Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Green Shoots
(1) Cooped-up Americans hit the road and buy homes. (2) Vacationers cancel overseas travel plans and see the US instead. (3) Forward earnings may be bottoming. (4) Tech earnings push Nasdaq across the 10,000 threshold. (4) Vegas opened its doors, and people walked through. (5) Battle over the electric vehicle market breaks out. (6) Tesla becomes most valuable car company as it pushes forward with electric trucks. (7) Nikola bets on fuel cells. (8) Ford is in the EV game too.
The Shortest Recession On Record
(1) Free Kindle book on the Fed. (2) Meet the Dating Committee. (3) The longest economic expansion followed by the shortest recession on record. (4) Did the economy bottom in May or in June? (5) Tracing out a swoosh. (6) Tracking mobility as the economy reopens. (7) Bull market broadening in recent days. (8) Remarkable rebound for both LargeCaps and SMidCaps. (9) Value doing some catching up to Growth. (10) Growth’s natural advantage is growth.
Across the Pond
(1) Free Fed Kindle book. (2) TINA is driving meltup. So is rebalancing. (3) TINA + MMT = MAMU. (4) Fed and ECB join forces to carpet-bomb their economies and financial markets with cash. (5) Lagarde’s whatever-it-takes moments: APP-Forever + PEPP two-step. (6) Going down the credit-quality curve. (7) PEPP rally in Eurozone credit spreads and stock prices. (8) Eurozone economic indicators remain depressing, while business surveys may be bottoming. (9) 2021 has to be better than 2020.
MAMU! (Mother of All Meltups)
(1) A trillion here, a trillion there; it adds up to real money. (2) Fed’s B-52 bombing campaign killed the bear market. (3) Was it really a bear market, or just Panic Attack #66? (4) From meltdown to meltup in a heartbeat. (5) Is the stock market heartless, or just optimistic at heart? (6) May’s employment report fits the V-shaped recovery scenario, sort of. (7) PPP might have brought back some paychecks, but not jobs in May. (8) Lots of unemployed expecting to get their jobs back soon. (9) Still a long way to go to repair damage in labor market. (10) BLS bean counters admit that counting beans has been hard during pandemic, resulting in a “misclassification error.” (11) Were nonworking PPP workers employed or unemployed? (12) The billion-dollar question: Will jobs be there when PPP isn’t?
The Great Reopening
(1) Could it be a V? (2) The worst may be behind Visa. (3) Jamie strikes an optimistic note. (4) The dice are rolling again in Vegas. (5) Aerospace & Defense investors betting on next year. (6) Semis get good news from Microchip. (7) Trump administration aims to lure semis back to US shores. (8) Exoskeletons overcoming disabilities.
OK, Zombies?
(1) Ugly followed by uglier earnings data. (2) Looking past the bad news. (3) RPS and EPS should start recovering during Q3, but new highs unlikely until 2022. (4) Consensus earnings estimates for 2020 and 2021 getting cut at slower rate. (5) S&P 500 forward earnings up for the past two weeks following weekly drops since early March. (6) Analysts may not be pessimistic enough about revenues, thus exaggerating likely drop in profit margin. (7) Flash credit crunch in March followed by surge in corporate bond issuance ytd! (8) That’s despite a wave of downgrades and defaults. (9) Warren Buffett thanks the Fed. (10) The biggest Fed Put of all times.
Swoosh
(1) A few podcasts when you have a few minutes. (2) Alphabet soup for economic recoveries. (3) There are also the square root and Nike’s swoosh. (4) V is the old normal. (5) Swoosh may be the new normal. (6) Late 2022 might be when we revisit peak GDP. (7) The first recession for services industries is a killer. (8) Feedback loops and aftershocks. (9) Auto output falls to zero, nada, zilch in April! (10) Cash stash update. (11) Studying virology online isn’t healthy.
The Twilight Zone: Free Money Theory
(1) The outer limits of MMT. (2) The Plunge Protection Team is back with lots of free money. (3) Ending a meltdown with a meltup. (4) Stocks are cheap compared to bonds. (5) Is there really a disconnect between stock prices and the economy? (6) Earnings expectations could bottom in the next few weeks. (7) GVC is more like a natural disaster than another great depression. (8) HUGE increase in personal saving. (9) From March’s dash for cash to April’s cash stash, which could fuel consumer-led V-shaped recovery in coming weeks. (10) MMT is Heaven on Earth. (11) Is cash on banks’ balance sheets really cash? (12) Movie review: “Grant” (+ + +).
US Declaration of (Cold) War
(1) Cyclical stocks rebound as economy reopens. (2) P/Es rising faster than Es are falling. (3) Progress on both the health and economic fronts of the war against the virus. (4) Cold war with China has the potential to replace hot war against virus as the new worry for investors. (5) China, not the US, started it, and the US is now declaring it. (6) China, not the US, has been upsetting the post-WWII global order. (7) Real vs wishful-thinking geopolitics. (8) A report that connects the dots. (9) Hong Kong Syndrome. (10) The market’s next worry. (11) Robots with hands evolving quickly.
Discounting a Vaccine
(1) Lots of important known unknowns about the virus. (2) One big known known about the Fed. (3) People are starting to socialize and party like the virus is gone. (4) Stock market is rallying like a vaccine is coming soon. (5) Q2 is so yesterday even though June hasn’t even started. (6) Railcar traffic remains depressed. (7) TSA screening more passengers. (8) Urbanites seeking suburban homes. (9) Signs of a bottom in NY, Philly, and Dallas. (10) Copper price moving up recently. (11) Woodstock and the flu of 1969.
Rebalancing Versus The Second Wave
(1) Throwing caution to the wind? (2) The second wave is the big risk ahead for the economy that could stall stock market rally. (3) Lots of money in cash and bonds available to rebalance into stocks. (4) On the same page: Savita’s story doesn’t conflict with our story. (5) After mad dash for cash, individuals are buying bond funds but still selling stock funds. (6) Institutional investors are natural-born rebalancers. (7) Record amount of liquid assets earning nothing. (8) Central bankers are natural-born buyers of bonds, enabling investors to rebalance into stocks. (9) Comparative epidemiology: 2020 vs 2009. (10) Waiting for a vaccine.
From Cabin Fever To Dopamine Rush
(1) Betting on dopamine to recharge retail sales. (2) Household debt levels pushed to new records by auto and student loans. (3) Low interest rates keep a lid on debt service. (4) Unemployment rising, incomes falling. (5) Have consumers been scared into saving more? (6) US and Chinese officials trade more barbs as manufacturers exit China. (7) Chinese companies may need to clear higher hurdles before listing shares in the US. (8) Tesla hopes to have a battery with a million-mile life expectancy. (9) Are peak sales of gas-fueled cars in the rearview mirror?
Parallel Universe
(1) Headlines for tabloids. (2) An antenna named “ANITA” finds a parallel universe. (3) Surreal developments. (4) Will killing the economy save lives? (5) Trump takes antimalarial drug against swamp fever. (6) Fed chair is now MMT’s biggest booster. (7) Fed can print ammo. (8) Powell won’t be entering negative universe for now. (9) Forward P/Es soar as stock prices rebound while earnings expectations dive. (10) Joe normalizes forward P/Es using 12-month forward EPS ending 18 months from now. (11) An update on Growth versus Value.
OK, Zoomers!
(1) Vaccine on the fast track. (2) Genetic sequencing to the rescue. (3) Messenger RNA bearer of good news. (4) Copy-and-paste approach to killing viruses before they kill us. (5) Using digitization and robots to speed up production of vaccines. (6) Phase 1 passed, on to Phases 2 & 3! (7) A vaccine that could cure the economy. (8) Tracing the outlook for real GDP. (9) How long will it take for a new high in real GDP? (10) Work-from-home may be more popular with employers than employees. (11) Productivity booster. (12) Unhappy hours for commercial landlords.
Awakenings
(1) Hearing more good things about Gilead’s anti-viral drug. (2) Will the US economy awaken from its government mandated catatonia? (3) Revising our real GDP forecast: Much worse in Q2, but recovery starts during Q3. (4) Small business survey full of bad news with one exception. (5) Consumers showing some tentative signs of leaving their cabins. (6) Gasoline demand is picking up. (7) Reopening for business, though not business as usual. (8) Inflation outlook: the 4Ds versus the 3Ts. (9) Fed would welcome and accommodate a temporary awakening of inflation. (10) Setting the stage for another Cold War. (11) Joe Biden?
Bumpy Road for Transports
(1) Powell to politicos: Be ready to step up. (2) Transports sending bearish signals. (3) Trucking one of few industries in positive ytd territory. (4) May railroad data show deterioration continues. (5) Investors help trucking and railroads stocks bounce, but still avoiding airlines. (6) April numbers out of China show economy starting to percolate. (7) Marriott says Chinese consumers starting to travel again. (8) Under Armour Chinese stores open, but sales still down y/y. (9) Will US follow China’s economic trajectory?
Looking for Bottoms
(1) The race for the cure. (2) Is remdesivir COVID-19’s Tamiflu? (3) Even Howard Stern is a virologist now. (4) Mixed message from commodity pits. (5) Professor Copper signaling a bottom in global manufacturing? (6) More gasoline will be pumped as lockdowns wind down. (7) M-PMIs: China is up, while the rest of the world is down. (8) Comparing S&P 500 fundamentals in 2020 to 2009. (9) As each day passes, 2020 becomes less important and 2021 becomes more important for stock market outlook. (10) S&P 500 forward revenues, earnings, and profit margin could bottom by mid-year.
VWW-II
(1) WW-I was followed by VWW-I. (2) Far fewer casualties so far during VWW-II than VWW-I, but the economic toll from lockdowns is mounting rapidly now. (3) If the stock market is the scorekeeper, then there will be peace in our time from the virus. (4) 2900 or so might be a good place for the S&P 500 to consolidate for a while. (5) Opening season could be full of hits and misses. (6) Brief update on COVID-19 tests, cures, and vaccines. (7) Q2 real GDP tracking down 34%. (8) Head count: 46 million distressed workers during April. (9) Government unemployment benefits are generous while they last, beating many workers’ usual pay.
The Best Things In Life Are Free
(1) Crosby, Sinatra, Vandross & Jackson sing about life’s freebies. (2) Stock investors singing about free money. (3) Jerome, Christine, Haruhiko & Spanky. (4) B-52: the bombers and the band. (5) The Fed is covering the Treasury’s deficit. (6) Fed’s policies great for distressed assets, not so great for liquid assets. (7) Band of central monetary planners. (8) Forward P/Es of FAANGM and distressed S&P 500 industries boosted by free money. (9) Most of the unemployed expect to be going back to work soon. (10) Movie review: “Driveways” (+ +).
FAANGMs & Drugs
(1) Passing time with Puccini. (2) Economic data dropping like a rock. (3) COVID-19 keeps us investing at home. (4) FAANGMs prove asymptomatic. (5) FAANGM products keep us sane while isolating, as their uptrending earnings attest. (6) Struggles to obtain PPE reignite US push to onshore critical manufacturing, including drugs and medical equipment. (7) US & China swap blame-game barbs. (8) The first country to develop COVID-19 vaccine may win more than bragging rights.
Earnings Fizzles & Fiscal Fireworks
(1) The big losers are boosting the P/E! (2) Industry analysts chopping earnings estimates. (3) An optimistic outlook for 2021 and 2022 could drive S&P 500 to new highs next year. (4) The CBO sees a depression during Q2 followed by a recovery during H2-2020. (5) YRI vs CBO. (6) CARES Act shows Washington really cares with big bucks. (7) Treasury expecting to get its money back from Fed’s lending programs. (8) Round and round we go with more rounds of free money. (9) MMT’s magical mystery tour. (10) No constituency left behind.
American Magic
(1) Entrepreneurial vs crony capitalists. (2) Big Business and Big Government are natural born allies. (3) The lobbying industry is their love child. (4) Coolidge, Reagan, Emanuel, and Machiavelli. (5) Airlines weighed down by bailouts and on flight plan to be nationalized. (6) Buffett isn’t taking any more flyers on airlines. (7) Buffett’s search for value halted by Fed’s QE4ever. (8) The Sage of Fort Knox. (9) Globalization under attack by viruses, tariffs, and border controls. (10) Stay Home vs Go Global update.
Liquidity & Distress
(1) Many fire sales extinguished by central bankers’ fire hoses. (2) As stores closed, personal saving rate soared. It will likely remain high after a short dip when lockdowns end. (3) GVC aftershocks reduce likelihood of V-shaped recovery. (4) Did you get out on February 19 and back in on March 23? Should you go away in May? (5) Shock absorbers: Distressed asset funds are like kids in a candy store again. (6) Jump in S&P 500 P/E led by most distressed industries. (7) Game changers on health front of the war against the virus. (8) Chinese government’s bullying approach raising resistance. (9) Meet China’s bat woman. (10) Planet of the Viruses: Imperiled animals are taking their revenge on pushy humans.
Morning Briefing 2020-04-30
(1) Obsessing over the P/E. (2) Pricing stocks for normal earnings and abnormally low interest rates. (3) Don’t fight the Fed, especially when it teams up with the Treasury. (4) A trillion here, a trillion there adding up to serious money. (5) Twilight Zone: Falling S&P 500 forward earnings boosting P/E. (6) Three US companies talk about China’s recovery. (7) PPG reporting paint sales improving in China. (8) Starbucks brewing more coffee again in China, and soon in US. (9) CAT is open for business in China. (10) Fortnite hosting crossover events.
Not Much Confidence Among Consumers & Analysts
(1) Rebound in S&P 500 to 2900 well ahead of schedule. (2) Forward P/E of 19.7 is a bit rich under the circumstances. (3) A hard road back to “normalized” earnings. (4) Lots of uncertainty on health front, and more bad news on economic and earnings fronts. (5) Due for some consolidation with less volatility. (6) Consumer Optimism Index falls off a cliff, and so do regional business indexes. (7) Industry analysts are adrift with no compass. (8) IMF working on assessing the damage from GVC. (9) Add another trillion to the rescue pot.