Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
TINA Versus TIAA
(1) The case for cash. (2) Yet another panic attack? (3) Trade war morphs into currency war. (4) Is Hong Kong about to become Tiananmen Square? (5) Weaker yuan offsets some of tariff costs to US consumers. (6) Buffett sitting on record pile of cash. (7) Despite the depressing global economic headlines, S&P 500 forward revenues and earnings at record highs! (8) Will global manufacturing growth recession turn into a full-blown downturn? (9) Eurozone, China, and Japan have homegrown problems.
Trump’s Trump
(1) Powell gets Trumped again. (2) Midcycle rate cut triggered by “uncertainties.” (3) The end of QT. (4) More rate cuts might still be appropriate, or not. (5) Powell is a perplexing pivoter. (6) Trump feeds Fed more trade uncertainty. (7) US real exports and imports have stopped growing. (8) Record US trade deficit even though oil deficit is almost gone. (9) With the exception of hours worked, latest employment report was solid. (10) Movie review: “The Farewell” (+ +).
Cleaning Up
(1) Innovation and pricing help Consumer Staples post positive surprises. (2) Shaving is out, but clean clothes are still in. (3) Chinese consumers are young, optimistic, and spending on cosmetics. (4) Coke and Pepsi courting the health conscious. (5) Nuclear fusion: It’s not fission or a spicy new cuisine. (6) Several companies chase the opportunity to jolt the world with nuclear fusion.
Dividing Up Wealth
(1) Exacerbated wealth inequality is a natural byproduct of a prolonged economic expansion. (2) Inevitably in a capitalist system, financial risk-takers benefit more than others in flush times, lose more in lean times. (3) A new Fed report on household net worth highlights these facts of capitalist life. (4) One takeaway: The wealthy’s wealth is more cyclical than other folks’ owing to bigger corporate equity stakes. (5) Another: Our rising economic tide of recent decades has lifted all boats, not just the yachts. (6) Should retired public-sector employees be counted among the wealthy?
The World According to Garp
(1) Global economic dysfunction isn’t all about Trump’s trade wars. (2) Low fertility rates around the world suggest voluntary self-extinction of the human race. (3) Debt financed fiscal spending on retirement benefits may be weighing on growth. (4) Central banks still doing whatever it takes, including enabling MMT. (5) Fiscal and monetary policies for geriatric economies. (6) Global manufacturing weighed down by trade wars and geriatric demographic profiles. (7) US economy seems less dysfunctional than many overseas economies.
The Fed Ahead
(1) Fed likely to reset policy course. (2) Economy doesn’t need a rate cut. (3) Risking a meltup and running out of ammo next time it is really needed. (4) Bostic isn’t flying with the FOMC doves, but he doesn’t have a vote either. (5) Bostic reviews the various measures of inflation. (6) Getting more attention: Dallas trimmed mean measure is around 2.0%. (7) More doves than hawks. (8) Movie review: “Once Upon a Time … in Hollywood” (- -).
Targeting Big Tech
(1) Internet War Game: DOJ vs FANGs. (2) Investors trust that anti-trust is tough to prove. (3) Harm to customers may be a lower bar for Barr. (4) S&P 500 Industrials is rocking it, outperforming the broad index and in third place among sectors ytd. (5) Boosting the sector ytd are ten industries, including Aerospace & Defense. (6) A scary world and a free-spending Congress mean defense won’t be attacked. (7) The industry’s P/E has fallen to a very grounded 16.6. (8) Crouching credit crunch in China? (9) Rising defaults are ominous in a slowing economy with mammoth amounts of debt outstanding: $25 trillion of corporate bonds and bank loans.
Mark to Market
(1) The Boom-Bust Barometer is running out of room to boom. (2) There’s no ceiling on forward earnings, which is in record-high territory. (3) Yet another record high for forward revenues. (4) Another hook up for quarterly earnings? (5) Using the Blue Angels as a valuation model. (6) Some moon shots in the fundamentals of selected retailers.
Valuation Here & There
(1) The ideal mix of inflation, interest rates, and growth might be 2-2-2. (2) Low growth is good growth the longer it lasts. (3) Why are analysts’ long-term earnings growth expectations so high? (4) Blame Consumer Discretionary, not Tech this time. (5) PEG ratios aren’t extreme. (6) Heads or tails? High P/Es win either way? (7) Stay Home investment strategy is still winning and driving up US P/Es relative to the rest of the world. (8) Five MSCI sectors have higher P/Es in US than abroad. Tech is not one of them!
Mixed Signals
(1) Trucks are rolling along better than freight trains. (2) Consumers boost some bank earnings. (3) Forward earnings at another record high. (4) Typical earnings hook ahead? (5) S&P 500 profit margin remains very profitable. (6) Lots of questions about valuation. (7) Low Misery Index boosting P/Es. (8) Real earnings yield fairly valued. (9) Buffett says ignore Buffett Ratio. (10) The economic data are mixed, while the Fed’s Williams is mixed up. (11) Is near-zero inflation really an “insidious disease?” (12) Clarida is ready to ease.
Consumers Unchained
(1) Consumers spending like there’s no tomorrow—just not at department stores. (2) Retail sales hit another record high. (3) Flying consumers send airline earnings flying. (4) Consumer borrowing boosts bank earnings. (5) Transports yet to make a new high. (6) Senate throws the book at Facebook’s Libra. (7) Trump, Mnuchin, Powell, and France question the digital currency.
Central Bankers’ Ballet
(1) Meet ballerina Alexandra MacDonald. (2) Draghi & Powell: From pirouette to pas de deux. (3) June ECB minutes confirm broad support for easing. (4) Draghi’s latest “whatever-it-takes” speech. (5) Both ECB and Fed have second thoughts about normalizing. (6) Why are ECB and Fed officials freaking out? (7) Powell’s speech yesterday was a feather less dovish than last Thursday’s testimony. (8) The delusion of central bankers.
Truck & Train Spotting
(1) To be bullish, Dow Theory needs new high for DJTA. (2) Railroads are fine. The problem is Air Freight & Logistics. (3) US & China data showing global economy weaker than their domestic economies. (4) Record employment in trucking. (5) Trucks’ crossing: Wage inflation rising, while PPI inflation falling. (6) Railcar loadings growth signaling recession? (7) West Coast ports activity stalled at record high. (8) China railway freight traffic still on uptrend, while trade data stalls. (9) Powell seeing more slack in labor market than he did before.
Wuthering Heights
(1) Emily Brontë and the S&P 500. (2) Anxiety fatigue. (3) High P/Es make stocks more vulnerable to downdrafts. (4) Forward revenues and earnings rose to record highs in early July. (5) Earnings growth recession now, but market looking ahead to recovery next year. (6) No change in our bullish S&P 500 targets. (7) FAANGMs account for 18% of S&P 500 market cap and are hard to beat. (8) Powell doubles down on Fed’s easing pirouette. (9) Movie review: “Maiden” (+ + +).
Powell Gets Trumped!
(1) The Fed responds to Trump’s trade war. (2) Powell mentioned “trade” eight times yesterday. (3) Method in Trump’s madness. (4) The Fed’s existential crisis: Inflation isn’t a monetary phenomenon. (5) FANGs getting bitten. (6) Ten Asian rivers account for most of the plastic garbage in the oceans. (7) Getting hyper on hyperloops. (8) Consumers still in the mood to spend and have fun.
Fedspeak
(1) From plain-vanilla Fed governor to Numero Uno. (2) Learning-by-doing. (3) The power of words. (4) Powell’s, Put, Pivot, and Pirouette. (5) What does Powell mean to do next? (6) The Fed’s wordsmith department. (7) “Measured” was Greenspan’s favorite word. (8) Firming was needed before the Great Recession, then exceptionally low interest rates were the order of the day. (9) Defining “extended period.” (10) From “gradual” to “patient” to “appropriate,” and back again to what? (11) Keeping it real simple.
Global Economy: More Slow-Mo
(1) Powell’s Pivot and Pirouette will be tested this week. (2) The comforts of a Stay Home investment strategy. (3) Payroll employment zigs and zags the fixed-income markets. (4) One-and-done or none-and-done? (5) 50, 25, or zero bps? (6) Do the ECB and BOJ matter more than the Fed? (7) What’s wrong with Germany? (8) Sol y sombra: NM-PMI & M-PMI. (9) Leading to no good. (10) Forward revenues still on sunny side.
Another Powell Pivot Ahead?
(1) Neither weak demand nor dwindling supply in labor market, so far. (2) In our best-case scenario, productivity offsets labor shortages. (3) Labor force growth slows to a trickle. (4) Productivity growth collapsed during the Great Inflation and Great Recession. (5) The case for better real pay gains. (6) Good for consumers: Earned Income Proxy at record high. (7) Is a Fed rate cut still appropriate? (8) Will Powell pivot again?
Plastic: The Last Straw
(1) Let’s hit the beach. (2) Fracking boom sparks explosion in ethane production and plastic plants. (3) The plastics industry is a large driver of future demand for oil and gas. (4) Plastics getting trashed from all directions as recycling and reduced use are pushed by the woke, including some in corporate America. (5) Revised advice for this year’s graduates? (6) Companies embracing robots. (7) Waiting for robots to flip burgers at 4th of July BBQs.
The Rodney Dangerfield of Economic Expansions
(1) Happy birthday, expansion, and many more! (2) No boom, no bust. (3) The Trauma of 2008. (4) Longest expansion is also one of the most lag-prone expansions. (5) Credit crunches cause recessions, not old age. (6) Distressed asset funds are the new shock absorber in the credit markets. (7) Not enough distressed assets for DAFs. (8) Powell’s mini credit meltdown. (9) Do buybacks drive the stock market or vice-versa? (10) Joe’s updated analysis still finds negligible impact of share count on stock performance.
Turbulence for FedEx
(1) Fed’s Powell confirms our thinking: Don’t bank on a rate cut just yet. (2) “Appropriate” doesn’t mean imminent. (3) FedEx’s Smith frowns upon the US’s and China’s trade behavior. (4) FedEx hurt by slowing trade, but more’s afoot too. (5) S&P 500 Air Freight & Logistics industry has crashed so far it may be a bargain. (6) Shopify disrupting retail by helping little guys compete. (7) Planning to visit the “Most Interesting Store in the World.”
Earnings Season’s Greetings
(1) Get ready for another quarterly upside hook. (2) S&P 500 forward revenues and earnings per share at record highs. (3) Will macro slowdown show up in micro earnings reports? (4) Consumers are in a good place, though their confidence moderated a bit in June. (5) Are jobs really getting harder to find, or are skill mismatches getting worse? (6) Home sales should get a lift from lower mortgage rates. (7) Business equipment production is mostly down ytd with exception of information processing equipment. (8) Defense output taking off. (9) Mixed picture: trucks vs railroads. (10) Bank loans at record high. (11) Hard to find anything good to say about overseas economies. (12) Two studies with different results about S&P 500’s foreign sales exposure.
Lots of Central Bank Liquidity
(1) Normalization will have to wait. (2) Powell, Draghi, and Draghi. (3) Bears are still fighting the central banks. (4) The bears’ favorite chart has been mostly bullish. (5) The Powell Pivot has turned into the Powell Pirouette. (6) QT set to end in US. QE might be back on in Eurozone soon. (7) Kuroda, like Peter Pan, taking the BOJ to Neverland. (8) PBOC’s assets flatten, but cuts in required reserves boosting bank loans. (9) Clash of the titans: central banks vs the 4Ds. (10) Central banks are dependent on (weak) data.
Relief Rally #63
(1) What's next: more new highs or yet another panic attack? (2) Geopolitics getting more attention. (3) Jerome Powell is on standby to respond to China, Iran, or any other crisis. (4) Mario Draghi wants to help too. (5) Still traumatized by Trauma of 2008. (6) A list of 63 panic attacks. (7) New stock market highs despite inverting yield curve. (8) LEI stalls at record high. (9) CEI signaling slower GDP growth, not recession. (10) The Fed's word game. (11) "Patient" and "transient" are out, while "appropriate" is in. (12) July rate cut not a sure thing.
Oil & Libra
(1) There’s power in US energy independence. (2) OPEC and global GDP pushing oil in opposite directions. (3) Oil rallies on Trump/Xi meeting news. (4) Agencies cut oil forecasts. (5) US rig count falling but oil still gushing. (6) Plastics, solar, and electric cars shape oil’s future. (7) Facebook says, “Trust us with your money…really.” (8) Tech giant wants to be a banking giant, too.