Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Semis, Travel & Digital Dollars
Check out the accompanying pdf and chart collection. (1) Semiconductor shortages still plaguing auto companies. (2) Imbalance of semi supply and demand may drag into 2022. (3) SIA reports positive worldwide sales in June. (4) Semi companies forecast to grow earnings in 2022 even after a blowout 2021. (5) Delta puts everyone on high alert. (6) Drivers clogging the roads. (7) Hotel occupancy has recovered, but not fully. (8) Expect to use a digital yuan at the Winter Olympics. (9) EU and Japan already testing digital currency. (10) Fed still studying digital dollar.
There Is No Place Like Home
Check out the accompanying pdf and chart collection. (1) Hot in Atlanta. (2) Housing market is a mess. (3) Best cure for high home prices. (4) Would-be homebuyers bummed out and priced out. (5) New and existing home sales cool off. (6) Double-digit gains in home prices. (7) Housing inventories bottoming? (8) Falling vacancies for rental housing pushing up rents. (9) Evictions set to cause more turmoil in rental markets. (10) Homebuilding is in fits and starts. (11) Permits down sharply. (12) Materials costs and labor availability remain troublesome for homebuilders. (13) Assessing the outlook for S&P 500 Homebuilding.
Income & Wealth in America
Check out the accompanying pdf and chart collection. (1) A forthcoming exposé of corporate profits. (2) In summary: Profits beat the alternatives. (3) Profits drive widespread prosperity, which always entails some inequality. (4) Income mobility offsets income inequality. (5) America has evolved into a nation of proprietors. (6) Pass-through business owners personally account for at least 25% of employment! (7) Number of taxpayers in lowest income bracket has been declining. (8) Tax return data show upward income mobility. (9) Wealth inequality increases during periods of prosperity too. (10) The wealthy tend to be heavily invested in equities, which appreciate most during good times. (11) Real estate and pension entitlements more equitably distributed. (12) Adding Social Security as a retirement asset reduces wealth inequality significantly.
S&P 5000!
Check out the accompanying pdf and chart collection. (1) S&P 500 earnings still outpacing expectations. (2) Our target for S&P 500 is 5000 by year-end 2022. (3) Betting on continuation of elevated forward P/E. (4) Tech-related companies should continue to boost productivity and profit margins, and to prop up valuation too. (5) A bullish spin on US-China Cold War. (6) Industry analysts expect earnings winners in 2022 to be in S&P 500 Industrials, Consumer Discretionary, and Energy sectors. (7) 2023 earnings laggards expected to be Financials and Materials. (8) Normal forward P/E converging with normalized forward P/E. (9) Reversal of fortune for banks as loan loss reserves get back to normal. (10) Joe knocked down Tesla’s LTEG earlier this year. (11) Joe explains why LTEG is so high again.
The Fed, US Growth, China, and Cryptos
Check out the accompanying pdf and chart collection. (1) Fed in no rush to tighten. (2) Comparing June and July FOMC statements. (3) 2020’s recession was the shortest ever. (4) Solid gains in latest durable goods orders, consumer confidence, and Q2 earnings. (5) China changing the rules and spooking investors. (6) China’s VIEs: What exactly do US investors own? (7) China’s new nuclear missile base and military flights near Taiwan are alarming. (8) China’s laundry list of domestic headaches. (9) Senator Warren puts crypto on notice. (10) Spring Labs solves defi’s know-your-customer dilemma. (11) Is bitcoin in Amazon’s future?
European Tour
Check out the accompanying pdf and chart collection. (1) UK as a test case of virus variant vs vaccine. (2) Freedom vs mandates. (3) Economic Sentiment Indicator soaring in Eurozone. (4) Flash PMI highest in 21 years in Eurozone. (5) ECB following the Fed’s lead on inflation targeting. (6) Like the Fed, ECB in no rush to tighten. (7) Better never than late? EU finally ready to provide pandemic fiscal stimulus. (8) EMU MSCI has been lagging US MSCI since last year’s bottom. (9) US outpacing EMU in forward revenues and earnings race.
Hot Metals
Check out the accompanying pdf and chart collection. (1) Commodity price indexes at or near record highs. (2) Metals prices are mostly still red hot. (3) Easy money can explain high commodity prices and low bond yields. (4) Rising commodity prices tend to boost S&P 500 revenues and earnings. (5) Earnings Confidence Index is making a comeback. (6) Regional business surveys still finding strong growth and plenty of inflationary pressures. (7) More upside in leading indicators. (8) LEI/CEI ratio tracks S&P 500 profit margin.
Longest Bull Market On Record
Check out the accompanying pdf and chart collection. (1) S&P 500 immune to Delta variant of Covid? (2) Pace of vaccinations likely to quicken as Delta makes the evening news. (3) Fed policy not immune to Delta. (4) Comparing the current meltup to the 1999 ascent. (5) Earnings meltup has been leading stock prices higher since last spring. (6) S&P 500 forward P/E still stuck at 22.0. (7) Analysts’ consensus long-term earnings growth expectations are broadly insanely high. (8) The Mag-5 continues to set the fashion trend for all the major investment styles. (9) Amazingly wide spread between forward P/Es of S&P 500 LargeCaps and S&P 400/600 SMidCaps. (10) Movie review: “The Mosquito Coast” (+).
Transports, Tech & Fintech
Check out the accompanying pdf and chart collection. (1) Surging imports signal continued strong US economic recovery. (2) Demand is outstripping J.B. Hunt’s capacity. (3) Supply chain in knots. (4) Delays at the ports and on the rails. (5) Truck drivers in demand and getting higher wages. (6) Tech’s wide margins may attract regulatory scrutiny. (7) Traditional banks face growing fintech competition. (8) Square enters small business lending, and Robinhood goes public. (9) Defi uses no bankers, only blockchain. (10) The Wild West of banking.
Taking Stock
Check out the accompanying pdf and chart collection. (1) A weak panic attack over the past week. (2) A fourth Delta-led wave of the pandemic would boost vaccination pace. (3) Oil price dropped on Monday on OPEC+ deal to supply more oil, not on weak demand. (4) US petroleum usage back at 2019 record high. (5) Financials have more earnings power stashed in loan loss reserves. (6) Economic reopening fundamentals remain bullish. (7) Industrial production of technology hardware still soaring in record-high territory. (8) Industrials have record orders. (9) Record highs for S&P 500 forward revenues, earnings, and profit margin. (10) Bond yield is influencing stock market investment styles. (11) The jobless benefits vs jobs debate. (12) Kids just got more affordable.
Bond Conundrum Explained
Check out the accompanying pdf and chart collection. (1) A year of bond-market conundrums. (2) An old stock-market adage applies to the bond market now too. (3) Bond yields fall despite four months of higher-than-expected CPI inflation. (4) Powell’s four pandemic-related reasons not to rush to tighten. (5) The next inflationary shock likely to be in wages. (6) A few bearish indicators for bonds. (7) Fed’s bullish impact on bonds amplified by flood of deposits commercial banks forced to invest in bonds. (8) OPEC+ deal greases bond yields’ slippery slope. (9) Powell vs Greenspan conundrums.
Depersonalization-Derealization Disorder
Check out the accompanying pdf and chart collection. (1) A distressing disorder about dealing with reality. (2) Pandemic of the unvaccinated. (3) Did Euro 2020 spread Delta? (4) UK opens up as Covid outlook turns “quite scary.” (5) Plenty of stimulus left in M2 and order backlogs. (6) Restaurant sales at record high. (7) NY and Philly business surveys show inflationary boom continuing in July. (8) Fed is suppressing bond market’s opinion. (9) S&P 500 Growth boosted by drop in bond yield. (10) Is China preparing an invasion of Taiwan and a preemptive nuclear attack on Japan?
Peak Earnings Growth & Biden’s Competition Plan
Check out the accompanying pdf and chart collection. (1) Q2 marks peak earnings growth for current cycle. (2) M-PMI dips in June, but still signals earnings growth ahead. (3) As earnings growth slows, so may stock gains. (4) Federal agencies get Biden’s marching orders on boosting business competition. (5) Tech, healthcare, agriculture, and transportation industries are among those targeted. (6) Stocks shrug off threat of increased regulations. (7) Meet the progressive lawyers with their fingerprints on Biden’s plans. (8) Small electric airplanes taking flight.
Inflationary Boom Continues
Check out the accompanying pdf and chart collection. (1) Fed’s wish to overshoot inflation target has come true. (2) The temporary base-effect-and-bottleneck theory of inflation (BEABTI) is getting harder to believe. (3) CPI got hotter in June. (4) Base and baseless effects. (5) Are inflationary expectations well anchored? (6) More small businesses passing higher costs to higher selling prices. (7) ECB adopts FAITH. (8) Tapering will follow substantial progress. (9) Handicapping odds of Biden’s tax plans.
Yielding to the Central Banks
Check out the accompanying pdf and chart collection. (1) Lots of central banks filling up the punch bowl. (2) PBOC cuts reserve requirement to boost bank lending. (3) Lots of punch for global stock and bond markets. (4) The Fed is TIPSy. (5) Bond yields are unreal, as even junk yields fall below inflation rate. (6) S&P 500 dividend yield falls below 2.00% on the way to 1.00%. (7) Millions more S corporations than S&P 500 corporations. (8) S corporations boosting corporate profits but not corporate taxes. (9) A new study on profits.
Variants & Other Strangers
Check out the accompanying pdf and chart collection. (1) Nasty little, free-riding, living-dead mutants. (2) Variants of concern. (3) Following the Greek alphabet: Alpha through Delta so far. (4) Israel’s latest data. (5) No spectators in Tokyo’s Olympic stadiums. (6) China’s vaccine challenged by Delta. (7) Keeping score. (8) Distorted signal from Fed-rigged bond market. (9) Supply-side challenges include shortages of labor, chips, and homes for sale. (10) Capital spending is booming. (11) Investment styles mutating on a daily basis. (12) Movie review: “Nobody” (+ +).
From China with Love No More
Check out the accompanying pdf and chart collection. (1) Semi shortages hurting autos, helping semi companies. (2) Ford caught flat footed, suffers the most. (3) Toyota’s bet on auto sales rebound pays off. (4) Countries consider semiconductor companies a national treasure. (5) May worldwide chip sales surpass 2018 peak. (6) The list of aggressive moves by the Chinese government grows longer. (7) China’s latest crackdown on its tech companies hits US IPO investors’ pocket books. (8) WHO investigation into origin of Covid-19 stymied. (9) Was the Wuhan Military World Games a super-spreader event? (10) Xi speech minces no words. (11) Take a trip to The Metaverse.
Inflationary Expectations
Check out the accompanying pdf and chart collection. (1) Powell says inflationary expectations still well anchored. (2) Powell is relieved that Fed doesn’t have the same problem with sliding inflation as ECB and BOJ do. (3) Powell should set up dashboard for key inflation indicators. (4) One-year and three-year inflationary expectations currently at 4.0% and 3.6% according to FRBNY survey. (5) Americans most hurt by inflation see more of it than others do. Are they more alert to it? (6) Other surveys also show elevated short-term inflationary expectations. (7) Wage pressures rose during Q2. (8) Earned Income Proxy at record high.
Earnings-Led Slo-Mo MAMU
Check out the accompanying pdf and chart collection. (1) Comparing current MAMU to 1999 meltup. (2) S&P 500 stunt plane flying through the vapor trails of the Blue Angels. (3) Why has the forward P/E held up so well around 22? (4) Revenues and profit margin fuel V-shaped recovery in earnings. (5) Peak in M-PMI consistent with peak growth rates in revenues and earnings. (6) Decelerating gains for S&P 500 ahead. (7) S&P 500 at 4800 sooner or later? (8) A good week for FAAMGs. (9) Updating the four investment styles. (10) Stay Home still beating Go Global. (11) Bonds disconnected from reality by Fed and foreign bond purchases. (12) Tapering should resolve the bond market conundrum. (13) Fed is now money market mutual fund of last resort. (14) Movie review: “No Sudden Move” (+).
Jobs, Drought & Commodities
Check out the accompanying pdf and chart collection. (1) Lots of help-wanted signs may mean 4% unemployment is around the corner. (2) Few say jobs are hard to get. (3) Our bet: Tapering starts after September Fed meeting. (4) Heat wave exacerbates drought in the West. (5) Farmers opt not to farm. (6) Watching fruit and veggie prices. (7) Wells running dry, towns sinking, and price of water skyrocketing. (8) San Fran Fed watching impact of climate on economy. (9) Lumber and copper prices drop, while steel holds at the highs.
Margins, Productivity & Housing
Check out the accompanying pdf and chart collection. (1) They are all tech companies now. (2) How to construct a Productivity Portfolio. (3) Searching for and finding some uptrends in profit margins. (4) The Phillips Curve model isn’t dead, but it isn’t real either. (5) Regional prices-paid and prices-received indexes peaking. (6) Harvard housing study is a Biden policy document. (7) Are institutional investors to blame for the housing shortage?
Rapidly Rotating Styles
Check out the accompanying pdf and chart collection. (1) Churning underneath the calm surface. (2) Blaming it on TINA. (3) In the broad-bull-market camp. (4) In the sooner-rather-than-later camp on Fed tapering. (5) More churning ahead as earnings growth slows and Fed tightens. (6) Hard to see a correction with M2 up $5.0 trillion since January 2020. (7) Cash has been the painful alternative to stocks. (8) Mag-5 and the four investment styles. (9) Lower-wage workers account for 81% of private payrolls and 68% of wages and salaries.
The Facts of Life & Death
Check out the accompanying pdf and chart collection. (1) Country music played backwards. (2) On the road with Ivanka. (3) Hot chicken in the Athens of Tennessee. (4) Mutating virus. (5) Pandemic exacerbated demographic trends. (6) Fewer babies, more seniors. (7) Retiring Boomers. (8) Labor shortages likely to stimulate productivity growth. (9) Getting older in America. (10) Too many white collars, not enough blue collars. (11) Lower wages rising twice as fast as higher wages. (12) Is inflation just passing through? (13) Tapering timeline. (14) Movie review: “The Gentlemen” (+).
Plastics, Earnings & AI
Check out the accompanying pdf and chart collection. (1) Mother Nature has been inflating plastics prices via weather and Covid. (2) Help wanted at plastic plants. (3) Watching recent jump in oil and gas prices. (4) Commodity Chemical industry earnings soar this year but peter out in 2022. (5) Checking out 2022 S&P 500 earnings. (6) Industrials and Consumer Discretionary sectors maintain their leadership next year. (7) Materials and Financials not so much. (8) The US military embraces data and AI. (9) A disturbing view of machine-based warfare.
Peak Earnings Growth
Check out the accompanying pdf and chart collection. (1) Q2 marked the peak in GDP and earnings growth. (2) Decelerating gains. (3) S&P 500 has had a V88.8 rebound. (4) Our updated S&P 500 targets for this year and next year: 4300-4700 and 4400-4800. (5) Lower wages up twice as fast as higher wages over the past 24 months. (6) Existing home prices up 24.4% y/y, frustrating would-be buyers. (7) No shortage of price increases. (8) Powell is ready to talk about tapering at next FOMC meeting. (9) ECB on autopilot while awaiting fiscal stimulus. (10) ECB hits 2% inflation target. (11) Inflation remains MIA in Japan.