Daily Research Updates
Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Some Happy Stuff
(1) Trump’s dark night in America. (2) 83% of Americans are dissatisfied with state of affairs in US, up from 70%-80%. (3) Racial tensions trump economy and terrorism as number one problem, according to Gallup. (4) Pointing fingers. (5) The bullish “Trump House” scenario. (6) Unlike Trump, stock market accentuating the positives. (7) Are stocks discounting Trump, Hillary, or none of the above? (8) Q2 was big for consumer spending. (9) Consumers increasingly happy about present, decreasingly about future. (10) Less misery. (11) The myth of household income stagnation, again. (12) “Star Trek Beyond” (+).
Paths of Least Resistance
(1) Bull goes where no bull has gone before. (2) Ahead of schedule. (3) Financials getting their NIMs squeezed. (4) Financials deliver by cutting costs and trading more. (5) YRI’s Theme Park. (6) Oil price going nowhere as summer drivers go somewhere. (7) Microsoft is ahead in the Cloud. (8) IBM’s new Blockchain service. (9) More content for viewers who only have 24 hours in a day. (10) Pokemon Go software could power next tech and productivity revolution.
Playing for Time
(1) Huge relief rally since February 11. (2) No dancing in the streets for bull’s record high. (3) Earnings need to recover to sustain bull’s lofty valuations. (4) Earnings are set to do just that. (5) Raising next year’s S&P 500 target from 2200-2300 to 2300-2400. (6) Time is money: The longer the expansion, the higher the valuation. (7) No boom, no bust! (8) Forward earnings resuming ascent into record territory. (9) Secular stagnation is bullish because rates stay low and so does recession risk. (10) A corporate finance perspective on valuation.
Credit Where Credit Is Due
(1) Citigroup Economic Surprise Index surprisingly upbeat. (2) So why isn’t the bond yield up more so far? (3) Writing a letter of recommendation for central bankers. (4) Empirical fact: Easy money is boosting asset prices more than real economies. (5) China’s zombies on life support. (6) Helicopter flying lessons for central bankers. (7) ECB doing more QE with corporate bonds, but loans remain flat. (8) Missing the Target2. (9) Trust Americans to borrow money when it is really cheap to do so.
Fairest of Them All
(1) Global valuations: Who is the fairest of them all? (2) Asking the to-be-or-not-to-be question again: Stay Home or Go Global? (3) Lots of reasons why US is relatively expensive. (4) US has more diversified and resilient economy than most other countries. (5) US P/E almost always exceeds rest of world’s P/E. (6) Comparing revenues, earnings, and margins. (7) Economic surprise index goes vertical from negative to positive. (8) Couch potatoes can now be laptop shoppers. (9) Not much upbeat overseas. (10) “The Infiltrator” (+ + +).
More Flying, Buying, & Paying
(1) DJTA showing signs of life. (2) Airlines flying, trucks rolling, trains running. (3) Tesla has a master plan. (4) Amazon has an awesome Prime Day. (5) Bitcoin miners get a bit less. (6) Jamie opens up the checkbook for tellers. (7) Banks spending billions on fintech to get rid of branches.
The Scream
(1) No point in screaming in a vacuum. (2) Misleading danger signs on technicals, earnings, valuation? (3) Edvard Munch said it all. (4) Don’t fight the men and women with the printing presses. (5) Central bank asset purchases well outpace world GDP. (6) Excess liquidity going into assets. (7) Less panic. (8) High-frequency economic indicators confirm stock rally, though not record high yet. (9) Bull has thicker skin and better breadth. (10) Bull/Bear Ratio is neutral. (11) Growing middle class poses growing risk for Chinese government.
The Stallone/Seinfeld Bull Market
(1) Happy birthday, Sly. (2) Bulls can live 5-15 years. (3) Little blue pill. (4) The Trauma of 2008. (5) Black hole of negative interest rates. (6) A typical Seinfeld episode. (7) The power of compounding and rising dividends. (8) China’s latest inflation numbers: More sweet than sour. (9) Another earnings season with positive surprises. (10) Getting to the bottom of the Brexit vote. (11) A Canadian model for UK-EU deal.
Rolling Stone?
(1) Good news was great news. (2) Bond yields didn’t budge on strong payrolls. (3) Fed funds futures still predicting none-and-done. (4) Fed might want to lie low during upcoming election, including the one in Italy. (5) Williams says Brexit no big deal. (6) TGIF rally was widespread. (7) Valuation driven higher by lower bond yields and no recession. (8) Forward revenues and earnings lifting a bit. (9) Arbitrage spread favors more buybacks and M&A deals. (10) Earned Income Proxy rises to yet another record high. (11) Regrexit. (12) Democracy in Europe could get messier.
Dog Days
(1) Heat wave. (2) Another summertime crisis in Europe. (3) UK property bubble goes pop. (4) Italy grabs Brexit as a good excuse to bail out banks. (5) Homer’s warning (the Greek, not the Simpson). (6) Consumers dining out less and buying fewer new cars. (7) Consumers’ lament: Kids are too expensive, and the rent is too high. (8) How high is too high for P/Es of Utilities with bond yields under 1.50%? (9) How times have changed: Tech and Health Care valuations look very reasonable.
Explaining the Backlash
(1) The father of Globalization. (2) The division of labor and the size of the market. (3) It hasn’t been a winwin for everyone. (4) Is the backlash really about free trade or about unchecked immigration? (5) Free trade should prevail because it increases the wealth of nations. (6) Why are government bond yields plunging toward zero or going sub-zero? (7) Fed and US bonds have been globalized. (8) Global economy still growing, but may be more vulnerable to recession after Brexit. (9) Will Brexit be followed by Quitaly? (10) The Italian banking system is an awful mess.
Uncertainty Can Be Bullish
(1) Trennert, Straszheim, Rothman, Laffer, Greenberg, and me. (2) Laffer curves election outcome toward Trump landslide. (3) Reagan, like Trump, also was despised by Republican establishment. (4) Talking about a melt-up on a down elevator. (5) Is the Brexit panic over already? If so, why? (6) Melt-up in bonds and interest-rate-sensitive stocks. (7) Brexit uncertainty begets certainty about central bankers’ reaction. (8) Carney is promising rate cuts this summer. (9) ECB can’t find enough bonds to buy and can’t get inflation going. (10) BOJ has the same no-show problem with inflation as ECB. (11) Yellen will have some things to talk about at Jackson Hole in late August.
Happy-Go-Lucky
(1) Consumers consuming. (2) Young people much more optimistic than older ones. (3) The present component of Consumer Optimism Index is at cyclical high. (4) Two-day Brexit drubbing followed by solid relief rally. (5) Financials: Value traps? (6) All but two banks pass Fed’s stress test. (7) Pluses and minuses for US Financials. (8) Flat yield curve depressing net interest margins. (9) European Financials facing more challenges than US ones.
Complacent Consolidation?
(1) Why are migrants a problem in Austria, but not in Czech Republic? (2) Venice flooded with water and tourists. (3) Cleveland celebrating Cavs. (4) LeBron & me. (5) Brexit relief rally already? (6) Consolidation will end when earnings growth resumes. (7) In 2017, S&P 500 revenues should grow 4% in aggregate and 5%6% per share. (8) Same goes for earnings if profit margin stays steady. (9) Valuation is high, but bond yields are low. (10) Are stocks undervalued or are bonds overvalued?
Second Thoughts
(1) Power to the People! (2) Freedom from the bureaucrats. (3) Dear Google: What is the EU? (4) Bye-rs’ remorse. (5) Can Scotland veto Brexit? (6) Party-poopers in France, Germany, Italy, Netherlands, and Austria. (7) Markets warn: Beware of what you vote for. (8) UK accounts for just 3.9% of US exports. (9) Corporations continue to have incentive to buy back shares. (10) Buybacks plus dividends total staggering $5.1 trillion since start of bull market.
Populism Contagion Risk
(1) Is Globalization disintegrating? (2) Global economic integration has been bullish for stocks. (3) Success breeds discontented masses who support populist politicians. (4) Greenspan exaggerates risks, but may be right about ineffectiveness of monetary policy now. (5) Central banks don’t have tools for stopping political contagions. (6) Remaining bullish on “Stay Home” investment strategy. (7) Brexit justifies none-and-done for Fed this year. (8) The long goodbye. (9) No cans left to kick. (10) Pandora’s exit door. (11) Madame Frexit. (12) Not much global growth prior to Brexit.
Musk’s Oil
(1) Either a visionary or a snake oil salesman. (2) Market gives Bronx cheer to converting Tesla into a solar company. (3) Utility valuations may be flying too close to the sun. (4) Utilities want to charge more, while paying less for their customers’ surplus solar electricity. (5) Musk’s idea of combining solar energy with electric cars would be great if his companies ever stop losing money. (6) Chanos is short Tesla and SolarCity and ranting about the deal. (7) Building homes is a profitable business, but finding workers and land is challenging. (8) Winnebago indicator is bright green.
Globalization Now & Then
(1) History lesson: Not enough of us study it. (2) Back to the future: Prague, Vienna, and Venice. (3) The Thirty Years’ War and the Peace of Westphalia. (4) Globalization under the merchants of Venice. (5) Success breeds discontent. (6) The counter-revolution by populists. (7) Professor Summers thinks technological innovations reducing demand for labor. (8) Why are there more physically and mentally unhealthy white males? (9) The numbers don’t add up for Trump unless he scores really big with white males.
AI’s Future Is Here
(1) Summers changes his mind about technology. (2) From brawn to brain. (3) Amazing, but terrifying. (4) Too smart for our own good? (5) AI: Golden Age or arms race? (6) Meet the smartest girls in the AI class: Alexa, Ava, Samantha, Siri, and Sophia. (7) Zuckerberg’s home. (8) Our frenenemy’s skin is made of Frubber. (9) She is no Muppet. (10) Looking for the off switch. (11) Have humans peaked already? (12) Paradise lost: When androids take our jobs. (13) Paradise found: A basic income for all? (14) “Ex Machina” (+).
Kafka & Yellen
(1) Kafka’s hometown. (2) Life for Kafka characters is Kafkaesque. (3) Central banks’ unconventional monetary policies are right out of a Kafka novel. (4) Yardeni Research volunteers its services to replace the Fed. (5) Fed officials want to be normal, but can’t get there. (6) It’s official: Yellen buying into “new normal.” (7) George does not dissent this time. (8) Bullard goes from hawk to dove, seeing one-and-done-forever. (9) Disney vs. Kafka. (10) Central banks facing existential threat from bitcoin, seeking to control it.
Not So Hot
(1) Something not quite right. (2) Dark spots in a bright picture. (3) Truck sales looking toppy. (4) Bitcoin is making a big comeback. (5) Blockchain has lots of applications. (6) Goldman’s magnificent 5. (7) Out of Kenya. (8) Bringing jobs back home for robots. (9) Some signs of stress in consumer credit.
Pandora’s Box
(1) UK polls showing more leavers than remainers. (2) Unwelcome precedent for the rest of EU and EMU. (3) Opening the door for populists, nationalists, and protectionists. (4) Pound pounded. (5) Bund yield butchered. (6) Financials toasted. (7) Bookies are Brexit contrarians. (8) Lots of reactionary forces unleashed by globalization. (9) There’s an Amazon Dash Button for that. (10) No reason to leave home. (11) US consumers still consuming.
Great Sucking Sounds
(1) In a world of overpriced bonds, US bonds are relatively cheap. (2) Yield-thirsty Europeans are slurping up US bonds. (3) Draghi’s corporate bond vacuum machine. (4) Buffett Ratio is one of many in buffet of measures signaling overvaluation. (5) S&P 500 is also pricey relative to revenues per share. (6) Until the next recession, stocks still look attractive through lens of record-low bond yields. (7) Chinese officials switching gears, while stepping on both the accelerator and the brakes. (8) IMF official warns China of debt excesses. (9) Getting less and less bang per yuan.
The Dark Side
(1) Cosmic analogies for the stock market include black holes and supernovas. (2) Greek tragedies end badly, albeit with plenty of warning from the chorus. (3) Knights of the Dark Side: Gross/Soros/Druckenmiller see bad times ahead. (4) Brexit, China, and valuation all driving the wise guys into gold. (5) Negative interest rates in Eurozone and Japan pull down US bond yields. (6) Fed’s latest flow-of-funds data show big buyers of stock are still corporations and ETFs. (7) Don’t bet against the buyers of last resort. (8) Clash of the Titans: Gross/Soros/Druckenmiller vs. Yellen/Draghi/Kuroda.
Global Earnings Lack Luster
(1) Earnings outlook better over here than over there. (2) US forward earnings and P/E outperforming during current bull market. (3) Global economy lacks vitality. (4) World Bank lowers growth forecast for the world. (5) No spice in Chinese trade data. (6) Global leading indicators pointing to slow growth. (7) Low oil prices lead to higher oil prices and now more supply. (8) Coming out of bankruptcy with more oil and less debt. (9) Iran is gushing again. (10) Oil not so cheap in the stock market.