Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Too Grande To Fail?
Check out the accompanying pdf and chart collection. (1) China’s Evergrande panic attack hits global stock markets. (2) Crash course in Evergrande. (3) “Massive” describes its scale, debt, and crisis. (4) Will it’s rescue also be massive? (5) Lehman or LTCM? (6) China should be building more nursing homes than apartment buildings. (7) Betting against a credit crunch. (8) Bullish for the dollar, bearish for commodity prices.
What’s the Matter?
Check out the accompanying pdf and chart collection. (1) Panic Attack #70? (2) S&P 500 won’t double again anytime soon. (3) A very long stretch above 200-dma. (4) Narrowing breadth. (5) Dow Theory raising a caution flag in theory. (6) September and October are two bad months that often provide good buying opportunities. (7) Bull-Bear Ratio getting more bearish, which is bullish. (8) Nine items on the worry list. (9) Evergrande is #1 right now. Will it be Lehman or LTCM? (10) McConnell won’t play Dems’ game. (11) Missing parts. (12) Biden’s taxes on small businesses. (13) China and Russia playing war games.
Travel, Evergrande & Hydrogen
Check out the accompanying pdf and chart collection. (1) Travel stocks looking better if US Delta cases have peaked. (2) Waiting for the return of the US business traveler. (3) Watching Covid case counts in China and new gambling rules in Macau. (4) Covid took a bite out of China’s August air travel and KFC sales. (5) Analysts’ net earnings revisions turn positive for S&P 500 travel-related industries. (6) Why we’re watching China’s very leveraged, very troubled, very large property developer Evergrande. (7) Angry Chinese consumers at Evergrande’s doorstep demand their money back. (8) Trucks and cars powered by hydrogen fuel cells give EVs a run for their money.
Inflation & Labor
Check out the accompanying pdf and chart collection. (1) Powell scores a point. (2) Three moderating factors. (3) The spectrum of inflation forecasts. (4) Roaring 2020s vs Inflationary 1970s. (5) Inflation expectations remain elevated according to FRB-NY survey. (6) Small business owners raising prices. (7) Diminishing base effect. (8) Rent inflation on the rise. (9) Lots of job openings. (10) A woeful tale from businesses in Richmond area looking for workers.
Global Tapering Ahead?
Check out the accompanying pdf and chart collection. (1) Central bankers are the new Wild Bunch. (2) Since start of pandemic, major central bank assets up 51%. (3) Major central bank assets growing at slower pace. (4) Add that to the stock market’s worries list. (5) Is ECB tapering or recalibrating? (6) ECB’s LTRO facility is a big hit. (7) ECB is also struggling with whether inflation is transitory or persistent. (8) BOJ preparing to end Kuroda’s excellent adventure. (9) PBOC likely to cut required reserves ratio. (10) Fed setting the stage for tapering before year-end.
Not So Transitory After All?
Check out the accompanying pdf and chart collection. (1) Raising S&P 500 EPS by $5 per year through 2023. (2) Five quarterly earnings hooks in a row. (3) Forward earnings at another record high. (4) A long worry list is traditional this time of year. (5) No sign of a peak in August’s PPI. (6) Three broad measures of consumer prices aren’t pretty. (7) Almost $1.5 trillion in reverse repos at the Fed. (8) Bonds are awash in liquidity. (9) Fund flows contradict TINA. (10) Drilling down into the PPI rabbit hole.
Transportation, Supply Chains & Carbon Trading
Check out the accompanying pdf and chart collection. (1) Some retailers’ shelves are looking a little sparse. (2) Watching the inventory-to-sales ratio slide. (3) Inventory stuck on trains, railroads, and boats. (4) More container ships are bobbing in the waters off the coast of Los Angeles than are at port. (5) Empty shipping containers are in the wrong locations. (6) Truck drivers still in short supply. (7) Prices throughout the shipping complex have surged. (8) Lots of optimism priced into railroad and trucking stocks. (9) The market for carbon credits may grow into a big business. (10) Traders, project developers, and verifiers all starting businesses.
Around the World
Check out the accompanying pdf and chart collection. (1) Spreading Covid for the holidays. (2) Comparative pandemic waves around the world. (3) Israel leads the way. (4) US fiscal and monetary easing leaked abroad through US trade deficit. (5) Are commodity prices peaking? (6) Global PMIs showing global slowdown. (7) Chip shortage is tapping on global auto industry’s brakes. (8) US leading the global performance derby for forward revenues, forward earnings, and forward profit margins. (9) Comparing Go Global P/E to US Value P/E. (10) Stay Home still beating Go Global.
Let’s Get Real
Check out the accompanying pdf and chart collection. (1) Slower GDP growth ahead. (2) Pent-up demand for goods has been satisfied. (3) Inflation is eroding purchasing power. (4) Real consumer spending flat for the past four months. (5) Auto industry’s lament: “Buddy, can you spare some chips?” (6) Priced out of the housing market. (7) Capital spending booming. (8) Plenty of room for restocking. (9) Covid still messing up the labor market. (10) Wages inflating. (11) Doves vs hawks on the FOMC. (12) Movie review: “A Private War” (+ + +).
Financials, China & Carbon
Check out the accompanying pdf and chart collection. (1) Financials take the lead ytd in 2021’s homestretch. (2) Reversal of loan-loss reserves offsets low interest rates and slack loan growth. (3) Could Financials be signaling higher interest rates ahead? (4) China’s Xi continues to meddle. (5) This time, gamers, online algorithm users, and famous actors face new rules. (6) Chinese services economy, hurt by Covid resurgence, contracts in August. (7) Watching Chinese property giant’s $88 billion of distressed debt. (8) Examining ways to recycle captured carbon. (9) The CO2 for Coca-Cola's bottled water comes out of thin air.
Modern Monetary Theory In Practice
Check out the accompanying pdf and chart collection. (1) Forward earnings continue to lead S&P 500 to record highs. (2) Another crisis, another opportunity for politicians. (3) MMT on steroids and speed. (4) A guide to sausage making in DC. (5) Will moderate Democrats avert a progressive onslaught? (6) Powell’s inflation dashboard missing some dials. (7) Different measures of inflationary expectations show different readings. (8) Powell admits progress has been made, but continues to accentuate the negatives in the jobs market.
Corporate Finance For Fun & Profit
Check out the accompanying pdf and chart collection. (1) Revenues and earnings continue to impress. (2) Both S&P and NIPA profit margins at record highs. (3) S&P 500 accounts for about 60% of NIPA profits. (4) Lots of S corporations in the mix. (5) Are companies offsetting rising costs with productivity, raising prices, or both? (6) Regional business surveys showing another increase in prices-received index as prices-paid index levels at record high. (7) Wage inflation not widespread yet. (8) The big risk is a wage-price spiral if productivity disappoints. (9) Corporate cash flow at record-high $3 trillion. (10) Corporations floating lots of new issues in Fed’s overflowing punchbowl.
Some Thoughts on Valuation
Check out the accompanying pdf and chart collection. (1) Tapering before the end of the year. (2) Rate hikes not for a while. (3) Commercial banks facing big deposit inflows and weak loan demand buying bonds. (4) S&P 500 tracking Dividend Yield Model. (5) Are SMidCaps cheap or not? (6) Closer looks at S&P 500 vs Russell 1000 and S&P 600 vs Russell 2000. (7) Powell declares mission accomplished on inflation front. (8) July’s PCED inflation data still not confirming inflation is transitory. (9) Four regional business surveys showing possible peaks in prices-paid indexes, while prices-received indexes hit new highs in August. (10) Movie review: “Respect” (+ +).
The Beats Go On
Check out the accompanying pdf and chart collection. (1) The opera ain’t over. (2) Q2 revenues and earnings growth beats will be hard to top for a while. (3) Another record high for profit margin. (4) Lots of upbeat surprises. (5) FOMC discussed tapering at July meeting. (6) November meeting likely to start tapering process. (7) Powell’s virtual lullaby. (8) Powell’s dashboard showing progress in the labor market with room for a bit more progress.
Alpha, Beta, and Delta
Check out the accompanying pdf and chart collection. (1) Dovish comments from a Fed hawk. (2) FDA gives seal of approval to Pfizer vaccine. (3) Dr. G says Delta has peaked. (4) Mandating vaccinations. (5) From risk-on/risk-off to Delta-on/Delta-off. (6) A Productivity Portfolio for all seasons. (7) Is inflation coming or going? (8) The base effect should start wearing off soon. (9) Persistent shortage of new autos could continue to boost their prices. (10) Soaring home prices putting upward pressure on rent inflation. (11) How much longer will healthcare inflation remain subdued? (12) Inflationary pressures persist in price surveys.
Double, Double Toil & Trouble
Check out the accompanying pdf and chart collection. (1) A very short history of S&P 500 doublings and 12 months after. (2) Likely to take a while for next doubling. (3) The arithmetic of getting to 5000 and then 10,000. (4) DJIA 70,000 in our future? (5) Pikes Peak of earnings growth. (6) Forward revenues, earnings, and profit margins all at record highs for S&P 500/400/600. (7) SMidCaps underperforming LargeCaps even though the former’s fundamentals are better. (8) Peaking economic growth confirmed by LEI, flash PMIs, and two regional business surveys.
Red Flag
Check out the accompanying pdf and chart collection. (1) Hurricane season is here. (2) Stormy season ahead for stock market too. (3) Rooting for consolidation of 100% gain in S&P 500. (4) Three peaks—in economic growth, earnings growth, and policy stimulus. (5) Geopolitical risks rising. (6) Signs of a top in commodity prices and a bottom in the dollar. (7) Real retail sales are unreal in China. (8) President-for-life Xi needs more babies. (9) The world’s largest nursing home. (10) China uses America’s Afghanistan disaster to warn Taiwan. (11) Movie review: “Stillwater” (-).
Retail, Earnings & Carbon
Check out the accompanying pdf and chart collection. (1) Consumers spending differently now. (2) Sweatpants are out, notebooks and pencils are in. (3) Target beats analysts’ target. (4) Lowe’s CEO still upbeat on housing. (5) TJX customers back to bargain shopping. (6) Analysts defy Delta and raise earnings forecasts. (7) Hoping carbon-capture technology can save the world. (8) The oil giants enter the carbon-capture game. (9) Gathering carbon from the air, chimneys, and tailpipes. (10) Turning captured CO2 back into fuel.
Searching for Peak Inflation
Check out the accompanying pdf and chart collection. (1) Any pent-up demand left? (2) Business sales soared to new record high during June. (3) Restocking of depleted inventories should boost economic growth. (4) Factories are humming. (5) PCED inflation currently around 3.0%-4.0% should settle back down to 2.0%-2.5% later this year. (6) Should the Fed’s inflation target be raised from 2.0% to 3.0%? (7) Base effect having less effect on boosting inflation now. (8) Demand shock and supply shortages still boosting some prices. (9) Lots of inflationary pressures still in PPI, commodity prices, and prices-received indexes.
Reviewing Valuation
Check out the accompanying pdf and chart collection. (1) Fed moving from outcome-based to outlook-based policymaking? (2) Brainard explains the difference between reactive and preemptive. (3) Clarida’s whacky outcomes speech. (4) Powell’s three conditions for rate hiking. (5) But, starting tapering and completing it comes first. (6) Falling behind the inflation curve. (7) Very wide spread between valuations of LargeCaps and SMidCaps. (8) Same can be said of Growth-vs-Value spread. (9) Mag-5 continues to dominate investment styles. (10) Investing in Value in US isn’t much more expensive than doing so overseas.
A Long & Winding Road
Check out the accompanying pdf and chart collection. (1) Delta depresses consumer sentiment. (2) Fourth wave of the pandemic. (3) Dr. Gottlieb’s relatively reassuring outlook. (4) CCI is a better measure of consumer confidence than CSI. (5) Dopamine is the best drug for cabin fever. (6) YRI’s Earned Income Proxy at another record high. (7) Any pent-up demand left? (8) Mixed metaphor: Schumer claims to have crossed the finish line, but Pelosi has moved the goal post. (9) Are there enough workers and shovel-ready projects to get new infrastructure spending started? (10) Now, the hard part. (11) Movie review: “Mudland” (+ + +).
Consumers, Valuation & mRNA
Check out the accompanying pdf and chart collection. (1) Just as the party got started…Covid’s back. (2) This wave may pass faster than the previous three. (3) Consumers have jobs and money to spare. (4) Southwest sees a Covid impact, but Wendy’s and Sysco say all’s good. (5) Strong earnings knocking most forward P/Es down. (6) Tech multiples rise slightly. (7) Surging oil and commodity prices send Energy and Materials forward P/Es falling. (8) Hoping mRNA can cure everything. (9) Moderna and BioNTech make much more than just Covid vaccines. (10) Personalized cancer cures may be in our future.
Speed Bumps & Headwinds
Check out the accompanying pdf and chart collection. (1) A great leading indicator. (2) A business-cycle recovery on steroids and speed, but now what? (3) From tailwinds to headwinds. (4) The pandemic: It’s all Greek to me. (5) Slowdown ahead. Will it be normal or abnormal? (6) Parts shortages set the stage for more pent-up demand. (7) Small business owners can’t get enough help. (8) Liquidity growth is peaking too. (9) More tapering talk. (10) Productivity growth peak is a few years away and likely twice as fast as now. (11) “Substantial further progress” has been made. (12) Open for business with a record 10.1 million job openings.
Voluntary Self-Extinction Of the Human Race
Check out the accompanying pdf and chart collection. (1) Stop breeding, says VHEMT. (2) Cost-benefit analysis of having kids. (3) Ag revolution caused migration from farms to cities. (4) Urbanization has depressed fertility rates. (5) Pandemic and climate change are also depressing births. (6) The most alarming UN report on climate change yet. (7) Fahrenheit 3.6. (8) MMT might actually make sense for increasingly geriatric nations. (9) Japan as a role model for for human self-extinction. (10) The world according to Garp: fertility, population, and urbanization. (11) China’s three-child policy. (12) US demographic trends should boost productivity.
Man of La Mancha
Check out the accompanying pdf and chart collection. (1) Buenos dias. (2) Finding relief in Spain from cabin fever at home. (3) The Running of the Bulls has been canceled in Pamplona, but not on Wall Street. (4) Soaring earnings continue to drive the stampede of the charging bulls. (5) SMidCaps are very cheap relative to LargeCaps. (6) Supply constraints weighing on M-PMI. (7) Lots of unfilled orders to keep economy growing. (8) Memo to Powell: Substantial progress in the labor market. (9) No sign yet that inflation rebound is transitory. (10) Wage inflation stampeding in two industries. (11) Movie review: “The Titans That Built America” (+ + +).