Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Transportation & Green Ships
Check out the accompanying pdf and chart collection. (1) Retailers are ready for the holiday rush. (2) Shipping prices ease, and Transports underperform the S&P 500. (3) West Coast import volumes plateauing at record high. (4) Keeping an eye on the drop in intermodal rail traffic. (5) The surge in trucking volumes has stalled. (6) Analysts still optimistic about railroad and trucking industries’ 2022 earnings. (7) Ports open overnight, but truckers stay home. (8) Containers overstay their welcome. (9) Shippers test green energy. (10) Electric, methanol, wind, and nuclear get a chance.
The Genie Is Out of the Bottle
Check out the accompanying pdf and chart collection. (1) Inflation is turning out to be both pesky and persistent. (2) Powell’s latest pivot. (3) Blaming supply-chain disruptions for inflation rather than excessively stimulative fiscal and monetary policies. (4) FOMC consensus expects inflation to drop close to 2% next year. (5) We expect FOMC will raise inflation target from 2% to 3% next year. (6) Inflation blast from the past: COLAs are back already. (7) Regional price indexes remain inflated. (8) Are inflationary expectations really “well anchored” at 2%? (9) Average inflation targeting is a bad idea. (10) Movie review: “Dopesick” (+ + +).
China, Materials & Green Isn’t Clean
Check out the accompanying pdf and chart collection. (1) China’s Xi gets a promotion. (2) Troubled Chinese real estate developers scramble to raise money. (3) China’s new home sales and prices fall again in October. (4) Covid-19 cases still pop up despite China’s zero-tolerance policy. (5) Beijing requires a negative Covid test before entering the city. (6) Chinese economy growing, but slower. (7) A look at top-performing sectors over past two decades. (8) Demand for materials used in Chinese construction could sag. (9) Demand for materials used in EVs and windmills should keep booming. (10) Examining the dirty side of clean energy.
Updates on Profit Margins & Europe
Check out the accompanying pdf and chart collection. (1) Record-high stock prices driven by record-high earnings. (2) S&P 500 revenues and earnings beating Q3 expectations. (3) Negative forward guidance on labor and parts shortages not weighing on earnings expectations. (4) Annual revenue and earnings estimates for 2021-23 at record highs. (5) Profit margin expectations plateauing at record level. (6) No sign that cost pressures are squeezing margins. (7) Europe relying on Russian gas to keep warm. (8) Breakthrough cases, a new pandemic woe in Europe. (9) Europe’s recovery slowing despite lots of fiscal and monetary stimulus.
Is the Meltup a Bubble?
Check out the accompanying pdf and chart collection. (1) Not everything is in a bubble. (2) Sentiment isn’t euphoric. (3) Bitcoin is impossible to value. (4) Home prices overvalued relative to incomes. (5) High stock market valuations supported by strong earnings. (6) SMidCaps may be starting to outperform. (7) S&P 500 P/E inflated by Growth, which is inflated by Mag-8. (8) Alarmingly high Buffett Ratio misleadingly ignores record profit margin. (9) No cause for alarm in Fed’s latest Financial Stability Report. (10) Biden explains “Bidenflation.”
Inflation: Blast from the Past
Check out the accompanying pdf and chart collection. (1) Similarities and differences between now and the 1970s. (2) Productivity should make all the difference. (3) Our upwardly revised inflation forecasts. (4) Commodity prices still rising. (5) Labor shortages empowering workers. (6) Short-term wage-price spiral unlikely to persist if productivity grows. (7) Biden puts OPEC+ in driver’s seat. (8) Hilarious US Energy Secretary laughs out loud. (9) Policy response to climate change is inflationary. (10) Record US imports despite supply disruptions. (11) Moderating and accelerating inflation components. (12) “China price” now a source of US inflation. (13) Movie review: “Silk Road” (+ +).
Health Care & Gates’ Green Investments
Check out the accompanying pdf and chart collection. (1) Patients’ return to health care facilities this year will mean tougher comparisons for the S&P 500 Health Care sector in 2022. (2) Lack of workers hurts behavioral health facilities. (3) The many cats and dogs adopted during the pandemic need Zoetis’ drugs. (4) Bill Gates’ Breakthrough Energy Ventures gets billionaires to open their wallets. (5) Breakthrough-funded companies are developing more efficient clean energy, pulling carbon from air, and making everything imaginable greener. (6) Coming soon: better batteries, electric planes, and farming that would shock Old MacDonald.
Are We There Yet?
Check out the accompanying pdf and chart collection. (1) Hurdles to global recovery are receding in rearview mirror—yet that’s where global central bankers’ sights remain glued. (2) Is extreme accommodation still appropriate? (3) Central bankers of the past might have acted by now to resist inflation. (4) ECB, BOJ, and Fed all talk the talk about transitory nature of accelerating inflation and supply/labor shortages. (5) When will they walk the walk? (6) Covid-19 pandemic isn’t over, but we are learning to live with it.
The Bond Conundrum, Again
Check out the accompanying pdf and chart collection. (1) No tapering tantrum in bond market. (2) Tapering isn’t tightening. (3) But tapering sets stage for tightening if inflation persists. (4) Are retail investors buying bond funds to rebalance out of stocks? (5) Major central banks in no rush to raise their official lending rates. (6) Bank of England surprises. (7) Chinese trade surplus at record high during October. (8) Large capital outflows from China. (9) Property developers hitting a great wall in China. (10) Investors starting to realize that SMidCaps are cheap.
Transitory or Persistent?
Check out the accompanying pdf and chart collection. (1) Distracting from the message. (2) Powell defines “transitory.” It’s not “persistent.” (3) Powell may be transitory. (4) End of federal jobless benefits seems to have boosted employment. (5) Our Earned Income Proxy at new high again. (6) More full-time jobs, less long-term unemployment. (7) Lower-wage workers beating inflation, while higher-wage workers are not. (8) Supply disruptions and labor shortages depressed productivity and boosted unit labor costs during Q3. (9) The case for the Roaring 2020s. (10) Labor shortages are chronic because they are in DNA of population. (11) Movie review: “Finch” (+).
Semis & Quantum Computers
Check out the accompanying pdf and chart collection. (1) Semiconductor shortage may last another year. (2) ON Semiconductors’ Q3 beat keeps its rally going. (3) NXP says semi content in autos keeps growing. (4) Tech giants dive into semiconductor design. (5) Analysts still see semiconductor earnings growing, albeit more slowly, next year. (6) China says its new quantum computer is better than ours. (7) Introducing semiconductor qubits. (8) Quantum computers being used for good and evil. (9) Toyota using quantum computers to develop solid-state batteries. (10) Bad actors harvesting data today to quantum-hack tomorrow. (11) Quantum startups merging with SPACs.
No Shortage of Earnings!
Check out the accompanying pdf and chart collection. (1) The definition of a meltup. (2) Earnings-led vs P/E-led meltups. (3) S&P 500 flying to record altitudes along with Blue Angels. (4) How to move a wagon train. (5) Q3 earnings beating expectations. (6) Consensus earnings estimates rising for next five quarters. (7) Record highs for forward revenues and earnings. (8) Why aren’t SMidCaps beating LargeCaps? (9) Profit margins set to stall at record highs? (10) M-PMI remains bullish for earnings. (11) Inflation target practice at the Fed.
What’s Up with TINA?
Check out the accompanying pdf and chart collection. (1) “TINA” isn’t the only acronym in town. (2) Big inflows into equity ETFs. (3) Big outflows from equity mutual funds. (4) A couple of extra trillion dollars here and there. (5) Lots of excess saving. (6) Bond funds having more fun. (7) The Fed taketh away. (8) Tapering around the corner. (9) From FAAMGs to GAMMAs. (10) Excluding GAMMAs, S&P 500 forward P/E more reasonable. (11) Smith, Marx, Schumpeter, Keynes, and Samuelson: What they got wrong.
Greenwashing in Glasgow
Check out the accompanying pdf and chart collection. (1) UN’s 26th conference to nowhere. (2) Two important no-shows. (3) China’s homegrown problems keep the country pumping CO2. (4) Putin is in no rush to help the world kick its fossil fuel addiction. (5) Chilly Siberians wouldn’t mind a little global warming. (6) Four countries produce half of CO2 emissions. (7) King Coal rules Asian power producers. (8) A green version of whitewashing. (9) Coal and gas prices take a dip. (10) On the lookout for a wage-price spiral. (11) Supply disruptions hit auto component of GDP. (12) The inflation “tax” weighs on real personal income and consumer spending. (13) Movie review: “De Gaulle” (+ +).
Margins, FAANMGs, and Batteries
Check out the accompanying pdf and chart collection. (1) Margin pressure is on. (2) Companies boost sales and raise prices to fight back. (3) Technology helps reduce costs and boost productivity. (4) Meet Flippy, a chicken-wings-cooking robot. (5) Many robots and four humans pick, pack, and ship 200,000 packages a day in one warehouse. (6) FAANMG’s gains slow. (7) Facebook, Amazon, and Apple hold back the gang. (8) Panasonic moves forward with bigger, better Tesla battery. (9) Honeywell utility-scale battery provides power for 12 hours and doesn’t use lithium. (10) Form Energy offers up a 100-hour battery. (11) Bill Gates’ firm invests in ESS. (12) FleetZero wants cargo ships to use batteries, too.
Kinks in the Chain
Check out the accompanying pdf and chart collection. (1) From JIT to JIC. (2) Not so easy to go back to JIC. (3) From demand shock to supply shock. (4) Auto industry invented JIT, and is now crippled by it. (5) Lowering and raising our real GDP through the end of next year. (6) Raising our inflation forecast. (7) Supply-chain indicators. (8) Santa will have plenty of good excuses for not delivering all the goods. (9) Is California to blame? (10) Amazing Amazon has hoarded all the truckers, trucks, and cargo planes!
Less Worrisome Worry List, For Now
Check out the accompanying pdf and chart collection. (1) Monday webinars. (2) Hooray for profits! (3) Bobby McFerrin’s happy tune. (4) Halloween came early for stock investors. Xmas might have started early too. (5) Bull/Bear Ratio isn’t bullish, which is bullish. (6) Ex-FAAMGs, stocks are fairly valued. (7) Earnings picture remains bright. (8) Lots of very liquid liquidity sitting in demand deposits. (9) No fiscal cliff ahead. (10) Beijing says “Forget CO2, burn coal baby!” (11) Nord Stream 2 likely to be full of gas for Europe soon. (12) Evergrande is still in business. (13) Inflation remains the main worry on the worry list.
Phillips CurveMaking a Comeback?
Check out the accompanying pdf and chart collection. (1) Something different. (2) #1 new release. (3) Johnny Paycheck and the Great Resignation. (4) Quitting for better pay, caregiving at home, less stress, retirement, self-employment, jobless benefits, or health. (5) The oldest Baby Boomers turned 65 in 2011, 75 in 2021. (6) Growth in working-age population and in labor force close to zero. (7) Is the Phillips Curve rising from the dead? (8) The model is missing an important variable, i.e., productivity. (9) Labor shortage likely to depress unemployment rate and boost productivity. (10) Movie review: “Dune” (+).
Radioactive Briefing
Check out the accompanying pdf and chart collection. (1) Counting the cargo ships in LA’s harbor. (2) Companies face higher input, transportation, and labor expenses. (3) P&G has the pricing power to pass on rising costs. (4) Delta doesn’t. (5) Kellogg and Deere face striking workers. (6) Workers in Buffalo attempting to form first US Starbucks union. (7) Beige Book lays out the price pressures companies face. (8) Transition to green energy may require more nuclear plants. (9) England and France counting on nuclear energy as part of their energy mix. (10) New small reactors gaining acceptance. (11) Price of uranium and uranium-themed ETFs jump. (12) New exchange-traded trusts snapping up the radioactive commodity.
Recession Assessment
Check out the accompanying pdf and chart collection. (1) A new book about profits and other related matters. (2) A hypersonic business cycle? (3) Short recession. Fast recovery. What’s next? (4) GDPNow model now sees almost zero growth in Q3! (5) Two professors forecasting a recession in the next 18 months. (6) Consumer expectations are depressed, but leading indicators still signaling growth. (7) Slicing and dicing latest FOMC minutes: Time to start tapering. (8) Brainard and Lagarde are two BFF central bankers out to save the world from climate change.
The Fed’s Squid Game
Check out the accompanying pdf and chart collection. (1) Fed’s green light enabled the V-shaped recovery. (2) Light was still green when inflation was deemed to be transitory. (3) More persistent inflation forces Fed to turn on flashing orange light. (4) Will a wage-price spiral force Fed to turn on the red light? (5) Powell is frustrated. (6) Will supply bottlenecks also be less transitory than Fed expects? (7) Lots of liquid assets. (8) Parts shortages depressing output in US and Eurozone. (9) Mixed readings in September’s CPI. (10) Stock market bulls likely to charge through flashing orange light. (11) It’s still a green light for banks. (12) China’s faulty light switch. (13) Movie review: "Squid Game" (+).
Climate Central Planners
Check out the accompanying pdf and chart collection. (1) Incompetent central planners. (2) Not ready for prime time: Renewables still unreliable and insufficient. (3) A Nobel idea. (4) Soaring natural gas prices crimping supply of energy-intensive metals. (5) Clumsy transition to renewables adding to inflationary pressures. (6) A surprising scenario: weaker Chinese economy, stronger metals prices, and firm dollar. (7) A chronology of China’s energy crisis. (8) Xi’s climate pledge to the UN. (9) Coal prices still soaring in China. (10) A very brief history of inflation during the 1970s. (11) A very brief history of the 2020s.
JP Morgan, China & Methane
Check out the accompanying pdf and chart collection. (1) JPM leads the bank earnings brigade. (2) Results helped by improving credit and strong capital markets. (3) Corporate loan demand still sluggish. (4) Yield curve may lend a hand in the future. (5) The hits keep coming in China’s property market. (6) China’s energy prices soar, and electricity service gets interrupted. (7) Xi wants “peaceful” reunification with Taiwan as he flies military jets nearby. (8) Environmentalists focus on methane. (9) Blaming the cows and sheep. (10) New foods and a mask might help gassy cows. (11) Old natural gas wells silently hurting the environment.
Lots of Moving Parts in US Labor & Housing Markets
Check out the accompanying pdf and chart collection. (1) There are 1.25 jobs for each unemployed worker. (2) Surge in quits creates more job openings. (3) Employers hard-pressed to fill job openings. (4) Housing market cooling, but will stay warm. (5) New and existing home inventories edging up. (6) Home price appreciation may have peaked for a while. (7) Fewer “For Rent” signs. (8) Plenty of federal relief still left for renters. (9) Still good times for multifamily homebuilders. (10) Institutions buying homes to rent.
Profit Margin Winners & Losers
Check out the accompanying pdf and chart collection. (1) Demand for energy outpacing renewable supplies. (2) Renewable energy sources are unreliable. (3) Hard to say which way the wind will blow, if at all. (4) Grim choice: natural disasters vs freezing in the dark. (5) Bigger natural disasters because more people in harm’s way. (6) Unintended consequence for ESG investors: Dirty energy could outperform clean energy in the stock market. (7) Energy has tiny market-cap share currently. (8) An ideal scenario for dirty Energy’s profit margin. (9) Q3 earnings reporting season likely to be full of tales of labor and parts shortages and rising costs. (10) SMidCaps’ fundamentals stronger than LargeCaps, and their stocks are cheaper.