Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Looking Under the Hood
Check out the accompanying pdf and chart collection. (1) Will services boom follow goods boom? (2) Fixing up our house. (3) National parks crammed with too many humans seeking communion with nature. (4) Hint of rotation from goods to services in retail sales. (5) US manufacturing has been flatlining since China entered WTO. (6) Lean inventories should continue to boost domestic production and imports too. (7) Light, medium, and heavy trucks are all in high demand. (8) No sign of tech slowdown. (9) Construction industry hitting an affordability wall? (10) Climate-change activists capping oil wells? (11) Defense & space still flying high.
Stocks, Inflation & The Productivity Portfolio
Check out the accompanying pdf and chart collection. (1) Tapering tantrum time? (2) We weren’t surprised by hawkish drift in dots. (3) Stocks beat bonds as inflation hedges. (4) Rising costs can squeeze profit margins unless they are offset by raising selling prices or boosting productivity. (5) Revenues and earnings tend to rise faster than prices. (6) Real earnings yield, which is currently bearish, is highly correlated with other leadings economic indicators, which are currently bullish. (7) Real dividend yield isn’t a useful market timing tool. (8) Valuation and the Misery Index. (9) Movie review: “Oslo” (+ + +).
Powell, Earnings, FAANGs & Robots
Check out the accompanying pdf and chart collection. (1) Fed’s dots paint a new picture. (2) Powell’s talking about talking about tapering. (3) Might tapering begin in September? (4) Expecting blockbuster Q2 earnings and record GDP. (5) Post-Covid ad-spending surge helps Facebook and Google. (6) Netflix hurt by competition from Disney and the outdoors. (7) Tech regulatory threats grow. (8) Tech shares no longer leading the market. (9) Welcome to the Fourth Industrial Revolution. (10) Faster and cheaper computers and sensors creating better robots. (11) Robots improve companies’ efficiency and productivity.
Credit & Wealth
Check out the accompanying pdf and chart collection. (1) Jamie Dimon’s warning and positive spin. (2) Credit card debt and business loans are down. (3) Loan losses are MIA. (4) Corporations have lots of bond debt and lots of cash. (5) Lots of homeowners with lots of homeowners’ equity. (6) Household net worth rose to a record high along with stock market and home prices during the pandemic. (7) The 1% have been getting wealthier faster thanks to their equity portfolios. (8) Residential real estate and pension entitlements are more equitably distributed. (9) The Millennials will inherit lots of wealth. (10) Billionaires aren’t like the rest of us.
Move Along, Nothing To See
Check out the accompanying pdf and chart collection. (1) Old saying in the pits. (2) Commodity prices providing clearer signal than bond yields. (3) Broken lumber. (4) Dust bowl of 2021? Drought out West getting worse. (5) Chinese fattening up their pigs with US grains. (6) US oil production remains depressed. (7) China tapping on the brakes? (8) Rising commodity prices boosting S&P 500 revenues, earnings, and margins. (9) Strong profits + labor shortages = capital spending boom. (10) Technology production at record high led by computer & peripheral equipment.
The Greatest Punchbowl on Earth
Check out the accompanying pdf and chart collection. (1) Conundrum in the bond market. (2) Powell’s mantra. (3) The future of ZIRP. (4) Japanese yields vs the copper/gold ratio. (5) A second month of base affected CPI gains. (6) Tsunami of liquidity. (7) Banks drowning in deposits, while loan demand is weak. (8) Overnight repos at the Fed. (9) Buddy, can you spare a muni? (10) Tipsy. (11) Taxing jobless benefits. (12) Tug-of-war between the Fed and inflation. (13) Are the Bond Vigilantes dead again already or just taking a siesta? (14) Movie review: “Halston” (+ + +).
From China with Love
Check out the accompanying pdf and chart collection. (1) China’s Xi aims for a kinder, gentler image. (2) Vigil for Tiananmen Square massacre prohibited in Hong Kong, but brave residents come out anyway. (3) Companies and individuals looking to leave the changed city. (4) Chinese technology companies face tighter rules at home. (5) Yet China’s rulers count on tech companies to help the country win on the world stage. (6) Chinese vessels still intimidating in the South China Sea. (7) Chinese planes menace Taiwan. (8) China’s economy faces tougher comps and rising producer prices. (9) Turning coal ash into rare earth metals is a win-win-win.
Anatomy of the Bull Market
Check out the accompanying pdf and chart collection. (1) Corrections, bears, and bulls. (2) The market knows best, usually. (3) Outlook for the four investment styles. (4) Staying with the outperforming sectors since September 1, 2020. (5) Breadth measures showing broad bull market. (6) Broad bull market should continue to benefit SMidCaps, with outperforming forward earnings. (7) How much downside for Growth-to-Value ratio? (8) The valuation case for staying home in Value. (9) Why have the Bond Vigilantes taken a siesta? (10) Europe is lagging the US on pandemic front and still in recovery rather than expansion mode. (11) EU’s pandemic relief is actually a green new deal. (12) When will the ECB start tapering?
Another Jolt of Inflation Ahead
Check out the accompanying pdf and chart collection. (1) Base effect: Nothing to see here; keep walking, please. (2) Shortages should be transitory too, so say Fed officials. (3) Inflation targets vs trajectories. (4) A baseless case for 2.0%. (5) Inflation is a tax. (6) Fighting Mother Nature’s deflationary forces. (7) Demand and supply shocks. (8) A three-month perspective on inflation. (9) Drilling down into the CPI. (10) A few things to worry about: costs of gasoline, food, used cars, and rent. (11) Wage inflation is picking up.
Can Washington Lift Wages?
Check out the accompanying pdf and chart collection. (1) The meaning of full employment. (2) Lots of turnover in labor market. (3) Frictional unemployment reflects geographic and skills mismatches. (4) Plenty of job openings. (5) 25 states say no to federal jobless benefits. (6) Checking off Powell’s check list. (7) Timing tapering. (8) Confusing employment data. (9) Another record high for wages and salaries. (10) Biden wants to raise wages, which he erroneously claims are lowest in 70 years! (11) The myth of income stagnation, again. (12) Bullish outlook for real pay in Roaring 2020s scenario. (13) Broad-based rebound in corporate earnings fuels broad-based bull market. (14) Movie review: “Mare of Easttown” (+ +).
Biden, Oil, and Solar
Check out the accompanying pdf and chart collection. (1) Biden’s $6 trillion budget proposed. (2) Administration banks on low growth, low inflation, and low interest rates. (3) Higher taxes don’t prevent deeper deficits. (4) Debating the definition of infrastructure. (5) Shell gets shellacked by court ruling. (6) Climate change court cases on the rise. (7) Will CO2 emissions fall or just shift to new players? (8) Massachusetts may be next to require new homes have solar. (9) Finding new surfaces for solar panels.
Booms & Busts
Check out the accompanying pdf and chart collection. (1) The next recession. (2) Big blow to Big Oil. (3) US oil field output remains depressed, as does the rig count. (4) US oil demand almost fully recovered. (5) Iran is a wild card. (6) Demand and supply shocks. (7) A business cycle on fast forward. (8) Inflationary pressures galore. (9) Great for profits and capital spending, for now. (10) Booms are followed by bananas. (11) Lots of reasons for labor shortages.
More Inflation Ahead
Check out the accompanying pdf and chart collection. (1) Serling vs Hitchcock. (2) Lots of head-spinning developments. (3) The 1920s vs the 1970s. (4) The Roaring 2020s vs The Great Inflation 2.0. (5) Subjective probabilities of 65/35, down from 70/30. (6) T-Fed vs the 5Ds. (7) Jamie Dimon’s warning. (8) A week of big wins for climate-change activists and OPEC+. (9) Rising risk of higher oil prices and weaker dollar. (10) California’s drought worsens. (11) So much cash and so many shortages. (12) Who is liquid and why? (13) Q1 was an amazingly good quarter for earnings. (14) Movie review: “Vertigo” (+ +).
Tapering, Crypto & The Drought
Check out the accompanying pdf and chart collection. (1) Clarida’s just the latest Fed head to talk about talking about tapering. (2) Treasury market takes tapering talk in stride. (3) What’s in Fed’s inflation tool kit? (4) Western drought forcing tough decisions on the farm. (5) Keeping an eye on fruit and veggie prices. (6) With strong FQ-2, Deere says farmers doing great and buying equipment. (7) Fed studies digital dollar, while crypto financial ecosystem flourishes. (8) China’s regulators cracking down on crypto trading and mining. (9) Lots of crypto banking services outside of the banking system. (10) DeFi even trickier for regulators to control. (11) Mark Cuban sees a future filled with smart contracts on the blockchain.
Earnings-Led Meltup!
Check out the accompanying pdf and chart collection. (1) S&P 500 forward earnings go from lagging to leading the market. (2) Forward revenues, earnings, and profit margin all at record highs. (3) S&P 500 operating earnings up 47% during Q1. (4) No sign that rising costs are squeezing profit margins. (5) Solid productivity pop during Q1. (6) An update on sausage making in Washington. (7) There’s still some hope that checks and balances will rein in progressives’ wish list.
More Tapering Talk
Check out the accompanying pdf and chart collection. (1) How many is “a number” of participants? (2) Tapering sooner rather than later? (3) Two hawks and three doves. (4) More states are cutting jobless benefits. (5) Plenty of job openings. (6) Camps and schools are reopening. (7) Will Powell pivot again? (8) Fed’s word games. (9) Bond market conundrum 2.0. (10) Few signs of tapering tantrum in the bond market or in stock market forward P/Es. (11) Valuation multiples down for Mag-5 and overseas stocks.
Not That ’70s Show
Check out the accompanying pdf and chart collection. (1) Inflation was so 1970s! (2) Comparing the 2020s to the 1970s. (3) Wages soared while productivity crashed during the Great Inflation. (4) This time, productivity may be making a comeback. (5) The risk is a wage-price spiral. (6) Dopamine demand shock plus policy stimulus shock boosting inflation now. (7) No shortage of shortages. (8) Buddy, can you spare a house? (9) Rent inflation could make a comeback. (10) US provides the world’s economy with a shot in the arm. (11) Brief world tour. (12) Movie review: “Godfather of Harlem” (+ + +).
Tapering, Housing & Batteries
Check out the accompanying pdf and chart collection. (1) Fed’s April minutes never say “tapering” but imply it’s coming. (2) Elevated valuations get a shout-out. (3) Rate hiking could start before mid-2022. (4) Everyone has a housing tale. (5) After a long run, housing stocks pull back. (6) High lumber and steel and copper prices … oh my! (7) Rising construction industry wages add to pressure. (8) Homeowners across the country enjoy double-digit price increases. (9) Watching inventories and mortgage rates. (10) Solid-state electric vehicle batteries could be a game changer. (11) Checking out Harvard, Toyota, QuantumScape, and Solid Power.
Over-the-Top Earnings
Check out the accompanying pdf and chart collection. (1) Are inflationary booms good for profits? (2) Winners and losers in an inflationary boom. (3) Nominal GDP and business sales confirm inflationary boom. (4) Bullish for S&P 500 revenues. (5) Q1 earnings rose twice as fast as expected. (6) S&P 500 forward earnings is flying. (7) Forward profit margin sets another record high despite rising costs. (8) What’s behind the Baby Bust? (9) Unmarried Millennials. (10) Freaked out by the pandemic and climate change. (11) Too many singles, not enough babies.
The Technology Imperative
Check out the accompanying pdf and chart collection. (1) Technology rules the business world. (2) We are all in the cloud now. (3) Tech still accounts for a quarter of S&P 500’s market cap and a fifth of its earnings. (4) Tech is more powerful, more useful, and cheaper than ever. (5) S&P 500 excluding Tech and excluding the Mag-5. (6) A few examples of low-tech companies using high-tech to boost profit margins. (7) The proof is in the profit margins and spending on tech. (8) A word of caution. (9) Value’s turn to outperform for a while. (10) Cryptocurrencies: nothing to fear but government bans. (11) Tulips and dotcoms..
Inflationary Boom or What Else?
Check out the accompanying pdf and chart collection. (1) Reagan & Volcker versus Biden & Powell. (2) Different spins on the inflationary boom from pessimists and optimists. (3) Tech-led productivity is the only way out of this mess. (4) Too many college graduates. (5) The meaning of post-pandemic life. (6) Fear of shortages versus fear of inflation. (7) Business cycle on fast track. (8) Base-effect inflation should diminish in coming months, but rent inflation could rebound. (9) Two conflicting measures of medical care services inflation. (10) Inflation remains subdued according to Cleveland Fed’s median CPI. (11) Movie review: “The Woman in the Window” (+).
CPI, Retailing & 2022
Check out the accompanying pdf and chart collection. (1) CPI jump mostly about, but not solely, a base effect. (2) Used cars and home-related goods get pricier. (3) Amazon and Tesla dragging down the Consumer Discretionary sector’s ytd returns. (4) Most other Consumer Discretionary industries are having a good year. (5) Taking a look at 2022 S&P 500 earnings. (6) Industrials, Consumer Discretionary, and Energy seen having fastest earnings growth next year. (7) Boom in Materials ends if analysts are right. (8) Looking at Elon Musk’s other companies. (9) Monkeys playing Pong telepathically. (10) Boring underground to relieve traffic.
On the Margin
Check out the accompanying pdf and chart collection. (1) Is it time for a correction or just more rotation? (2) Technical indicators show too much bullishness. (3) Selling on awesome earnings news. (4) Getting tipsy about inflation. (5) Small business owners raising prices like its 1981. (6) An unprecedented V-shaped economic and earnings recovery. (7) A first-quarter earnings season for the record books. (8) Upward revisions galore. (9) No sign that rising costs are squeezing margins so far. (10) Early-cycle productivity “pop.” (11) Broadening bull.
The Opera Ain’t Over Until Papi Sings
Check out the accompanying pdf and chart collection. (1) The DarkSide is holding America up for ransom. (2) Ransomware gangs don’t take cash or checks. Bitcoin accepted here. (3) Are cryptocurrencies similar to viruses? (4) Will governments ban them? (5) Yellen’s senior moment. (6) Before tightening, Powell wants to see crowds gathering, jobless benefits run out, and schools reopen. (7) Powell’s dashboard: no green light for tapering yet. (8) The Fed issues a hedgy note on financial stability risk. (9) Powell and Brainard: He said, she said.
Bad & Good Inflation News
Check out the accompanying pdf and chart collection. (1) Tales of two employment surveys. (2) How many workers are actually unemployed? (3) Our Earned Income Proxy jumped to new record high in April. (4) Strange employment readings for different industries. (5) It pays to stay home rather than to go to work. (6) Biden seeks to build on legacy of progressive presidents. (7) The anti-Reagan. (8) Input costs continue to soar, and shortages are a big problem. (9) Productivity usually pops during recoveries and is doing it again. (10) Labor costs actually fell during Q1. (11) Profit margins still recovering despite cost pressures. (12) What are wages up to? (13) Movie review: “The Serpent” (+ + +).