Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Superbubble Bursting or Just Another Panic Attack?
Check out the accompanying pdf and chart collection. (1) Grantham’s superbubble. (2) Is the fourth superbubble bursting? (3) Back to 2500 on S&P 500? (4) Eight counterpoints. (5) The causes of bear markets. (6) The case against a recession. (7) Air is coming out of speculative bubbles without adverse economic consequences. (8) A correction in MegaCap-8 valuations. (9) Sentiment getting very bearish. (10) Geopolitical risks. (11) Panic Attack #73 is all about the Fed, and it might linger. (12) What does the Fed’s balance-sheet runoff mean for the Treasury and for liquidity? (13) Movie review: “Munich: The Edge of War” (+ +).
Morning Briefing 2022-01-20
Check out the accompanying pdf. (1) Throwing the book at Meta. (2) Meta keeps regulators around the world busy. (3) FTC antitrust case allowed to proceed. (4) Congress wants Meta and Big Tech to end anticompetitive practices and protect children. (5) State attorneys general target Meta too. (6) UK regulator requires Meta to sell Giphy. (7) EU considers the Digital Markets Act. (8) Lawsuit aims to sidestep Section 230. (9) Microsoft’s Activision deal should boost revenue and increase its gaming content. (10) Race to fill the metaverse with content. (11) Metaverse “land” prices skyrocket. (12) Walmart appears ready to jump into the metaverse, too.
A Very Brief US History Of the Postwar 1940s
Check out the accompanying pdf and chart collection. (1) Winston Churchill and Mark Twain on history. (2) The best of times or the worst of times? (3) Factions, partisanship, and the Constitution. (4) The system works best when it doesn’t work for any one faction. (5) WWII was followed by labor strife, racial strife, and a red scare. (6) Inflation soared during the second half of 1940s. (7) Comparative inflations. (8) Meet Joe Manchin, again. (9) Sinema is in the same opposition party as Manchin. (10) Alternative outcomes for BBB.
Mega Valuation
Check out the accompanying pdf and chart collection. (1) The valuation question, especially about the MegaCap-8. (2) Buffett Ratio off the charts. (3) Forward P/S well exceeds forward P/E because forward profit margin has been rising to new record highs. (4) MegaCap-8 forward P/S and forward P/E are elevated, but so are their margins relative to the rest of S&P 500. (5) Only three MegaCap-8 stocks are in tech sector of S&P 500. (6) Record worldwide demand for semiconductors. (7) US computer output at record high. (8) A whiff of stagflation last week. (9) Omicron less lethal, but spreads faster and disrupts business. (10) Retail sales weakness should be offset by inventory restocking. (11) Durable goods inflation not likely to persist, while rent inflation could do so. (12) Movie review: “Ray Donovan: The Movie” (+ + +).
Financials, China, and Wireless Charging
Check out the accompanying pdf and chart collection. (1) Higher interest rates boosting Financials. (2) Commercial and investment bank stocks at or near highs. (3) Jefferies’ earnings disappointment spooks market. (4) Could SPACs be to blame? (5) China roiled by Covid shutdowns. (6) The push for Olympic blue skies disrupts plants in northern China. (7) China’s property developers still digging out from debt. (8) Keeping an eye on hypersonic missile developments in China and North Korea. (9) Pulling the plug on electricity outlets. (10) Wireless electricity transmission at home, in space, at the office, and on the road.
Earnings Season Starting
Check out the accompanying pdf and chart collection. (1) Latest earnings reports should beat expectations again. (2) Real Q4 GDP tracking at 6.8%. (3) S&P 500 forward earnings at another record high. (4) Our latest forecasts for S&P 500 earnings and the stock price index. (5) Profit margins likely to stall at record high. (6) Consumers shopped and borrowed at solid paces during Q4. (7) Homebuilders seeing demand and raising prices. (8) US petroleum usage at record high. (9) Financials boosting profits by reducing loan-loss reserves. (10) Industrials experiencing record new orders, especially for capital goods. (11) Global M&A likely to continue to boom in 2022.
Is the Party Ending Or Just Moving?
Check out the accompanying pdf and chart collection. (1) Drinking the Fed’s punch. (2) Party getting out of hand. (3) Fed will soon stop filling up the punch bowl, but there will be lots of liquidity left in there. (4) Inflation spiked by spiked punch. (5) FOMC minutes’ talk about paring Fed’s balance sheet shocks investors. (6) Bond Vigilantes no longer punch drunk? (7) Expected inflation is up, but prices-paid index is down. (8) Are rising bond yields so bearish for Growth? (9) No, but they are bullish for Financials. (10) Mag-8 accounts for almost 50% of Growth’s market cap. (11) When in doubt, diversify with Energy, Financials, and the Mag-8.
The Markets, the Fed, and Jobs
Check out the accompanying pdf and chart collection. (1) Investors discounting more hawkish Fed. (2) A week of rotation from Growth to Value. (3) Growth P/E down, Value up. (4) Lots of chatter, again, about a great rotation. (5) Stay away from disruptive hyped-up tech stocks. (6) FOMC agrees: “Transitory” is out, “persistent” is in until further notice. (7) Discussing normalization. (8) Powell mentioned paring Fed’s balance sheet late last year. (9) Labor market is booming. (10) More full-time jobs replacing part-time ones. (11) Real wage rate stalls at record high. (12) Alternative wage measures. (13) Movie review: “King Richard” (+).
All Things Tech
Check out the accompanying pdf and chart collection. (1) Checking out CES, virtually. (2) Autos are the new tech. (3) Semis introduce new chips as global sales keep climbing. (4) Check out Gallium’s new AR headset, an app for dog nose prints, and a digital frame for your NFTs. (5) Tech had a great 2021, but a rough start to 2022. (6) A look ahead at Tech industries’ earnings estimates. (7) SenseTime—China’s Google—is spreading around the world. (8) SenseTime’s facial recognition and AI expedite purchasing, fight Covid-19, and make cars smarter. (9) China may also be using it to track the country’s Muslim minority. (10) SenseTime’s shares rally after Hong Kong IPO.
Covid-19, Mag-8, And FOMC-19
Check out the accompanying pdf and chart collection. (1) Powell’s pivot on inflation puts contrarians on alert. (2) Alternative bets. (3) M-PMI prices-paid index recedes. (4) Omicron and done? (5) The fastest-spreading virus on record. (6) The wild brushfire analogy for optimists. (7) Milder symptoms. (8) Herd immunity, here we come? (9) Cases soaring in US and Europe. (10) The Magnificent 8 were magnificent again in 2021. They might be again in 2022. (11) Growth isn’t cheap. (12) Rearranging the deck chairs on the USS FOMC. (13) Biden likely to choose more progressives to fill Fed vacancies. (14) Meet Sarah Raskin.
Bonds Have More Fun With Old People
Check out the accompanying pdf and chart collection. (1) Enlightening students about “entrepreneurial capitalism.” (2) Will bond market conundrum persist in 2022? (3) Two-year Treasury note anticipating three rate hikes this year. (4) Gravitational pull of near-zero yields in Germany and Japan. (5) Bearish indicators for bonds remain bearish. (6) Age Wave remains bullish for bonds. (7) Chronic labor shortages should stimulate productivity. (8) Bond funds had record inflows in 2021! (9) Will the worst S&P 500 industries in 2021 be among the best in 2022? (10) Last year was another good year for Stay Home investors. So should be 2022.
Happy 2022!
Check out the accompanying pdf and chart collection. (1) Santa outpunched the two Grinches. (2) Omicron spreading like wildfire, and could burn out quickly. (3) Biden hands the pandemic back to state governors. (4) The Fed should be done tapering by March. (5) Whose afraid of 75bps? (6) Yield curve says don’t fight the bond market. (7) Santa’s earnings-led meltup. (8) Fewer kinks in supply chain. (9) Lots of booming economic indicators. (10) Plenty of liquidity, which is more liquid than it was before the pandemic. (11) The case against Volcker 2.0. (12) Durable goods prices soaring after deflating for many years. (13) Rent inflation will remain troublesome. (14) Inflation may be peaking according to regional business surveys. (15) Movie review: “Being the Ricardos” (+ +).
Santa vs the Two Grinches, Again
Check out the accompanying pdf and chart collection. (1) Santa runs into turbulence. (2) The attack of the two variants. (3) Omicron is fast spreading, but less dangerous, especially to the vaccinated. (4) Will herd immunity be the outcome? (5) New cases soaring in Europe, but not hospitalizations, so far. (6) China faces the Omicron challenge. (7) The hawkish variant of the FOMC. (8) Levitating dot plot. (9) Waller says March is a “live meeting.” (10) Pivots and rotations. (11) A slimmed-down variant of Biden’s BBB likely to pass in early 2022. (12) People are disappearing in China, and so is retail sales growth. (13) Will China’s property bubble burst or just deflate? (14) Movie review: “Spencer” (+).
Will 2022 Be Better Than 2021?
Check out the accompanying pdf and chart collection. (1) Outdoor gas heaters collecting dust. (2) Taking on the bears. (3) Higher buybacks mean more stock grants. (4) Coming tax hikes may be spurring insider stock sales. (5) Households own lots of stock, but are they crazy like a fox? (6) Stocks have rallied at the start of Fed tightening cycles. (7) What could go right in year ahead? (8) Covid could go from pandemic to endemic. (9) Opportunities in travel-related areas. (10) Boeing could finally fly. (11) Everyone’s getting married. (12) Energy recovery should continue. (13) The year of the autonomous truck.
Behind the Inflation Curve
Check out the accompanying pdf and chart collection. (1) Fed head provided a heads-up. (2) Powell has mutated from dovish to hawkish variant of Fed chair. (3) FOMC’s latest projections likely to show more rate hikes in 2022. (4) Fed scrambling to catch up with inflation curve. (5) Real interest rates are unreal. (6) Is the bond yield alarming or not? (7) Durable goods inflation should moderate next year. (8) Inflation is currently disconcerting. (9) Supply chains are still kinky. (10) Monitoring the supply chains. (11) Amazon shows the way.
Does Covid = Y2K For Earnings?
Check out the accompanying pdf and chart collection. (1) Technicians don’t like what they see in Nasdaq. (2) A replay of Y2K boom and bust for tech as a result of Covid? (3) Scramble to boost productivity should offset less pandemic-related tech demand. (4) Nasdaq 100 beating Nasdaq composite (2,500+ stocks). (5) S&P 500/400/600 Information Technology having a good year. (6) Mag-8 are in both S&P 500 and Nasdaq 100. (7) Mag-8 accounts for more than a quarter of S&P 500 market cap and is trading at a forward P/E of 34.8 on a free-float basis. (8) S&P 500 profit margins probably peaked during Q2 but should stay high, especially ex-Financials. (9) Lots of solid revenues and earnings growth rates among S&P 500 sectors.
Santa’s Sleigh & Biden’s Helicopters
Check out the accompanying pdf and chart collection. (1) Stocking stuffer idea. (2) Two Grinches: the Omicron variant and the hawkish Powell variant. (3) Believing in Santa. (4) S&P 500 makes another record high … Ho-Ho-Ho! (5) Good tidings for Tech. (6) A happy holiday yield-curve story. (7) Bidenflation: Dropping cash from helicopters works all too well. (8) Larry Summers was right. (9) Inflation likely to persist, but moderate later next year. (10) How real are S&P 500 earnings? (11) Real earnings yield says sell. We say don’t sell. (12) Movie review: “West Side Story” (+ +).
China, Wall Street, and the CIA
Check out the accompanying pdf and chart collection. (1) Evergrande’s restructuring looks likely. (2) It’s not alone. (3) Chinese economic growth slows, so its central bank boosts liquidity. (4) Hongkongers moving out. (5) Biden ires China by giving Taiwan a seat at the table and skipping the Olympics. (6) China building military outposts. (7) The little guys standing up to Xi might start a trend. (8) US financial giants see an opening in China and take it. (9) But are they hurting the US by developing China’s markets? (10) Taking a look at the venture capital firm that invests the CIA’s money. (11) Warning the US to up government research funding or risk losing our edge to China.
The World vs the Virus
Check out the accompanying pdf and chart collection. (1) Peter and the Variant. (2) Is Panic Attack #71 over already? (3) The Virology and Epidemiology Department at YRI. (4) Variants happen. (5) Stay Home continues to outperform Go Global. (6) US MSCI forward earnings on steeper uptrend than in rest of world (ROW). (7) US forward revenues outperforming ROW. (8) Profit margins higher in US than ROW. (9) Omicron spreads faster. So why doesn’t the stock market care? (10) A variant similar to the common cold? (11) Shots and pills should work against Omicron. (12) “President Fauci.”
Taper Tantrum 4.0
Check out the accompanying pdf and chart collection. (1) Taper tantrums now and then. (2) Easier for the Fed to back off during past three tantrums than now. (3) A work in progress. (4) November’s CPI won’t help. (5) What is the yield curve telling us? (6) Sentiment indexes are bearish on balance, which is bullish. (7) Betting on earnings growth and liquidity. (8) The stock market equation. (9) Peak earnings growth will be followed by less earnings growth. (10) Growth-vs-Value rollercoaster driven by pandemic waves. (11) The death of Growth, Tech, and high-P/E stocks has been exaggerated.
The Economy Is Booming
Check out the accompanying pdf and chart collection. (1) New theme song for the stock market by The Clash. (2) Strong economy is good for earnings. (3) Not so good for valuation if FOMC votes to taper faster. (4) GDPNow tracking near 10% for Q4! (5) Raising our Q4 forecast. (6) Only boom in Boom-Bust Barometer. (7) M-PMI remains high, while NM-PMI is at new record high. (8) Are supply disruptions as disruptive as they say? (9) Full-time employment leading jobs recovery. (10) Wages and prices rising. (11) S&P 500/400/600 forward revenues, earnings, and margins confirming strong business activity. (12) Movie review: “House of Gucci” (+ +).
Consumers & Fusion
Check out the accompanying pdf and chart collection. (1) Holiday gatherings should help propel retail sales. (2) Hoping Omicron doesn’t play the Grinch. (3) Improving job market and rising incomes otherwise bode well for retailers. (4) Consumers’ debt is up, but debt service relative to disposable income remains low. (5) S&P Consumer Discretionary sector beating the S&P 500. (6) Amazon weighs on the Retail Composite. (7) Analysts upbeat on retailers’ earnings next year. (8) Nuclear fusion becomes a hot topic. (9) Fusion attracts big bucks from Gates, Bezos, and others. (10) Playing with the most powerful magnets on Earth. (11) Double-checking the math.
Follow the Money
Check out the accompanying pdf and chart collection. (1) The two Grinches: Omicron and Jay Powell. (2) Powell wants to speed up tapering trot. (3) Don’t sell Santa Claus short. (4) The Fed averted a great credit crunch last year. (5) Animal spirits gone wild in capital markets. (6) The wealthy diversifying their wealth by funding more ventures and startups. (7) Record refinancing in nonfinancial corporate bond market. (8) C&I loans falling. (9) Leveraged loans at record high. (10) Lots of stock issuance. (11) Booming IPO issuance. (12) Lots of VCs. (13) Record M&A deal-making.
Is America Shovel Ready?
Check out the accompanying pdf and chart collection. (1) Obama’s insight: Shovel-ready projects don’t exist. (2) Biden needs construction workers for his BBB infrastructure projects. (3) The difference between “shovel ready” and “shovel worthy.” (4) Meet Mitch Landrieu, the new infrastructure czar. Wish him luck. (5) A dismal history of big infrastructure spending. (6) Construction costs are high. (7) Construction workers have plenty of work now. (8) Durable goods orders are booming, and shipments aren’t lagging far behind notwithstanding supply-chain issues. (9) Forward earnings of S&P 500 Industrials soaring along with orders. (10) IT equipment output is also booming.
The Omicron Panic
Check out the accompanying pdf and chart collection. (1) Austria’s lockdown and Germany’s record infections unnerved investors recently. (2) Then Omicron news hit the tape on Friday. (3) A new potentially dangerous variant. (4) Travel lockdowns. (5) S&P 500 drops a bit, while oil nears a bear market. (6) Drug makers are prepared to play Whac-A-Mole with variants of Covid. (7) Two or three rate hikes next year? (8) Plenty of excess M2. (9) More Fed officials talking about tapering at faster pace. (10) Movie review: “The Eyes of Tammy Faye” (+ + +).