Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Still Decoupling
(1) Standing out. (2) The benefit of slower global growth. (3) US small business survey showing lots of cyclical highs. (4) Citigroup Economic Surprise Index positive in US. Not so much in G9. (5) JP Morgan global composite index confirming global growth. (6) OECD Leading Indicators especially weak in Japan and Germany. (7) Maersk sees shipping slowdown. (8) Lower fuel costs should benefit EMs.
Competitive Devaluation
(1) US MSCI continues to outperform. (2) Dollar soaring as ECB and BOJ boost their balance sheets after Fed terminated QE. (3) Devaluation is often a zero-sum game. (4) Desperate measure for desperate countries. (5) Currency wishes come true for Draghi and Kuroda, but not for economy and inflation. (6) Interesting correlations between US dollar, commodity prices, and EM MSCI. (7) China is first to report trade stats, and they were good last month.
More Relief
(1) Recalling the causes of October’s panic attack. (2) Where are we now? (3) Cocoa price as an Ebola thermometer. (4) Reversal of futures: Distant crude oil prices exceeding nearby ones. (5) QE termination anxiety in US dissipated by more of it from ECB and BOJ. (6) Eurozone economy crawling along. (7) Chinese curse: Prolonged soft landing. (8) Falling oil prices depress Energy earnings, but boost Transportation earnings. (9) US consumers have the will and means to spend. (10) Crude oil plunge yields winners and losers. (11) Evil doers in Russia and Iran among the losers.
Gridlock & Goldilocks
(1) Three bullish cycles: Mid-term elections, third years of presidential terms, and years ending in “5.” (2) An anti-progressive, pro-business vote. (3) Review of Republican sweep. (4) Second “shellacking.” (5) Gridlock is bullish. Shutdowns are not. (6) Madison’s biggest fan. (7) McConnell’s impressive deal-making resume. (8) Employment report pushes the Fed to tighten sooner, but doves likely to focus on subdued wages. (9) Price inflation may be keeping lid on wage inflation. (10) “Stay Home” still the way to go. (11) “Interstellar” (-).
Mood Swings
(1) Manic-depressive disorder. (2) Computers vs. humans. (3) Algorithms reading the headlines. (4) Bull/Bear Ratio’s latest bungee jump. (5) The bears have left the building. (6) Did the fourth phase of the bull market start on Oct. 16? (7) Don’t fight the central banks. (8) Don’t fight the political cycle. (9) Congressional mid-term elections and third years of presidential terms tend to be very bullish. (10) SMidCaps are rising and outperforming again for a couple of good reasons.
As The World Turns
(1) Wild ride in S&P 500 Transportation. (2) Burning cheaper fuel. (3) Intermodal loadings at record high along with ATA Trucking Index and real business inventories. (4) Slow speed reduces odds of derailment. (5) A couple of hot capital spending indicators in GDP. (6) Gasoline bill cut by at least $100 billion. (7) Wage gains remain too low for Yellen. (8) M-PMIs show global economy muddling along. (9) Focus on overweightrated S&P 500 Transportation.
Kuroda’s Put
(1) Main drivers of the bull market. (2) Worries have evaporated. (3) BOJ upping the ante. (4) QQE-1 was scheduled to terminate by end of FY2014. (5) QQE-2 is more open-ended at least through end of FY2015. (6) Contrary indicator alert: Japanese pension fund raising global equity allocation from 24% to 50%. (7) What if monetary policy can’t cure what’s wrong, but central bankers don’t get it? (8) How do you say “meltup” in Japanese? (9) Forward earnings weighed down by falling oil prices. (10) Valuation metrics getting pricey again. (11) Central bankers and government pension funds aren’t value buyers.
In Praise of Folly
(1) Folly speaks. (2) A famous essay. (3) Central banks get top billing today. (4) Doing more of the same including inflating bubbles. (5) Counterfactual praise. (6) From brief meltdown back to melt-up. (7) Japan: From aw-shucks to shock & awe. (8) Draghi’s low-key shock & awe. (9) Fed policy is also market dependent. (10) Biggest fool may be Pouting Putin. (11) Pool of fools in Washington. (12) Mid-term election rally almost a sure thing? (13) Risk On is back on. (14) “Nightcrawler” (+ +).
Mission Accomplished
(1) No surprises. (2) QE gets credit from its proud conceivers. (3) The right message. (4) Is inflation back on right track as Fed claims? (5) Harry Truman and the Fed’s two-handed economists. (6) Does forward guidance make sense, or is it nonsense? (7) Running out on “considerable time” on March 18, maybe? (8) Gradual normalization ahead or “one and done?” (9) Sentiment roller coaster, panic attacks, dips, and relief rallies. (10) Lots of earnings weakness across most MSCI sectors overseas. (11) Focus on overweight-rated S&P 500 Health Care.
Considerable Time
(1) FOMC likely to treat rather than trick. (2) Fed officials were probably spooked by recent market turmoil. (3) QE has been terminated, until further notice. (4) FOMC has to fear stoking current melt-up. (5) Fed policy is market dependent. (6) Rosengren denies Fed’s role in wealth and income inequality. (7) No exit for central banks from ultra-easy monetary policy for a considerable time. (8) The “one and done” scenario. (9) Long expansion scenario would justify higher P/Es until it doesn’t. (10) Focus on market-weight-rated S&P 500 Industrials.
Earnings Swooning
(1) Upside hook missing for Q3 earnings. (2) Oil is weighing more on earnings than the dollar. (3) Energy’s NERI drops sharply this month. (4) Big cuts in S&P 500’s Q4 and 2015 estimates last week. (5) Forward earnings losing some mojo. (6) Will ECB bank stress test results lead to more lending, or more stress? (7) Two Eurozone skeptics. (8) Italy’s economic suicide movement. (9) Germany’s Ifo vs. M-PMI. (10) Corruption is officially forbidden in China. (11) Power to the People, or the Party?
Bottom of the Barrel?
(1) From “Peak Oil” to “Trough Oil.” (2) Oiling the secular bull market in equities. (3) Transports at record high as Energy loses energy. (4) Raising Energy sector back to market-weight because stocks are cheap. (5) Downside of oil prices is a known unknown. (6) Saudis can inflict only so much pain on others before it hurts them too. (7) China is bargain hunting. (8) Technology could reduce breakeven for shale oil producers. (9) More upside for US economy following long recovery. (10) Industrial machinery orders soaring. (11) “St. Vincent” (+ + +).
Earnings World
(1) Is the strong dollar depressing Q4 earnings estimates? (2) Not much impact so far on S&P 500/400/600. (3) US forward earnings remains on uptrends in record territory. (4) Sector search shows Energy weighing most on S&P 500 earnings. (5) Cyclical sectors showing earnings resilience despite strong dollar. (6) Overseas, the earnings picture is less bright. (7) S&P 500 Transportation index is on the fast track. (8) Railcar loadings and trucking freight index at record highs.
Accentuating the Positives
(1) V-shaped stock rebound toys with moving averages. (2) Transportation stocks flying high again. (3) Buying on dips still in fashion. (4) Oil provides a nice windfall for consumers. (5) US federal income tax revenues up big. (6) S&P 500 forward revenues in record-high territory. (7) Forward earnings still moving forward. (8) The current earnings season is mostly upbeat. (9) What about Q4? (10) ECB is back in the game. (11) China continues to emerge.
Yin & Yang
(1) Yin is deflation. Yang is easy money. (2) Why can’t central banks boost inflation? (3) Easy credit has boosted supply more than demand. (4) Aging demography also weighing on Japan and Eurozone. (5) Secular stagnation is a serious problem in Japan and Eurozone. (6) Postmortem: Commodity super-cycle was latest bubble to burst. (7) Oil’s super-cycle is also over. (8) Global oil demand has stopped growing. (9) What is the breakeven price for shale oil producers? (10) Focus on underweight-rated S&P 500 Energy.
The Bottom?
(1) Manic market. (2) From “the top” to “the bottom” in one month. (3) October selloffs have been buying opportunities. (4) Too many bottom pickers? (5) Less worrisome worry list. (6) Investors love central bankers shooting bullets, even if they are blanks. (7) Bully for Bullard! (8) Fannie, Freddie, and Feddie to the rescue. (9) More jobs and cheaper gasoline boosting US confidence. (10) A bit of good news from Europe. (11) Putin playing a weak hand. (12) Ebola, VIX, and high-yield bonds
Early Halloween
(1) Trick or treat? (2) From nothing to fear to plenty of fear. (3) Bears are hiding in the correction camp. (4) Sentiment takes a dive. (5) Cheap oil is good for consumers, but not so good for railroads. (6) Airline stocks have been contaminated. (7) Meet Obama’s Ebola “czarina.” (8) The commodity super-cycle was the bubble this time. (9) Lots of blank bullets. (10) Retail sales don’t add up.
The Fear Factor
(1) Going viral? (2) Emotional market. (3) Technicians looking into the abyss. (4) Bad Octobers and good Octobers-Mays. (5) Breaching protocols and support levels. (6) Valuation multiples are depressed and compressed. (7) SMidCaps are much cheaper now, especially relative to LargeCaps. (8) Supply factor depressing oil prices and Energy stocks. (9) Saudis want to shut down high-cost producers in US and Russia with lower oil prices.
Running Out of Ammo?
(1) Global slowdown front-page news. (2) Litany of woes. (3) From “shock and awe” to “Aw, shucks!” (4) Divided we fall. (5) G20 have no plan. (6) Abe sees downside of yen’s downside. (7) Fed’s Fischer leaning towards “none and done.” (8) Lagarde’s plea. (9) Unintended consequences of ultra-easy money include buybacks. (10) China isn’t tanking just yet. (11) S&P 500 forward revenues at record high. (12) S&P 500 forward earnings stalling at record high.
Behind the Curtain
(1) Curtain call. (2) Bad wizards. (3) Crisis of confidence. (4) More than just another dip? (5) Our Global Growth Barometer is taking a dive. (6) Strong dollar and too much oil supply may be exaggerating GGB’s drop. (7) Curtain raisers at the ECB, BOJ, and Fed. (8) Draghi says fixing economy isn’t his job. (9) Kuroda ready to buy more assets. (10) Fed’s “lift-off” may be delayed. (11) October selloffs can create opportunities. (12) More recession risks overseas than at home. (13) Risk off for now. (14) “The Judge” (+ +).
Behind the Curtain
(1) Curtain call. (2) Bad wizards. (3) Crisis of confidence. (4) More than just another dip? (5) Our Global Growth Barometer is taking a dive. (6) Strong dollar and too much oil supply may be exaggerating GGB’s drop. (7) Curtain raisers at the ECB, BOJ, and Fed. (8) Draghi says fixing economy isn’t his job. (9) Kuroda ready to buy more assets. (10) Fed’s “lift-off” may be delayed. (11) October selloffs can create opportunities. (12) More recession risks overseas than at home. (13) Risk off for now. (14) “The Judge” (+ +).
Heavy or Light Weights?
(1) Is the Fed coming or going? (2) Stress tests for ECB and BOJ. (3) Is bad economic news bad or good news? (4) Competitive devaluation is an issue. (5) Dudley sees first rate hike in mid-2015, or not. (6) Stocks and bonds. Mars and Venus. (7) Draghi and Kuroda are less confident. (8) IMF’s concern about global growth depresses stocks. (9) FOMC’s concern about global growth boosts stocks. (10) Time to go fishing for the rest of the year, or until mid-term elections.
Dollar Play
(1) Home field advantage. (2) No currency risk at home. (3) “Stay Home” still beating “Go Global.” (4) Is the strong dollar bullish or bearish for stocks? (5) The short answer: Bullish on a relative basis. (6) Three trends since 1995. (7) From US-centric to China-centric, and back again. (8) Germany hard hit by Ukraine crisis. (9) Depreciations of euro and yen won’t help Eurozone and Japan, but should benefit US MSCI relative to other major stock markets.
US Dollar, Inflation, & Earnings
(1) Is there a relationship between the dollar and expected inflation? (2) Fed tracking TIPS yield spread as expected inflation measure, which is falling recently. (3) Anchor aweigh. (4) TIPS measure in US actually reflecting deflationary forces in Japan and Eurozone. (5) There may be a simpler story. (6) Either way, the Fed is likely to normalize monetary policy very gradually. (7) Or else it might be either “one and done” or “none and done.” (8) Low price inflation keeping a lid on wage inflation. (9) Dollar may take center stage during Q3 earnings season. (10) Usually, strong dollar and weak commodity pricing not good for earnings. (11) Focus on overweight-rated S&P 500 Transportation.
One and Done?
(1) Jobs report poses numerous challenges for Fed’s doves. (2) March 18, 2015 could be the Fed’s D-Day. (3) Fed’s best and brightest fumbled jobless rate forecasts. (4) “Considerable time” should be over by the end of this month. (5) More green than red on Yellen’s dashboard. (6) Full-time employment rising and Earned Income Proxy makes another new high. (7) Doves freaking out: Evans and Dudley worrying about dangers of Fed’s exit strategy. (8) Will strong dollar shut Fed’s exit door? (9) Inflationary expectations falling as greenback soars. (10) Could it be “none and done” followed by stock market melt-up? (11) Buy the consumers, not the producers of commodities. (12) “Gone Girl” (+ +).