Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
It Ain’t Over ’Til It’s Over
Check out the accompanying pdf and chart collection. (1) Gridlock isn’t locked in yet. (2) Ray Charles and Chuck Schumer. (3) If the Dems win the two Senate races in Georgia on Jan. 5, a Blue Wave tsunami could still happen. (4) Trump has 70 Days of Revenge if he so chooses. (5) Next shocker: The Durham report? (6) Yogi Berra’s wisdom. (7) Vaccine countdown brings light at the end of the tunnel for pandemic-challenged companies, potentially broadening stock market rally. (8) Breadth of fresh air: The stock market starts rotating from indoors to outdoors. (9) Plenty of room to broaden bull market.
The Distribution of Corporate Equities Among US Households
Check out the accompanying pdf and chart collection. (1) Can you hear the roar of the 2020s? (2) Pfizer announces vaccine that is 90% effective. (3) Trump’s Operation Warp Speed is on speed. (4) There are still several important known unknowns about Pfizer’s vaccine. (5) Other vaccines are still in the running. (6) Large Fed research team compiles impressive database on distribution of household wealth. (7) Households own about 65% of corporate equities directly and indirectly. (8) The One Percent holds about 50% of corporate equities and mutual fund shares. (9) Older generations own a larger share of equities than younger ones. (10) Education is a key contributor to financial success.
God Bless James Madison
Check out the accompanying pdf and chart collection. (1) Meet the author of the US Constitution. (2) Gridlock by design is driving politicians mad, causing deranged partisanship. (3) Investors have learned to tune out the noise from Washington. (4) Awaiting final vote on gridlock in two January Senate races in Georgia. (5) Less fiscal stimulus and another looming shutdown. (6) Investors happy that Blue Wave agenda probably stymied by gridlock. (7) Still looking like V-shaped recovery in labor market. (8) Productivity growth rebounding in the Roaring 2020s. (9) The productivity-pay gap is a big myth that’s been around too long. (10) Movie review: “The Queen’s Gambit” (+ + +).
Back to the Future
Check out the accompanying pdf and chart collection. (1) Refreshed by selloff, tech shares bounce. (2) Semiconductor sales shine in September. (3) China steps on Ant’s IPO dreams. (4) CCP calls for tech independence and a bulked-up military. (5) Pompeo taunts China while traveling through Asia. (6) New competition in green transportation: hydrogen-powered cars and trucks.
World Tour
Check out the accompanying pdf and chart collection. (1) The third wave of the pandemic. (2) Stay Home continues to outperform Go Global. (3) US MSCI forward earnings outperforming the rest. (4) US profit margin well exceeds the rest. (5) US isn’t cheap. S&P 500 Growth is expensive. (6) Forward P/Es of S&P 500 Value and ACW ex-US showing much less divergence. (7) Global economy takes two steps forward, one step back. (8) The Zombie Apocalypse has been averted, so far. (9) Zombies refinancing debt at record-low interest rates get to live to die another day.
Viral Stress Test
Check out the accompanying pdf and chart collection. (1) GDP should fully recover from lockdown recession by end of 2021. (2) The third wave of the pandemic. (3) Credit/debit card spending remains on uptrend. (4) Puzzling strength in Treasury data on individual income tax and payroll tax receipts. (5) Labor compensation recovering. (6) Remarkable rebound in proprietors’ income. (7) Personal saving data suggest first round of fiscal stimulus hasn’t been all spent. (8) Consumer spending on goods at record high, led by housing-related spending. (9) Pandemic-challenged services mostly remain challenged. (10) Can restaurants survive on takeout alone? (11) Housing indicators remain strong.
And the Winner Is . . . ?
Check out the accompanying pdf and chart collection. (1) Who creates jobs in America? (2) American businesses have been doing well despite Washington’s never-ending meddling. (3) Is gridlock really as bullish as widely perceived? (4) Does Powell matter more than Trump or Biden for stocks? (5) The front-cover curse. (6) Remember the Silent Majority? (7) Two pollsters explain why Trump will win in the Electoral College. (8) The pandemic could cost Biden the White House if enough voters fear he will shut down the economy more than they fear the virus. (9) Polls say Biden-led Blue Wave is likely. (10) How fast will President Biden raise taxes? (11) Civics lesson: The Electoral College. (12) Movie review: “Away” (+).
Trick or Treat?
Check out the accompanying pdf and chart collection. (1) Markets get spooked. (2) Panic Attack #67 started on September 3 and should end on November 3. (3) Election uncertainty and spiking Covid-19 cases haunt the markets. (4) Markets rotate to risk off and Tech stocks stumble. (5) Next year should bring new fiscal stimulus and easier earnings comparisons. (6) Scientists trying to use Crispr to cure cancer. (7) Bayer is the latest big pharma company to buy into Crispr. (8) PPP loans affect some banks’ financials, but only temporarily.
Leaning Out
Check out the accompanying pdf and chart collection. (1) Voom = V-shaped boom. (2) Another round of lockdowns more likely under Biden or Trump? (3) Coming soon: more fiscal stimulus and a vaccine. (4) Regional business surveys strong again in October. (5) Capital spending outlook improving along with durable goods orders. (6) Big drop in the unemployment rate. (7) But people are dropping out of the labor force, especially working-age women. (8) Pandemic creates major challenges for working parents. (9) Moms & dads opting to stay at home with the kids. (10) A day in the life of one of our colleagues.
Who Owns Stocks in America?
Check out the accompanying pdf and chart collection. (1) From V to swoosh? (2) Setbacks on the health front of the world war against the virus. (3) October’s flash PMIs remained strong in US, but weakened in Eurozone. (4) Progress on the vaccine front. (5) We are rooting for the stock market to consolidate, not for another panic attack. (6) A simple question with a complicated answer: Who owns equities? (7) Equities come in assorted varieties: publicly traded, closely held, directly held, and indirectly held. (8) Households have been holding about 60% of all equities in US since early-1980s. (9) Proprietors’ income is comparable to corporate profits. (10) S corporations generate as much pre-tax profits as S&P 500 corporations after taxes. (11) S corporate profits taxed as dividends in personal income. (12) So who owns equities? It’s complicated.
Hot Houses
Check out the accompanying pdf and chart collection. (1) Fed’s regional surveys remain V-shaped through October. (2) Velocity of money making a comeback. (3) Leading index leading higher. (4) Millennials turning into motivated home buyers. (5) Running out of housing inventory. (6) Existing home prices rising faster than for new ones. (7) Larger homes with backyards are prime properties. (8) Swooshing gasoline usage. (9) Central bankers trying to drown virus in liquidity. (10) Bond Vigilantes are the walking dead. (11) Movie review: “On the Rocks” (+).
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.