Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Speed Bumps for Tech
Check out the accompanying pdf and chart collection. (1) A look at what could clip the wings of high-flying tech stocks. (2) Regulators could dampen the fun. (3) Netflix, Logitech earnings may signal that the Covid-related tech-spending surge has run its course. (4) Tech IPOs looking frothy? (5) As deurbanization continues, homebuilders keep building. (6) Mortgage rates stay low while homebuilding shares fly high. (7) Introducing the zeptosecond. (8) Scientists aim to learn more about electrons and chemical reactions.
Financial Stability Could Lead to Instability
Check out the accompanying pdf and chart collection. (1) Slow walking toward the fast-approaching elections. (2) Eight possible outcomes. (3) Gridlock would be bullish. (4) Market needs to mark time to buy time for earnings to catch up. (5) S&P 500 forward revenues and forward earnings remain on recovery paths. (6) The Fed’s lending facilities aren’t lending much. (7) IMF report says fiscal and monetary policies providing “The Bridge to Recovery.” (8) Policies have saved the day, but risk causing too much risk-taking. (9) Are markets disconnected from reality? (10) Some industries remain vulnerable to insolvency. (11) Banks are well capitalized for now. (12) China’s vulnerabilities get spotlighted.
Is the Fed Pegging The Bond Yield?
Check out the accompanying pdf and chart collection. (1) Why isn’t the bond yield over 1.00%? (2) Copper/gold price ratio pegs yield at 1.61%. (3) Economic surprise index should be bearish for bonds, but it hasn’t been so far. (4) Same can be said of M-PMI. (5) TIPS market still open for inflation bets. (6) Fed continues to buy all the bonds that the Treasury issues. (7) Gravitational pull from bond yields in Japan and Germany. (8) Dividend-yield model remains bullish for S&P 500. (9) China’s recovery challenged by geriatric demographic profile. (10) Some bad news and some not-so-bad news on the pandemic in US. (11) Editorial: We agree with Great Barrington Declaration on the pandemic.
Stocks & the Economy: Still Connected So Far
Check out the accompanying pdf and chart collection. (1) The V-versus-K debate. (2) Fed’s survey of consumer wealth shows progress was made in the right direction between 2016 and 2019. (3) 82 million Americans own homes. (4) Home prices along with owners’ equity in homes at record high. (5) Education is the major divider between the Haves and Have Nots. (6) A record 37% of Americans have a college degree. (7) NY and Philly business surveys remained strong in October. (8) Still pumping gas. (9) September’s survey of small business owners showed rebounding demand for workers. (10) September retail sales boosted once again by de-urbanization. (11) Industrial production disappointed in September, but should remain on uptrend. (12) Movie review: “Godfather of Harlem” (+ + +).
The Future of Semis, Banks & Cows
Check out the accompanying pdf and chart collection. (1) Wind in semi sales’ sails. (2) Analysts forecast semiconductor earnings rebound in 2021. (3) Shares have priced in lots of good news. (4) Q2 bank loan loss reserves may have peaked if Covid-19 cases plateau. (5) Low interest rates and less net interest income weigh on bank earnings. (6) Revenues from capital markets trading and underwriting save the day. (7) Old MacDonald had … factory-grown protein molecules? (8) Fans tout the environmental benefits of returning pastures to Mother Nature. (9) Impossible Foods’ secret sauce: genetically altered yeast.
Que Sera, Sera
Check out the accompanying pdf and chart collection. (1) Doris Day’s advice to investors about the election. (2) The future will bring more government spending, particularly on infrastructure. (3) 2021 unlikely to see a recession, so the bull should continue to charge ahead. (4) For stocks, Powell matters more than who occupies the White House. (5) Do investors want Trump, Biden, or just a clear winner? (6) Goldman weighs in. (7) Under Biden, higher taxes on higher incomes. (8) Biden Plan scores poorly on dynamic basis as high taxes weigh on growth. (9) Biden has a spending plan for that. (10) Biden Blue Portfolio.
’Tis the Earnings Season: Leaders & Laggards
Check out the accompanying pdf and chart collection. (1) The Halloween month. (2) Remarkable rebound in real GDP after remarkable fall. (3) Mapping GDP into S&P 500 revenues and earnings. (4) The first services-led recession. (5) In the past, revenues cycle was driven more by goods than by services GDP. (6) Buybacks don’t make much of a difference to per-share revenues and earnings growth rates. (7) No change in our earnings recovery outlook. (8) Q2 earnings season had a big upside hook. (9) S&P 500 forward revenues, earnings, and profit margin all continuing to recover. (10) Drilling down to the forward earnings of sectors and industries.
Don’t Fight T-Fed
Check out the accompanying pdf and chart collection. (1) Crossing the border into the fiscal realm. (2) Fed is here to help finance the debt. (3) Consolidating the Treasury and the Fed into “T-Fed.” (4) “Feddie” is still here for us too. (5) Has the Fed been capping the bond yield since MMT Day? (6) Buying all of the Treasury’s new bond issues. (7) MMT has boosted demand deposits and M2 growth. (8) Hooked on fiscal stimulus, Fed officials begging for more. (9) ECB and BOJ are on board the MMT Magical Mystery Tour along with the Fed.
Banks, Sweden & Digital Currencies
Check out the accompanying pdf and chart collection. (1) A year financials want to forget. (2) Watching loan losses in commercial real estate, credit cards, and autos. (3) Next week’s earnings reports will reveal whether banks have to set aside more reserves than the market already expects. (4) Banks’ forward earnings have risen, but questions about 2021 linger. (5) How Sweden managed through the first Covid wave with restaurants open and no masks. (6) Recently, Sweden has become more restrictive in the wake of a second wave, while the rest of Europe has become less so, avoiding the blanket shutdowns it had before. (7) Central banks develop digital currencies, with Chinese in the lead.
Strategy Matters
Check out the accompanying pdf and chart collection. (1) Lots of V-shaped recoveries around the world, so far. (2) New record high for volume of non-auto retail sales in Eurozone. (3) CRB raw industrials spot prices on recovery track. (4) Weekly S&P 500 forward revenues auguring well for Q3 revenues recovery. (5) S&P 500 Growth has been beating Value since early June. (6) Longer term, Value’s total return gets a bigger boost from dividends than Growth’s. (7) With or without dividends, Value has lagged Growth during the bull market since 2009. (8) A vaccine might give Value a shot in the arm. (9) Next Generation EU fund moves Europe toward more fiscal unification. (10) NGEU is also the New Green EU.
Not So Bad
Check out the accompanying pdf and chart collection. (1) Late start to school year depresses September payrolls. (2) Solid gain in payrolls excluding teachers. (3) Payrolls regain 54% of jobs lost during lockdown recession. (4) Big recovery in aggregate hours worked augurs well for our Earned Income Proxy and personal income. (5) Regional business surveys correctly predicted the V-shaped recovery in national M-PMI from April through September. (6) Lots of upbeat comments from M-PMI report. (7) NM-PMI isn’t all about services. (8) Lots of upbeat comments from NM-PMI report and a few not-so-happy ones. (9) Prices-paid indexes in regional and national business surveys are rebounding. (10) Watching, but not worrying, about inflation.
E Pluribus Unum Shopper
(1) Notwithstanding our political differences, we are all shoppers. (2) Shopping releases dopamine. (3) The best cure for cabin fever. (4) GDPNow is tracking big Q3 recovery. (5) Working for a living should offset less government support. (6) Another round of fiscal stimulus would keep V-shaped recovery going through next year. (7) Still some extra bucks in personal saving. (8) Our Earned Income Proxy continues to recover. (9) Housing-related spending leading the “V is for Victory” parade. (10) De-urbanization great for home-related sales, including autos. (11) Services are recovering but remain challenged by social distancing. (12) Doing our part for the war effort. (13) Not much of a recession in tax-payments data.
Lots of Issues To Debate
(1) A presidential debate for the history books. (2) Mnuchin’s stimulus hint trumps debate shouting match. (3) More V-shaped indicators. (4) Hotel REITs need travelers to continue their rebound. (5) Shuttered stores hurting Retail REITs. (6) Cell towers and data centers help Specialized REITs outperform. (7) Chinese media fans the US/China cold war flames. (8) Diplomats stop talking. (9) Sinicization continues. (10) Will more Chinese professors in the US return home? (11) The Boring Company keeps on digging.
Inventory Swings
(1) Having too much inventory during a recession is a problem. So is not having enough during a recovery. (2) Companies responded rapidly to pandemic by slashing orders and production. (3) Inventory liquidation during H1 set stage for rebound during H2. (4) Pent-up saving and demand during lockdown recession triggered V-shaped recovery as restrictions were lifted. (5) Retail sales lead bungee rebound in business sales. (6) Inventories can be a big swing factor for real GDP. (7) Good for transportation. (8) Something is really not right with jobless claims data.
Still on V-Shaped Recovery Track
(1) September data still on V-shaped recovery track. (2) Is there enough stimulus left? (3) Doubling down on the increase in real GDP. (4) Regional business indicators up again in September. (5) Not enough new homes to meet booming demand. (6) Solving part of the puzzle on why federal tax receipts are so strong. (7) Stalling high-frequency indicators could be seasonal issue. (8) The pandemic’s impact on corporate finance. (9) Pandemic making corporations dash: from dash-to-cash credit lines to dash-to-issue bonds and stocks. (10) Why is M&A boom MIA? (11) Buybacks bust. (12) Zombies are dead and alive.
The Great Debates
(1) Let the debates begin. (2) Battle of the Septuagenarians. (3) Cognitive test. (4) Recalling the first Great Debates between Kennedy and Nixon. (5) Rooting for gridlock. (6) September and October tend to be down months except when they are up months. (7) Two months before and four months after presidential elections. (8) Republicans tend to be bullish. And so do Democrats. (9) Hard to pinpoint cause of Panic Attack #67. (10) No bear market in 200-dmas. (11) A technically correct technical correction. (12) Even the Magnificent Five FAAMGs are prone to a correction. (13) Known unknowns will soon be known. (14) Movie review: “Social Dilemma” (+ +).
Cold Warriors
(1) Trump’s and Xi’s barbs heat up cold war. (2) Xi wants China’s private businesses to kowtow. (3) China unveils plans to blacklist “unreliable” foreign companies. (4) Trump’s attempt to ban WeChat foiled for now. (5) Battle over TikTok escalates. (6) Xi won’t stand for opposition at home or in Hong Kong. (7) US finds another Chinese spy, this time in NYC. (8) US’s visible support of Taiwan irks China. (9) Chinese military on display on India’s border and in South China Sea. (10) China adopts MMT to keep its economy growing. (11) Nikola hits a bump in the road, while Tesla’s smooth sailing continues.
The Economic Consequences Of De-Urbanization
(1) The roof is rockin’. (2) Housing boom offsetting lots of busts. (3) Existing home sales are hot, especially for homes with room for an office, and a swimming pool to boot. (4) Millennials are suddenly, finally buying homes en masse. (5) 32% rebound in Q3 real GDP? (6) Inventories of existing and new home sales are historically low. (7) Residential construction plus home improvements exceed nonresidential construction, as well as public construction. (8) Housing-related economic activity should more than offset weak recovery in pandemic-challenged industries. (9) A win-win for distressed home sellers and real estate investors.
Fed Fully Embraces MMT
(1) September is the worst month for stocks. (2) Stocks weighed down by known unknowns, and too much bullishness. (3) Powell before and during the pandemic. (4) Another pivot: Powell on MMT before and after Covid. (5) A trillion dollars here, a trillion dollars there. (6) Waiting for another round of fiscal stimulus, which might be derailed by fight over SCOTUS. (7) A straight line of dots near zero. (8) FOMC inflation projection undershoots 2% through 2023. (9) Should we have faith in FAITH? (10) Maximum employment exceeds full employment. (11) Powel paints dark picture without more fiscal stimulus. (12) Inflation expectations remain relatively subdued. (13) A couple of dissenters.
The Good with the Bad
(1) We never had it so good as in 2019. (2) Even persistently pessimistic Census data now confirm that household incomes rose to record highs last year. (3) Just a coincidence that standard of living rose to new record highs under Trump? (4) It’s done so under previous pro-business presidents. (5) Can we bury stagnation myth once and for all, please? (6) Real hourly wages up more than 1.0% per year since 1995. (7) Census still using CPI, while Fed uses PCED. (8) Falling average size of households reduces their average incomes. (9) Are the rich paying their fair share yet? (10) Income inequality isn’t a myth. It’s a consequence of capitalism-driven prosperity. (11) Can a housing-led rebound take us back to Heaven on Earth? (12) Movie review: “Defending Jacob” (+ +).
Transports Cruising Along
(1) Transports benefit from pandemic-fueled online shopping. (2) Industry rebounds on business restocking and resumption of global trade too. (3) Railroads and truckers doing great, airlines not so much. (4) FedEx posts banner earnings, plans for holiday and vaccine onslaught. (5) Cruising the ocean blue using green energy. (6) Ammonia fuel cells propel a ship in Norway. (7) Ferries among first adopters of hydrogen fuel cells. (8) ExxonMobil making biofuels to propel ships. (9) Capturing ships’ carbon—possible alternative to changing fuels?
Inflation & the Pandemic
(1) Raising forecasts for GDP and for S&P 500 revenues and earnings too. (2) S&P 500 forward earnings continue to recover. (3) Mag-5 and passive investing one more time. (4) Another look at equity ETFs vs mutual funds. (5) From 666 on the S&P 500 to 0.666 on the bond yield. (6) The Fed is in control of the bond yield. (7) Disinflation losing one of the 4-Ds? (8) The Age Wave Model is still disinflationary. (9) MMT on steroids in the US since late March. (10) Japan and China have been doing MMT for a while without inflationary consequences. (11) Virus infects CPI.
The Magnificent FiveNow & Then
(1) Our new Topical Study on P/E x E. (2) Explaining and making the case for forward earnings. (3) Practical applications. (4) The Mag-5 since 1993. (5) Today’s Mag-5 are the FAAMG stocks. (6) Are today’s Mag-5 mega because of Trump or despite him? (7) One more time with more details: Mag-5’s impact on three investment styles. (8) Are today’s Mag-5 mega because of ETFs?
What in the World Is Going On?
(1) A one-of-a-kind recession. (2) V-shaped recovery in global PMIs and leading indicators. (3) Impressive rebound in Chinese exports. (4) Copper leading the rebound in industrial commodity prices. (5) Rebound in global economy and commodity prices weighing on dollar. (6) The euro gets a boost from EU’s fiscal policy response to pandemic. (7) S&P 500 Materials confirming global economic recovery. (8) The Magnificent 5 favored LargeCap, Growth, and Stay Home investment styles until September 2. Not so much since then. (9) Asking an expert about the outlook for vaccines. (10) Lots of known unknowns need to be known before the pandemic will be over.
Survival of the Fittest In Retailing
(1) Market bounces after correction in go-go tech industries. (2) Economically sensitive industries outperformed during the correction. (3) Pace of retail bankruptcies picks up this year. (4) As more stores shut lights permanently, will the survivors benefit? (5) Technology aims to save the world from global warming. (6) Electric construction trucks replace diesel. (7) Generators switch from diesel to hydrogen. (8) Waiting for the unveiling of long-lasting aqueous air batteries.