Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Warning: Hazardous Data
(1) KDDD: Known Data Deficiency Disorder. (2) Definition of “good” data. (3) Lots of good economic data suggesting economy bottomed in April. (4) Economic Surprise Index goes from record low to record high in the past few weeks. (5) Mortgage applications and pending home sales show strong housing recovery. (6) Industry analysts have stopped cutting their earnings estimates for 2020 and 2021. (7) S&P 500 forward earnings up for the past six consecutive weeks. (8) Gasoline usage rebounding as Americans drive more to work and to shop. (9) But are they also driving more because they don’t want to take mass transit and can’t travel overseas? (10) Hard to count the unemployed. (11) Lots of issues with pandemic data.
Stress Tests
(1) A bank stress test with additional sensitivity to the virus. (2) A group of 34 lenders get tested for V/U/W scenarios. (3) A freeze on buybacks and a cap on dividends. (4) Awash in deposits and making lots of loans. (5) Provisioning for more losses. (6) GFC was much worse for Financials than GVC so far. (7) Large corporations in better position to survive GVC than small businesses. (8) Financials led dividend cuts during GFC. This time, Energy more likely to lead the way. (9) Tech firms and Financials are the big repurchasers of their own shares. (10) Buybacks data confirm that most are to offset dilution from employee stock compensation plans rather than to boost EPS.
Natural & Man-Made Disasters
(1) Self-inflicted collateral damage in the fog of war. (2) A five-part plan for avoiding lockdowns next time. (3) Learning to live with the virus now in case a vaccine can’t be found. (4) Reagan, Emanuel, Obama, and Trump. (5) Why didn’t Centers for Disease Control and Prevention with a $6.5 billion annual budget control and prevent COVID-19? (6) Generous government unemployment benefits may be boosting unemployment and weighing on recovery. (7) Return-to-work benefits? (8) Consumer spending getting a post-lockdown boost from all the saving done during lockdown. (9) Movie review: “Irresistible” (+).
Wall of Worry
(1) Market meltup meets Wall of Worry. (2) COVID spike lengthens list of investor concerns. (3) NY roads get crowded as COVID restrictions lift. (4) Price of crude drops on COVID spike, but still up sharply from April low. (5) A look at how COVID has affected oil supply and demand. (6) Surge in oil inventory should peak this quarter. (7) Honeywell joins the ranks of companies offering quantum computers. (8) A quantum Internet is being developed to link quantum computers.
Cooped-Up Demand
(1) A simple way to get rid of cabin fever. (2) Cash-fueled CUD vs usual old PUD. (3) Gasoline usage continues to recover in US. (4) Jumping jack flash PMIs. (5) Three regional economic rebounds. (6) Commodity prices moving in the right direction. (7) S&P 500 consensus forecasts for 2020 and 2021 revenues and earnings starting to bottom. (8) Why aren’t revenues down more? (9) Forward revenues and earnings also bottoming. (10) How broad is bottoming in S&P 500 forward earnings? (11) The worst may be over for downward earnings revisions. (12) What’s worse for freedom: lockdowns or masks?
Party Like It’s 1999
(1) Prince was an amazing prognosticator. (2) Defying doomsayers by throwing a party. (3) Countering the pessimists, but acknowledging that they could be right someday about the End of Days. (4) Fed deploys B-52s rather than helicopters to fight latest crisis. (5) Two alternative 1999-like party scenarios. (6) Who are all those unmasked men and women? (7) Nasdaq party may just be getting started. (8) Agreeing with Santoli. (9) Smart money is bearish. (10) It’s record-low corporate bond yields, Smarty! (11) Robinhood is a bit player in this party. (12) Unlike Greenspan, Powell is no cheerleader. (13) The Great Disconnect, then and now.
Huge Windfall For Corporate America
(1) The Fed’s D-Day. (2) A very successful shock-and-awe campaign. (3) Time to declare mission accomplished? (4) MMT + TINA = MAMU. (5) The MAMUs of 1999 and now. (6) Powell Put aimed at supporting both stocks and bonds. (7) Slicing and dicing forward P/Es now and then. (8) Robinhood for the young and the restless. (9) Fed stoking moral hazard by saving fallen angels from turning into Zombies. (10) Record corporate bonds outstanding and record gross new issuance at record-low interest rates. (11) Movie Review: “Da 5 Bloods” (+ + ).
Don’t Sell US Consumers Short
(1) American shoppers once again live up to their reputation. (2) A pile of personal saving helps fuel a V-shaped spending recovery. (3) Trump wants US manufacturing to come home. (4) Complex supply chains may make reshoring difficult. (5) Manufacturing in the US may increase costs and turn former Chinese suppliers into competitors. (6) Down on the farm: Robots killing weeds and picking fruit. (7) Autonomous tractors can work day and night.
Fed vs Virus Waves
(1) The meltup of the day. (2) Is a two-month lockdown recession a recession or just a natural disaster? (3) Index of Coincident Economic Indicators peaked during February, troughed during April. (4) Both S&P 500 forward revenues and forward earnings seem to be bottoming already. (5) Powell’s Put dwarfs predecessors. (6) Corporate bond investors get a Fed Put too. (7) Fed pumping waves of liquidity to offset virus waves. (8) The Fed: Savior of Fallen Angels and Zombies. (9) Now we know how Powell intended to fix corporate debt crisis. (10) Five characteristics of virus-proof companies.
Sensitive Prices
(1) Commodities showing less manic depression than stocks. (2) Less dramatic swings in commodity prices than in stock prices. (3) Commodity prices have actually held up surprisingly well under the circumstances. (4) Boom-Bust Barometer goes bust. (5) Copper didn’t crash along with global auto production. (6) S&P 500 forward revenues is down, but not out. (7) Gasoline demand leading the rebound in petroleum usage, but inventories continue to build. (8) Lumber price prospects turning bullish. (9) Why isn’t gold soaring even higher?
Crazy Year
(1) 2020: Is it over yet? (2) Longest expansion followed by shortest recession. (3) Monetary and fiscal responses for the record books. (4) Huge pile of savings could finance V-shaped recovery in consumption. (5) Record-setting meltup follows record-setting meltdown. (6) Sentiment turns too bullish too fast. (7) Rooting for churning. (8) Biden’s nightmares. (9) Biden’s savior. (10) Second wave already, or more of the first wave? (11) Viral statistics can be sickening and misleading. (12) Mobility stats showing more mobility. (13) Vaccines to the rescue? (14) Movie: King of Staten Island (+ +).
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.