Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Speed Bump for Tech
(1) Assessing the tech wreck. (2) In the future, there will be more innovation. (3) Nvidia’s man in a black leather jacket is bullish on the future. (4) A terrible accident won’t stop self-driving cars. (5) A reasonably valued sector with some outliers. (6) Safe havens are less stormy now that the bond yield has edged lower. (7) Food fight among grocers. (8) Takeout meals delivered to your front door. (9) Fulfilling is getting more costly. (10) What’s the difference between the business practices of China and the Corleones? Scale.
In the Spring, There Will Be Growth
(1) Goldilocks likes spring best of the four seasons. (2) Chauncey’s economic forecast. (3) Q1 earnings season is coming, and it could be better than expected despite upward earnings revisions. (4) S&P 500/400/600 revenues outlook continues to improve. (5) Analysts still revising S&P 500 revenues higher on balance. (6) Earnings expected to grow around 20% for S&P 500 this year. (7) Still plenty of buybacks and dividend payouts to fuel bull market. (8) Consumers have the means to spend more. They also have the confidence to do so. (9) The unemployment rate is likely to fall further.
Meet Jerome Powell
(1) Hotcakes gum up Amazon’s algorithms. (2) Cheaper by the half dozen. (3) Six fed funds rate hikes since start of “normalization.” How many more to go? (4) 3.00% fed funds rate may be the new normal. (5) A refreshing change: Jerome Powell is a lawyer, not an economist. (6) Giving less weight to unobservable measures of slack. (7) The yield curve is neither here nor there. (8) Powell is a low-key middle-of-the-road fellow. (9) Taking a deep dive into the USTR’s case against China’s unfair trade practices. (10) The Chinese government wants more high-tech stuff to be made in China by 2025.
Trade: War-Making or Deal-Making?
(1) US declares that China doesn’t play fair. (2) USTR issues 215-page report on China’s abusive trade practices, focusing on technology. (3) Trump likes to negotiate in public, which unnerves stock investors. (4) Trump aspires to be like Reagan, not Hoover, on trade. (5) “A treacherous path on trade.” (6) Panic Attack #60 isn’t over yet. (7) Remarkable divergence between forward earnings and forward P/E. (8) Not much happening in bond and commodity markets. (9) Major exporters already exempted from Trump’s tariffs on steel and aluminum. (10) Reading Trump’s temperament on trade: He likes to negotiate and win. (11) Like it or not, Trump is delivering on his campaign promises on trade.
Correcting Tech & Editing Genes
(1) Trifecta of bad headlines for Tech sector. (2) Facebook is in our faces. (3) Tech M&A will continue. (4) Earnings remain bullish for Tech, and valuations are reasonably high. (5) Tech IPOs still attracting buyers. (6) Crispr 101. (7) Cutting diseases out of our DNA. (8) Is there method in Trump's March tariff madness?
Morning Briefing 2018-03-21
Morning Briefing is also available. (1) Fed officials watch prime-age male dropouts. (2) Nonparticipating slackers. (3) Fed study finds that technology is creating “job polarization.” (4) Vanishing “middle-skills” jobs. (5) Education level matters more than ever. (6) Almost half of nonparticipating prime-age males are on daily pain medication. (7) Fed study explains productivity slowdown resulting from retiring older workers being replaced by younger ones. (8) Technology could overcome Age Wave in productivity equation. (9) Only immigration can halt America’s evolution to same aging profile as Japan’s current geriatric society.
The Animals Remain Spirited
(1) Animal spirits remain elevated following Trump’s Election Day upset. (2) Hard data on earnings are bullish for stocks, while other hard data are mixed. (3) CEOs are ecstatic. (4) Small business owners are euphoric. (5) Purchasing managers are upbeat. (6) Consumer optimism and our Boom-Bust Barometer are boosting our Weekly Leading index, which is bullish for stocks. (7) Weird Q1 weakness in GDP showing up again. (8) Truckers have the pedal to the metal. (9) Widening trade deficit may offset some of Trump’s fiscal stimulus.
Morning Briefing 2018-03-19
A of this Morning Briefing is also available. (1) Meet Ambassador Lighthizer, the US trade czar. (2) USTR’s report card on China’s trade fairness likely to show lots of “F”s. (3) Section 301 making a comeback as US weapon in trade negotiations, or trade war if deals aren’t made. (4) China’s government has big ambitions for state-run economy by 2025. (5) Imposing a price on trade theft. (6) WTO benefits China more than US! (7) Trump’s “America First” puts multilateral trade organizations second. (8) National security becomes a trade issue under Trump, or at least a negotiating position. (9) Steel tariffs may be a sideshow compared to trade conflict with China over technology and intellectual property. (10) Reagan’s team of supply-siders is back.
Retailing: Survival of the Fittest
(1) For the birds. (2) Doves, hawks, and cranes at the Fed. (3) Two FOMC voters see gradual rate hikes. (4) Two FOMC nonvoters see less and more gradual paths. (5) Last department stores standing do so by selling space. (6) Strategic partners are a survival strategy for retailers. (7) Toys Were Us. (8) Blockchain could solve Trump’s trade problem. (9) Maersk keeping track of shipping containers with blockchain. (10) US trade deficit problem worsening, especially with China, as US economy expands.
Slicing & Dicing TCJA Earnings Windfall
(1) More TCJA good news ahead in Q1-2018 earnings season. (2) Revenues also boosting earnings on better global growth, higher oil prices, and weaker dollar. (3) Upward earnings revisions for 2018 driven much more by TCJA than by better rvenues. (4) Profit margins jump as a result of TCJA. (5) Corporations likely to use TCJA windfall for capacity expansion, labor compensation, buy backs, and dividends. (6) While statutory tax rate was cut by 40%, effective rate was cut by 34%. (7) Repatriated earnings should bring back lots of cash, i.e., $1.9 trillion after taxes.
From Headwinds to Tailwinds
(1) Top Fed heads now seeing tailwinds rather than headwinds. (2) The Powell/Brainard tag team. (3) “Gradual” remains the word for rate hikes. (4) Transitory vs structural forces keeping a lid on inflation. (5) Fed is focused on still-depressed labor force participation rate of prime-aged males. (6) House of dollars built on stronger foundation than house of cards. (7) Record net worth for households, with new highs for stocks and homes. (8) Solid rebound in owners’ equity in homes. (9) Ratio of mortgage debt to disposable personal income is down sharply.
Following the Money
(1) #1 Amazon Hot New Release in Investing. (2) Monthly data on equity mutual funds and ETFs showing record inflows into ETFs and lots pouring into all funds investing globally. (3) Nonfinancial corporations continue to buy back shares. (4) The Buffett ratio is looking as rich as it was when the tech bubble burst, but inflation and interest rates are lower. (5) Lots more people working full time. (6) Earned Income Proxy rises to yet another record high. (7) Wage inflation remains subdued, but continues to outpace price inflation. (8) The Phillips curve remains flat. (9) No shortage of bank loans in China. (10) Movie: “Red Sparrow” (+).
Meet Peter Navarro
(1) Navarro is a controversial fellow. (2) Trade as a national security issue rather than an economic one. (3) He is opposed to foreign direct investments fueled by US trade deficits. (4) Focusing on trade deficit in goods and ignoring surplus in services. (5) Free and fair trade is the goal. (6) Will Navarro get Cohn’s job? (7) Jackie reviews the regulatory unshackling of the Financials. (8) The latest sensation among gamers: Fortnite.
Eurozone Seems Unruly
(1) Eurozone stocks remain as cheap as ever relative to US stocks. (2) It took six months to form a weak German coalition government. (3) There is actually an anti-bailout party in Germany. (4) Merkel’s fourth term will be as a lame duck. (5) German liberals will have more power to spend money. (6) German IFO and M-PMI dip, but remain high. (7) Italy’s latest election produced the usual political circus. (8) Euroskeptics are gaining power in Germany and Italy.
Known Knowns & Unknowns
(1) Tight labor market in US. (2) Global Growth Barometer trending higher. (3) Exports are booming and so are imports, resulting in wider trade deficit. (4) Global export indicators are booming. (5) Revenues per share of All Country World MSCI is at a record high. (6) Analysts now expect TCJA to add almost $12 per share to S&P 500 earnings this year. (7) Protectionism may or may not be a problem. (8) Inflation may or may not remain subdued. (9) The Bond Vigilantes may or may not saddle up.
Dow Vigilantes
(1) The 61st panic attack or more of the 60th? (2) Bearishness about monetary tightening and protectionism offset bullishness of TCJA. (3) One day, a panic attack will be followed by a bear market rather than a relief rally. (4) Trump-led protectionism is a cause for concern. (5) Is Trump going to be like Reagan or like Hoover on trade? (6) Whirlpool got taken to the cleaners. (7) The WTO might temper Trump’s trade tantrum. (8) The Dow Vigilantes could do the same. (9) US economy is cruising so nicely. Why spoil it in time for the mid-term elections? (10) Fed Chairman Powell likely to pursue course of gradual normalization of monetary policy. (11) Movie: “Black Panther” (+).
Phones & Homes
(1) Ready or not: 5G is coming fast. (2) The running of the telecom bulls in Barcelona. (3) Phone service for the IoT. (4) Billions of dollars of new telco infrastructure spending. (5) Washington wants to help. (6) A major facelift coming for S&P Telecom sector. (7) Disappointing housing stats reflect bad weather in Northeast and supply shortage. (8) Toll’s happy tale.
Giddy Up!
(1) Mini-version of 1987. (2) Déjà vu all over again. (3) Updating the bullish impact of TCJA on earnings. (4) Giddy talk on CNBC resulting from giddy talk during latest earnings season conference call. (5) Melissa tunes in to the conference calls of the 30 DJIA corporations. (6) “[D]oggone good!” (7) Tax reform making US companies more competitive, with greater “capital flexibility.” (8) TCJA windfall likely to boost capital spending, buybacks, dividends, and employee benefits. (9) Lots of talk about funding organic growth rather than M&A.
Earnings Are Great Again
(1) Earnings in outer space. (2) Earnings were on course to be great again before Trump, and now will be even greater after TCJA. (3) Revenues growth above 9% y/y during Q4. (4) Forward revenues at record high. (5) Double-digit earnings growth during 2017 will be followed by more of the same in 2018. (6) Forward earnings signaling $160 per share in 2018. (7) Profit margin rose to new record high during Q4, and that was before TCJA will push it higher! (8) Lots of new record highs for revenues and earnings among the 11 sectors of the S&P 500.
Fed on Inflation Watch
(1) Panic attacks come and go. (2) Was the 60th panic attack really a correction since it was so short? (3) Wish came true for correction hunters. (4) The latest flash crash was an abridged version of Black Monday (October 19, 1987). (5) No sign of imminent recession in LEI or CEI. (6) Growth rate of CEI suggests real GDP growth remains around 2% y/y. (7) No boom, no bust. (8) Will the Bond Vigilantes spoil the party? (9) Bond yields are normalizing. (10) Fed officials rooting for inflation to rise to their 2% target. (11) Fed staff conceding macro inflation models aren’t working, yet Fed officials continue relying on them.
Deflating & Inflating Industries
(1) Amazon is eating the lunch of brand names. (2) Walmart’s disappointing counterattack. (3) Squeezing the ketchup makers. (4) Materials companies have pricing power. (5) Trump’s infrastructure spending planning is a starting point. (6) Trump administration considering limiting imports of steel and aluminum. (7) Robots are learning to knit. (8) Swedes go cashless. (9) BP boosting its forecast for number of electric cars.
Soarin’ Fundamentals for Stocks
(1) The Magic Kingdom. (2) FastPass+ is the way to go. (3) Our Boom-Bust Barometer is soaring to new highs. (4) The same goes for our Weekly Leading Index, as weekly consumer confidence soars. (5) Forward earnings has been flying. (6) Analysts raised S&P 500 earnings for 2018 by over $11 since TCJA. (7) A year’s increase in 9 weeks for 2018 earnings of S&P 500/400/600. (8) Joe drills down to the S&P 500 sectors and industries to determine impacts of TCJA.
Living with Lowflation
(1) The 60th panic attack. (2) The 60th relief rally. (3) Learning to live with slightly higher lowflation. (4) Inflation indicators mostly show mounting inflation pressures, or maybe not. (5) Liquidity is a fluid concept. (6) Combined balance sheets of Fed, ECB, and BOJ still expanding. (7) Chinese banks are flooding China with liquidity. (8) Flood of repatriated earnings heading back to US. (9) TCJA adding lots of bucks to earnings. (10) Watching out for inflation.
Life on the Edge
The next Morning Briefing will be sent on Tuesday, February 20. (1) Will the cloud lose to the edge? (2) More devices connected to the Internet. (3) Every millisecond counts. (4) Disrupting the disruptors. (5) Internet of Things requires lots of semiconductors. (6) Powell won’t take the punch bowl away, but he won’t be adding any more punch. (7) The value of the trade-weighted dollar is mostly determined by relative growth of US to the rest of the world. (8) ECB seeing expansion rather than recovery in Eurozone. (9) Chinese currency has been strong. (10) The dollar has its ups and downs.
Ups & Downs of the Dollar
(1) Will the weak dollar boost earnings and inflation too? (2) The stock market’s tug-of-war between earnings and valuation. (3) Dollar bulls have been surprised by dollar’s weakness since early 2017 despite three Fed rate hikes. (4) Dollar inversely correlated with Global Growth Barometer. (5) Dollar inversely correlated with S&P 500 revenues and earnings. (6) Dollar’s impact on inflation is fuzzy. (7) Go Global has made more sense than Stay Home since dollar peaked in early 2017. (8) Sandra’s scorecard for Italy’s political and economic scene.