Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Chips Shortage
Check out the accompanying pdf and chart collection. (1) Semiconductor sales and stocks booming. (2) Auto manufacturers searching for chips. (3) Introducing gallium nitride. (4) NXP forecasts strong Q1. (5) Cloud computing driving chip demand too. (6) Chinese focused on developing home-grown chips. (7) US tech giants want to develop semis in house too. (8) Watching the US and Chinese 5G rollout race. (9) Abu Dhabi can claim best 5G download speeds in the world. (10) China’s in the lead, but it’s still early days.
Watching Inflation: More Signs of Trouble?
Check out the accompanying pdf and chart collection. (1) Inflation is up for discussion. (2) Inflation’s eeny, meeny, miny, moe. (3) The tug of war between the 4Ds and MMT. (4) Regional prices-paid and prices-received indexes are hot. (5) M-PMI prices-paid index also heating up. (6) In recent years, not much correlation between the CPI and the dollar, commodity prices, import prices, intermediate PPI, or survey measures of prices paid and received. (7) Barely any inflation in the Eurozone, Japan, and China. (8) IMF advises policymakers to err on easing side. (9) Earnings seasons now and then.
Funny Money
Check out the accompanying pdf and chart collection. (1) Something is off. (2) Yellen and Lagarde warn about dark side of cryptocurrencies and favor regulation. (3) Is a stablecoin driving the volatility in bitcoin? (4) Waiting for the AG’s report. (5) Citadel is playing both sides of the Street. (6) The third wave of the pandemic is cresting. (7) A third wave of checks is coming. (8) High-frequency economic indicators remain high. (9) Consumers are sitting on a pile of liquid assets, as reflected in MZM and M2. (10) Business spending booming. (11) Construction booming.
Gamesters vs the Dynamic Duo
Check out the accompanying pdf and chart collection. (1) Gamesters: The new kids on the Street. (2) Shorts get roasted in game of chicken. (3) Robin Hood vs the sheriff of Nottingham. (4) Don’t fight the T-Fed duo in the Game of Thrones. (5) Powell prioritizes “broad-based and inclusive” maximum employment over both inflation and financial stability mandates. (6) A narrow definition of macroprudential policy jurisdiction. (7) Powell claims recent valuation-multiple spikes weren’t caused by Fed. (8) Much too soon to think about thinking about tapering. (9) The income-equality mandate: Minding the gaps. (10) T-Fed’s BFFs. (11) Unasked question. (12) Yellen wants to rebuild the economy. (13) Four crises and Rahm’s Rule. (14) Movie review: “The White Tiger” (+ +).
Faster 5G Rollout & Faster-Charging Batteries
Check out the accompanying pdf and chart collection. (1) 5G and EV: two races to watch. (2) T-Mobile leads the 5G rollout, leaving Verizon and AT&T playing catch-up. (3) T-Mobile has the broadest nationwide coverage, the best 4Q subscriber growth, and much better share price performance over the past year than its two rivals. (4) 5G opens the door to technological marvels galore. (5) A look at S&P 500 P/E inflation over the past year. (6) Foreign EV automakers may see greener pastures in the US after Biden’s initiatives. (7) The winner of the EV race may be the manufacturer with the longest-running, fastest-charging battery. (8) Innovation is super-charging EV battery evolution.
Morning Briefing 2021-01-27
Check out the accompanying pdf. (1) Victory over the virus may not require full herd immunity. (2) Widespread immunity of just the herd’s most essential and vulnerable equates to 230 million doses of vaccine, half as much as required for full herd immunity. (3) Looking at vaccine supply/distribution/administration logistics, we estimate the virus could go from plague to pest by summer 2021. (4) We think investors are right to assume that Biden’s strategic goals to fight the virus can be met. (5) But much still could go wrong to derail the optimism. (6) Virus mutations might represent the biggest threat.
Act Big
Check out the accompanying pdf and chart collection. (1) Yellen talks softly and carries a big act. (2) Government continues to spew out checks. (3) American Rescue Plan is fourth congressional pandemic response. (4) Bernie Sanders is all for reconciliation if Republicans won’t reconcile. (5) Rahm’s Rule again. (6) The Mag-5 underperforming despite their new record-high market cap. (7) Market breadth has improved thanks to vaccines. (8) V-shaped recovery in forward revenues, earnings, and margins. (9) In January, US PMIs remained remarkably robust. (10) Pandemic is mutating. (11) Stock market valuation multiples in outer space.
The Checks Are in the Mail
Check out the accompanying pdf and chart collection. (1) The Economist’s rocketship dodges the front-cover curse. (2) Samuelson’s mistake. (3) From lots of liquidity to tons of it. (4) The Fed is pumping away. (5) CARES Acts I-III add up to $3.6 trillion in rocket fuel. (6) Biden’s Acts IV and V would add another $4 trillion, give or take. (7) First round of rescue checks fueled rocketship recovery from lockdown recession last year. (8) Latest round of checks is half as much, but GDP is almost back to pre-pandemic level. (9) It may be time to start worrying about inflation, or at least monitoring it more closely. (10) Movie review: “News of the World” (+).
Covid’s First & Last Anniversary
Check out the accompanying pdf and chart collection. (1) Approaching Covid-19 anniversary. (2) Can businesses that grew because of Covid-19 maintain the momentum? (3) A look at Logitech, Peloton, and Netflix earnings and conference calls. (4) BofA works to keep the fintechs at bay. (5) Liquidity piling up at commercial banks, with deposits up 21.6% y/y. (6) Banks stashing cash in Treasuries. (7) Electricity generation getting a little bit greener every year. (8) Natural gas consumption expected to fall. (9) Welcome Tesla to the Magnificent Five.
Substantial Further Progress Ahead?
Check out the accompanying pdf and chart collection. (1) Yellen wants US government to “act big.” Seriously. (2) Act II of CARES Act could be as stimulative as Act I. (3) Full economic recovery from pandemic recession one year later. (4) Another (bigger) round of government checks with fewer social-distancing restrictions. (5) No double dip so far in credit and debit card shopping or in gasoline usage. (6) Higher inflation and bond yields as the year progresses. (7) Five new voters on FOMC with consensus views. (8) The Fed’s new mantra: “substantial further progress.” (9) The Fed’s new FAITH. (10) Free advice to Powell & Co.: Beware of what you wish for.
MMT on Steroids & Speed
Check out the accompanying pdf and chart collection. (1) Powell says it again: Not thinking about raising rates. (2) Powell impressed by recovery. (3) Rosengren endorses Biden plan. (4) Fed and banks financed most of 2020 federal budget deficit. (5) Yields stay low despite soaring commodity prices. (6) New record high in real GDP coming this year. (7) Economy getting Blue Wave booster shot. (8) Upward revision in December retail sales likely. (9) Yellen & Powell: MMT-BFFs. (10) Tech boosts capital spending. (11) The Blue Wave and the budget reconciliation process. (12) Movie review: “The Flight Attendant” (+ +).
Financials on the Move
Check out the accompanying pdf and chart collection. (1) Optimism rising about Financials earnings. (2) Steeper yield curve and booming markets kick 2021 off right. (3) Bank buybacks look ready to resume. (4) Loan loss reserves low with government help. (5) Beware fintech competition and higher taxes and regulations from Democrats. (6) Technology lets us do just about everything from the couch. (7) Keeping an eye on software as a service, artificial intelligence, and quantum computers. (8) Elon is our hero. (9) Robots on the rise and medical miracles.
Not in Kansas Anymore
Check out the accompanying pdf and chart collection. (1) Dorothy and Stephanie. (2) The power of myths. (3) Surreality. (4) The sky is the limit for T-Fed in MMT world. (5) Ease on down the yellow brick road to socialism. (6) The central bank wizards. (7) Free money for all. (8) Are the Bond Vigilantes making a comeback? (9) Yield-curve targeting coming? (10) Bitcoin: the official currency of Oz. (11) Managing money in Oz. (12) More style rotation in 2021. (13) Tesla is in outer space.
Will Blue Wave Increase Or Decrease Earnings?
Check out the accompanying pdf and chart collection. (1) Valuations vs mutating virus. (2) Retail sales stalled late last year. (3) Our proxy for wages and salaries continued to recover in December as government benefits declined. (4) Here comes another round of pandemic support checks to lift consumer spending. (5) Unbelievable: Real GDP has almost fully recovered. (6) Santa delivered bullish PMIs. (7) Signaling solid revenues recovery this year. (8) We are more positive on revenues than the analysts. They are more positive on profit margins than we are. (9) Buybacks should make a comeback this year unless they are drowned by the Blue Wave tsunami.
Party Like There’s No Tomorrow
Check out the accompanying pdf and chart collection. (1) A new theme song for the meltup party. (2) The sun will come out tomorrow, and so will the hangover. (3) Bull market stampede trampling the bulls. (4) Valuation meltup harder to justify if yields continue to rise. (5) Irrational exuberance + ultra-stimulative fiscal and monetary policies = MAMU. (6) Fiscal follies. (7) Yield-targeting and monetary madness. (8) The Bond Vigilantes are stirring. (9) What could possibly go wrong? (10) Don’t fight the Fed when it is fighting a pandemic? (11) The race against the fast-spreading mutants. (12) Movie review: “The King” (+ +).
Socialism, Materials, and Drones
Check out the accompanying pdf and chart collection. (1) The Blue Wave makes a splash. (2) Without gridlock, expect even more federal spending and mounting deficits. (3) The market has rallied almost as much during Blue Waves as it has during gridlock. (4) Hoping centrist Senator Joe Manchin (D-WV) will stymie the Socialists. (5) Mutant variants of Covid-19 may be troublesome. (6) Materials’ broad-based rally continues into 2021. (7) Weak dollar and strong industrial production in China and the US send commodity prices higher. (8) Last year’s corporate cost cutting should boost this year’s earnings growth. (9) Drones making deliveries, fighting crime, and playing lifeguard.
What in the World Is Going On?
Check out the accompanying pdf and chart collection. (1) A new strain. (2) Waiting for the latest viral wave to crest. (3) The UK has a contagious problem. (4) Strong M-PMIs. (5) Resilient NM-PMIs. (6) Purchasing managers say that commodity prices are all on the rise. None are down. (7) Forward revenues and earnings mostly in recovery mode around the world. (8) Commodity prices pointing the way forward. (9) Expected inflation rising along with commodity prices as the dollar weakens. (10) Emerging Markets MSCI tends to rebound when the dollar is weak.
The Punch Bowl
Check out the accompanying pdf and chart collection. (1) New Year’s resolution. (2) What’s ahead: Sobering correction or intoxicated meltup? (3) Fed chairs no longer party poopers. Now they refill punch bowls at wild parties. (4) Powell, like Greenspan before him, doesn’t see irrational exuberance. (5) Georgia’s election will be either sobering or intoxicating for stock investors. (6) From dual to sole mandate. (7) The three central banks are the life of the party. (8) No shortage of liquidity at Club Fed. (9) Margin debt amplifies bull and bear markets. (10) Monetary aggregates are dancing up a storm.
Three-Front War
Check out the accompanying pdf and chart collection. (1) The long staycation. (2) Me and Forrest. (3) Three-front war against the virus. (4) WMDs should annihilate virus. (5) But beware of Mutant Ninja viruses. (6) No double-dip in our forecast. (7) Upbeat leading indicators. (8) Remarkable rebound in wages and salaries to pre-pandemic record high. (9) Booming demand for homes runs into record shortage of housing inventory. (10) Capital spending remarkably strong too. (11) Stocks on 1999 meltup track. (12) Powell’s open bar. Punch bowl will remain full and spiked. (13) Fed keeping a lid on bond yield. (14) V-shaped recoveries for S&P 500 forward revenues and earnings. (15) Movie review: “Gangs of London” (+).
Looking Forward: Tech, China & Tesla
Check out the accompanying pdf and chart collection. (1) Brighter days expected in 2021. (2) The S&P 500 Tech sector’s stock price index has gone sideways for three months, outpaced by cyclical sectors. (3) Copper shines and oil rebounds. (4) Cyclical earnings expected to have strongest growth next year as economy recovers. (5) US financials given access to China’s markets, but at what price? (6) New electric vehicles racing to dealerships in 2021. (7) Europe prods consumers and companies to embrace EVs. (8) Will solid-state batteries threaten Tesla’s dominance?
The Mobility Question
Check out the accompanying pdf and chart collection. (1) Income inequality is controversial. (2) The pandemic has exacerbated the divide between the Haves and Have Nots. (3) Prosperity is good for everyone, even though the rich tend to prosper more. (4) A nation of proprietors: A happy trend that should resume after the pandemic. (5) Marx and Engels were terrible forecasters. (6) Class warfare is a wrong-headed ideology. (7) Entrepreneurial vs crony capitalism. (8) The rise and triumph of passthroughs. (9) Proprietors generating almost as much income as corporations. (10) An important source of capital spending and employment. (11) Economic mobility is also a controversial subject in need of more data and analysis.
Corporate Financial Matters
(1) One more time: higher S&P 500 earnings and targets. (2) Reviewing corporate sector’s balance sheet and income statement. (3) Nice rebound in profits, but with record corporate debt. (4) Refinancing at record-low interest rates. (5) Revenues rebounding along with GDP. (6) A happy outlook for profit margin. (7) NIPA profits include S&P 500 earnings and more. (8) Undistributed profits boost cash flow to record high. (9) Capital spending rebounds with cash flow. (10) Lots more gross corporate debt issuance, some for refinancing at record-low rates. (11) Big jump in corporate liquid assets. (12) Stock issuance is hot, while buybacks are cold. (13) Popular story about buybacks has it backward.
The Bulls vs the Virus
Check out the accompanying pdf and chart collection. (1) Bulls don’t love too much company. (2) Party like its 1999? (3) Signs of digital tulip mania. (4) Bitcoin as a gauge of speculative excess. (5) Beware of MBD (mad bull disease). (6) Raising our forecasts for real GDP as well as S&P 500 revenues and earnings. (7) Technology likely to boost productivity and margins, though a corporate tax hike would be a downer. (8) The third wave of the pandemic is the worst, but should be the last. (9) The ECB provides another round of PEPP. (10) Movie review: “Ava” (-).
The Margin Imperative
Check out the accompanying pdf and chart collection. (1) Sowing the seeds of future profits. (2) Tech margins forecast to keep getting better. (3) Industrials and Financials margins expected to rebound in 2021. (4) Real estate margins shrinking this year and next. (5) State and local government payrolls and budgets under pressure. (6) Watching municipal bonds sold by transit systems, airports, toll roads, universities, and nursing homes for signs of trouble. (7) Consider China the US’s top national security risk. (8) Chinese scientists say their quantum computer has achieved quantum supremacy. (9) Introducing quantum cryptography.
Inflation Was Sooo 1970s!
Check out the accompanying pdf and chart collection. (1) Early disinflationist. (2) Fears of post-pandemic reflation. (3) Inflation outcome will make or break portfolio strategies. (4) Recalling the Great Inflation of the 1970s, when everything went wrong. (5) Food and oil price shocks, and a wage-price spiral. (6) The 4Ds vs M1. (7) US monetary aggregates are soaring. (8) Are the 4Ds still relevant? (9) More good news on the productivity front. (10) The war-and-peace model of inflation. (11) Not much inflation in US, Eurozone, Japan, and China. (12) Reflating or abating deflation? (13) Bonds, copper, and the dollar all showing more inflation than deflation now.