Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Dodging an Earnings Recession?
(1) 2018: A good year for earnings, and bad one for stocks. (2) 2019: So far so good for stocks despite weak earnings. (3) Q2 earnings growth still (barely) positive, while Q1 likely to be down slightly. (4) Weekly data on forward revenues, earnings, and margins turning more upbeat for comparable quarterly data—maybe. (5) Joe explains growth vs value styles. (6) Melissa explains how Baby Boomers are weighing on one popular measure of wage inflation.
G-Star Astrology
(1) Wish upon an r-star and g-star. (2) Ranting about Fed’s reliance on astrology. (3) Business output outpacing real GDP by a full percentage point. (4) More potential for growth if labor shortages stimulate labor-saving innovations. (5) Fed’s pause may be justified even if economic growth picks up over the rest of the year. (6) Not much cost-push inflation from labor markets. (7) Pensions are underfunded, especially government-sponsored ones. (8) Lots more millionaires hiding in public sector. (9) Life is exceptionally good if you can retire at 50 and live until 90.
Bond Yields: Failure To Launch
(1) Lots of bonds. (2) Predicting the bond market is more about global inflation and monetary policies than about supply and demand. (3) Bearish bond gurus wrong so far. (4) Demography, debt, and deflation weighing on global growth, and keeping a lid on bond yields. (5) A world of hurt. (6) Yield curve spread signaling recession, while credit yield spreads sending all-clear message. (7) Fed data show big drop in US direct investment abroad led by plunge in reinvested earnings. (8) Are Trump’s “America First” policies working?
Disconnecting the Dots
(1) Forecasting oil prices gets slippery when the biggest users and producers shift. (2) As autos use less oil, plastics use more. (3) There’s a new king of production. (4) Energy sector’s 2019 earnings expected to tumble. (5) Tesla holds its lead in the electric car race. (6) But EV competitors have the pedal to the metal.
Following the Money
(1) Don’t miss seeing the data for the dots, warns Powell. (2) Defining “normal,” for the balance sheet at least. (3) The new normal fed funds rate remains nebulous. (4) The pause that refreshes (markets). (5) Did the bull make it to 10? (6) The past decade has favored Growth over Value.
Peace & Productivity Dividends Ahead?
(1) The Fed’s cornucopia of data. (2) US direct investment abroad turns negative in reaction to Trump’s trade policies. (3) Last year, foreigners were sellers of US stocks and corporate bonds. They bought some Treasuries. (4) Bears have more corporate debt to be bearish about. (5) Leveraged loans at record high. (6) Lots of private equity available to purchase distressed assets. (7) Supply-and-demand credit analysis not very rewarding for predicting bond yield. (8) The truth about households.
Peace & Productivity Dividends Ahead?
<p><em>See the <a href="https://archive.yardeni.com/premiumdata/mb_190311.pdf">pdf</a> and the <a href="https://archive.yardeni.com/pub/cc_20190311.pdf">collection</a> of the individual charts linked below. </em></p> <p>(1) Bad vs good data. (2) Rules for forecasters. (3) Draghi’s new mantra. (4) Remember Eurosclerosis? It’s back. (5) All we are saying is give peace a chance. (6) How the moon impacts Chinese trade. (7) Don’t put much weight on latest payroll stat. (8) Upward revisions to payrolls matter. (9) DC shutdown boosted January’s employment and depressed February’s number. (10) Blaming the weather too. (11) Earned Income Proxy at record high. (12) Tightening labor market could produce productivity dividend.</p>
Getting Loopy
(1) Slicing and dicing the S&P 500 sectors. (2) Last year’s tax cut boosted profit margins of some sectors more than others. (3) Winners emerging from Retail Apocalypse. (4) Shrinking can make a store stronger. (5) Going loopy over hyperloops.
Yesterday, Today & Tomorrow
(1) S&P 500 revenues at new record high. (2) The revenues growth cycle is turning down. (3) S&P 500 earnings and profit margin dip from recent record highs. (4) The tax cut was a big earnings booster last year. (5) The current “earnings recession” reflects last year’s tax cut rather than this year’s weakness. (6) Weekly market fundamental indicators looking toppy after big run-up. (7) Shaving our EPS forecasts. (8) Record-high dividends.
Will There Be a Peace Dividend?
(1) Another bout of irrational exuberance? (2) Will there be a peace dividend after trade war ends? (3) Stocks rally despite recession-like readings for M-PMIs in China and Europe. (4) Negative economic surprises. (5) Can old age kill a bull market and an economic expansion? (6) Joe devised an alternative to S&P 500 divisor. (7) Joe’s share count confirms that buybacks haven’t boosted earnings per share by much. (8) Drilling down to the sectors’ share counts. (9) Melissa reports that TCJA may reduce stock compensation.
The Truth About Buybacks
(1) Older, but wiser. (2) A simple model of the bull market driven by share buybacks. (3) Why aren’t earnings per share growing much faster than aggregate earnings? (4) Goldman says corporations will continue to be biggest buyers of stocks. (5) Contrary to popular belief, few buybacks benefit shareholders. (6) Buybacks are mostly offsetting the dilution resulting from stock grants. (7) Three measures of shares outstanding down only modestly during current bull market. (8) Dividend payouts are the only true cash return to investors and remain around 50% of after-tax profits. (9) Fed’s data on buybacks widely misinterpreted. (10) Progressive politicians should leave buybacks alone. (11) Movie review: “Free Solo” (+ + +).
Intrusive Disruptive Technology
(1) Holding onto gains. (2) Hot cyclicals. (3) Waiving a deadline. (4) Downturn in interest rates helps too. (5) About Facebook. (6) Our smart devices are spying on us. (7) Smile for the cameras. (8) Alexa feels your pain. (9) Your DNA can be easily traced. (10) Governments’ Big Brothers have our numbers.
Fed Heads Galore
(1) Frustrated bears. (2) More recessionary indicators. (3) Chauncey Gardiner predicts: “There will be growth in the spring.” (4) Industry analysts on verge of calling an earnings recession for H1-2019, yet they are turning more upbeat on 2020. (5) A sunnier disposition for consumers. (6) A funny thing happened on the way to the forum. (7) Fed officials pontificate on Fed’s balance sheet and inflation targeting.
From MOU to MAMU?
(1) Extending the deadline. (2) Open issues include how to enforce a deal. (3) Trump has a tiff with Lighthizer. (4) Both Xi and Trump need a deal. (5) Once again, “it’s the economy, stupid.” (6) Diverging labor markets: Strong in US, weak in China. (7) The Cheerleader-in-Chief: Trump likes meltups more than meltdowns in the stock market. (8) Global stock and commodity markets discounting a trade deal and better global growth. (9) The forex and bond markets are sitting on the fence. (10) No recession in credit yield spreads.
Stocks Go from Doom to Vroom!
(1) More concern about the extinction prediction. (2) The rest of the world is catching up to Japan’s birth dearth problem. (3) A new book predicts an “empty planet.” (So it should be easier to make a reservation at good restaurants.) (4) Hungary running out of goulash eaters. (5) It’s official: China’s maternity wards are emptying out as its nursing homes fill up. (6) Chinese producing more debt, fewer babies. (7) Stimulating baby-making with incentives in Russia. (8) Round up the usual suspects: US DOJ has a long rap sheet on Chinese spies.
Demography Goes Mainstream
(1) More concern about the extinction prediction. (2) The rest of the world is catching up to Japan’s birth dearth problem. (3) A new book predicts an “empty planet.” (So it should be easier to make a reservation at good restaurants.) (4) Hungary running out of goulash eaters. (5) It’s official: China’s maternity wards are emptying out as its nursing homes fill up. (6) Chinese producing more debt, fewer babies. (7) Stimulating baby-making with incentives in Russia. (8) Round up the usual suspects: US DOJ has a long rap sheet on Chinese spies.
In Praise of Folly: Stopping Stock Buybacks
(1) Mencken, Reagan & Emanuel on government. (2) Senators Schumer and Sanders are here to help. (3) Buybacks were once banned. Should they be limited now? (4) Unintended consequences of Clinton’s million-dollar cap for exec pay. (5) S&P data suggest aim of buybacks is to reduce dilution from stock compensation rather than to boost earnings per share! (6) Almost 100% of profits used for buybacks and dividends, leaving “only” depreciation allowance to fund plenty of capex. (7) Labor market data belie notion that real incomes and wages have been stagnating for most households and workers. (8) The income inequality debate. (9) Workers of America, buy stocks in your 401(k)s and IRAs!
Recharging Bull
(1) Rational buying follows irrational selloff. (2) V-shaped rebound in stock prices. (3) Bull will get big prize in early March. (4) New record high? Toga! Toga! Toga! (5) Flash recession? (6) Temps and truckers remain upbeat. (7) Earnings recessions aren’t always bearish. (8) Who’s to blame for Panic Attack #62? (9) Naming names: The falsely and justly accused. (10) Quiet time ahead for Fed’s QT? (11) Movie review: “Capernaum” (+ + +).
Techlash
The next Morning Briefing will be sent on Tuesday, February 19. (1) 2015 all over again? (2) 2018 was a banner year for earnings and impossible to beat this year. (3) Earnings growth recession possible this year. (4) So why are stock prices rallying when everyone is cutting earnings estimates? (5) Those forecasting an earnings recession are also predicting test of Xmas Eve low. (6) All we are saying is: Give 3100 a chance, again. (7) Trump’s tax cut was worth $20 per share. (8) Tech companies have a privacy issue. (9) Internet Bill of Rights. (10) Don’t get Zucked! (11) Information Fiduciaries. (12) Will 5G fry our brains?
A Passage to India
(1) EM stock prices rebounding from last year’s rout. (2) Fed calls the shots for EM stocks, bonds, and currencies. (3) US stocks have significantly outperformed the rest of the world during the current bull market. (4) The rest of the world has more homegrown problems than does the US. (5) After five-year run, India’s Modi is facing a spring election. (6) India’s farmers and poor haven’t fared well under Modi. (7) India has lots of mouths to feed, yet food prices are falling. (8) Rigging GDP growth and the jobless rate. (9) The central bank is easing just in time for elections.
One & Done? Up or Down?
(1) An old adage. (2) Yellen is a classic “two-handed economist.” (3) 2016: Déjà vu all over again. (4) 2-year Treasury divines the Fed’s future moves. (5) Flat yield curve is in none-and-done camp. (6) No recession in credit-quality yield spreads. (7) Will the buck stop here? (8) ECB and BOJ remain much more dovish than Fed. (9) Oil prices remarkably firm given gushing US oil wells. (10) EMs get a boost from Fed pause. (11) A deal with China could provide a short-term boost to Go Global investment strategy.
Donald Trump & Gwyneth Paltrow
(1) Can the US economy decouple from China and Europe? (2) January’s payroll gain was boosted by government shutdown. (3) No sign of recession in US employment indicators. (4) Will tighter lending standards derail US expansion? (5) China needs a trade deal with US. (6) Trump wants supply chains to leave China. (7) More disintegration than integration in EU. (8) Europe on the edge of a recession. (9) Raise taxes on the wealthy, and they will leave. (10) Movie review: “The Invisibles” (+ + +).
Spy Games
(1) CEOs tacitly support Trump’s calling out China on trade and IP. (2) Case studies of how China steals IP. (3) Swiping Tappy from T-Mobile. (4) Undercover hackers uncovered. (5) Planting spies in US companies. (6) Recruiting Chinese students studying abroad. (7) Communication Services companies on spending spree for streamable content.
Modern Monetary Theory
(1) Why are bond yields so subdued? (2) Modern Monetary Theory is the flavor of the day. (3) Kelton says federal deficits don’t matter until they matter to inflation. (4) Politicians, naturally, love MMT. (5) Link between deficits and inflation isn’t what it once was. (6) Other than Starbuck’s ex-CEO, does anyone hate deficits anymore? (7) Taking a walk on the supply side. (8) The CBO is so old school.
Revenues: Good & Bad News
(1) Good news for revenues in January’s M-PMI. (2) New orders index rebounded last month, while new factory orders continued to grow in November. (3) Hard to match last year’s revenues growth. (4) Weak global economic indicators weighing on outlook for S&P 500 revenues growth. (5) Global M-PMI falling. (6) Global leading indicators increasingly downbeat, especially for Europe and China. (7) Copper starting to shine. (8) Dollar remains a headwind for revenues growth.