Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Call of the Wild
(1) Raising odds of the Melt-Up scenario. (2) A dog named "Buck." (3) Klondike Gold Rush in stock market. (4) Going feral. (5) Fidelity cutting fees, while Schwab opens lots of accounts. (6) Swamped by another fiscal cliffhanger? (7) M-PMI and weak dollar are bullish for revenues. (8) Can the Fed hit a bullseye on inflation target? (9) Sticky CPI suggests that underlying inflation is higher than shown by PCED.
Money Talks
(1) Sleepless in New Haven. (2) Getting a majority vote. (3) Too many bulls again? (4) Equity ETFs: The new black hole? (5) No need for a sales pitch as bullish ETF investors come charging through the doors. (6) Global equity ETFs on a roll. (7) Much of US stocks’ underperformance is due to the weaker dollar. (8) Fed Vice Chair Fischer on stage with same act on real interest rates. (9) Might rapid technological innovation explain weakness in productivity and capital spending?
2-2-2 Scenario
(1) Time to reminisce about old times. (2) On the mark. (3) Tom Hanks and Da Vinci. (4) 666: Permutations and combinations of a devilish number. (5) More on the 2-2-2 scenario. (6) Productivity and labor force trends argue for low secular growth. (7) Shooting for 2700 on S&P 500 by mid-2018. (8) Speaking of old times: Will it soon be 1987 all over again? (9) Movie Review: “Atomic Blonde” (+).
Shovel-Ready Industrials
(1) Tale of two industrial companies. (2) Purchasing managers are purchasing. (3) Good vibes from the commodity pits and the forex markets for Industrials. (4) Low-octane fuel. (5) Cat is a tiger. (6) Boeing is flying high. (7) Not much drive among auto manufacturers.
Earnings-Led Melt-Up?
(1) Earnings trump worries, including Trump. (2) Nothing to fear but nothing to fear. (3) Stock prices rising along with earnings. (4) Consumer confidence survey confirms that life is good, and the labor market has plenty of job openings. (5) Germany having Oktoberfest in July. (6) Frictional unemployment in the US. (7) Excluding retiring seniors and studying juniors, there isn’t much slack left in US labor market.
Go With the Capital Flows
(1) Dollar moved down as global economy was moving on up. (2) Dollar peaked after Trump won and before latest two Fed rate hikes. (3) Draghi and Kuroda are more dovish than Brainard and Yellen. (4) Our international capital flows proxy turned less bullish for the dollar last year. (5) International reserves holdings by central banks also a good barometer for the dollar. (6) Draghi has done whatever it takes, yet the euro is strengthening again. (7) Are emerging markets less prone to Fed tightening tantrums? (8) Oil and the dollar divergence is unusual.
Summertime Lullaby
(1) Porgy, Bess, and all that bullish jazz. (2) Bull to bear: “Hush up, little baby.” (3) Summertime, and the bears are still hibernating. (4) The 2-by-2-by-2 scenario is the consensus. (5) Worry list: Central banks’ balance sheets, reflation, and the swamp. (6) ECB and BOJ not rushing to normalize. (7) S&P 500 Financials stall on flatter yield curve, lack of volatility for trading desks, and lackluster loans. (8) Movie Review: “Dunkirk” (+ + +).
Cashless
(1) Can you say “goodbye to cash” in Swedish? (2) “Swish,” “zelle,” or “venmo” it to pay by phone. (3) Fewer hold-ups. (4) Cybercriminals cashing in. (5) It’s gloomy in India. (6) Services rain on India’s agricultural parade. (7) India MSCI not cheap. (8) Modi’s motives are questionable. (9) Cow vigilantes. (10) Economy decelerating in India. (11) RBI under pressure to cut rates as inflation plummets.
Gray Swans
(1) The Nirvana scenario. (2) Taleb’s birds. (3) Black Swans don’t have to be bad. (4) An industry of bird watchers. (5) Is predicting Black Swan events an oxymoron? (6) There are a few Gray Swans out there. (7) The Grayest Swan is a melt-up. (8) Healthcare reform is sinking in the swamp. (9) Are consumers retrenching or not? (10) A primer on ETFs and their potential contribution to a meltdown.
Orient Express
(1) Stir-frying China’s economic growth with lots of debt. (2) Don’t bet against a billion people. (3) China following Japan down the same road. (4) Chinese economy getting Botoxed as it ages and slows. (5) Premier Xi doing more of the same. (6) Social financing and bank lending at record highs. (7) A bit of good news: Shadow banking doing less of the lending, and capital outflows slowing. (8) Aging is a drag on China. (9) Improving margins.
Bulls Flying with Doves
(1) Brainard: Leading the dovish pack. (2) Melting up with the doves. (3) Dollar matters to the Fed for a change. (4) Flatter Phillips curve. (5) Still undershooting inflation target. (6) Balancing rate hikes with balance-sheet tapering. (7) Brainard and Yellen agree that neutral federal funds rate is in sight. (8) More Fed fairy dust charges up bull again. (9) Swan song. (10) Not surprisingly, Fed favors discretion over rules.
There’s an App for That
(1) Living in 3D. (2) Want to live in a pretzel? (3) Replacing construction workers with printers. (4) 3D buildings going up in Dubai, China, and Mars. (5) Build your fast-drying home in a day. (6) Pain won’t go away for retailers. (7) Pigs selling discounted lipstick. (9) Bezos and Alexa going after the Geek Squad. (10) Shorting malls is easy: There’s an ETF for that. (11) Make Brazil hot again!
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.