Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Global Revenues & Earnings
(1) Not much evidence of EM crisis in weekly analysts' consensus estimates. (2) Are EM stocks oversold and cheap? (3) Some Eurozone stocks may be overbought and expensive. (4) Forward revenues rising to record highs in US, meandering elsewhere. (5) Margin squeeze in EMs. (6) China MSCI is cheapest since 2001. (7) Brazil’s revenues up, but margins down with P/E at 33% discount. (8) Eurozone’s weak economic and MSCI f d t l P/E (9) J i till l ti l h
Another Relief Rally
(1) What a relief! (2) Breaking 50-dma isn’t so bad. (3) Big correction in BBR sentiment indicator. (4) Keeping calm and carrying on despite half-a-dozen anxiety-provoking uncertainties. (5) Even Roubini isn’t that bearish on EM crisis. (6) EMs: Too important to implode? (7) US consumer income measures at record highs. (8) The Fairy Godmother of the bull market speaks. (9) Raising the debt ceiling without drama. (10) German court passes the case. (11) Europe still muddling.
Uptrends
(1) Barring recession, earnings heading to new record highs. (2) Earnings have a history of 7% growth. (3) Spread between earnings yield and bond yield drives buybacks. (4) Earnings growth solid in Q4, but looking weak for Q1. (5) Revenues growth was weak during Q4. (6) Is there enough forward momentum in OECD leading indicators to overcome EM crisis? (7) Focus on overweight-rated S&P 500 Transportation.
Man vs. Machine
(1) Virtuous cycles now and then. (2) Golden Ages. (3) Professor Gordon is pessimistic. (4) “The Second Machine Age” is here. (5) Bounty vs. spread. (6) Machines replacing routine workers. (7) The job of knowledge workers is to eliminate jobs. (8) Productivity outpacing real wages and employment. (9) Do it yourself. (10) YRI Earned Income Proxy at record high. (11) Yellen’s testimony. (12) Stock picking is making a comeback. (13) “Alone at Sea” (+).
Something Wicked This Way Comes?
(1) Another anxiety attack. (2) Will tapering trigger an EM-led contagion? (3) From East Asian EMs to US subprime mortgages to EZ-PIIGS. (4) Message from a friend in UK. (5) Less irrational exuberance in P/Es. (6) Are investors turning too pessimistic on revenues growth? (7) Is it different this time for profit margins? (8) Risk to margins may be weak pricing rather than rising costs. (9) Focus on overweight-rated S&P 500 Financials.
Fragile Fear
(1) The Fragile Five are submerging. (2) Fickle short-term capital flows. (3) Are F-5 scarier than five PIIGS? (4) Greece again, but no Grexit. (5) EMs do matter to both US and the world. (6) The F-5 may not matter all that much. (7) Severe devaluations stress F-5 with higher import prices, and wider trade and budget deficits. (8) Not much stress in commodity prices so far.
Soft Patch or Ice Patch?
(1) New month, old worries. (2) Chill now, thaw later. (3) Plunge in national M-PMI doesn’t jibe with regional surveys. (4) Markit’s M-PMI showing life. (5) Lots of upbeat M-PMIs around the world. (6) Eurozone factory index at 32-month high. (7) Our FSMI is at 1700, around key support for S&P 500. (8) P/E correction. (9) Guidance and headlines depressing Q1 earnings estimates. (10) Focus on market-weight-rated S&P 500 auto-related industries.
Take the Money & Run?
(1) January Barometer hits and misses. (2) Positive annual exceptions to negative Januarys. (3) Meltup/meltdown less likely? (4) An inauspicious beginning. (5) Assessing the bear case. (6) Are the bears teeing us up for yet another relief rally? (7) The moon can influence China’s M-PMI. (8) Power to the Chinese people. (9) Oil exports pumping up US GDP. (10) Fed giving more weight to inflation data, and so are we. (11) “Jack Ryan: Shadow Recruit” (- - -).
The Fed & Emerging Economies
(1) Fed to EMs: “We wish you well.” (2) “Your problems are not our problem.” (3) A sanguine assessment. (4) Turkey and India act. (5) A scenario for tempering tapering. (6) EM crisis could boost dollar and depress US inflation. (7) US import prices deflating. (8) Weak stocks: Just a correction, or something worse? (9) From P/E-led to E-led bull market. (10) Both Cyclical and Defensive sectors hard hit ytd.
State of the Union
(1) The state of emerging economies is not so good, but the crisis may be abating. (2) The state of the US economy is quite good. (3) The US carries a lot of weight. (4) Employment indicators are upbeat. (5) Jobs more plentiful. (6) Regional and small business surveys show hiring and job openings. (7) Factset survey shows no increase in capital spending. (8) R&D and software may be reducing need to expand physical capacity. (9) Orders for both industrial and metalworking machinery at record highs. (10) Focus on overweight-rated S&P 500 IT sector.
Crises Now & Then
(1) 1929 and now. (2) So far, so good. (3) The previous emerging markets crisis wasn’t bearish for S&P 500. (4) Thailand in 1997 and Argentina now. (5) Emerging market crisis didn’t start last week. (6) No default allowed in China. (7) Disappointing earnings season. (8) Real GDP vs. GDP deflator. (9) Focus on marketweight-rated S&P 500 housing-related stocks.
Something To Fear?
(1) Nothing to fear but emerging economies and deflation. (2) Brewing since last spring. (3) More downside risk to the upside scenario. (4) Some EMs were up last week. (5) From most to least overbought sectors. (6) Finding support. (7) A cap on valuations. (8) Four challenges for EMs. (9) China’s Charley Horse. (10) China’s WMPs set to implode? (11) What will the Fed do? (12) “The Invisible Woman” (+).
World Tour
(1) The consensus forecast. (2) No serious objections. (3) The IMF worries about deflation but doesn’t predict it. (4) Advice to Fed: Temper taper. (5) Advice to ECB: More liquidity. (6) Improving outlook. (7) Global production rising faster, led by advanced economies. (8) World MSCI revenues expected to grow 4%5%. (9) US economy strong enough for more tapering. (10) UK is best in class. (11) Japan might grow faster than IMF expects. (12) Subpar recovery for Eurozone. (13) Severe profit margin compression in emerging economies.
Valuation, Earnings, & Deflation
(1) A dull start to a dull year? (2) Good, not great expectations. (3) Stocks were a great buy during August 2011. Not so much now. (4) Slightly overvalued using forward P/E. (5) Some very pricey industries. (6) Earnings-driven stock market this year. (7) Earnings should be up 10% in 2014. (8) So why is Q4-2013 disappointing so far? (9) Deflation may be a problem for margins. (10) The commoditization challenge.
Deflation Scare
(1) The deflation mandate. (2) Long waves of inflation and deflation. (3) Why do central banks dread price deflation? (4) Can price deflation cause asset inflation? (5) The Rhythm of History. (6) Good vs bad deflation. (7) Bullish for bonds. (8) Asset classes and deflation. (9) Deflation hits retailers. (10) Disinflation bordering on deflation in Eurozone and US. (11) “Nebraska” (+ +) and “August: Osage County” (+ +).
R&D Rocks
(1) Keeping a lid on costs and boosting margins. (2) Are record profit margins bad news for the bulls? (3) Profits not as wonderful on aggregate basis. (4) An upbeat assessment of capital spending. (5) R&D and software account for a third of capital spending. (6) Smart equipment. (7) More bang per R&D buck thanks to IT. (8) The Internet of Things. (9) Rockwell’s super-smart factories. (10) Obamacare creates more problems that private sector will solve. (11) Focus on overweight-rated S&P 500 Industrials.
Picking Up Steam
(1) Business sales growing at slow pace in current dollars, at faster pace adjusted for inflation. (2) Retail sales surprisingly strong during Q4. (3) Q4 GDP now looking to be up 3%-4%. (4) Fed should give less weight to December’s weak jobs report, but hold off next tapering step ‘til March. (5) Small business survey confirms improving labor market. (6) Small business owners have more capital-spending plans. (7) NFIB survey shows that Big Government is the #1 problem. (8) Focus on market-weight-rated S&P 500 Retailers.
Advancing & Submerging Markets
(1) OECD leading indicators predicting better global growth ahead. (2) Better for advanced than emerging economies. (3) Good news for revenues. (4) Japan’s leading indicator gives thumbs up to Abenomics. (5) Eurozone’s peripheral countries leading upturn in region’s leading index. (6) BRICs remain below par. (7) Will EMs underperform again this year? (8) Margin squeeze as commodity super-cycle ends and labor costs rise. (9) EMs need a weak dollar to outperform, but may not get it.
The Paradox of Progressivism
(1) Will consumers continue to lead the bull market? (2) Fluky employment report. (3) Earned Income Proxy remains on solid uptrend. (4) Progressives want more income redistribution. (5) Measuring incomes before and after entitlements. (6) Consumer Discretionary stocks aren’t cheap, but should benefit from more discretionary spending. (7) Tempering tapering after December jobs report. (8) Will Europe continue to outperform? (9) “The Wolf of Wall Street” (+ +).
Tolerating Tapering
(1) Stock prices: 10% per year for another four years? (2) Looking down on tapering. (3) Terminating QE1 and QE2 led to big corrections. (4) From QE1 to QE5 and beyond. (5) FOMC sees more of QE’s downside for financial stability. (6) Diminishing returns. (7) Not sure if and how it works. (8) A good trade: More growth less QE. (9) Ideal for Rational Exuberance scenario, with earnings rather than P/Es driving stock prices higher. (10) They’ve had enough of QE.
Looking Up
(1) No end to the endgame. (2) Awesome 2013. (3) Still keen on Consumer Discretionary, Financials, and Industrials. (4) Year # 6 for charged-up bull. (5) Investors more upbeat, less anxious than a year ago. (6) Back to “Old Normal” growth? (7) Less fiscal drag. (8) More US oil. (9) The Fracking Dividend. (10) Learning to tolerate tapering. (11) Europe’s tepid recovery. (12) China issuing bonds. (13) Focus on overweight-rated S&P 500 Transportation.
Earnings, Revenues, & Margins
(1) The “January Effect” is coming. (2) A scatterplot. (3) Another earnings season is starting. (4) Why it may not matter. (5) Analysts forecasting double-digit earnings growth. (6) Can 5% revenues growth produce 10% earnings growth? (7) Global PMIs confirming moderately upbeat outlook for revenues. (8) Emerging Markets PMI is rebounding. (9) However, NERIs are still negative. (10) Analysts predicting rising margins. (11) Margins could suffer if companies expand payrolls and capacity more rapidly. (12) For now, business spending on labor and capital lowest relative to GDP since early 1950s.
Anatomy of a Melt-Up
(1) Updating three scenarios. (2) And the 2013 winner is: Rational Exuberance. (3) Will Irrational Exuberance get the 2014 award? (4) A year to pack our bags in May? (5) Stampeding bulls. (6) The Great Rotation is picking up steam. (7) Buybacks approaching record highs. (8) Forward P/Es could head into the high teens. (9) Fed may have to speed up tapering. (10) No soft patch in latest US economic data. (11) “American Hustle” (+ +).
Build and They Will Come?
(1) Restocking for the holidays. (2) Voluntary or involuntary? (3) Another soft patch ahead early next year? (4) Watching consumer confidence. (5) Auto dealers using incentives to reduce inventories. (6) Housing starts strong, but lack confirmation in permits and mortgage applications. (7) Pricing is weak, reflecting discounts and cheap imports. (8) Can the Fed boost inflation?
Singles & Income Inequality
(1) Obama set to fight inequality. (2) It’s here to stay. (3) Governments can impose equality by spreading poverty. (4) Populist ruling classes and their capitalist cronies. (5) Demography is driving income distribution in US. (6) Single persons could soon outnumber married ones. (7) Two earners make more than one. (8) The Fed is struggling to communicate. (9) Low inflation provides great opportunity to taper. (10) Technology finds more commodities. (11) Mexico deregulates crude and should produce more of it. (12) Focus on underweight-rated S&P 500 Materials.