What I Am Reading

June 02 (Friday) Latest Morning Briefing Executive Summary: Tech, AI & Irises The stock price indexes of the S&P 500 Information Technology sector and its top-performing industry ytd, Semiconductors, have left their peers in the dust. Not only has the transformative potential of AI whetted investors’ appetite for tech; so have semiconductor companies’ rosier earnings outlooks now that they’re out from under their inventory glut. Does this tech rally have legs? We think so over the longer term, since earnings prospects are bound to rise as AI spending and the semiconductor cycle head north. … Also: Irises have caught our eye, specifically their potential for “authenticating humanity.” OpenAI CEO Sam Altman envisions that potential changing the world. (subscribers’ link) YRI Daily Markets Overview Replay of Dr. Ed’s webinar on May 30. Markets Here’s how to buy Treasury bills as yields top 5% | C OPEC+ unlikely to agree bigger oil cuts on Sunday, sources say | R Central banks Fed Prepares to Skip June Rate Rise but Hike Later | W Fed’s new projections may fill the void on interest rate guidance | R   US US job growth beats expectations in May | R U.S. Job Openings Rose in April, Reversing Three Months of Decline | W Main driver of inflation: Wage hikes | C Debt ceiling: Senate passes debt ceiling bill, sends to Biden | C   Industries & companies Aerospace: Boeing further delays first Starliner astronaut mission for NASA | C Energy: Exxon, Chevron Near Deals to Drill in Gas-Rich Algeria | W Financials: CFPB says money stored in payment apps is not federally insured | C Healthcare: Medicare details plan to cover Alzheimer’s treatments | C Manufacturing: As China Risks Grow, Manufacturers Seek Plan B—and C and D | W Media: Meta says it will block news in California if bill becomes law | C Restaurants: Consumers more likely to cut back on restaurant visits than trade down | C Tech: Nowhere for Investors to Hide From AI Hype | W Tech: Nvidia Is Still a ‘Buy’ on Wall Street as Analysts Race to Boost Price Targets | W Travel: Fears of inflation and recession have not slowed consumer travel | C Technology Why Apple’s headset could become first VR success story | C Climate Corporate ESG Requirements Are About to Ramp Up. Here’s How CFOs Can Prepare. | W

June 01 (Thursday) Latest Morning Briefing Executive Summary: Tech, AI & Irises The stock price indexes of the S&P 500 Information Technology sector and its top-performing industry ytd, Semiconductors, have left their peers in the dust. Not only has the transformative potential of AI whetted investors’ appetite for tech; so have semiconductor companies’ rosier earnings outlooks now that they’re out from under their inventory glut. Does this tech rally have legs? We think so over the longer term, since earnings prospects are bound to rise as AI spending and the semiconductor cycle head north. … Also: Irises have caught our eye, specifically their potential for “authenticating humanity.” OpenAI CEO Sam Altman envisions that potential changing the world. (subscribers’ link) YRI Daily Markets Overview Replay of Dr. Ed’s webinar on May 30. Markets Robust Jobs Market Poses Threat to Stocks’ Rally | W US Treasury Cash Pile Hits New Low as Debt Ceiling Wrangling Persists | B Column: US oil and gas output still rising in response to high prices last year | R US I Business Is Slowing. So Companies Are Juicing Profits. | W Private payrolls rose by 278,000 in May, well ahead of expectations, ADP says | C Will I Have More Money Than My Parents? Young US Workers Worry About Retirement | B Debt ceiling: Senate to take up bill, Schumer seeks to fast-track vote | C US II Main driver of inflation: Wage hikes | C How inflation and higher interest rates changed car buying | C Who is the hardest hit by inflation in the U.S. | C How inflation is measured: 3 examples | C Why Your Steak Is Getting Pricier | W China Opinion | China Remains a Formidable Economic Foe | N Geopolitics & trade NATO Faces Pressure on Clear Membership Path for Ukraine | W   Industries & companies Aerospace: Boeing CEO ‘not overly anxious’ about Chinese narrowbody jet | R Financials: Goldman Sees 25% Trading Revenue Drop, Plans More Layoffs | B Financials: Apple Customers Say It’s Hard to Get Money Out of Goldman Sachs Savings Accounts | W Technology Job Cuts From AI Are Just Beginning, the Latest Challenger Report Suggests | B AI Is Writing Code Now. For Companies, That Is Good and Bad. | W Climate ESG Blowback: Exxon, Chevron Investors Reject Climate Measures | W A pledge to fight climate change is sending money to strange places | R Beyond markets Human Metapneumovirus Cases Surged in 2023. Is There an HMPV Vaccine? | B Rising 2023 Summer Camp Costs Show Waitlists Have Usurped Fun | B

May 31 (Wednesday) Latest Morning Briefing Executive Summary: Another Hated Bull Market The S&P 500 has been in a bull market since October. So how come there are so many bears refusing to believe that? Today, we recount the reasons that they write off the stock market’s legitimately broad-based advance since fall as just a rally within a bear market. We also correct a few of their misperceptions and outline the bulls’ stronger case. … And for a trader’s perspective on this divisive market, a few words from Joe Feshbach. (subscribers’ link) YRI Daily Markets Overview Replay of Dr. Ed’s webinar on May 22. Markets Have Megafirms Like Nvidia Grown Too Big? Investors Believe They Are Only Getting Started | W Treasury yields fall as investors await debt ceiling deal vote | C   Central banks ECB Warns Rate Hikes Are Putting Market Stability at Risk | B ECB’s de Guindos warns financial markets are vulnerable to a sharp sell-off | C US US home prices to fall less than expected despite high borrowing costs, Reuters poll shows | R Rising Rates Make It Harder to Help Distressed Homeowners. Regulators Are Trying to Fix That. | W Mortgage demand drops to the lowest level in three months | C Debt ceiling bill clears key hurdle, teeing up final House vote before it goes to Senate | C Former New Jersey Gov. Chris Christie to launch presidential campaign next week | C China China’s Recovery Slows Further as Factory, Services Activity Pulls Back | W New warning signs emerge for China’s property market | C Europe Column: Germany energy transition faces key chemical sector conundrum | R Geopolitics & trade U.S. Manufacturers Seek China Alternatives as Tensions Rise | W Dimon calls for Washington-Beijing engagement in first China visit since 2021 controversy | C China Woos Dimon, Musk as Pressure Builds on Xi to Boost Economy | B Technology Hedge Funds Are Deploying ChatGPT to Handle All the Grunt Work | B A.I. poses human extinction risk on par with nuclear war, Sam Altman and other tech leaders warn | C

May 30 (Tuesday) Latest Morning Briefing Executive Summary: Shock Absorbers Why is economic growth seemingly defying gravity, or at least the gravitational pull of the Fed’s tightening measures over the past year and change? It’s not that the rules of business-cycle physics are defunct. Rather, the pandemic has added new forces to the equation, with distortive effects. Eight unusual forces are acting as shock absorbers to keep the economy from sinking into the widely expected recession. Today, we examine each, including the amount of liquidity in the economy, the uncommonly strong labor market, productivity-enhancing technological advancements ushering in the “Roaring 2020s,” and well-heeled Baby Boomers consuming like there’s no tomorrow. (subscribers’ link) YRI Daily Markets Overview Replay of Dr. Ed’s webinar on May 22. Markets Don’t expect the stock markets to rejoice about the debt ceiling deal | NN Why Are Markets So Calm? It’s Revenge of the Quant Funds | W The Dollar Is Still King in Europe, and It’s Swaying Interest Rates | W Central banks Major central banks were expected to pause rate hikes soon. Now it’s not so clear cut | C US What’s in the debt ceiling deal struck by Biden and McCarthy? | C Donald Trump is very likely to be the Republican nominee | E Recession Is Coming, and It Could Be Lengthy | BR The Olive Oil Crisis Spreads as Prices Soar. What’s to Blame. | BR More High-School Grads Forgo College in Hot Labor Market | W Why Americans Are Having Fewer Babies | W China China’s Economy Can’t Grow at 10% Forever | BR China’s cancel culture is nationalist, not woke | E Japan Japan’s ageing society is finding creative ways to dispose of its dead | E Geopolitics & trade China Rebuffs Pentagon Chief, Blunting Push for Rapprochement | W Hungary is becoming more important to China | E   Industries & companies Autos: Electric cars could be crucial for the EU to meet its climate goals | E Financials: These Bank Alternatives Can Keep Cash Rolling In | W Media: Disney’s ‘Little Mermaid’ Tops Weekend Box Office | W Media: The CEO of YouTube Has a Favorite Video and a Plan to Win Over Anyone Watching TV | W Media: Streaming services remove movies, shows: Here’s why | C Technology ‘It’s not a bubble yet’: Wharton’s Jeremy Siegel predicts Big Tech boom fueled by A.I. | C The AI Boom Runs on Chips, but It Can’t Get Enough | W Beyond markets How Bitcoin and Other Crypto Keep Escaping Extinction After Crashes and Bubbles | BR It’s Not Even ‘Deflation’ In the False Way That Monetarists Define It | FO

May 27 (Saturday) Latest Morning Briefing Executive Summary: Covid Again? Upbeat NERI. China bracing for another Covid wave but will rely on vaccines rather than lockdowns. … Latest earnings was better than expected, but S&P 500 earnings was still down 3.0% y/y, which is better than the -7.0% consensus expectation. Q2 should be down again modestly before comps turn positive again. … Joe reviews the latest NERI readings, which seem to be turning more optimistic. (subscribers’ link) YRI Daily Markets Overview Replay of Dr. Ed’s webinar on May 22. Markets Municipal Bond Issuers on Edge as Debt Ceiling Deadline Nears | W Stocks Traders Shun Leverage With Debt-Cap Deadline Approaching | B AI Is Becoming the Stock Market’s Answer to Everything | B Gasoline Prices, a Source of Pain Last Year, Have Come Way Down | N Central banks We Expect Economic Growth to Weaken Until Fed Pivots to Rate Cuts | Morningstar   US Debt Limit Debt ceiling negotiations push toward critical default deadline | R Debt-Ceiling Deadline Tracker: New Risks Emerge If Washington Does a Deal | B Janet Yellen Sets June 5 Deadline for Debt-Limit Accord | W Yellen’s Debt Limit Warnings Went Unheeded, Leaving Her to Face Fallout | N Ahead of Debt-Ceiling Deal, Some Democrats Point Finger at Biden | W US U.S. Consumer Spending Jumped in April and Inflation Accelerated | W Joe Biden wants a ‘new economic world order.’ It’s never looked more disordered. | PO The Anti-Woke Presidential Candidate Who Wants to Crush ESG and Gut the Fed | W Move Over, Mars. Elon Musk Turns His Attention to 2024 White House Race. | W Has ‘Gig Work’ Become a Dirty Word? | N   India Column: India’s electricity supply improves in cooler pre-monsoon | R China China’s Wuhan finance regulator urges hundreds of firms to repay debt, local media report | R A Chinese Alternative to Bloomberg Terminals Quietly Limits Information Overseas  | W Geopolitics & trade Europe Rebuffs China’s Efforts to Split the West in Pushing Ukraine Cease-Fire | W North Korea spent the pandemic building a huge border wall (reuters.com) Chip Companies, Wary of Break With China, Seek Looser Limits on Federal Cash | W   Industries & companies Autos: Volkswagen Bets an Old SUV Can Help It Win Over Americans | W Tech: How AI Is Catapulting Nvidia Toward the $1 Trillion Club | W Technology Elon Musk’s Neuralink Says It Has FDA Approval for Study of Brain Implants in Humans | W Reality Is Broken. We Have AI Photos to Blame. | W

May 26 (Friday) Latest Morning Briefing Executive Summary: Covid Again? Upbeat NERI. China bracing for another Covid wave but will rely on vaccines rather than lockdowns. … Latest earnings was better than expected, but S&P 500 earnings was still down 3.0% y/y, which is better than the -7.0% consensus expectation. Q2 should be down again modestly before comps turn positive again. … Joe reviews the latest NERI readings, which seem to be turning more optimistic. (subscribers’ link) YRI Daily Markets Overview Replay of Dr. Ed’s webinar on May 22. Markets Nvidia close to becoming first trillion-dollar chip firm after stellar forecast | R Can You Recession-Proof Your Portfolio? | Morningstar   US ‘Not sure history has ever seen this before’: Top CEOs on the economy | C Biden, McCarthy See Progress but No Deal on Debt Ceiling | W Debt ceiling negotiations intensify between Biden, Republicans | C   Europe Germany Enters Recession in Blow to Europe’s Economy | W India World’s largest milk producer India faces 15% hike in milk prices | C   China China, Once Pioneer of Zero Covid, Shrugs Off Looming Wave | W Column: China’s refined nickel imports slump to near 20-year lows | R   Geopolitics & trade Pressure Is on U.S. to Hit Back at China’s Ban on Micron | W China Hack Is Latest Challenge for West’s Diplomatic Reset With Beijing | W Why North and South Korea Have Big Ambitions in Space: An ‘Unblinking Eye’ | W Industries & companies Airlines: Spate of Runway Near Misses Casts Shadow Over Summer Travel  | W Autos: Tesla’s Elon Musk, Ford’s Jim Farley to talk EVs on Twitter Thursday | C Energy: Column: The ‘Big 4’ drivers of coal imports and power emissions | R Media: Inside Disney and Comcast’s Fight Over the Future of Hulu | W Media: TikTok Is Testing Its Own AI Chatbot Called Tako | W Retail: Kohl’s, Best Buy, Lowe’s Sales Sluggish as Shoppers Pull Back | W Travel: Half-Empty a Year Ago, Cruises Are Now Packed Like Sardines | W Beyond markets How the A.I. explosion could save the market and maybe the economy | C Reid Hoffman Is Praising the Virtues of AI | N The Brilliant Math Coach Teaching America’s Kids to Outsmart AI | W Microsoft sprinkles OpenAI everywhere to retain software partners | C

May 25 (Thursday) Latest Morning Briefing Executive Summary: Covid Again? Upbeat NERI. China bracing for another Covid wave but will rely on vaccines rather than lockdowns. … Latest earnings was better than expected, but S&P 500 earnings was still down 3.0% y/y, which is better than the -7.0% consensus expectation. Q2 should be down again modestly before comps turn positive again. … Joe reviews the latest NERI readings, which seem to be turning more optimistic. (subscribers’ link) YRI Daily Markets Overview Replay of Dr. Ed’s webinar on May 22. Markets Financials Lead Stock Decline as Sentiment Sours | B The Ultimate Buy and Hold Portfolio | Morningstar Central banks Fed Officials Split on Support for More Hikes, Minutes Show | B Fed Officials Were Divided Over June Rate Pause | R Fed officials less confident on the need for more rate hikes, minutes show | C US I The Odds of US Going Past Default Date Are 25% and Rising, JPMorgan Says | B GOP, Biden Negotiators Resume Talks Amid Debt Default Impasse | B On the Debt Ceiling, the White House Is Doing What It Said It Wouldn’t Do, Negotiating | B Debt-Ceiling Fight Comes Down to Spending: Freeze or Cut? | W Explainer: US debt ceiling focus on ‘discretionary spending’ means cuts ahead | R Potential Debt Ceiling Deal Would Barely Change Federal Spending Path | N US II Florida Gov. Ron DeSantis joins presidential race, taking on Trump for GOP nomination | C Not just Disney: DeSantis brings history of business battles to the presidential campaign | C Downtown LA’s Office Distress Shows the Pain Coming for Cities | B Young adults are taking longer to reach ‘key life milestones’ impacting finances later, analysis shows | C Europe It Just Had an Energy Crisis, Now Europe Faces a Food Shock | W China China braces for new covid wave; XBB variant vaccines on the way | WP Geopolitics & trade China’s Risky Strategy to Control One-Third of the World’s Lithium Supply | W U.S. and China See Fragile Opportunity to Repair Ties | W Exclusive: Russian hypersonic scientist accused of betraying secrets to China | R Saudi embrace of Assad sends strong signal to US | R Industries & companies Financials: Exclusive: HSBC puts global footprint under fresh scrutiny, considers dozen exits | R Tech: Meta has started its latest round of layoffs, focusing on business groups | C   Technology Why Fake Drake and AI-Generated Music Are Here to Stay | Wired Generative AI Podcasts Are Here. Prepare to Be Bored | Wired Take Your Ultrawide Monitors Everywhere With an AR Laptop | Wired Beyond markets Mountain of FTX Evidence: Emails, Chat Logs, Code and a Notebook | N

May 24 (Wednesday) Latest Morning Briefing Executive Summary: Around The World Global economic growth has been lackluster this spring, neither a boom nor a bust. Rebounding global trade and the easing of supply-chain disruptions should moderate global inflationary pressures without a global recession. The Fed and the ECB are committed to raising rates to restrictive levels and keeping them there to bring inflation down. The Fed’s rate is probably where it should be, while the ECB may have a couple more rate hikes to go. The BOJ’s ultra-easy policy continues. The PBOC is massively stimulating, suggesting all is not well in China. Today, we survey the major indicators of global economic growth for insight into how vulnerable the global economy is at this juncture. (subscribers’ link) YRI Daily Markets Overview Replay of Dr. Ed’s webinar on May 22. Markets S&P 500 closes 1% lower Tuesday as debt ceiling talks drag on in Washington | C US Dollar Has More Room to Strengthen, Goldman Sachs Says | B Column: China’s petroleum trade subdued at start of 2023 | R Column: Aluminium is the West’s critical minerals blind spot | R Central banks Ex-Fed Chair Bernanke: There’s more work ahead to control inflation | C US I U.S. Growth Touches Fastest Monthly Rate in More Than a Year | W Economy in better shape than doomsayers say: BlackRock exec | C US II Biden Tries to Close Debt-Ceiling Deal Democrats Sought to Avoid | W Debt-Ceiling Deadline Tracker: Markets Jittery Despite Progress | B Debt-Ceiling News: 9 Key Issues in Talks to Avoid US Default | B Why it matters that McCarthy wants military spending ‘off the table’ | MSNBC Ron DeSantis to Launch 2024 Presidential Run in Twitter Talk With Elon Musk | W DeSantis campaign lines up fundraisers for White House race | C House Members Offer Rare Bipartisan Immigration Measure | W Industries & companies Media: Netflix password sharing crackdown starts in U.S. | C Media: HBO Max is now just ‘Max’—4 things to know about the streaming shakeup | C Retail: Dior, Tiffany, Le Creuset: Why we’re buying luxury goods like crazy | Vox Corporate finance Choice Hotels Seeks to Buy Wyndham Hotels & Resorts | W Virgin Orbit shuts down after selling assets in bankruptcy auction | C

May 23 (Tuesday) Latest Morning Briefing Executive Summary: Looking Forward To Better Earnings Our analysis of forward earnings—a good indicator for actual earnings over the next four quarters—suggests an April bottom. That jibes with our mid-cycle-slowdown thesis. … Many who expect a recession instead have been misled by the LEI’s recession signaling. The LEI overrepresents the weak goods side of the economy and underrepresents the strong services side that’s been keeping the economy afloat. … We think the forward profit margin, like forward earnings, has bottomed; margins have been improving for all but three S&P 500 sectors. … And: Still no credit crunch from the banking crisis. … Also: An update on bond market indicators. (subscribers’ link) YRI Daily Markets Overview Replay of Dr. Ed’s webinar on May 22. Markets Saudi oil minister warns market speculators to ‘watch out’ ahead of OPEC+ meeting | C Central banks Fed Rate Path Hinges on Trade-Off Between Stable Banks or Prices | B US I Biden, McCarthy Hold ‘Productive’ Meeting but No Debt-Ceiling Deal Yet | W Opinion | Liberals Are Persuading Themselves of a Debt Ceiling Plan That Won’t Work | N What Is the 14th Amendment, and Can Biden Use It to Fix the Debt Ceiling? | W Questions About Trump, DeSantis and Biden Fuel Growth of 2024 GOP Field | W US II Why Inflation Erupted: Two Top Economists Have the Answer | W Why fears of a banking crisis were overblown | P What do Gen Z graduates want out of work? Stable jobs and good work-life balance. | Vox US Women in Work: Number Participating in Economy at Record High | B A Housing Bust Comes for Thousands of Small-Time Investors | W Europe Europe’s Economy Cools Down as Interest-Rate Rises Bite | W Germany’s EON to Set up New European Gas and Power Trading Unit | B Pasta prices have surged, prompting crisis meetings in Italy and calls for a strike | C The IMF now expects the UK to avoid a recession | C Geopolitics & trade China’s New Chip Ban on Micron Puts South Korea in a Delicate Spot | W Rising Nuclear-Weapons Risks Overshadow G-7’s Push for Disarmament at Hiroshima | W Industries & companies Autos: Hyundai Accelerates From Budget Brand to Tesla Competitor | W Energy: Oil giant Shell braces for shareholder revolt over climate plans | C Pharma: Covid vaccines: What’s next for Pfizer, Moderna | C Retail: Retailers Clamp Down on Returns | W Corporate finance Bankruptcies are skyrocketing — and that’s only half the story | The Hill Climate JPMorgan Makes One of the Biggest Bets Ever on Carbon Removal | W   Beyond markets Paper Money Diehards Refuse to Fold | W

May 22 (Monday) Latest Morning Briefing Executive Summary: Leading The Wrong Way? So where’s this recession signaled by the LEI and widely expected to come anytime now? Why haven’t high inflation and monetary tightening ground economic activity to a halt yet? Because a recession isn’t coming anytime soon. We never bought that it was inevitable anyway. We’re raising our subjective odds of a soft landing, instead of a recessionary hard one, to 70% from 60%. The burden of proof is now on the pessimists. … So what’s been keeping the economy from a textbook recession? Unusual forces are in play, acting as economic shock absorbers. … Also: Our Roaring 2020s boom-times thesis remains intact. … And: Dr. Ed reviews “Air” (+ +). (subscribers’ link) YRI Daily Markets Overview Replay of Dr. Ed’s webinar on May 15. Markets Stock Prices of Office Landlords Plummet as Short Sellers Pile In | W Using Options to Bet on a Bullish or Bearish Breakout for Stocks | BR Biden’s Billion-Dollar Oil Trade Faces a Big Test | W Central banks Fed Rate Increases Hit Small Businesses the Hardest | W Fed Official Is Open to Forgoing June Rate Hike | W Fed’s Kashkari says a June pause on rates wouldn’t indicate an end to hiking cycle | C   US Immigrants’ Share of the U.S. Labor Force Grows to a New High | W Biden and McCarthy to meet at White House on Monday to try and avoid looming debt default | C Joe Biden’s global vision is too timid and pessimistic | E Europe Meet the lefty Europeans who want to deliberately shrink the economy | E   China Is China’s recovery about to stall? | E Geopolitics & trade The fault lines in America’s China policy | E Isolating China will be ‘impossible and dangerous,’ analyst says, as the G-7 gets tough on Beijing | C Europe can’t decide how to unplug from China | E China Seeks to Counter Musk’s Starlink With Own Satellite Network | W Why China fears Starlink | E Industrial Policy Is Booming at the G-7. Where Does It Stop? | BR The fight over the future of global payments | E Industries & companies Autos: GM will introduce an all-electric Cadillac Escalade ‘IQ’ later this year | C Autos: Ford looks to charge up EV drive with flurry of battery deals | R Consumer: Tyson Insiders Bought Up the Beaten-Down Stock | BR Energy: Exxon Mobil, Shell, and 8 Other Stocks to Play a Resurgent Energy Sector | BR Financials: Goldman Sachs CEO Solomon Responds to Critics and Makes His Case for the Stock | BR Financials: Morgan Stanley’s James Gorman to Step Down as CEO. Who Could Be Next. | BR Fintech: Apple’s Next Version of the Wallet App Could Be Killer. Why PayPal and Other Fintechs Should Worry. | BR Media: TikTok’s Algorithm Can Be a Huge Boost for Authors. A Ban Could Hurt Book Sales. | BR Tech: Meta fined a record $1.3 billion over EU user data transfers to the U.S. | C Tech: China chip stocks rally after Beijing said U.S. chip giant Micron is ‘major security risk’ | C Corporate finance Chevron to Buy PDC Energy in $6.3 Billion Stock Swap | W JPMorgan Chase raises key revenue target to $84 billion after First Republic takeover | C