiting for Godot and wage inflation. (9) New forces keeping a lid on price inflation. (10) Secular stagnation over there depressing bond yields over here. (11) Producers misjudged Chinese demand. (12) Profit margins still aren’t reverting. (13) Tour of London.
Oil Bubble Bursting
(1) Bullish or bearish for global economy and equities? (2) Drilling deeper. (3) Zero-sum game? (4) Russia’s catastrophe. (5) No props from next OPEC meeting. (6) The Saudis’ game plan. (7) Wolf on Wall Street says it was all a big bubble. (8) Drilling money into the ground. (9) Transports on speed. (10) Subsidize frackers! (11) Cutting earnings estimates for next two years.
The Great Deflators
(1) The New Abnormal. (2) Nostalgia about normalizing monetary policy. (3) Monetary policy affects both demand and supply. (4) Awash in liquidity and oil. (5) Easy money fueled the oil bubble. (6) Secular stagnation specter haunting Europe. (7) China remains on soft-landing course. (8) Specter of deflation in Asia. (9) Durable goods prices are falling everywhere. (10) How the Great Moderators became the Great Deflators. (11) Central bankers keeping zombies alive. (12) Governments are the biggest zombies of all. (13) Meet the Selfies. (14) “Whiplash” (+ + +).