Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Hot Money
(1) Definitive definitions of meltdown and melt-up. (2) The numbers game. (3) Trump’s YUGE tax-cut plan cut from 3½ pages to 1 page. (4) Statutory vs effective corporate rates. (5) In my dreams: 15% tax rate on sole proprietorships. (6) Nervous about sky-high valuations, but even more nervous about missing more gains. (7) Equity ETF bubble continues to inflate. (8) Animal spirits a bit less spirited, but still high given softness in hard data. (9) Stocks’ pep rally led by spirited actual and expected earnings. (10) Movie review: “The Lost City of Z” (- -).
Earnings Boosting Stocks
(1) Nasdaq titans breach 6000. (2) Yet Industrials and Materials are leading April run in S&P 500 so far. (3) Beating expectations and raising guidance. (4) Finding more traction in the slippery oil patch. (5) CAT purring with Asian tigers. (6) Solstice: One of Honeywell’s sweet spots. (7) Are Millennials childish or adultish? (8) The basement suburban legend. (9) Education matters. Having children not so much.
Brain Drain
(1) Turing Test. (2) Tech’s latest Great Disruption: From brawn to brain. (3) Robots are easy-going, but will AI make them cranky? (4) AI at YRI. (5) Head in the Cloud. (6) The sinister goal of knowledge workers. (7) IT+R&D spending up from 26% to 44% of capital spending since 1981. (8) Consumers are spending more than business on computers, really. (9) Swamp vs Valley people. (10) The Great Disruptors want to read your mind with a quantum computer, while you are cruising in an electric flying car. (11) When taxing robots, beware of the one called “Spartacus.”
Minimalist Millennials
(1) Millennials are different than Baby Boomers. (2) Not rushing to get married. (3) Baby dearth. (4) Turn-ons and turn-offs. (5) Still renting. (6) Our in-house Millennial. (7) Cool experiences. (8) Lifestyles-of-the-rich-and-famous is so yesterday. (9) Cars are just cars. (10) Habitats for Hobbits. (11) An alternative way to be an adult.
Now, Voyager
(1) Team tours abroad. (2) Voyager now on Google Earth. (3) France: The more things change, the more they stay the same. (4) Commodity prices still trending higher. (5) High PMIs. (6) French and German shoppers are shopping. (7) Inflation disinflating again? (8) Overseas revenues and earnings growth rates rising. (9) Asian exports data showing widespread strength. (10) IMF raising rather than lowering growth outlook, for a change. (11) Bette Davis assesses the global economy.
Financials: Out of Favor Again?
(1) Bronx cheer. (2) C&I loans and flatter yield curve are turn-offs. (3) Net interest margins expanding. (4) Capital markets issuance boom may explain weakness in business loan demand. (5) No alarms about credit quality, even in auto loans, on bank conference calls. (6) Goldman was an outlier with a miss for a change. (7) S&P 500/400/600 forward revenues and earnings continue to rise in record territory.
Go With the Flows
(1) Fed provides lots of data about capital market flows. (2) Looking at US-based equity mutual funds and ETFs that invest in the US or around the world, we see big inflows to domestic ETFs since election. (3) World equity mutual funds and ETFs (based in US) were less popular last year. (4) Production is yet another weak indicator in auto industry’s soft patch. (5) Truck freight and sales stalled. (6) Economic Surprise Index is down. (7) Washington may have to respond sooner with fiscal stimulus, while the Fed can wait on next rate hike. (8) Chinese economy remains too dependent on government and debt.
The Trump Doctrine
(1) Eye on the prize. (2) Alternative leadership styles. (3) Obama vs. Trump Doctrines. (4) Geopolitics hasn’t shocked this bull market so far. (5) Might stocks stall if Trump puts Foreign Policy First, ahead of America First? (6) Mixing it up in Yemen, Syria, Afghanistan, and North Korea. (7) Running out of strategic patience. (8) Trump has a few kind words for Yellen. (9) Auto industry is main soft patch in US economy. (10) China’s economy is doing a wheely, really.
Creative Destruction
(1) The headline stories that aren’t on front pages are important too. (2) Now that Fed is tightening, bull market in stocks feeds on earnings. (3) Thursdays are when we contemplate creative destruction throughout the US economy. (4) US economy continues to create more jobs than it destroys. (5) JOLTS and NFIB survey showing lots of unfilled job openings. (6) Apple is disrupting chip industry as it turns to making its own hardware. (7) Google’s TPU is another example of a software company making its own hardware. (8) Will Tesla clobber auto dealers the way Amazon is clobbering malls? (9) Spring is in the air for home prices as demand exceeds supply.
Back to the Future?
(1) Chauncey Gardner’s favorite season. (2) S&P 500 revenues and earnings are growing again. (3) Green shoots. (4) Forward revenues and earnings at record highs for S&P 500/400/600. (5) Industry analysts may be boosting 2018 estimates to reflect impact of Trumponomics. (6) A few downbeat hard-data indicators. (7) Back to slower, but longer growth? (8) Demography and technology did not change on Election Day. (9) The CBO’s estimate for potential real GDP growth at odds with Trump’s MAGA ambitions for economy. (10) Hard to Make America Young Again. (11) Both labor force and productivity growth weighing on economic growth. (12) Earnings remain on growth track for stock market.
DIY Fed Policy
(1) The old normal vs. the new abnormal for Fed policymaking. (2) Monetarism’s brief day in the sun. (3) Normalization now involves reducing an abnormally large balance sheet. (4) Learning-by-doing at the Fed. (5) Dudley and Yellen gang up on Taylor. (6) Taylor worked for Greenspan, then devised a linear equation to replace him. (7) Inflation and output gaps. (8) Atlanta Fed has an app for running monetary policy.
Over There & Over Here
(1) Getting around London town. (2) Fairly relaxed about both Brexit and Trump. (3) Not so relaxed about US stock valuation multiples. (4) Frexit would face a bigger constitutional challenge than did Brexit. (5) EMU looks cheaper than US MSCI now that forward earnings are improving in Eurozone. (6) A sector perspective shows that EMU may not be as cheap as it looks relative to US. (7) Employment still among strongest hard data, except for big job losses among retail stores. (8) Is Trump bringing back factory jobs already? (9) Fed getting ready to unwind balance sheet as securities purchased under QE mature. (10) Another reason to expect gradual rate hikes. (11) Movie Review: “Cézanne et Moi” (+).
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.