Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Talkative Yellen, Chip Shortage, and Bad Drought
(1) The Fairy Godmother causes mini taper tantrum. (2) Boom times at semiconductor companies. (3) Shortages may end just-in-time purchasing. (4) New capacity may take years—not quarters—to build. (5) Temperatures are heating up out West. (6) Tech companies creating gadgets and apps to help with drought. (7) Farming moves indoors and goes vertical. (8) Solar panels coexist with crops.
Crushing Earnings
Check out the accompanying pdf and chart collection. (1) Earnings on a hot streak. (2) A remarkable earnings hook. (3) Earnings now expected to be up 30% this year. (4) Analysts predicting record-high profit margin. (5) Forward earnings rising in record-high territory. (6) Earnings surprises are widespread. (7) Insanely stimulative policies driving earnings charge. (8) Raising our revenues, earnings, and profit margin forecasts. (9) Just-in-time inventory shortages. (10) A whiff of stagflation in latest M-PMI. (11) The shortage of workers is structural.
JRB & FDR
Check out the accompanying pdf and chart collection. (1) The end of prohibition. (2) FDR, LBJ, and JRB expand the social welfare state. (3) Lots of plans to Build Back Better. (4) The anti-Reagan is pro-unions. (5) Reversing PATCO. (6) Raising wages by decree. (7) Amazon cares about its workers, so they don’t care to unionize. (8) $15 is becoming the new $10 for hourly pay. (9) Trickle-down wage increases from Amazon and Walmart. (10) Will Biden restart the wage-price spiral? (11) Wage inflation measures remain subdued, but not for long. (12) Is a refundable child tax credit the start of a universal basic income?
Taxing Matters
Check out the accompanying pdf and chart collection. (1) Third round of relief checks. (2) Record increase to record high in personal income. (3) Personal saving at record high. (4) Plenty of liquidity available to push real GDP to record highs over rest of 2021. (5) Why raising tax rates may not raise tax revenues. (6) Economic growth is the best driver of tax revenues. (7) Tax expenditures are a sinkhole of exemptions and deductions. (8) Taxing capital gains. (9) The One Percent is paying more than 40% of federal income taxes. Isn’t that enough? (10) Trump’s tax cut benefitted people who probably hired more people with their tax windfalls. (11) Movie review: “Quo Vadis, Aida?” (+ + +).
Hubris Goeth Before a Fall
Check out the accompanying pdf and chart collection. (1) Off-base inflation assumptions. (2) Fiscal and monetary policies sending demand well above supply. (3) Not-so-transient inflation may force Fed action. (4) Beware taper tantrums. (5) China’s latest misdeeds. (6) Tesla bows to Chinese government’s pressure. (7) Companies opting out of China. (8) Chinese censors cancel director’s Oscar win. (9) China’s Orwellian campaign goes global. (10) World leaders waking up. (11) From jeans to genes. (12) A look at the picks and shovels in genomics.
Profitable Corporations
Check out the accompanying pdf and chart collection. (1) Great fundamentals for S&P 500. (2) Earnings jumped about 50% during H2-2020, with revenues up about 15% and margin up 30%. (3) Impressive and surprisingly widespread rebound in profit margin. (4) Rising costs weigh on profit margins of users but boost margins of suppliers. (5) Analysts continue to raise their earnings estimates for this year. (6) Biden corporate tax hike likely to take a bite next year. (7) Floating on a sea of liquidity. (8) Capital markets wide open. (9) Government’s visible lending hand averted widespread bankruptcies. (10) SPACs’ shell game may be over now that there is a new sheriff at the SEC.
Inflation: The Japanese Model
Check out the accompanying pdf and chart collection. (1) Something very Zen about Japan. (2) Japan’s population is shrinking and aging rapidly. (3) Japanese government debt at 220% of GDP. (4) Flat nominal GDP for 24 years. (5) Prolonged period of deflation. (6) Japan has been doing MMT for at least a decade. (7) Used car prices soaring. (8) Missing chips. (9) Soaring home prices could soon boost rents. (10) PPI inflation rates heating up some more in US and Asia. (11) CPI inflation rates remain subdued in US, Eurozone, and Asia. (12) Extreme alternative inflation scenarios: Japan now vs Germany from 1921-23.
New World Disorder
Check out the accompanying pdf and chart collection. (1) Head-spinning stuff. (2) A chat with a Canadian surgeon in a pool in Florida. (3) India’s disaster. (4) Three red-hot US regional business surveys. (5) Home prices are on fire. (6) A shortage of blue-collar workers. (7) Prices-paid and prices-received indexes continued to soar in April. (8) Speed bumps for SPACs, cryptocurrencies, and stock prices. (9) Outperforming investment styles underperforming recently. (10) Bad actors: Putin and Xi. (11) Bond Vigilantes taking a siesta. (12) Movie review: “I Care a Lot” (+ +).
Banks and DApps
(1) Crosscurrents in banking. (2) Banks’ deposits are up, and borrowing is down. (3) Companies don’t need bank loans. (4) Banks holding lots of Treasuries and cash. (5) Net interest margins feeling the squeeze. (6) Released reserves save the day. (7) Introducing dApps. (8) Bitcoin may dominate payments, but Ethereum dominates dApps. (9) Keeping an eye on the Binance Smart Chain.
Stimulus Shock
(1) Cookies and politicians. (2) Addicted to sugar. (3) Beef, pork, and mystery meat in pandemic relief acts. (4) Handy crib sheet to keep fiscal spending score. (5) Running out of workers to “Build, Back, Better.” (6) Employers need workers who can spare some time to work for a living. (7) Small business owners have lots of job openings. (8) Tight labor markets likely to boost wages. (9) Small business owners raising prices and expect to continue doing so. (10) Earnings enjoying the sugar high. (11) Mag-5 plus Tesla dominate their S&P 500 sectors.
For Whom the Bull Tolls
(1) Happy vs sad theme songs. (2) Old stock market adages. (3) Waiting for the next panic attack. (4) The relevance of Ernest Hemingway. (5) Contrarians say the sun also sets. (6) Too much bullish sentiment? (7) MMT + TINA = MAMU. (8) Margin debt again. (9) Into the weeds of Biden’s proposal to increase corporate tax revenues. (10) GILTI as sin. (11) A tax even Europeans don’t like.
The Off-the-Charts Economy
(1) Relief checks fuel retail buying spree. (2) GDPNow tracking at 8.3% for Q1. (3) Lots of record highs in major retail sales categories. (4) Gasoline usage almost fully recovered. (5) Housing-related retail sales booming. (6) Business sales are bullish for S&P 500 revenues. (7) Lean inventories set stage for even more economic strength in coming months. (8) NY and Philly business survey are on fire. (9) Tug of war in the bond market: Shoguns vs Vigilantes. (10) The Fed’s talking heads can’t stop talking. (11) More backward-looking forward guidance. (12) Movie review: “The Courier” (+ +).
China Trouble
(1) Waking up to China’s hostile agenda. (2) China’s military might is on show on the South China Sea and near Taiwan’s airspace. (3) Hong Kong is officially under China’s thumb. (4) CEOs learn to bite their tongues to do business in China. (5) Foreign CEOs may soon find they need to pick sides. (6) Hackers and spies and lies—oh, my! (7) Chinese stocks had a great 2020, but tough start to 2021. (8) A digital yuan could push US pols and regulators to get moving on a digital dollar.
Government Gone Wild
(1) Off-the-charts fiscal policies. (2) Nonstop handouts. (3) Swelling outlays swell federal budget deficit. (4) Treasury spending on Income Security soars. (5) Government spends mostly on redistributing income now. (6) Shrinking the tax base isn’t a good way to increase tax receipts. (7) MMT tells politicians it’s alright to spend more until inflation makes a comeback. (8) Helicopter Ben was wrong about the delivery aircraft. (9) Lots of government social benefits to persons. (10) An update on the Magnificent Five.
Outlook vs Outcome, Preempting vs Reacting
(1) Did you get the Fed’s latest memo? (2) Here’s the message again: We are in no rush to raise rates. (3) Reacting to outcomes rather than preempting outlooks. (4) Pandemic changed Fed’s reaction function. (5) Forward-looking vs backward-looking guidance. (6) Powell’s latest super-dovish interview. (7) Redefining a recovery. (8) Powell’s latest spin on asset bubbles and the Archegos incident. (9) Is Powell channeling Greenspan’s 2008 shocking admission? (10) Another Great Inflator? (11) Clarida explains it all. (12) QE4ever by the numbers. (13) Q1 earnings season by the numbers.
Rocket Fuel
(1) Bowie beats out Prince for this year’s market theme song. (2) Margin debt is like rocket fuel. (3) Why hasn’t the Fed changed the margin requirement since 1974? (4) Margin debt soaring with stock prices. (5) Pandemic relief checks add up to $800 billion, with 25% spent and 75% saved. (6) FRB-NY is monitoring what consumers are doing with their relief checks. (7) Soaring personal saving over the past year reflected in record increase in M2. (8) “Mind boggling” comes to mind. (9) Lofty valuations, with Buffett Ratio voting for Major Tom. (10) Rapidly rising PPI inflation belies Fed’s “base effect” cover story. (11) Steel and lumber prices in outer space. (12) Movie review: “Hemingway” (+ + +).
MAMU, JOLTS, and Wuhan
(1) Jamie Dimon ready for the Roaring 2020s. (2) Goldilocks’ moment. (3) Adding MAMU to Dimon’s short worry list. (4) JOLTS report shows February’s job openings as high as a year ago. (5) S&P 500/400/600 forward earnings all at record highs. (6) Double-digit earnings growth ahead for four quarters in a row. (7) That devilish 1.666% bond yield. (8) Valuation multiples for the Goldilocks moment. (9) How is China beating the virus?
No Sign of Wage-Price Spiral
(1) T-Fed’s flood of liquidity fueling broad-based inflation in asset prices. (2) A fiscal relief plan for MAMU. (3) While cost-push and demand-pull inflation heat up, consumer price inflation remains subdued. (4) Even Professor Gordon is less pessimistic on productivity. (5) Pandemic was a booster shot for capital spending on IT. (6) Wage inflation remains subdued despite signs of labor shortages. (7) An analysis of higher vs lower wages. (8) Progressives’ real-pay-stagnation claim is a statistical myth. (9) Real hourly wages up 1.2% per year since 1995.
Floating on a Sea of Liquidity
(1) The M-PMI is highly correlated with the y/y changes in the S&P 500 and in the Treasury bond yield. (2) M-PMI currently bullish for stocks and bearish for bonds. (3) M2 up $4.2 trillion y/y. (4) More helicopter money on the way. (5) M-PMI orders and production boom, and so does prices-paid index. (6) NM-PMI at record high. (7) Employment, usually a coincident indicator, has been a lagging one so far. (8) Our Earned Income Proxy jumped to a record high last month. (9) Fed will wait until economy reaches broad-based and inclusive maximum employment before tightening. (10) Plenty of signs of labor shortages despite high joblessness. (11) Wage inflation remains relatively subdued. (12) Movie review: “My Octopus Teacher” (+ + +).
Old Economy Rocking & Rolling
(1) Materials and Industrials rock on. (2) Biden’s infrastructure bill and economic recovery keep the party going. (3) Steel and copper prices near highs. (4) Analysts scramble to raise steel industry earnings for this year, but aren’t planning on high prices sticking around into 2022. (5) European surge in Covid cases may taper enthusiasm for the metals. (6) Behind bitcoin and CryptoKitties, there’s a blockchain doing the work. (7) Large companies and upstarts help enterprises deploy blockchain technology.
Impending Doom or Impending Boom?
(1) Who is that masked man? (2) Lady in distress. (3) Will March madness bring April’s fourth wave? (4) Will vaccines protect us from UK’s B.1.1.7 variant? (5) No doom, only boom in consensus earnings forecasts. (6) More boom than gloom in bond yields too. (7) Valuation multiples floating on a sea of liquidity. (8) Archegos is playing out like a Greek play. (9) S&P 500 forward earnings has fully recovered and points to profits boom this year. (10) How much will the taxman slice off of corporate profits in 2022? (11) That sinking feeling about fiscal excess.
Alfred Hitchcock & The Dot Plot
(1) The dot plot could be the next horror show for the financial markets. (2) Powell says to pay no attention to the forecasts of his colleagues. (3) Monetary policy is backwards looking on purpose. (4) Falling behind the yield curve. (5) Fed’s forward guidance pushes tightening into 2023 or later. So it is likely to come much sooner. (6) The regional surveys of business activity and pricing are hot. (7) Delivery times getting longer as unfilled orders pile up. (8) The government is on a spending spree. (9) Taxes are coming.
From the 4Ds to the 5Ds!
(1) Nostalgia time. (2) The bull’s long charge. (3) Da Vinci Code again. (4) Fed resists pegging bond yield, and outsources inflation fighting to Bond Vigilantes. (5) Powell’s happy spin. (6) The Fifth Dimension: Adding Desperadoes to the 4Ds. (7) The yield-curve spread is signaling economic expansion with rising bond yields. (8) The first future-shock business cycle on a fiscal and monetary cocktail of steroids and speed. (9) The bull market has been broadening since early September 2020. (10) Financials boosted by ascending yield curve and prospect of higher earnings, dividends, and buybacks. (11) Net charge-offs were remarkably moderate last year. (12) Rally in Emerging Markets MSCI could stall on rising US bond yields. (13) Movie review: “The Father” (+ +).
Transports on a Roll
(1) Traffic jam builds in the Suez Canal. (2) Global trade is tangling up supply chains. (3) Dow Transports shakes off Covid and hits new highs. (4) Airlines flying before broad recovery in traffic. (5) Recovery in trade volumes and M&A help railroad stocks. (6) Internet purchases boost the shippers. (7) A look at the industries with record-high forward earnings per share. (8) Facebook working on brain/computer interfaces. (9) Smart glasses take on a whole new meaning. (10) Make things happen with a twitch of a finger.
Talking Fed Head
(1) Will the base effect on inflation be basically transitory? (2) What about the M2 effect? (3) The base effect has started in the Richmond Fed’s district, and then some. (4) Delivery times on the rise. (5) Home price inflation not reflected in CPI, but could soon indirectly boost rent inflation. (6) Powell admits sun is coming out, but only seeing clouds. (7) Ignore the dot plot. (8) An odd op-ed. (9) Fed’s top priority: broad based and inclusive employment. (10) Powell declares Phillips curve is dead. (11) Any bad consequences of Fed policies will be temporary, or else you’ll get another relief check.