Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Commodity & Currency Review
(1) Stocks having more fun. (2) The length of a mile is getting shorter for stocks’ marathon runners. (3) DJIA’s 5000 markers. (4) Commodity prices signal global growth. (5) Dr. Copper is too busy making money to make house calls. (6) Oil prices rising despite lots of US oil production. (7) The trade-weighted dollar is inversely correlated with our Global Growth Barometer. (8) The former is weak, while the latter is strong.
Many Happy Returns
(1) The longest Santa Claus rally on record. (2) Trump vs FDR. (3) Market says: “Love him or hate him, don’t bet against him.” (4) Lots of happy returns as stock market soars. (5) Biggest corporate tax-cut winners are spreading the love to their workers. (6) US Treasury projected to collect more than $300 billion from more than $2 trillion of repatriated earnings. (7) Great Rotation beginning as money leaves bonds for stocks. (8) Political turmoil in Germany. (9) Germany’s economy booming. (9) Movie Review: “The Shape of Water” (+ +).
Autonomous Auto World
(1) Showing off auto technologies. (2) Hurricanes can be good for auto sales. (3) New cars competing with lots of cheaper used ones. (4) Driverless cars will arrive soon. (5) Wirelessly networked cities. (6) The big debate: will driverless cars decrease or increase traffic congestion? (7) We are all Ubers now. (9) Amazon on wheels.
Valuation: Beauty & the Beast
(1) More on earnings-led vs P/E-led meltups. (2) The former is more sustainable than the latter. (3) Is the “Great Rotation” finally starting? (4) Buffett Ratio is going higher, according to S&P 500 price-to-sales ratio. (5) Forward earnings soaring while forward revenues are flying. (6) REY and MAPE models show fairly valued market. (7) More on impact of TCJA on earnings. (8) DTA vs DTL.
Earnings-Led Meltup
(1) Meltup odds rising. (2) Odds of a meltdown haven’t increased. (3) Bullishness is over the top. (4) Is an earnings-led meltup a meltup? (5) Analysts are just starting to boost their earnings estimates in response to tax cuts. (6) Revenue and profit margin estimates are also rising. (7) Companies are starting to share their windfalls with workers. (8) A bull market within a bull market. (9) Global economic indicators continue to heat up. (10) 666 again! (11) Movie review: “The Post” (+).
FANG-dango
The next Morning Briefing will be sent on Tuesday, January 16. (1) Taking a shower with Alexa. (2) FANGs gaining market cap share. (3) Say “hi” to Alexa Voice Services. (4) Semiconductor firms are big winners. (5) Volocopters are coming. (6) FANGs cannibalizing FANGs. (7) FANGs under attack by regulators and critics. (8) Show biz has turned into a blood sport.
Revisiting Animal Spirits
(1) Animal spirits higher today than a year ago. (2) The “hard” data is looking harder than a year ago. (3) Remarkable reversal in surprise index. (4) No more chatter about “secular stagnation.” (5) Consumer and business surveys showing that jobs are plentiful and available workers are not. (6) Fewer small businesses complaining about government regulations. (7) M-PMI orders index through the roof. (8) TCJA is jacking up consensus earnings forecasts. (9) Q1 data likely to be firmer than during the previous Q1s of current expansion.
Morning Briefing 2018-01-09
Morning Briefing. (1) TCJA is the sausage de jour coming out of DC’s sausage factory. (2) $1.3 trillion in corporate tax windfall over next 10 years has some sizeable offsets. (3) Net interest deduction is capped. (4) It doesn’t pay to have lots of debt anymore. (5) NOL deduction is also limited. (6) New rules for R&E amortization. (7) Big bonus for depreciating assets. (8) Different strokes for different folks. (9) Will the repatriated profits windfall go to buybacks, dividends, bonuses, or capital spending? Or all of the above? (10) Very interesting earnings conference calls ahead!
Crying Wolff
(1) Author Wolff cries that “wolf” is in the White House. (2) Beware of psychiatrists offering free analysis. (3) Tweets from the genius with the biggest button. (4) Investors see more upside in global economy than downside from latest Washington circus. (5) Global PMIs are hot. (6) Dr. Copper is upbeat. (7) Earnings expectations are pumped up for earnings season. (8) Bulls showing no fear of bears or wolves. (9) Despite mismatch between lots of job openings and jobless workers, wage inflation remains subdued. (10) A match made in Heaven for stock investors: solid growth with low inflation. (11) Double Feature Movie Review: “Molly’s Game” and “I, Tonya” are both rated (+ +).
2018: More Happy Returns?
(1) Earnings expected to keep on trucking. (2) Higher oil prices and a weaker dollar are tailwinds for earnings. (3) Lots of positive earnings revisions leading up to corporate tax cut. (4) Reinsurance should bounce back, barring more disasters. (5) No disasters for other insurers last year, or this year. (6) Falling inventories and turmoil in Iran could give Energy sector an earnings boost, offset some by falling P/Es. (7) Outlook for Tech earnings winners still bright with reasonable P/Es. (8) Drone spotting.
Happy New Year!
(1) Back from abroad, and back to work. (2) Invest in Chinese tourists. (3) 2018: Continuation of the global synchronized boom. (4) Global trade growing solidly. (5) US economic surprise index very strong. (6) Housing may be starting to boom. (7) Trucking index off the chart. (8) Tax cuts could fuel a stock market meltup this year. (9) Deferred tax assets make analyzing effective tax rate a taxing exercise. (10) Movie Review: “All the Money in the World” (+ +).
Creative Destruction in 2018 and Beyond
The next Morning Briefing will be sent on January 3. We wish you all the best during the holidays and the year ahead. (1) The year of living disruptively. (2) 2017 saw sea changes in how we shop, relax, store energy, and think of money. (3) Winds of change have buffeted sector leadership. (4) Change is the only constant, so expect more of same. (5) Next year’s game- and life-changers: AI, robotics, genetic engineering. (6) May 2018 bring tidings of comfort as innovations make life easier and joy as investment opportunities abound.
Good Morning, Vietnam
(1) Southeast Asia family vacation. (2) First stop: Hanoi. (3) Mopeds are like dragonflies in this city. (4) Government determined to rev up economy. (5) Enticing foreign investors with beer. (6) Next stop: Thailand, where a gift sometimes isn’t. (7) The investment equivalent of a white elephant.
Corporate Finance 101
(1) Nonfinancial corporations have record cash flow. (2) Q3 could be third quarter of 3% growth in real GDP. (3) Depreciation expense is a great tax shelter. (4) NFCs’ effective tax rate has been around 21% for a while. (5) No dearth of capital spending. (6) Lots of bond issuance, buybacks, and dividends. (7) More taxing matters. (8) Movie review: “Darkest Hour” (+ +).
Financials Are Catching Up
(1) The first digital tulip bubble. (2) Cornering the market. (3) Bitcoin vs. the banks. (4) Financials getting inflows, deals, and less regulation. (5) Wall Street returning to the business of trading. (6) Flatter yield curve. (7) Earnings optimism. (8) The Dark Web is very dark.
Go With the Flows
(1) From global energy-led rolling recession in 2015 to recovery in 2016, and boom in 2017-2018 (?). (2) Global manufacturing PMIs are running hot. (3) China’s exports and imports are back to record highs. (4) Citigroup Economic Surprise Index is highly elevated in the US. (5) Odd downward revision in GDPNow. (6) OECD leading indicators led higher by Germany and Brazil. (7) Americans collectively have never been richer as stock prices soar and home values rebound. (8) The Buffett Ratio is back to its previous record high.
Taxing Matters
(1) Puzzling over a big divergence on corporate taxes. (2) Thanks to QE programs, Fed’s profits soared along with its balance sheet. (3) Fed’s profits included in NIPA measure of corporate taxes, not in IRS tabulation. (4) NIPA also includes corporate taxes paid to other taxing authorities besides the IRS. (5) IRS data suggest corporate federal tax rate well below 20%. (6) Work in progress. (7) S&P 500 tax data suggest big corporations aren’t free-loading on the tax system as much as widely believed.
Hot Money
(1) What goes up attracts more buyers. (2) Is it a meltup if earnings are rising along with prices? (3) Flow-of-funds analysis showing lots of money pouring into stocks. (4) Equity ETF inflows at record high over past 12 months through October. (5) Lots of money pouring into mutual funds and ETFs that invest globally. (6) Revenue and earnings squiggles are upbeat. (7) Two obvious risks to the good times. (8) Labor market is tight, yet wages remain subdued. (9) Movie review: “Lady Bird” (+ +).
Tech Fender Bender
(1) Odd number. (2) The day the music died. (3) Tech gets hit on tax bill, net neutrality, and attack by old guard. (4) Taxing intellectual property. (5) Tax reform could increase taxes for tech companies. (6) FCC set to vote against net neutrality. (7) Tech still delivering good earnings growth. (8) No sign of geopolitical risk in S. Korea’s Kospi. (9) S. Korea, Singapore, and Taiwan all booming along with global demand for semiconductors.
World Equities & QE
(1) They didn’t read the memo. (2) Combined assets of Fed, ECB, & BOJ flattening. (3) The Fed taking baby steps to shrink balance sheet. (4) ECB scheduled to cut monthly asset purchases in half next year. (5) BOJ’s stealth tapering underway? (6) PBOC is back in the easing game. (7) S&P 500 forward earnings remarkably strong, outpacing lots of strengthening global economic indicators. (8) Bottom line: Global economic outlook remains upbeat.
Bountiful Profits
(1) Lots of GDP producing lots of profit. (2) Book profits at record high. (3) Dividends flat at record high. (4) Retained earnings recovering from energy-led profits recession. (5) Corporate cash flow at record high along with tax-based depreciation. (6) High profit margins. (7) Bottom line: Looking up. (8) Proprietor’s income is 60% the size of corporate profits.
Market Math
(1) Flynn, the Flim-Flam Man. (2) Another impeachment panic attack? (3) Bad news tends to be ignored during meltups. (4) Focusing on S&P 500’s tax rate. (5) A drop from an effective tax rate of 25% to a statutory rate of 20% would add an estimated $6 a share in 2018. (6) Targeting S&P 500 to hit 2800 by mid-2018 and 3100 by end 2018. (7) S&P 500 forward revenues and earnings making new highs. (8) OECD tax data for 2016 show corporate tax burden relatively light. (9) OECD: Americans paying relatively high property taxes, low sales and social security taxes.
Taxing & Shopping Matters
(1) Theories, urban legends, opinions, fake news, and facts. (2) Is the corporate tax rate currently 35%, 21%, or 13%? (3) Corporate tax reform may be about eliminating foreign tax dodges rather than cutting taxes. (4) ‘Tis the season for retailers. (5) Thor Industries makes RVs that are selling like hotcakes, confirming strong consumer trends. (6) 2018 is coming: Another double-digit year for earnings?
Barreling Along
(1) Full throttle, pedal to the metal, and escape velocity. (2) Truck tonnage index at record high. (3) Intramodal railcar loadings at record high. (4) Home shopping may be boosting truck traffic. (5) Animal spirits remain highly spirited. (6) Consumer optimism survey suggests jobless rate could soon fall below 4.0%! (7) Regional business surveys are upbeat. (8) Outlook for new orders looking good. (9) German business index hits a new high, which is bullish for German stocks. (10) Movie review: “Three Billboards” (+).
Electric Lights-Out Orchestra
(1) Cordless devices need cords for docking stations. (2) GE and Siemens generating less interest for their large turbines. (3) GE blames renewables. (4) Power is getting decentralized in the electric power business. (5) Less demand for coal-fired plants in China and India. (6) Emerging economies emerging into services. (7) Electric cars could juice up electricity demand, met by more solar panels. (8) Cobots are more human-friendly than robots. (9) Last one to leave the factory floor gets to shut the lights off forever.