Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
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.
The Myth of Icarus
Check out the accompanying pdf and chart collection. (1) Meet Icarus, ill-fated son of Daedalus, who invented the Labyrinth. (2) Icaria may be a tourist trap. (3) Wax and the Buffett Ratio. (4) Untimely and timely valuation ratios. (5) Growth tends to fly closer to the Sun than Value. (6) Normalized P/Es looking past the pandemic. (7) Elon flying with Icarus. (8) The Sun is further from Mars than from Earth. (9) Is Tesla the Yahoo! of this bull market? (10) S&P 500 has been tracking dividends divided by 2% dividend yield. (11) A 1.00% dividend yield would put the S&P 500 at 6000 today. (12) One more time: Bond yield would be closer to 2.00% than 1.00% but for Fed’s intervention. (13) Some like it not too hot.
‘There Will Be Growth in the Spring’
Check out the accompanying pdf and chart collection. (1) Some good news among the labor market’s latest disappointing news. (2) Private payrolls and full-time jobs remain upbeat. (3) Earned Income Proxy continues to recover. (4) GDPNow sees real GDP tracking at 11.2% for Q4! (5) The economic wisdom and insights of Chauncey Gardiner. (6) Labor force still down 4 million from peak. (7) Jobless tally 5 million above start of year. (8) Payrolls down 10 million from peak. (9) Both goods and services employment continued to recover in November. (10) Remarkably resilient income and payroll tax receipts. (11) Counting the unemployed. (12) Jobless claims aren’t what they claim to be. (13) Movie review: “The Undoing” (+).
Delivering Vaccines During the Holidays
Check out the accompanying pdf and chart collection. (1) More holiday shopping moves online as consumers avoid stores and Covid-19. (2) Freight & Logistics and Trucking industries having a banner year. (3) Opportunities and challenges in the holiday online shopping surge for FedEx and UPS. (4) Both companies aim to deliver vaccines at Warp Speed. (5) Truckers still hiring drivers and expanding capacity. (6) Rails helped by trade and autos, hurt by coal and oil. (7) Airlines having a year to forget. (8) Much optimism priced into Transports’ earnings multiples, except for Airlines’. (9) AI seeping into everything. (10) CRM companies harness AI in battle for market share. (11) Look Mom, no driver.
The Carrie Trade
Check out the accompanying pdf and chart collection. (1) Stephen King’s first horror novel. (2) Bond Vigilantes have something in common with Carrie. (3) Bond, Dow, and Dollar Vigilantes. (4) The CRB index is bullish for Emerging Markets, commodity currencies, and materials stocks. (5) Red metal is bullish on Red China. (6) Copper/gold price ratio is bearish for bonds. (7) The Fed’s Carrie trade is keeping bond yield under 1.00%. (8) Public pension funds are significantly underfunded according to Fed data. (9) A political problem that may require a political solution.
What Could Possibly Go Wrong?
Check out the accompanying pdf and chart collection. (1) Too many bulls? (2) A so-so sell signal from Bull/Bear Ratio. (3) Frothy sentiment indicators. (4) No longer leading the running of the bulls. (5) Glory or gory? (6) A 8-point worry list for bulls. (7) Panic Attack #68 is up next, but when? (8) January 5 Georgia elections could make or break Biden’s agenda. (9) Fiscal stimulus cliff ahead? (10) Bearish scenarios for the dollar and bonds. (11) The Middle East is heating up again. (12) Meltdowns usually follow meltups. (13) Santa’s rally came early this year.
Dawn of a New Era?
Check out the accompanying pdf and chart collection. (1) Post-election relief rally. (2) Three booster-shot Mondays. (3) Team of seniors. (4) Rocking-chair Liberals vs Progressives. (5) Still suffering from EDP (Era of Deranged Partisanship). (6) The 2020s still likely to roar. (7) Yellen beats Warren. (8) Georgia on my mind, until January 5 election. (9) Mnuchin’s Gambit: check, but not checkmate. (10) T-Fed lives to fight another day. (11) A sea of liquidity. (12) Does the FOMC know that the NY Fed is pegging the bond yield below 1.00%? (13) The post-lockdown recovery remains remarkable. (14) Movie review: “Let Him Go” (+).
Bibbidi Bobbidi Boo
Check out the accompanying pdf and chart collection. (1) The Fairy Godmother is back. (2) Vaccine and Yellen news fuel S&P 500 Energy sector’s top performance so far in November. (3) Global oil production cuts and improvement in demand bringing market back into balance. (4) US companies in the Oil Patch cut costs, merge, or go bankrupt. (5) New Biden administration could shepherd in a return of Iranian production and an emphasis on renewables. (6) Solar just makes sense. (7) New materials could make solar panels far more efficient. (8) A solar panel that works on a cloudy day. (9) Miracle molecules.
The First Thanksgiving Of the Roaring 2020s
Check out the accompanying pdf and chart collection. (1) Thank you, thank you, thank you. (2) A cornucopia of vaccines for the holidays. (3) 1914-1920 were dark days indeed. (4) The 1920s was a decade of innovation, productivity, and prosperity preceded by a world war, a pandemic, and a depression. (5) Comparative pandemics. (6) A cornucopia of technological innovations for the 2020s. (7) Calvin Coolidge vs Joe Biden. (8) Raising our earnings estimates and shooting for 4000 on the S&P 500 by the end of 2021. (9) V-shaped earnings recovery. (10) Widespread rebound in the revenues and earnings of the S&P 500 sectors. (11) Net earnings revisions back in positive territory.
Broadening Bull Market
Check out the accompanying pdf and chart collection. (1) Much ado about $450 billion. (2) Is T-Fed extinct already? (3) Biden likely to pick a Fed-grown Treasury secretary. (4) Warp Speed is on the fast track. (5) Vaccine could open the door to the Roaring 2020s. (6) Value stocks getting inoculated. (7) SMidCaps outperforming too. (8) Kinetic Energy stocks. (9) US MSCI underperforms rest of world. (10) Are technicals too bullish? (11) Home-buying is booming. (12) New home for the holidays. (13) Wealth inequality hasn’t worsened significantly since 1989. (14) Movie review: “The Crown” (+ + +).
Looking Beyond the Pandemic
Check out the accompanying pdf and chart collection. (1) Which underperforming sector this month has some of market’s best-performing industries? Consumer Discretionary. (2) Forward-looking investors see consumers looking forward to fun times, post-pandemic. (3) Kohl’s and TJX show optimism about the future by reinstating dividends. (4) Executives calling on Congress to push through a stimulus package now. (5) Project Warp Speed expands US manufacturing of vaccines and pharmaceuticals. (6) New vaccines based on mRNA save the day and may hold the key to the development of other vaccines and drugs in the future.
The Fed’s Third Mandate
Check out the accompanying pdf and chart collection. (1) Tesla is in the fast lane. (2) Back to the Future. (3) T-Fed congratulates the Fed and the Treasury for a job well done. (4) Strong recovery should support valuations, says the Fed. (5) Corporate debt bomb has been detonated, says the Fed. (6) Households are stable, and banks are in good shape too. (7) Non-banks are on regulators’ radar screen. (8) The meaning of “backstop.” (9) Record equity in homes. (10) Millennials have a lot of catching up to do with Baby Boomers and GenXers in homeownership derby.
The Banks Of Last Resort
Check out the accompanying pdf and chart collection. (1) A trillion here, a trillion there adds up to $21.8 trillion. (2) Whatever it takes to “infinity and beyond.” (3) The Fed is playing by the MMT playbook. (4) Is the Fed trying to peg the bond yield below 1.00%? (5) Record-low interest rates fueling housing boom and record corporate bond issuance. (6) A pile of liquidity waiting for vaccine. (7) ECB and BOJ pumping liquidity as fast as the Fed. (8) A synergistic approach to technical and fundamental analysis. (9) Commodity prices continue to recover. (10) The copper/gold ratio is bearish for bonds, increasing odds that Fed will peg yield below 1.00%. (11) Not much more downside for the dollar. (12) Still favoring Stay Home over Go Global.
Biden’s Challenges & Choices
Check out the accompanying pdf and chart collection. (1) Another record high. (2) Meet Mr. Gridlock: Joe Manchin, the conservative Democratic senator from West Virginia. (3) No “crazy stuff.” (4) Meet Lael Brainard, the Fed governor who could be the next Treasury secretary. (5) Democrats likely to push Fed to do more if their fiscal agenda is checkmated by Republicans. (6) Fed still has plenty of ammo. (7) Memo to Biden: Trickle-down economics works both ways—spreading pain, not just gain. (8) The rich tend to own S corporations and proprietorships that employ lots of people. (9) Movie review: “The Life Ahead” (-).
Ob-la-di, Ob-la-da
Check out the accompanying pdf and chart collection. (1) Life goes on as playing fields shift for the pandemic, the nation, the Industrials sector, and fintech. (2) Financials, Materials, and Industrials pay catch-up. (3) Better earnings getting closer as 2021 nears. (4) Covid-19 and the US-China trade war have manufacturers looking to come home. (5) US manufacturing also benefitting from automation and connections to the cloud. (6) It’s time to pay more attention to fintech companies. (7) Fintech making inroads in personal loans, online banking, and mortgages, with their sights set on credit cards.