Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Steady Does It
(1) The four seasons. (2) Industry analysts holding onto double-digit S&P 500 earnings growth for 2017 and 2018. (3) Earnings outlook more likely buoyed by improving global economy than by Trump agenda, which is still on the come. (4) Consensus forward revenues and earnings providing bullish guidance. (5) Global PMIs signaling slow, but steady growth. (6) European holiday: lots of festive indicators. (7) French are world-class shoppers. (8) Two drags on growth: labor shortages and subdued wage gains.
Outbound & Inbound
(1) Size matters. (2) Sum of US exports and imports augurs well for global economy and for US factories. (3) The West Coast’s hip ports are hopping. (4) ATA truck tonnage index rose to record in May. (5) Kudlow says Trump has Putin over a barrel. (6) Flying Transportation stocks. (7) Forward revenues and earnings bullish for Transports. (8) Net Earnings Revisions Index increasingly positive for Transports.
More of the Same
(1) No surprises in payroll employment. (2) Wage inflation remains subdued but outpacing price inflation. (3) Earned Income Proxy augurs well for consumer spending. (4) Consumers upbeat, especially about here and now. (5) Despite wild swings in CESI, real GDP growth steady around 2.0%. (6) Boom-Bust Barometer and Weekly Leading Indicator remain bullish for equities. (7) Fed’s Fischer has lots to say, but not much is new. (8) Fed remains on slow but steady normalization course. (9) Movie: “The Beguiled” (- - -).
Fireworks
(1) Lots of bucks per bang. (2) Wickedly awesome IPOs. (3) Biotech returns with healthy returns. (4) More Tech IPOs. (5) Not much energy in Energy. (6) Buybacks drown new issues. (7) Banks pass Fed’s stress test and reward investors with dividend hikes and buybacks. (8) Tech should rebound after some profit taking. (9) World semiconductor sales at record high.
The Third Mandate
Happy Fourth of July! We will be back on July 6. (1) Fed officials need our attention. (2) Four rate hikes later, no tightening tantrum. (3) Stock and bond investors responding to Fed with benign neglect. (4) Bond yield, yield curve, and expected inflation all telling Fed “no mas.” (5) Fed should fear that halting rate hikes will send stocks to the moon. (6) Melt-ups are not conducive to financial stability. (7) Williams, Fischer, Yellen all weigh in on the subject. (8) The Fed’s “great unwinding” is winding down the road. (9) Furniture sales on flying carpet.
Puzzling Productivity & Profitability
(1) Oomph and Oompah in Germany. (2) Lots of reasons why productivity should be growing faster. (3) Technology goes from replacing brawn to brain. (4) Is that good or bad for productivity? (5) Amazon Web Services and UBER reducing demand for servers and autos. (6) Record-high profit margin belies productivity funk. (7) Stagnation is a myth: Real pay is growing. (8) Powerful forces keeping a lid on price inflation. (9) Nonfinancial corporations have lots of cash and are spending it on capex, not just buybacks.
A Matter of Some Interest
(1) Republicans want to eliminate interest expensing, while granting 100% capital spending deduction. (2) Tax code favors leveraged balance sheets. (3) Dividends plus buybacks eating up earnings, but plenty of cash flow left for capex. (4) Tax subsidy worth $5.90 per share for S&P 500. (5) Record bond refinancing boosted profits over the past year. (6) Dividend yield valuation model shows stocks cheap relative to bonds. (7) Japan is the poster child for a geriatric society. (8) Japan’s self-extinction by the numbers. (9) From extended families to one Carebot. (10) Basic Universal Income vs. Basic Fertility Income. (11) Make babies for fun and profit.
Voluntary Self-Extinction
(1) Meet Les U. Knight, who wishes for less humankind. (2) Birth dearth is depressing labor forces around the world. (3) Fertility tends to be higher on farms than in cities. (4) Crop of kids easier and cheaper to grow outside of city limits. (5) Green Revolution on balance depressed population growth. (6) Malthus got it so wrong. (7) Chinese government’s 2-child policy may be undercut by previous 1-child policy. (8) There is still fertile soil in India and Africa. (9) US leading indicators still bullish on real GDP, which is likely to remain stuck growing around 2.0%. (10) NBx2 again. (11) Movie Review: “My Cousin Rachel” (+).
Sheik Up
(1) Opaque oil: Hard to see higher prices. (2) S&P 500 Energy is dead last so far this year. (3) US, Libya, and Nigeria are offsetting OPEC’s production cuts. (4) Tanks and tankers filled to the brim with crude. (5) Saudis give more power to a young sheik. (6) Saudi Vision 2030 plan aims to diversify economy away from oil. (7) Oil weighs less on S&P 500. (8) Saudis selling the family’s jewel. (9) Cheers for S&P 500 Restaurants.
Earnings Boom
(1) Among the weakest economic expansions, weighed down by both consumer and business spending. (2) The Trauma of 2008 was traumatizing. (3) No boom, no bust: Only 25 months to go to make this the longest expansion. (4) Profits performance remarkably good considering weakness in nominal GDP. (5) Profit margins still aren’t reverting. (6) There is a boom in our Boom-Bust Barometer, which remains bullish for earnings. (7) Forward earnings are flying high in numerous S&P 500 industries.
Second Thoughts
(1) Dealmakers sinking in the swamp. (2) Animal spirits remain mostly aroused. (3) Back to new normal real GDP growth. (4) Cruising along at 2%. (5) Citigroup Economic Surprise Index fluctuates. (6) Housing starts depressed by fewer DIYs. (7) Not-so-bad retail sales and production indicators. (8) Looking up in NY and Philly districts. (9) Record highs for forward revenues and earnings. (10) It all adds up to our No-Boom-No-Bust scenario, which remains bullish for stocks.
Wonder Men & Women
(1) Warrior women. (2) Jeff Bezos is Amazon Man. (3) A one-man inflation killer. (4) Elon Musk & Orphan Annie: The sun will come out tomorrow. (5) Frackers are freaking out OPEC. (6) Disinflation again. (7) Takeout food. (8) Oil’s slippery price slope. (9) Bonds signaling that inflation is dead in long run. (10) The Fed’s Wonder Woman. (11) Mr. Wonderful. (12) Movie Review: “Wonder Woman” (+ +).
Healthier
(1) Business sales suggest solid growth for S&P 500 revenues. (2) Inflation-adjusted retail sales showing a Q2 rebound. (3) Atlanta Fed raises Q2 real GDP to 3.2%. (4) Online shopping accounts for record 29.7% of GAFO sales. (5) Health Care getting out of bed. (6) Biotech and Managed Care looking especially fit. (7) Grocery war is heating up fast. (8) Consumers win as consumer staples brands lose.
Small Is Beautiful
(1) S&P 1500 is up $16.7 trillion since start of bull run. (2) Small companies have lots of employees. (3) Might small company hiring explain weak productivity? (4) Profits driving business cycle as profitable companies continue to expand payrolls and capacity. (5) Earnings of S&P 400/600 well outpacing S&P 500 earnings. (6) May survey finds small businesses’ earnings improving on balance. (7) Finding qualified applicants for job openings is a major challenge.
Tech Now & Then
(1) The life and death of bulls. (2) Matadors and recessions. (3) An aging bull that remains frisky. (4) Charge of the bullish brigade. (5) Tech now and in 1999/2000. (6) Beware of sectors with too much market cap. (7) Tech’s valuation and LTEG aren’t excessively high. (8) There’s lots of jalapenos in the salsa dip for chips. (9) Semiconductor forward earnings flying with worldwide sales.
White Swans
(1) Bullish chowder. (2) Frothy valuations. (3) Swamp sickness. (4) Betting on downsized Trump agenda. (5) Benchmark model pinpoints next recession in March 2019. (6) NBx2 scenario: No Boom, No Bust! (7) Price inflation is keeping a lid on wage inflation. (8) Are bond investors seeing less growth or less inflation or both? (9) Big Three central bank balance sheets remain ultra-easy, on balance. (10) Fed’s priority is probably to raise rates more before reducing balance sheet. (11) Update of quarterly valuation ratios shows mixed picture.
Beware of Fighting Elephants
(1) Proverbial elephants. (2) Clash of the titans: Amazon vs Walmart. (3) Food at home is over $900 billion industry. (4) Prime service for less-than-prime customers. (5) Food stamps for online groceries. (6) Playing ball with a big elephant. (7) Amazon banning CR*P products. (8) Consumer Staples: Paying up for safety. (9) Beer, cigarettes, and drugs.
All-Consuming Questions
(1) Running out of warm bodies? (2) Three measures of payrolls. (3) One job open for every jobless worker. (4) One-third of small businesses have jobs they can’t fill. (5) Half of small businesses say no qualified candidates for unfilled positions. (6) Wages should be up 3.0%-4.0% rather than 2.5%. (7) Vehicle miles traveled at record high. (8) Gasoline usage falling recently. (9) Has Trump’s “America First” pitch made America last for tourists?
Chirping Canaries
(1) Animal spirits still mostly animated. (2) Hard data remain soft. (3) Home in the range for the S&P 500. (4) Hannibal’s FAANG elephants leading the bulls to new heights. (5) Adding sentinel animals to the zoo. (6) Go Global beating Stay Home so far this year. (7) Solid global PMIs. (8) Lots of happy canaries in Europe and Asia. (9) Global trade growth picking up. (10) Asian exports also showing signs of life. (11) Forward earnings for major overseas MSCI indexes increasingly upbeat.
Hannibal Spirits
(1) Hannibal and his animals. (2) Climb every mountain. (3) Annual meeting of Bahre’s often bearish strategists. (4) Air is getting thin up here. (5) Record net inflows into equity ETFs, while equity mutual funds continue to hemorrhage. (6) White-hot FAANGs. (7) Earned Income Proxy at another record high. (8) Fewer labor force dropouts, a.k.a. NILFs. (9) Baby Boomers were careerists and materialists. Millennials are lifestylists and minimalists. (10) There’s more to life than money. (11) “Get Out” (+).
United Tech, Divided Transports
(1) FAANG and headless headlines. (2) 10 Bennies for 1 Amazon. (3) Amazon is in the wrong aisle. (4) Active managers overweighting FAANG. (5) Tech accounts for a bit more than a fifth of S&P 500 earnings and market-cap shares. (6) Dow Theory remains bullish. (7) Rails are back on fast track. (8) Airlines have lots of passengers they can drag off planes. (9) Trucking industry’s freight tonnage stalled at record high. (10) Truck prices falling.
A Memorable Earnings Season
(1) Seasonal drop, but y/y growth. (2) Forward earnings at record highs. (3) Tax cuts wading through the swamp. (4) Winning streak: Profit margin remains at record high. (5) A traumatic legacy. (6) Resource utilization rate still below previous cyclical peaks. (7) NBx2 scenario: No Boom, No Bust. (8) Double-digit earnings growth for S&P 500 Financials, IT, and Materials. (9) Revenue growth rising along with other measures of economic activity. (10) Aggregate vs per-share growth.
Steady Eddie
(1) Cruising at a safe speed. (2) Real GDP growth looks nice and steady on y/y basis. (3) GDP growth is higher excluding the government. (4) Steady, Fast, and Crazy Eddies. (5) Larry Summers says he told us so. (6) Demography is weighing on working-age population and labor force growth in US. (7) Age wave analysis shows younger workers growing faster. (8) Japan’s death cross. (9) Global trade indicators showing improving economic activity.
Fueled by Apple Juice
(1) The Great Race to be the Apple of the auto industry. (2) How much metal and rubber are in the code? (3) Ford: Hackett’s job as Fields put out to pasture. (4) Andreesen Pac Man Theory of software. (5) Who will be the Nokia of the auto industry? (6) Can we get Trump to pitch for YRI? (7) The best defense is more weapons for US allies. (8) Disappointing budget for US defense spending. (9) Bitcoin’s fans and fiends.
Global Synchronized Moderate Growth
(1) Wish for better earnings has come true. (2) S&P 1500 rising in record territory. (3) S&P 500 earnings estimates for 2018 high and dry. (4) S&P 500/400/600 all had upside earnings hooks during Q1 reporting season. (5) Altogether now. (6) A world of upbeat PMIs. (7) Real GDP tracking 2% in major economies. (8) Germany’s business confidence is soaring. (9) Aging is a drag on growth. (10) Less secular growth until further notice.