Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Climate for a Change
(1) LargeCap’s forward revenues & earnings beat the SMidCaps. (2) Profit margins lower for stocks of all sizes. (3) No new high for SmallCap index price. (4) Valuation for SMidCaps worsened compared to LargeCap. (5) Coronavirus fears spread through markets. (6) FAANGMs causing P/E divergence between LargeCap and SMidCaps. (7) Global elite and youth activists debate climate change in Davos. (8) Global prosperity linked to carbon emissions? (9) IPCC says eight years left before planet gets too hot. (10) Corporate CEOs focused on sustainability for good. (11) Capital reallocated to sustainable investments.
Something To Fear
(1) When wishes come true. (2) P/E-led meltup increases risk of correction. (3) From nothing to fear to fearing a pandemic. (4) We are all virologists now. (5) China’s autocrats: part of the solution or part of the problem? (6) China syndrome: a major health crisis has been waiting to happen. (7) Has technical picture been too bullish? (8) Too many winners? (9) Valuation models: different strokes for different folks. (10) Misery Adjusted P/E is neutral. (11) Sticking with 3500 S&P 500 target by year-end.
Going Viral?
(1) Panic attacks vs bear markets. (2) Going for a ride with the Blue Angels. (3) Will latest virus outbreak be Panic Attack #66, or something much worse? (4) SARS, MERS, EVD, and now nCoV. (5) We are all virologists now. (6) Bad start to the Year of the Rat in China. (7) Signs of global life in commodity prices and flash M-PMIs. (8) Housing-led growth in US during 2020? (9) US leading indicators may have run out of room to signal economic expansion. (10) Railcar loadings are depressing, while truck tonnage is upbeat. (11) Neither boom nor bust in global forward revenues and earnings. (12) What’s the message from the bond market? (13) Movie review: Jojo Rabbit (+).
Staying Defensive in a World of Danger
(1) Dangerous world means more defense spending. (2) Boeing shares grounded, but most other aerospace & defense stocks flying high. (3) Mergers, spending on aircraft, missile defense, and space all help. (4) If Dems win Oval Office, there may be trouble for defense stocks ahead. (5) Venture capital funding a bit soft in Q4 but strong for 2019 as a whole. (6) Internet companies are receiving the most funding, especially software as a service.
Happy Chinese New Year
(1) Pigs, rats, and politicians. (2) Pandemics and plagues. (3) China rapidly becoming the world’s largest nursing home as a result of ongoing urbanization and previous one-child policy. (4) Real retail sales growth cut by over two-thirds in past 10 years. (5) Less bang per yuan of monetary easing. (6) Soaring food prices depressing retail sales too. (7) China’s PPI is a good indicator of global growth, and is deflating slightly. (8) Vehicle sales weak in China. (9) Trump’s trade deal with China looks good on paper. (10) Tariffs won’t be eliminated until Phase 2 deal is done. (11) IMF sees modest pickup in global economic growth ahead. (12) Commodity prices are showing signs of life, as are European auto sales.
Love Songs for Investors
(1) To the moon. (2) Sinatra’s stock market. (3) Powell gets blame for Q4-2018 meltdown and credit for meltup since then. (4) Fed giving more weight to inflation indicators; so should investors. (5) Fed is back in patient mode as inflation remains subdued. (6) The CPI has an upward bias relative to PCED. (7) Trump is the stock market’s rainmaker. (8) Trump morphing global multilateral trade system into bilateral one. (9) GDP growth: more of the same. (10) Wage gains aren’t inflationary if driven by productivity. (11) Real wages suggesting faster productivity growth. (12) Movie review: “Bombshell” (+).
Banking on the Trade Deal
(1) Analysts following Financials have low expectations for 2020. (2) Financials stocks rallied last year. (3) JPM/Citi blow past Q4 estimates. (4) Trade deal may boost lending and open Chinese market. (5) Yield curve has reversed its inversion. (6) Q4 fixed-income trading surge will mean tougher comps in 2020. (7) CECL keeps accountants busy. (8) Rally means happy investors but pricey stocks. (9) China gets closer to introducing a digital yuan; Fed’s Brainard suggests more gradual change in US.
Lots of Good News
(1) Tough comps for 2019 earnings. (2) 2020 should be better for earnings. (3) S&P 500 forward revenues and earnings at record highs. (4) Forward earnings implies a 9% increase in earnings this year. (5) Last year’s worries are so yesterday. (6) The Mullahs are cornered, and must fear the US after their top general was droned. (7) Is there method to Trump’s madness? (8) Trump’s favorite popularity poll is the stock market. (9) Valuation multiples are flying closer to the sun.
The Fed: Rounding up the Usual Suspects
(1) Running out of basis points. (2) Bernanke’s presidential address. (3) Bernanke promotes QE as permanent tool for Fed. (4) QE plus forward guidance = 300bps cut in federal funds rate, according to Big Ben. (5) Yellen and Powell agree with Bernanke. (6) Summers sees “last hurrah” for central banks. (7) FOMC’s annual rotation still leaves the Fed on hold. (8) A roundup of the views of Fed officials. (9) “In a good place.” (10) Powell is patient again. (11) The global economy remains relatively weak, and is on Fed’s radar screen.
Stocks & Bonds: In the Fast Lane
(1) Back to the future: forward P/E back at 18.4. (2) Getting closer to 3500 too fast, too soon. (3) S&P 500 forward revenues at new high, while forward earnings has stalled. (4) Is the stock market discounting a productivity growth rebound in the decade ahead? (5) Technology: from jets to main frames to PCs to a brave new world. (6) Reach-for-yield driving stock and bond prices higher. (7) Falling high yields. (8) Counting the number of jobs versus the number of workers. (9) Percentage of full-time workers highest since March 2008. (10) Movie review: “1917” (+ +).
The Vegas Show
(1) 2030 is only 10 years away. (2) A future full of futuristic gadgets. (3) Elon Musk on our roofs. (4) Elon Musk’s new battery. (5) Microbes as household pets. (6) A Crispr future. (7) Smart toilets. (8) 3-D plus one. (9) Musk in our brains. (10) Flying cars. (11) We will all be Jetsons. (12) What’s cheap, what’s not cheap in the S&P 500. (13) Paying up for safety.
Will Inflation Make a Comeback in 2020?
(1) Another 2%+ quarter for real GDP. (2) Good news and not-so-good news in trade. (3) Purchasing managers are upbeat in services, still depressed in manufacturing. (4) No growth in factory orders. (5) Truck and rail traffic are on the weak side. (6) Auto sales are cruising at the same speed. (7) Employment indicators still showing a strong labor market. (8) Big issue in 2020: Will rising wage inflation boost price inflation? (9) More wage inflation in services than in goods industries. (10) Competitive pressures should keep a lid on price inflation and stimulate productivity.
More Happy Dividend Returns in 2020?
(1) Is the market high on a sugar high provided by the central banks? (2) Investors should not be preachers. (3) The problem with P/E-led meltups. (4) The Fed’s balance sheet is expanding again. (5) The ECB’s balance sheet is expanding again. (6) The BOJ’s balance sheet never stopped expanding. (7) The PBOC has cut reserve requirements 7 times since early 2018. (8) Dividends growing solidly despite earnings growth recession. (9) Dividends’ CAGR trend is around 6% still. (10) Latest bull market in S&P 500 hugging 2% dividend yield valuation model. (11) Compounding dividends are the 8th Wonder of the World.
Nothing To Fear But Nothing To Fear (and Iran)
(1) Iran again. (2) Executive action in Baghdad. (3) The ’20s vs the ’70s. (4) Is there more upside left in stocks following the Roaring ’10s? (5) The wall of worry. (6) Less to worry about? (7) Will Iran be Panic Attack #66? (8) The meltup could be on hold depending on geopolitical developments in the Middle East. (9) The valuation question. (10) The earnings question. (11) The global growth question. (12) Global manufacturing remained depressed according to December’s M-PMIs. (13) Movie review: “Richard Jewell” (+ +).
Chips for the Holidays
(1) FedEx and Boeing are downers in an otherwise up year. (2) Tech and Nasdaq come out ahead. (3) Semi Equipment is the best-performing S&P 500 industry in 2019. (4) Semi stocks are saying the cycle’s bottom is in, and good times are ahead. (5) 5G’s rollout means more equipment, more devices, and more chips. (6) Analysts upgrading semis. (7) Offering AI services makes you cool.
2020 Vision
(1) DaVinci Code 2020. (2) Hard to see a credit crunch next year with central banks still easing. (3) Less geopolitical tumult in 2020? (4) No regime change in 2021 White House. (5) 2020 vs 2019: Tighter labor market, less trade tension. (6) Another good year for consumers, and a better one for housing industry. (7) Productivity growth likely to surprise to the upside. (8) The Fed is done for a while. (9) Risks: Round up the usual suspects and the zombies too. (10) Stock market meltup? (11) Earning the coupon on bonds. (12) Neutral on the dollar at this level.
Slicing & Dicing Pork & Profits
(1) Peace dividend likely for global economy. (2) A serious shortage of pigs in China. (3) Soaring meat prices inflating Chinese retail sales. (4) Chinese forward revenues and earnings remain subdued. (5) China MSCI is cheap and likely going higher. (6) What’s weighing on NIPA profits? (7) S corporations muddying the waters. (8) Dividend data suggest that underlying trend of profits is upward. (9) National Income shares can be misleading.
Peace in Our Time
(1) Anti-war slogan. (2) Phasing in a trade deal with China. (3) Manufacturing may be weighed down by too much capacity and aging consumers. (4) No global boom in 2020. (5) The zombie story again. (6) Commodity prices may be signaling better growth ahead. (7) Mixed bag of US economic indicators still adding up to 2% growth. (8) Germany’s auto industry dragging down European manufacturing. (9) The Year of the Pig has been bad for pigs, and Chinese consumers. (10) Real retail sales growth in China remains on downtrend. (11) Children of one-child nation facing big burden as young adults tending to their aging parents’ needs.
Pedal to the Light-Truck Metal
(1) Auto manufacturers in the slow lane, hurt by international sales and EV investments. (2) Auto retailers in the fast lane, thanks to used light-truck sales. (3) Zero trade fees help brokers battle Fin Tech upstarts. (4) Shareholders like Schwab’s recent moves. (5) Fin Tech companies pressuring asset management fees too. (6) Tesla’s solar roofs may have their day in the sun.
More Easy Money in 2020
(1) The Fed Grinch who turned the past four Fed chairs into Santas. (2) Powell pivoted from Grinch to Santa last Christmas. (3) It’s been a very long Santa Claus rally since last Christmas. (4) Is it RM or QE? Who cares? The Fed’s balance sheet is expanding again. (5) Draghi’s swan song: Another open-ended QE aimed at stimulating MMT. (6) Kuroda says lots of bonds left for the BOJ to buy. (7) Don’t fight the three major central banks. (8) Thank you, Paul Volcker!
What’s in Style?
(1) Is it SMidCap’s turn to outperform? (2) Fed’s third rate cut this year along with yield curve reversal have consequences. (3) Smaller firms’ profit margins may be getting squeezed more than larger ones by tight labor market. (4) Margins higher for large companies than small ones. (5) Growth vs Value: Another perspective. (6) Go Global isn’t rising to the occasion so far. (7) Germany hasn’t bottomed yet. (8) OECD leading indicators bottoming, but not recovering. (9) China’s exports and imports stalled at record highs. (10) Forward revenues still moving forward in many places.
Purchasing Power
(1) The Fed is hearing that the local folks are benefiting from the long expansion. (2) Jobless rate down sharply for most Americans by race, ethnicity, and education. (3) Consumers’ purchasing power continues to power ahead. (4) There’s no stagnation in real wages, which are powering ahead to record highs. (5) Trend in employment growth remains solid. (6) Record number of full-time jobs. (7) Consumers are saving a lot, especially in liquid assets rather than in stocks. (8) Low rates forcing savers to save more. (9) Households’ debt-servicing burden is at record low. (10) The income inequality naysayers are getting some pushback finally. (11) Movie review: “The Irishman” (+).
’Tis the Season for Shopping
(1) This year’s holiday season has fewer shopping days. (2) Cyber Monday saw record spending. (3) Ritholtz warns investors to beware of seasonal hype. (4) While some retailers are raking it in, shifts in shopping patterns have stranded others in the cold. (5) Two S&P 500 retail industries with fraying earnings cloaks: Department Stores and Apparel, Accessories & Luxury Goods. (6) Likewise, there are haves and have-nots in the S&P 500 Technology sector. (7) High P/Es in S&P 500 Application Software industry mean there’s little room to err.
What’s New? Not Much!
(1) Global M-PMIs: some, but not much, improvement. (2) Trump making sausage out of trade talks? (3) Emerging economies showing better M-PMIs than developed ones. (4) Latest US M-PMI a downer for S&P 500 revenues growth. (5) Is trade-related uncertainty certainly bearish for stocks? (6) The Fed is probably done for now, but a one-and-done rate cut is possible early next year. (7) Looking forward to better earnings. (8) A few bond-friendly developments.
Signs of Life & Death
(1) The Great Inflation of the 1970s is long behind us. (2) Is inflation dead or just in a coma and on life support provided by the central banks? (3) The Fed’s delusional “make-up” strategy for inflation. (4) ECB ready to fine-tune inflation target. (5) BOJ out of ammo. (6) Central bankers want fiscal policy to take over. (7) China catches the swine flu. (8) Looking for a pulse in the global economy. (9) China’s lukewarm stir-fry. (10) German auto industry reducing payrolls. (11) US consumers on spending spree that has yet to trickle down to manufacturing.