Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
The Contrarians
(1) Favoring the out-of-favor. (2) A review of the most recent hits. (3) Greek yield drops from 44% to 6%. (4) Betting that China will have to do something. (5) Could US bond yields go lower? (6) Will precious metals become more precious? (7) Global boom would be a contrary bet leading to higher commodity prices, rising EM stock prices, and a weaker dollar.
Above the Rest
(1) Earnings and revenues are looking up. (2) Q1 wasn’t so chilly for earnings and revenues. (3) Four big S&P 500 sectors with record forward earnings. (4) Fewer small business owners say that sales are poor. (5) More job openings. (6) Revenues stuck in the mud for the rest of the world. (7) US stands out. (8) EMU MSCI at six-year high despite drab earnings. (9) Bundesbank ready to support more of whatever it takes from ECB.
No Rest for the Bull
(1) From high-flyers to laggards and back? (2) SMidCap correction pushes LargeCap to record high. (3) Meltdown in melt-up stocks is healthy. (4) A broader melt-up wouldn’t be healthy, but it’s still a highprobability scenario. (5) Buybacks, M&A, and the Great Rotation could drive valuations back up. (6) Industry analysts more upbeat on earnings after better-than-expected Q1. (7) How do you say “New Normal” in Chinese? (8) Deflation and job losses at China’s factories. (9) Less bang per borrowed yuan. (10) No bull in China.
Tornado Watch
(1) Tornado warning. (2) U-Haul says Houston is tops. (3) False alarms reduce response times, and corrections. (4) Investors are serene. (5) Yellen says small stocks overvalued, rest are fine. (6) Financial Stability Oversight Council annual report is less reassuring. (7) Meltzer says inflation is coming. (8) Less slack, more inflation? (9) Phillips Curve showing falling unemployment rate may be starting to boost wage inflation a bit. (10) Slicing and dicing the wage inflation data. (11) Will price inflation follow wage inflation?
Vagabonds & Vigilantes
(1) QE tapering: Bonds were sold on the chatter, bought on the news. (2) A range-bound forecast. (3) Bond Vigilantes want to know: “Who are those masked vagabonds buying bonds?" (4) New pension fund rules in Budget Act of 2013. (5) Portfolio rebalancers. (6) Individuals are back. (7) Fed isn’t done buying just yet. (8) Yields plunging in Eurozone. (9) Inflation remains subdued, and global growth is slow. (10) NZIRP for the foreseeable future. (11) Yellen is watching “disappointing” housing activity. (12) Bonds displacing gold as the new safe haven.
Train Spotting
(1) Stocks, the economy, and the weather. (2) Exports rising very slowly. (3) Homegrown growth. (4) Are railroads too busy hauling oil to ship autos? (5) Gundlach shorts housing. (6) Fed stepping on brakes and accelerator. (7) Transportation stocks rising along with business inventories. (8) Focus on overweight-rated S&P 500 Transportation stocks.
Urge to Emerge
(1) Rotating in Chicago. (2) A year of living less dangerously. (3) Hunting for value among EMs. (4) Some EMs are cheaper than others. (5) Forward earnings rising to record highs in India, Indonesia, and South Africa. (6) China looking toppy. (7) Mexico isn’t cheap. (8) Brazil’s earnings in a coma. (9) Fragile Five leading the EM rally. (10) As expected, Q1 earnings season showing typical better-than-expected results. (11) No sign of profit margin reverting to the mean
Field of Dreams
(1) A nonpartisan question. (2) Conservatives and liberals split on extended unemployment benefits. (3) Termination of such benefits may be boosting employment and reducing unemployment. (4) Not much chill in winter employment. (5) Earned Income Proxy at yet another record high. (6) Incentives not to work. (7) Lots of dropouts. (8) Are baby boomers hogging jobs? (9) Yellen’s Dashboard still showing distress in labor market. (10) Wage inflation subdued despite low short-term jobless rate. (11) Focus on market-weight-rated S&P 500 auto-related industries.
Around the World
(1) On balance, global growth is slow. (2) Industrial commodity index is surprisingly strong. (3) What’s weighing on global growth? (4) US auto and housing recoveries stalling. (5) Euro is too strong. (6) Japanese consumers are depressed by tax hike. (7) China is polluted.
On Drugs
(1) Overweighting Health Care. Market-weighting Consumer Discretionary. (2) Some consumer stocks are too expensive now. (3) Auto- and housing-related stocks reflect weakening recoveries. (4) Health Care stocks aren’t cheap either, but sector's M&A is bullish, and so are earnings. (5) The rush to invert. (6) Global tour of Pharma industry. (7) Best to invest in industries with barriers to entry. (8) Why is Draghi dragging his feet? (9) ECB isn’t rushing to drug up Eurozone with QE.
Tired Bull?
(1) Fully Invested Bears. (2) Barron’s has a tired bull on the cover. (3) Big Money poll finds more bulls than bears, but less bullishness. (4) Everyone hates bonds. We don’t, but we don’t love them either. (5) Contrarian indicators. (6) Is the market’s leadership change a sign of a top? (7) A brief review of the internal correction. (8) A brief review of forward earnings around the world shows USA is fairest of them all, but not cheapest.
M&A Mania?
(1) Here we go again. (2) Fed Model not a good market timing tool, but it does explain corporate buybacks. (3) Forward earnings yield vs. corporate bond yield. (4) Companies using inflated stock prices as M&A currency. (5) Software and R&D accounting for more of capital spending. (6) Macroeconomic vs. microeconomic models of inflation. (7) Competitive model explains a lot. (8) Yellen’s tools aren’t working. (9) Stocks should grind higher this year. (10) So far, 2014 is reminiscent of 2013, when defensive stocks outperformed until the end of April.
Mixed Global Signals
(1) Top down and bottom up lead to same conclusion. (2) Industrial commodity prices firming. (3) Growth in global crude oil demand slowing, especially among EMs. (4) Europe’s soft data stronger than hard data. (5) Auto recovery just starting in Europe. (6) China paying the price for too much capacity. (7) Another setback for Abenomics in exports. (8) Housing and auto recoveries stalling, according to railcar loadings. (9) Focus on underweight-rated S&P 500 Energy.
Moving Forward, Slowly
(1) Q1 earnings growth turns slightly negative. (2) The upbeat Tale of Three Cities. (3) Forward earnings still moving forward. (4) Might slow growth be bullish for valuations? (5) No boom, no bust. (6) Dating Committee data show expansion set to exceed average length. (7) No recession in leading indicators, including ECRI weekly. (8) Our Fundamental Stock Market Indicator is bullish.
Bubbles & Clouds
(1) Bubbles now and then. (2) Small stocks are more inflated than large ones. (3) Russell 2000 forward P/E at 24 thanks to lots of small companies with no earnings. (4) S&P 500 also has some high-priced industries. (5) Is the Cloud a bubble? (6) Defensive sectors are no bargains. (7) No national real estate bubble yet, but competition to make risky home loans is heating up. (8) European peripheral bonds rally like the worst is over. (9) Are ETFs the next weapon of mass financial destruction? (10) “Captain America” (-).
The Big Thaw
(1) From the Big Chill to the Big Thaw. (2) Spring forward. (3) February's batch of upward revisions is a big surprise. (4) Retail sales and production at record highs. (5) Housing has some headwinds. (6) Magnifying glass needed to see Eurozone recovery. (7) No recovery in forward revenues and earnings of EMU MSCI. (8) Will Draghi continue to levitate valuations? (9) Production growth slowing in emerging economies. (10) Focus on overweight-rated S&P 500 IT.
The Inflation Mandate
(1) Choppy market. (2) Yellen is remarkable. (3) Beware of what you wish for. (4) Food and rent lead inflation higher. (5) The oddity of paying rent on your owned home. (6) Fed’s inflation mandate is questionable. (7) Microeconomic models explain low inflation better than macro ones. (8) Easy money can be deflationary. (9) Mario Draghi is still talking about doing whatever it takes. (10) Focus on market-weight-rated S&P 500 Consumer Staples.
Curbing Enthusiasm
(1) Sentiment turns slightly less bullish. (2) Everyone is a value buyer for now. (3) A choppy year so far. (4) Are low bond yields bullish or bearish? (5) Long-term expected earnings growth is high. (6) So is PEG. (7) The bond market has a more subdued outlook for growth. (8) SMidCaps rerating? (9) Revenues and earnings growth rates likely to rebound from winter chill. (10) Focus on market-weight-rated S&P 500 Consumer Discretionary Retailers.
Valuation Correction
(1) Good news isn’t helping stocks. (2) Bullish FOMC minutes didn’t work last week. (3) Momentum meltdown reduces risk of broader melt-up/meltdown. (4) Reiterating 2014 by the end of 2014. (5) FSMI at cyclical high. (6) Latest Chinese data show slower growth with industrial deflation. (7) Ukraine turning deadly. (8) Earthquake for fracking? (9) What’s behind the valuation correction? (10) High P/Es not just in Biotech and Internet stocks. (11) Global MSCI volatility. (12) “The Lunchbox” (+ +).
Lowflation
(1) IMF chief warns about “lowflation.” (2) P/E inversely correlated with inflation and Misery Index. (3) Central bankers are macroeconomists blindly following the “slack” model. (4) What if globalization, technology, cheap money, and competition are driving lowflation towards deflation? (5) Any signs of deflation in revenues, margins, and earnings? (6) A whole bunch of global forward earnings comparisons. (7) Focus on underweight-rated S&P 500 Materials.
IMF’s Bullish Outlook
(1) A happier outlook for all but Japan. (2) Eurozone’s recovery remains lackluster. (3) US growth set to increase. (4) Upbeat on India. Not so much on Brazil. (5) An economic scenario that will keep secular bull charging. (6) Three risks to worry about: Deflation, EM crisis, and Geopolitics. (7) CRB commodity index and world forward revenues are looking up. (8) Examining the internal corrections in S&P 500 IT and Healthcare sectors.
Momentum Meltdown
(1) Too close to the sun. (2) The macro picture still looks bright. (3) Blame it on Waxman, Hough, and Lewis. (4) Lots of candy getting crushed. (5) A happy spin: Internal correction should increase longevity of bull. (6) BOJ’s QQE losing its bullish touch. (7) Abe isn’t Reagan. (8) Draghi getting set to walk the talk, and actually do something. (9) Stay Home, but Go Europe for a while longer. (10) Focus on overweight-rated S&P 500 Transportation.
Yellen’s Dashboard
(1) Yellen’s expanded dashboard includes wages. (2) Fed remains on course following jobs report. (3) YRI Earned Income Proxy at new record high. (4) Solid employment gains. (5) Still plenty of underemployment. (6) “Marginally attached” workers aren’t as distressed as Yellen believes. (7) Yellen’s misfits. (8) Participation rate of baby boom seniors is rising, not falling. (9) Uber-dove. (10) Wages and the cost-push inflation fear. (11) Momentum stocks now being driven by gravity. (12) “Noah” (- - -).
Around the World
(1) Lagarde’s guarded advice to the Fed, ECB, and BOJ. (2) Ultra-easy monetary policy less effective in highly regulated economies. (3) Choose one: Structural reforms or structural stagnation? (4) A quick world tour shows slow growth. (5) Yellen humanizes unemployment with a couple of misfits. (6) Welcome to the HFT debate.
Do Earnings Matter?
(1) Q1 earnings expectations slashed. (2) Expected growth for S&P 500 earnings just 0.9% y/y. (3) So why are stocks back at record highs? (4) The end of the never-ending winter. (5) Double-digit earnings growth expected to make a comeback soon. (6) Forward earnings matter, and they are at record highs. (7) A relief rally celebrating better weather. (8) Regional and national M-PMIs rebounded in March. (9) So did car sales, but Q1 average was no higher than H2-2013 average. (10) Q1 Performance Derby. (11) Health Care P/E rebounded after HillaryCare, and doing so again despite ObamaCare. (12) Focus on market-weight-rated S&P 500 Health Care.