Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Genies vs. Ogres
(1) Lagarde sees inflation genies and deflation ogres. (2) IMF prefers the monetary accelerator. (3) BIS says tap the brakes. (4) Chapter IV. (5) More “noisy” inflation data for Yellen. (6) Bullard sees rate hikes early next year. (7) Yellen more likely to follow Lagarde’s advice. (8) BOE implements “macroprudential policies” for housing. (9) Carney’s misguided guidance. (10) ECB's latest easing probably won’t do much for Eurozone. (11) German indicators weakening. (12) Abe’s third arrow is up in the air.
Deleveraging Reality & Myth
(1) The long goodbye. (2) A 50% expansion. (3) The balance-sheet-recession theory. (4) Warsh and Druckenmiller weigh in. (5) Sympathy for the ideology, not its logic. (6) The deleveraging hypothesis also has some holes. (7) Financial sector has deleveraged and de-securitized. (8) Have households really deleveraged? It’s a complicated story. (9) Student debt depressing students and housing. (10) No shortage of nonfinancial business debt. (11) Leviathan lives on debt.
Early Warning Indicators
(1) There’s always something to worry about. (2) Clear and present danger is currently in Iraq. (3) Watching oil prices and commodity prices for hints of more trouble. (4) No distress signal yet. (5) A good sign: S&P 500 Energy stocks outperforming. (6) S&P 500 remains resilient, along with Transportation stocks. (7) Global oil demand at another record high, but growth is slow. (8) Crude oil demand falling in Europe and Japan, flattening in China, rising in India and Latin America. (9) Non-OPEC output at record high led by North American producers. (10) Can we manage without Iraq?
Global Earnings Derby
(1) US MSCI continues to outperform. (2) Forward earnings still rising to record highs in US. (3) Emerging markets have the best revenues profile. (4) Eurozone earnings expectations freefalling for 2014 and 2015. (5) Same goes for UK. (6) Europe isn’t cheap anymore. (7) Japan’s “third arrow” sparks P/E-led rally. (8) EM forward earnings still flat-lining. (9) Industrial commodity prices diverging from oil price. (10) Flash PMIs are mixed. (11) US economy is upbeat. (12) Abe shows his third arrow.
Zaitech
(1) A brief history of Zaitech. (2) Japan as a role model. (3) Bigger than ever. (4) History tends to repeat itself. (5) Buybacks are a form of financial engineering. (6) Bond funds are “shadow banks.” (7) Laing warns that ETFs are weapons of mass financial destruction. (8) Eurozone’s bond bubble. (9) JGBs at 0.6%. (10) China has excesses galore. (11) Reaching for yield in emerging markets. (12) No exit from NZIRP? (13) Janet Yellen and Bette Davis.
Inflation Is Just “Noise”
(1) Bull is high on Yellen’s fairy dust. (2) When Yellen talks, investors listen and buy stocks. (3) FOMC statement reaffirms NZIRP. (4) In Yellen’s world, inflation isn’t heating up. (5) Liesman asks a good question. (6) Fed’s doves still see too much slack in labor market. (7) From thresholds to noisy data. (8) Fed has no target for volatility, while risk-taking remains “moderate.” (9) Fed is the source of markets’ complacency. (10) Uber dove wants more jobs for ex-cons. (11) Upbeat US economic indicators. (12) US MSCI still a global outperformer. (13) Fragile-5 morph into Fab-5.
The Plots Thicken
(1) Investors love Obama. (2) President’s critics say he is MIA. (3) Crises bring out the golfer in our President. (4) Disastrous consequences? (5) So why are stock prices up so much? (6) Are investors isolationists? (7) Why get in the middle of the Middle East’s Hatfields and McCoys? (8) So far, markets aren’t indicating that Iraqi turmoil will cause a recession. (9) Is the dot plot more information than we need from the Fed? (10) Focus on S&P 500 Energy sector, recently upgraded to market weight.
The Beat Goes On
(1) Forward earnings flying into the wild blue yonder. (2) Forward earnings is a great leading indicator except when it isn’t. (3) How mature is this expansion? (4) A striking difference. (5) Bears are going crazy over record-high profit margin. (6) Industry analysts doing it again. (7) Is inflation heating up in US? (8) Inflation is chilling in Eurozone.
Talking About Hiking Rates
(1) Talking the talk. (2) Less slack in UK and US? (3) BOE’s Carney changes forward guidance. (4) Macroprudential policies coming to UK housing market. (5) IMF says housing overheating in UK, Australia, Canada, and France. (6) Wage inflation remains low in UK. (7) Two camps on first rate hike at Fed. (8) Kuroda says BOJ doing enough, and Abe needs to do more. (9) Bank of Canada not doing much about housing bubble. (10) Stocks up, forward earnings down in UK. (11) Forward earnings looking toppy in Japan. (12) Weak loonie boosting forward earnings in Canada.
Something to Worry About?
(1) Geopolitical crises that spike oil prices tend to lead recessions. (2) A serious threat to the bull or yet another relief rally? (3) Caliph al-Baghdadi is bad and meaner than a junk yard dog. (4) The end of complacency? (5) A dangerous situation in Iraq. (6) Oil prices didn’t spike on Libyan and Iranian output cuts. (7) Feuding Caliphates: ISIS vs. Iran. (8) Will Fed taper tapering if oil prices spike? (9) Upgrading S&P 500 Energy to market weight. (10) Happy indicators for S&P 500 revenues. (11) Q2 real GDP is looking up according to latest retail sales and inventories data. (12) Eurozone’s recovery remains lackluster.
Credibility Issue
(1) The first lesson in investment school. (2) Another record for stocks. (3) Bazookas turning into Pea Shooters? (4) ECB’s latest package isn’t “whatever-it-takes.” (5) Euro remains strong. (6) PBOC using rifle rather than shotgun. (7) Is deflation moderating in China? (8) BOJ’s QQE may be losing its effectiveness. So pensions will buy shares. (9) Is the Fed on the right or wrong side of inflation? (10) Feldstein’s warning. (11) Four reasons why stocks fell yesterday, and why they matter.
Fundamentally Sound
(1) The bears’ favorite chart. (2) Investment strategists shouldn’t be preachers. (3) Lesson #1: Don’t fight the Fed. (4) Will the day of reckoning be when QE is terminated? (5) Is terminating the same as tightening? (6) S&P 500 is one of 10 leading indicators. (7) Our FSMI rises to record high. (8) S&P 500 rebound since Feb. 3 led by cyclicals. (9) Small business owners more optimistic and aiming to hire additional workers.
Too Much Love?
(1) Bullishness too high and volatility too low. (2) Same old reasons for staying bullish. (3) Earnings are earning their keep. (4) King Kong vs. the Bull. (5) Bulls don’t die of broken hearts. Recessions kill them. (6) Three risks to the bull market: reflation, melt-up, and oil spike. (7) Commodity price index confirming slow global growth. (8) PBOC gives some relief to selected banks. (9) Chinese imports are weak. (10) Will Japan’s Q1 lift be temporary? (11) Eurozone recovery muddles along.
Lake Winnipesaukee
(1) Fewer bears at Bahre’s annual retreat. (2) When will the Fed start hiking rates? (3) Will termination of QE trigger a stock selloff? (4) Bubbles everywhere? (5) 2015 by 2015? (6) What’s next: a melt-up? (7) Various valuation ratios all show stocks aren’t cheap. (8) Unemployment rate at 5.5% by January. (9) Low wage inflation should moderate Fed’s rate hikes once they start. (10) YRI Earned Income Proxy at record high again. (11) Fewer amber lights on Yellen’s dashboard.
Sentimental Journey
(1) Lots of bulls. (2) Okun’s Misery Index. (3) P/E inversely correlated with misery. (4) Party on? (5) Neither boom nor bust. (6) Industrial commodity prices rising, while global export volumes falling. (7) China’s government still boosting growth, but jobs indicator remains weak. (8) Eurozone’s GDP recovery remains weak despite solid PMI readings. (9) UK benefitting from Eurozone’s woes. (10) US exports confirm global slowdown. (11) Focus on overweight-rated S&P 500 Transportation sector.
Grinding Higher
(1) Complacency is worrying the Fed according to Hilsenrath. (2) Anatomy of corrections and bear markets. (3) Is the internal correction over already? (4) Forward earnings continue to grind higher. (5) Analysts’ upbeat earnings feeding investors’ complacency. (6) NIPA profits dropped during Q1, but should grind higher too. (7) Cash flow moving sideways in record territory. (8) Focus on market-weight-rated S&P 500 Auto industry.
Fretting About Complacency
(1) Nothing to fear, but nothing to fear, again. (2) Corrections are MIA. (3) Complacent indicators. (4) Dudley is nervous. (5) Minsky’s moments are mostly geopolitical for the moment. (6) Stocks love Obama’s foreign policy. (7) Bond Vigilantes, Zombies, and Vivants. (8) George, Lacker, & Plosser are trigger-happy. (9) The ECB will lead the way until Thursday. (10) Urge to emerge. (11) Stay Home outperforming Go Global again.
Chugging Along
(1) Transportation stocks on steroids. (2) Confirming secular bull thesis. (3) High correlation between business inventories and transportation indicators. (4) Shipping oil by rail is a big business. (5) Another record high for the S&P 500 profit margin. (6) It has been different this time for margins, so far. (7) Industry analysts remain upbeat on margins. (8) Core inflation rebounding in US. (9) Abenomics delivers higher inflation and unintended consequences. (10) ECB struggling to do whatever it takes. (11) “Ida” (+ + +).
Dancing With the Bull
(1) Morphing from cyclical to secular. (2) Bull market in earnings. (3) 50% jump in P/E since 2011. (4) Secular bull’s favorite sectors mostly the same as the ones during cyclical bull. (5) Eurozone yields driving US yields lower. (6) Will weaker euro boost Eurozone CPI inflation? (7) Draghi blows off Krugman. (8) Eurozone’s problem is lack of bank lending and weak monetary growth. (9) Stepping on the monetary accelerator and the regulatory brakes.
Durable Economy
(1) Slow, but steady. (2) Below-average expansion could last longer than average. (3) Forward earnings is a very upbeat leading indicator. (4) Other good omens. (5) Regional business surveys and flash PMIs are strong. (6) Young adults are more optimistic. (7) Profits driving capital spending higher. (8) IT revolution increases bang per capital-spending buck. (9) Transportation stocks outperforming ytd. (10) Focus on overweight-rated S&P 500 Industrials.
Trekky Bull
(1) Star trekky bull tramples “Clingons.” (2) Will Godot arrive before next great crash? (3) Maven says Fed will have to taper the taper. (4) The problem with going away in May. (5) Great Moderation 2.0 could be bullish or bearish. (6) Will risky assets get riskier? (7) CLO 2.0, and CMBS 2.0 too. (8) Analysts turning more upbeat on earnings. (9) Nitpicking Picketty’s data. (10) The flaw in the neo-Marxist formula. (11) Italy adds vice to GDP. (13) “Godzilla” (- - -).
Exit & Entry Strategies
(1) Hair-raising corrections. (2) Internal vs. external corrections. (3) Innocent bystanders. (4) Will Congress invert corporate inversions? (5) Too many bulls again. (6) Central banks: coming or going? (7) ECB set to do more of whatever it takes next month. (8) Janet Yellen and John Wayne. (9) New Fedspeak word: "Normalization." (10) Dudley is ready to raise rates eventually, but not by much. (11) Surprisingly weak earnings in UK and Eurozone. (12) Not all sectors in Japan getting a lift from Abenomics.
The Oil Story
(1) Regina and Saskatoon. (2) Bigger than Saudi Arabia. (3) Counting rigs. (4) National oil companies seeking experienced Western partners. (5) $110 a barrel remains the right price for now. (6) Global oil demand at record high, but growing slowly. (7) Emerging economies are slowing. (8) China’s oil demand has been flat for a year at record high. (9) Eurozone oil demand confirms weak economic recovery. (10) Focus on underweight-rated S&P 500 Energy sector.
Tracking Global Inflation
(1) The Comeback Kid? (2) World inflation remains subdued according to IMF. (3) Theory vs. practice. (4) Easy money can boost capacity too. (5) The not-so-super cycle in commodities. (6) Easy money can also boost asset prices rather than CPIs. (7) Is Eurozone’s lowflation due to strong euro or structural reforms? (8) Does the world really need more capacity in Japan? (9) New and old PPI in the US telling same story. (10) Rent inflation inflating US CPI.
Man on the Train
(1) Hazardous work. (2) Google it. (3) Don’t be evil. (4) Momentum stocks testing their 200-dmas. (5) Not ruling out a broad melt-up. (6) No “Great Rotation” out of bonds. (7) Dividend-yielding stocks are high priced. (8) Internal valuation correction goes global. (9) Last week’s landslide in India and EM stocks. (10) Emerging economies' growth is slow. (11) China’s real GDP growth already under 6%! (12) Eurozone’s recovery harder to see. (13) Confidence down again in Japan.