Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
The Shark & the Octopus
(1) Tesla worth more than Ford? (2) Elon’s stormy-weather tweet. (3) Tesla cruising along. (4) The auto mechanic will make house calls for electric cars. (5) Low P/Es for clunkers. (6) Amazon recruiting consumer staples companies to sell door to door. (7) Online sales almost 30% of GAFO. (8) Can Amazon improve on home-improvement retailers?
Across the Pond
(1) Worrying about US C&I loans in London. (2) Two significant soft patches in US economy. (3) Toxic fumes from subprime auto loans. (4) Used car prices falling, and so are new car sales. (5) M-PMI is soft data, but it’s upbeat. (6) Fed officials mostly predict two more rate hikes this year, with a couple seeing three. (7) One-and-done may be back on the table for 2017. (8) Fixed-income markets aren’t buying Fed’s hawkish talk.
Europe: Good Fundamentals, Bad Politics
(1) Brexit overdose in London. (2) UK is between the Rock and a hard place. (3) Brexit negotiations will be nasty. (4) Fundamentally, Europe is looking upbeat, according to PMI and ESI. (5) Forward revenues and earnings are also improving. (6) Investors seem to believe that populism is a passing fad in Europe. (7) Dutch treat. (8) French fried. (9) Will there be a Frexit referendum after presidential election? (10) Germans preferring the status quo voted for Mini-Merkel. (11) Italy is still Italy politically, but Italian banking crisis may be getting worse.
The Third Mandate
(1) More fuel for the melt-up. (2) Financial stability is the third mandate. (3) Putting odds on Nirvana, melt-up, or meltdown. (4) The S&P 500’s Price/Sales (a weekly version of Buffett Ratio) is in outer space. (5) Nose-bleed valuations unless Trump can boost earnings. (6) The melt-up mechanism may be in gear. (7) Stock buybacks plus equity ETF inflows are boosting stock prices. (8) Passive is the new active. (9) Valuation-dependent: Fed officials saying market is “a little rich” and “a little frothy.” (10) Dudley wants to add more fruit juice to the punch bowl. (11) Keep drinking for now; even fruit punch can cause a sugar high. (12) Movie Review: “The Zookeeper’s Wife” (+ +).
Jeff Bezos, The Terminator
(1) Jeff Bezos and Sigourney Weaver both have powerful exoskeletons. (2) Amazon is killing its competitors and inflation. (3) A short history of the plot to murder inflation. (4) From the Walmart price to the China price to the Amazon price. (5) Killing more and more categories. (6) Nearly one-third of GAFO online now. (7) More jobs at risk in retailing than manufacturing. (8) The hole in the mall. (9) Will theaters die along with anchor stores? (10) Autos getting weighed down by debt. (11) Used car prices falling.
Many Happy Revenues
(1) The recession is over. (2) Low oil prices are now stimulative on balance for the global economy. (3) Revenues are recovering with manufacturing & trade sales. (4) M-PMI is bullish for revenues, and so are regional business surveys. (5) Lots of sectors showing record-high forward revenues. (6) Belushi & Trump: “Toga! Toga! Toga! Toga!” (7) Giddy measure of consumer optimism. (8) Older consumers turned especially upbeat after Election Day. (9) Jobs are plentiful.
Bumps & Slumps
(1) Will failed ACA-R&R be followed by delayed and diminished (D&D) tax reform? (2) Plenty of time left for Trump to get it right, or wrong. (3) No harm, no foul for Trump on ACA. (4) Dollar remains strong despite recent slump. (5) End of energy recession early last year more bullish than Trump’s election, so far. (6) Low oil prices might finally be stimulating rather than depressing global economy. (7) Bond yields and stock prices may be slumping on lower oil prices. (8) Financials and Industrials clearly enjoyed Trump bumps, and now paying with slumps. (9) US stocks could slump for a short while relative to foreign ones.
Trump Swamped?
(1) Dead in the swamp already? (2) Trump is learning on the job. (3) Melissa’s good call. (4) Pelosi still takes ownership of Obamacare. (5) Trump’s Plan B is to let Obamacare implode and move forward on tax reform. (6) Markey Maypo, Uncle Ralph, and the stock market. (7) On to tax reform. (8) No cuts in ACA taxes on tap. (9) Tax reform might be tougher to reconcile than Mnuchin says. (10) US and regional business surveys available for March looking strong. (11) Eurozone PMIs very robust in March. (12) Q1 earnings season starting with forward earnings in high spirits.
Unchained
(1) If Trump lifts regs as promised, many companies will benefit big time. (2) Jackie recaps which industries stand to gain the most. (3) Financials, freed from Dodd-Frank shackles, would be a huge winner. (4) Other potential jackpot-hitters include autos, energy, homebuilders, and maybe even pharma. (5) Analysts project big earnings growth in 2017. (6) Joe gives us the lowdown on projected growth by sector.
Nothing Happened
(1) Another age-old adage. (2) Baron Rothschild’s secret. (3) The Bull/Bear Ratio may be too high. (4) Streets covered in blood vs. paved with gold. (5) Seinfeld market. (6) From tapering to tightening tantrums. (7) Emerging Markets growing faster despite Fed headwinds. (8) Bond funds still seeing net inflows. (9) Corporate bond liquidity crisis still a no-show. (10) Timeout for Trump rally? (11) Nothing to fear but profit-taking.
What Is Normal?
(1) Old timers. (2) The DJIA is up 20-fold since my first day on the Street. (3) Lots of adages. (4) Let the trend be your friend. Don’t fight the Fed. Taking away the punch bowl. Three strikes. (5) Bull markets start when Fed starts to ease, and continue when it starts to tighten. (6) Fed’s tightening usually ends badly. (7) If the real neutral federal funds rate is zero, the nominal rate should equal the inflation rate (2% currently). (8) Yellen’s swan song: Leave on a neutral note.
Lots of Strong Soft Data
(1) Yellen waiting to see if strong soft data turn into hard data. (2) Fed officials say business people more optimistic, but have a wait-and-see attitude. (3) “Gradual” remains in fashion at the Fed. (4) Less focus on “fiscal.” (5) Markets loved Yellen’s latest dovish cooing. She remains the Fairy Godmother of the Bull Market! (6) CEOs are bullish, which is good for capital spending. (7) Republicans are happy, while Democrats are sad. A net negative for spending? (8) Homebuilders seeing more traffic. (9) Lots of quitters. (10) NY & Philly business surveys remained exuberant in March. (11) The Fed plays with words and dots. (12) From one-and-done to three-a-piece.
Driverless
(1) Tech leads ytd performance derby among S&P 500 sectors. (2) Kudos to Health Care for coming in second despite Obamacare R&R commotion. (3) Homebuilders help to put Consumer Discretionary in third place despite retailers’ troubles. (4) The race to tech out cars pits Detroit against Silicon Valley. (5) But don’t expect Detroit’s economics to shift into higher margin & growth gears enjoyed by tech titans. (6) As tech firms make inroads into auto markets, Big Brother will be watching and driving.
Animal Spirits Showing Up in Earnings
(1) Happy eighth birthday. Now take a nap. (2) Trump wins whether ACA-R&R passes or fails. (3) The swamp thickens. (4) Breitbart wants to sink Ryan. (5) Small business owners think now is a good time to expand. (6) Old problems for SBOs were regulations and taxes. New one is shortage of workers. (7) Boom-Bust Barometer still boomingly bullish for earnings and stocks. (8) Forward revenues and earnings at record highs. (9) It’s not all about Trump: Global economy seems to be improving.
Go With the Flows
(1) The Fed’s world of credit. (2) Supply of equities continues to shrink, while debt continues to expand. (3) Lots of cash flow for nonfinancial corporations. (4) Move from active to passive clear in record purchases by equity ETFs. (5) Big buyers of equities not as valuation-oriented as traditional investors. (6) Treasury borrowing exceeds official deficit numbers. (7) Foreigners are biggest buyers of US corporate bonds. (8) China’s social financing blows away credit expansion in US. (9) Draghi’s policies have yet to boost Eurozone credit expansion.
Run, Bull, Run
(1) Bubba, Forrest, and the bull market. (2) Sprinting may not be healthy for aging bulls. (3) Among the best bull markets. (4) Bull market for job seekers. (5) Both soft and hard data confirming strength in labor market. (6) Another record high in full-time employment. (7) Earned Income Proxy also still rising in record-high territory. (8) Frackers have learned how to keep gushing at lower oil prices. (9) 27 Club. (10) Movie Review: “Kong: Skull Island” (- -).
Guns & Butter
(1) Entrepreneurial vs. crony capitalism. (2) Capitalism vs. corruption. (3) Adam Smith’s huge marketing mistake. (4) Are capitalists selfish or just insecure? (5) The customer is always right. (6) The butcher, the brewer, and the baker all faced cut-throat competition, until they joined a trade association. (7) Small business owners create jobs, not Washington’s politicians. (8) ADP data tell all. (9) Republican plans on spending and taxes add up to guns-and-butter. (10) Jackie discusses defense with Rick Whittington.
The Doors
(1) An untimely death of a poet. (2) Will Trump light a fire under corporate earnings? (3) Remarkable Zen-like calm of most stock investors. (4) Low VIX and bearishness agitating contrarians. (5) Behind Door #1: Nirvana. (6) Behind Door #2: Melt-up. (7) Behind Door #3: Meltdown. (8) Lowering bullish probability a notch from 90% to 80%. (9) Inflationary pressures are blowing in the wind. (10) No sign of clear and present danger of higher wage inflation.
Is Active Style Passé?
(1) A blatantly biased defense of active investing. (2) Is the deluge of passive money a contrary indicator? (3) Buffett’s last will and testament. (4) A passive melt-up. (5) Passive investors prefer low fees over cheap stocks. (6) Active managers did fine during previous two bull markets. (7) The choice is picking a passive index or actively picking the winners and losers in the index. (8) Stay Home investment strategy has beaten a passive global index. (9) Passive investing can feed on itself and distort capital allocation. (10) Passive investing is an active choice.
When Bulls Fly
(1) Everyone is happy and worried. (2) DC-PTSD. (3) Swamp’s lobbyists raking it in. (4) New odds: 10/30/60 now is 20/40/40 meltdown/meltup/normal bull. (5) Not all about Trump. (6) Bad stuff that didn’t happen can be bullish. (7) Our Boom-Bust Barometer and Weekly Leading Index are confirming vertical ascent of S&P 500. (8) Less fairy dust from Fairy Godmother. (9) But enough to keep bull flying. (10) Yellen should have been tougher on Friday.
Happy Anniversary
(1) Happy anniversary to an aging, but still hard-charging bull! (2) Group hug time? (3) Great call by BAM eight years ago. (4) Forward earnings up more than 100% since start of bull market. (5) Blue Angels show bulls can fly. (6) A kinder, gentler Trump is even more bullish than the bully Trump. (7) M-PMI soars, while public construction sags. (8) Lots of bulls to dance with. (9) Chuck Prince’s curse. (10) BAT is a full employment act for swamp dwellers. (11) BAT is bad for some, good for others. (12) Final Republican plan likely to be guns-and-butter rather than revenue-neutral.
Populism Popping Up in Europe Too
(1) A bunch of small countries. (2) US election widened yield spreads in Eurozone. (3) Madame Frexit is likely to win first round, but second round maybe not. (4) Lots of fake news in Europe too. (5) Old news: Italy may be a bigger problem than France. (6) Blonde Geert is Netherlands’ Orange Don. (7) Robots taking over Rotterdam. (8) Signs of life in Eurozone economy. (9) EMU MSCI is relatively cheap, but populist politics may be more troublesome in Eurozone than in US.
Buffett’s Rules & Ratios
(1) On the cheap side. (2) Buffett betting on and against Trump. (3) The Oracle sees diluted tax reform and no BAT. (4) The President’s speech. (5) Guns and butter? (6) Buffett Ratio suggests stocks aren’t so cheap. (7) Forward P/E and P/S ratios are also awfully high, unless Trump delivers earnings-boosting corporate tax cuts. (8) A protectionist-triggered recession is possible, but not likely. (9) More likely is that the economy will run very hot, or not so hot. (10) Dallas Fed survey shows regional energy recession is over. (11) Animal spirits roaming throughout the land.
Timing Isn’t Everything
(1) On the verge of civil, trade, and cyber wars? (2) The curse of Cain on Little Kim. (3) Stocks staying focused on setting record highs. (4) Saber-rattling at the FOMC. (5) Bond yield remains in our 2.00%-2.50% range. (6) S&P 500 revenues rise to record high during Q4-2016. (7) More evidence that the earnings recession is over. (8) Margins remain at record levels, frustrating reverting-to-the-mean bears. (9) CEO of Dow Chemical says Trump administration is the most pro-business ever. (10) Bull market may remain resilient even if Trump’s bullish agenda falls behind schedule. (11) Movie Review: “Bitter Harvest” (- -).
Swamp Waters
(1) Declaration of reconciliation. (2) No gabbing aloud allowed. (3) With or without dynamic scoring, “revenue-neutral” tax reform plans look like tax cut plans. (4) Trump plan omits revenue gained from border adjustment and revenues lost from ACA repeal. (5) Hard to estimate impact of deregulation and infrastructure spending in budget projections. (6) Guns and butter, again? (7) Why are analysts so bullish on profit margins? (8) Jackie explains the ins and outs of Pentagon spending. (9) Increasing defense outlays in three steps could trip sequestration. (10) Europe will have to spend more on weapons, which is why the stocks of defense companies are flying high.