Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
State of the World
(1) America is exceptional. (2) US economy stands out. (3) Dismal news out of Eurozone and Japan. (4) Less bang per yuan in China. (5) Debt weighing down some major economies. (6) US economy is diversified with lots of world-class industries. (7) Many US industries remain relatively unregulated. (8) US news remains upbeat. (9) China’s social financing plunged in July. (10) Stepping on the accelerator and brakes in Japan. (11) German GDP drops after mild winter boost. (12) “Calvary” (+ + +).
Revenues Looking Up
(1) Fundamentally, revenues drive earnings drive stocks. (2) Business sales, forward revenues, PMIs, and federal tax receipts all bullish for corporate revenues. (3) S&P 500 revenues up 5.8% y/y during Q2. (4) Europe is weighing on global revenues. (5) EM MSCI has outperformed since 2006 because revenues outperformed. (6) Latest Chinese indicators upbeat for China and for global economy. (7) Focus on marketweight-rated S&P 500 Retailers.
Another Good JOLTS
(1) Fed Chair is no slacker, but worries a lot about slack. (2) JOLTS report and NFIB survey upbeat on jobs. (3) Ratio of unemployed to job openings down to 2.03. (4) More hires than fires, and plenty of quits. (5) Quitting is a good sign. (6) Yellen’s comfort zone for wage inflation is 3%-4%. (7) Wage inflation remains remarkably low around 2%. (8) Lots of Baby Boomers will retire. (9) Lots will keep working, providing a new source of labor, i.e., elderly workers.
Revisiting Eurozone
(1) Earnings growth near 10% for Q2. (2) New record highs for forward revenues and earnings in US. (3) Tough year for EMU investors. (4) The case for resumption of EMU bull market in stocks. (5) TLTROs will soon provide lots more ECB liquidity. (6) Bond yields plunging and euro falling should help too. (7) Uptrends in exports to Eurozone and in retail sales. (8) EMU forward earnings bottoming, maybe. (9) EMU MSCI cheaper than US MSCI, as usual. (10) Leading indicators weaken, especially in Germany. (11) Resolution of Ukraine crisis will determine whether buying opportunity is now or in the foreseeable future.
Buying Dips
(1) Bad news bulls. (2) Lots of dips. (3) Dips to 50-dma have been good buying opportunities since early 2013. (4) Russian and other barbarians at the gates. (5) Bond market continues to ease as Fed moves towards tightening. (6) Nine reasons to be bullish on bonds. (7) Draghi wants euro to keep dipping. (8) Despite Q1 dip, US economy continues to grow with solid gains in business sector. (9) “The Hundred-Foot Journey” (+ +).
Geopolitical Matters
(1) Discounting geopolitical risk. (2) Will push come to shove? (3) Panic, or buying opportunity? (4) Ukraine weighing on Russia MSCI and Eurozone MSCI too. (5) Flight to safety boosting demand for Eurozone bonds. (6) Historically low yields in Eurozone pushing yields down in US despite tightening outlook for Fed. (7) Eurozone may be slipping back into recession owing to latest crisis. (8) Bad news out of Italy and Germany. (9) US is gushing oil. (10) Focus on overweight-rated S&P 500 Transportation.
Fundamentally Speaking
(1) FSMI at new record high. (2) Three high-frequency indicators. (3) Boom-Bust Barometer is booming. (4) Forward earnings booming too. (5) Still no recession in ECRI Weekly Leading Indicator. (6) July was a good month for US according to purchasing managers. (7) Eurozone’s retail sales showing signs of life. (8) China’s M-PMI moving higher, but employment component remains weak.
Secular Stagnation?
(1) Updating the “Great Rotation.” (2) Good, not great. (3) How much longer will money rotate from SmallCaps to LargeCaps? (4) Jittery investors lower P/Es, while analysts raise E estimates. (5) Forward P/Es cheaper, but not cheap. (6) Forward earnings making new highs. (7) Larry Summers is an important fellow with a debatable thesis. (8) Less support for his secular stagnation hypothesis in the labor market. (9) Consumers are earning more and spending more. (10) Focus on market-weight-rated S&P 500 auto-related industries.
Complacency Disturbed
(1) Bad two days in a long bull market. (2) Dow Theory is bearish in theory. (3) Corrections are not required by law. (4) Recessions, not old age, kill bulls. (5) Sanctions against Russia could weaken Europe too. (6) Don’t cry for hold-outs in Argentina. (7) Normalizing Fed policy shouldn’t cause a recession. (8) Bad news on Japanese wages. (9) Terrorists, WTO, and Ebola. (10) Earnings need time to catch up with valuation. (11) Earned Income Proxy at new high, auguring well for US consumer spending. (12) “Get on Up” (+ +).
New Abnormal?
(1) New abnormal for bonds. (2) Old normal for stocks. (3) From endgame fears to anxiety fatigue, and now complacency. (4) The Bond King’s word games. (5) Old vs. new normal (or neutral). Good morning or good evening? (6) Greenspan and Yellen are investment strategists now. (7) Should the Fed have an investment opinion on biotechs? (8) Japan and Eurozone are abnormal. (9) Old normal GDP in US. (10) Fed in no rush to normalize interest rates.
Heating Up
(1) Consumers are upbeat. (2) Jobs are more plentiful, so they say. (3) Consumers also say jobs are less hard to get, as confirmed by jobless claims and jobless rate. (4) Underemployment may be depressing Yellen more than consumers. (5) Asia is hot. (6) Good news out of China. Not so good out of Japan. (7) Production at record highs in lots of Asian economies. (8) Asia is especially cheap compared to the Eurozone with its economic and geopolitical woes.
Earnings Tuesday
(1) Earnings are still growing. (2) Another setup for positive earnings surprises. (3) All measures of profits on uptrends. (4) The magic long-term growth number is 7%. (5) Earnings providing tailwind for stock market. (6) Revenue estimates rising for S&P 500. (7) Broad-based upturn in revenues and earnings for the 10 sectors. (8) IT outperforming, while consumer sectors underperforming so far this year. (9) Financials are cheap. (10) Still recommending overweighting in Financials, Health Care, Industrials, and IT sectors.
Mixed Signals
(1) Bond yields at historic lows, as credit spreads start widening. (2) LargeCaps up, while SmallCaps down. (3) Q2 GDP estimates weaken, as earnings improve. (4) PMIs in Eurozone and China overstating economic growth. (5) Easy monetary policy is coming and going. (6) US labor market improving, yet there’s still slack. (7) ECB is easy on monetary policy, but tough on banks. (8) Strongest economy in Eurozone is weakening. (9) China’s excess capacity is producing more. (10) Japan losing its growth and inflation mojo. (11) “Lucy” (+).
Mad Dash
(1) A liberal labor market economist. (2) A dashboard with 19 labor market indicators. (3) The result is one index, which is posted on Fed’s website. (4) Different strokes for different folks. (5) Giving more weight to the slackers. (6) Yellen overweights wages. (7) Demographic shifts may be keeping a lid on wage inflation. (8) Easy come the bubbles.
Over Here & Over There
(1) Complacency setting stage for correction or melt-up? (2) Stock prices meandering, avoiding both extremes, for now. (3) Bearish contrarians on alert as all the bulls continue to buy the dips. (4) We are all investment strategists now. (5) Are stock investors too upbeat on Eurozone? (6) BRIC MSCI outperforming. (7) Abe may be losing his mojo. (8) US inflation in comfort zone. Too close to absolute zero in Eurozone.
False Dawn?
(1) Q2 GDP release coincides with next FOMC meeting. (2) Curbing our enthusiasm. (3) Might it be half as much as expected? (4) Beware of “false dawns.” (5) Consumer spending still leading the way higher. (6) Residential construction has stalled, while spending on home improvements is down. (7) Capital spending on equipment looking good, but not so good on structures. (8) Inventories turn from big drag to small boost. (9) Exports are up, but imports are up more.
US Is Outstanding
(1) The next bear market. (2) End of NZIRP could be a shock, but might trigger a correction rather than a bear market. (3) Not much misery in Misery Index. (4) Resource Utilization Rate has room to move higher. (5) Leading indicators remain bullish. (6) Two regional business surveys are booming. (7) US oil production continues to soar. (8) Railcar loadings upbeat for autos and housing. (9) Production trending higher. (10) Semiconductors are hot, but not overheating in the US.
Bubbles In Fashion
(1) Yellen makes a statement. (2) A smart-looking outfit. (3) Sign of the times. (4) Fed is monitoring junk bonds and leveraged loans. (5) Equities are fairly valued with a few small exceptions, according to Fed. (6) Senator Coburn makes a good point. (7) Too many bubbles to catch? (8) Bubbles will become more obvious once Fed starts hiking interest rates. (9) The biggest bubble of them all. (10) Beware of “false dawns.” (11) More on China’s credit bubble. (12) Focus on overweight-rated S&P 500 IT.
Solid Sales
(1) US business sales at new high. (2) Lots of indicators pointing to 5% revenues growth for S&P 500. (3) Analysts forecasting 5% revenues growth for lots of sectors. (4) Upward revision for consumer spending during Q2. (5) Wages and salaries outpacing inflation by about 2 percentage points. (6) YRI Earned Income Proxy showing solid income growth driving retail sales. (7) Chinese government still flooding economy with credit. (8) Investment advice from the Fed. (9) Yellen is a liberal. (10) Focus on market-weight-rated Retailers.
Corrections & Complacency
(1) Panic attacks followed by relief rallies. (2) Shorter and shallower event-driven corrections. (3) From anxiety fatigue to complacency. (4) Ahead of schedule. (5) Another new high for S&P 500 forward revenues and earnings. (6) Analysts predicting solid Q2 earnings growth for most of the sectors. (7) US stands out, which is why US stocks aren’t cheap. (8) Sector valuations around the world. (9) Yellen has been worrying about income inequality since 2006. (10) Help wanted.
Eurosclerosis Déjà Vu?
(1) Another summertime panic attack in Europe. (2) Draghi wants more reforms. (3) Europe’s arteries hardening again. (4) Introduction of the euro set the stage for current crisis in the Eurozone. (5) Bond yields approaching zero in Germany and France. (6) Eurozone’s weak recovery stalling as region remains officially in recession. (7) EMU MSCI forward revenues and earnings remain depressed. (8) Will the P/E-led rally continue? (9) ECB’s stealth QE. (10) Eurozone banks: To lend or not to lend? (11) “Stay Home” still outperforming “Go Global” ytd. (12) Weak numbers out of China and Japan. (13) Yellen testifies. (14) “Dawn of the Planet of the Apes” (+ +).
The Liquidity Story
(1) Frustrated central bankers. (2) Not very stimulating. (3) Liquidity floating lots of boats other than economy. (4) Pumping it up. (5) US short-term business borrowing well exceeds inventory financing needs. (6) ECB to provide 4-year loans to banks to make more loans, or whatever. (7) Eurozone banks still shedding loans. (8) BOJ also lending to banks that are lending to the government. (9) Lots of monetary and fiscal stimulus in China creates excess capacity and PPI deflation.
Yearning for Earnings?
(1) Do earnings matter? (2) Some investors matter more than others. (3) A new story that’s an old story. (4) Buybacks matter. (5) Q2 earnings estimates set for upside surprises again. (6) Still optimistic on 2015. (7) Profit margins expected to rise across-the-board. (8) Job openings spike higher. (9) Quits at cyclical high. (10) Yellen’s spin on job turnover data. (11) Europe seems to be sputtering.
The Fourth Phase
(1) Vivaldi, Templeton, and Birinyi. (2) The four phases of a bull market. (3) Transitioning from the third to the fourth phase. (4) Exuberance fueled by buybacks, M&A, and Yellen. (5) Equity fund flows entering the fourth phase. (6) Industry analysts are exuberant about earnings. (7) Can the secular bull survive a meltup/meltdown scenario? (8) Bear market triggers. (9) Sectors leading the earnings parade. (10) Global growth remains slow according to German data. (11) Focus on overweight-rated S&P 500 Transportation.
Monetary Lovefest
(1) Should monetary policy aim for financial stability? (2) Yellen prefers “macroprudential policies” to address the issue. (3) Yellen sides with Lagarde. (4) Raising margin requirements is on the table. (5) Bull charged up again by more NZIRP talk. (6) The melt-up scenario is back in play. (7) Frothy P/Es. (8) Internal correction is over. (9) Yellen’s Dashboard: Putting more weight on wage inflation.