Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
US-China Cold War Heating Up
(1) December 11, 2001: Was it another Day of Infamy? (2) Unlike previous US presidents, Trump goes very public on US complaints against China. (3) A long-festering problem. (4) Meet Peter Navarro, again: America’s foremost critic of China. (5) More Cold War speeches from top US officials. (6) Phase 2 has been phased out. (7) Drawing a line in the South China Sea. (8) Banning Chinese companies and moving supply chains out of China. (9) Even the US Attorney General blasts China. (10) Chernobyl, COVID-19, and the Three Gorges Dam. (11) Update: Stay Home or Go Global? (12) Movie review: “Washington” (+ + +).
Banks Are Winning & Losing
(1) Americans are filling their tanks and hitting the road. (2) More upside surprises from the Citi Economic Surprise Index, and forward revenues and earnings too. (3) Banks reserving for lots of rainy days still ahead. (4) Capital markets and trading save the day for Q2 bank earnings. (5) Push for COVID-19 vaccines pushing possible candidates into late-stage trials. (6) Scientists also try harnessing plants to make vaccines fast and cheap. (7) Tesla’s price cuts may signal drops in its technology and production costs—not its sales.
Getting Technical
(1) Shockingly awesome Fed response to GVC. (2) Now all we need is a shockingly awesome vaccine. (3) Fed is fighting the virus. (4) No choice but to rebalance out of bonds into stocks. (5) Powell: Not even thinking about raising interest rates. (6) Powell: Not even thinking about high asset prices either. (7) YRI’s in-house COVID-19 experts are on the cases and vaccines. (8) Technology solved the food shortages Malthus predicted. Now if it could just stop the virus. (9) Operation Warp Speed is spending lots of money to stop the virus. (10) The stock market is showing both bad breadth and a golden cross. Go figure.
Counting Chinese Yuan & US COVID-19 Cases
(1) Still in Rod Serling’s The Twilight Zone. (2) The fifth dimension of the imagination. (3) A FANGMANT of our imagination. (4) From MAMU to MAMD, and back to MAMU again. (5) Joe Biden, soon to be the most progressive president since FDR? (6) A surreal future scenario: Fed pushes the federal funds rate below zero and buys stocks. (7) “Wizard of Oz” was Dorothy’s Twilight Zone nightmare. (8) The Chinese government is inflating credit and stock prices. (9) Updates on challenged and challenging COVID-19 stats.
Bad Earnings & Good Yearnings
(1) The seasons, they go round and round. (2) Magnificent Six leading the way. (3) Discounting better earnings. (4) Bank managements will have some good and bad news. (5) Banks will have to boost loan-loss reserves some more. (6) Business borrowers cash in lines of credit. (7) Credit-card debt declines as delinquencies rise. (8) Commercial real estate is in a world of trouble. (9) Investment bankers are fully employed. (10) Unlike most recessions, this one has some winners in addition to plenty of losers. (11) From FANG to FANGMANT. (12) Opting to benchmark to S&P 500 equal-weighted index rather than market-weighted one. (13) Movie review: “Greyhound” (+ +).
TGI Thursday: Accentuating Some Positives
(1) Good to see Americans on the road again. (2) Surprising surge in Citi’s Economic Surprise Index. (3) S&P 500 forward earnings starting to rebound. (4) Improvement in worldwide semi sales expands to US and Japan. (5) Nvidia and AMD power S&P 500 Semiconductors index higher. (6) Some positive news on the semiconductor earnings front. (7) Another chip manufacturer considers expanding its US manufacturing. (8) TuSimple continues developing its autonomous trucks, while others have tougher road.
Modern Monetary Theory: In Theory & In Practice
(1) Meet Stephanie Kelton. (2) A manifesto for the people’s economy. (3) A champion of big government. (4) Resource allocation debate: government vs markets. (5) The magic of printing money. (6) Fiscal policy should take the lead in creating full employment. (7) Economic deficits matter more than budget deficits. (8) MMT is the New Deal on steroids. (9) Fighting inflation by raising taxes. (10) Public service jobs for all. (11) The Wiz is a Utopian. (12) Big-government politicians on both sides of the aisle embrace MMT. (13) Trump administration unites fiscal and monetary policy in MMT alliance to fight the GVC.
More on MAMU & MAMD
(1) No rest for the wary as meltup refuses to rest. (2) Forward earnings just starting to recover. (3) Comparing MAMU now and MAMU in 1999. (4) Greenspan’s 1996 question about irrational exuberance. (5) Fed forcing everyone out of bonds and into stocks. (6) If MAMU is followed by MAMD, will Fed buy stocks and push yields below zero? (7) Chinese officials are stock-market cheerleaders. (8) Services economy rebounding in China and US. (9) Buffett is back at the M&A buffet. (10) No contest between bond yield and dividend yield. (11) Real rates turn negative, which is good for gold and maybe for other commodities too. (12) Fed officials want to make sure we know they will accommodate us.
The Fed & the FAANGMs That Ate the Market
(1) Crossing red lines. (2) Powell chooses to leap first, look later. (3) Fed starts buying bonds of corporations that don’t need help. (4) No Asset Left Behind: How the Fed’s bond buying boosts stock prices and P/Es. (5) Saving fallen angels before they turn into zombies. (6) Dalio’s complaint. (7) Central bankers’ firehoses still pouring lots of liquidity even though the fire sales are over. (8) Fair-value P/E: 15 or 30? (9) Yield Curve Targets. (10) The Magnificent Six viral stocks: expensive for a reason. (11) FAANGMs are dominating all the major investment-style categories. (12) Movie review: “Chernobyl” (+ + +).
Mostly Good News
(1) Watching improved gasoline usage to gauge the road to recovery. (2) Good news from employment and manufacturing data, too. (3) Boeing 737 MAX flies closer to approval. (4) United adds planes as air travel slowly takes off. (5) Analysts stop slashing forward earnings forecasts for Industrials, and most other sectors too. (6) Surveying the status of COVID-19 treatments and vaccines in the wake of Pfizer’s good vaccine news.
Warning: Hazardous Data
(1) KDDD: Known Data Deficiency Disorder. (2) Definition of “good” data. (3) Lots of good economic data suggesting economy bottomed in April. (4) Economic Surprise Index goes from record low to record high in the past few weeks. (5) Mortgage applications and pending home sales show strong housing recovery. (6) Industry analysts have stopped cutting their earnings estimates for 2020 and 2021. (7) S&P 500 forward earnings up for the past six consecutive weeks. (8) Gasoline usage rebounding as Americans drive more to work and to shop. (9) But are they also driving more because they don’t want to take mass transit and can’t travel overseas? (10) Hard to count the unemployed. (11) Lots of issues with pandemic data.
Stress Tests
(1) A bank stress test with additional sensitivity to the virus. (2) A group of 34 lenders get tested for V/U/W scenarios. (3) A freeze on buybacks and a cap on dividends. (4) Awash in deposits and making lots of loans. (5) Provisioning for more losses. (6) GFC was much worse for Financials than GVC so far. (7) Large corporations in better position to survive GVC than small businesses. (8) Financials led dividend cuts during GFC. This time, Energy more likely to lead the way. (9) Tech firms and Financials are the big repurchasers of their own shares. (10) Buybacks data confirm that most are to offset dilution from employee stock compensation plans rather than to boost EPS.
Natural & Man-Made Disasters
(1) Self-inflicted collateral damage in the fog of war. (2) A five-part plan for avoiding lockdowns next time. (3) Learning to live with the virus now in case a vaccine can’t be found. (4) Reagan, Emanuel, Obama, and Trump. (5) Why didn’t Centers for Disease Control and Prevention with a $6.5 billion annual budget control and prevent COVID-19? (6) Generous government unemployment benefits may be boosting unemployment and weighing on recovery. (7) Return-to-work benefits? (8) Consumer spending getting a post-lockdown boost from all the saving done during lockdown. (9) Movie review: “Irresistible” (+).
Wall of Worry
(1) Market meltup meets Wall of Worry. (2) COVID spike lengthens list of investor concerns. (3) NY roads get crowded as COVID restrictions lift. (4) Price of crude drops on COVID spike, but still up sharply from April low. (5) A look at how COVID has affected oil supply and demand. (6) Surge in oil inventory should peak this quarter. (7) Honeywell joins the ranks of companies offering quantum computers. (8) A quantum Internet is being developed to link quantum computers.
Cooped-Up Demand
(1) A simple way to get rid of cabin fever. (2) Cash-fueled CUD vs usual old PUD. (3) Gasoline usage continues to recover in US. (4) Jumping jack flash PMIs. (5) Three regional economic rebounds. (6) Commodity prices moving in the right direction. (7) S&P 500 consensus forecasts for 2020 and 2021 revenues and earnings starting to bottom. (8) Why aren’t revenues down more? (9) Forward revenues and earnings also bottoming. (10) How broad is bottoming in S&P 500 forward earnings? (11) The worst may be over for downward earnings revisions. (12) What’s worse for freedom: lockdowns or masks?
Party Like It’s 1999
(1) Prince was an amazing prognosticator. (2) Defying doomsayers by throwing a party. (3) Countering the pessimists, but acknowledging that they could be right someday about the End of Days. (4) Fed deploys B-52s rather than helicopters to fight latest crisis. (5) Two alternative 1999-like party scenarios. (6) Who are all those unmasked men and women? (7) Nasdaq party may just be getting started. (8) Agreeing with Santoli. (9) Smart money is bearish. (10) It’s record-low corporate bond yields, Smarty! (11) Robinhood is a bit player in this party. (12) Unlike Greenspan, Powell is no cheerleader. (13) The Great Disconnect, then and now.
Huge Windfall For Corporate America
(1) The Fed’s D-Day. (2) A very successful shock-and-awe campaign. (3) Time to declare mission accomplished? (4) MMT + TINA = MAMU. (5) The MAMUs of 1999 and now. (6) Powell Put aimed at supporting both stocks and bonds. (7) Slicing and dicing forward P/Es now and then. (8) Robinhood for the young and the restless. (9) Fed stoking moral hazard by saving fallen angels from turning into Zombies. (10) Record corporate bonds outstanding and record gross new issuance at record-low interest rates. (11) Movie Review: “Da 5 Bloods” (+ + ).
Don’t Sell US Consumers Short
(1) American shoppers once again live up to their reputation. (2) A pile of personal saving helps fuel a V-shaped spending recovery. (3) Trump wants US manufacturing to come home. (4) Complex supply chains may make reshoring difficult. (5) Manufacturing in the US may increase costs and turn former Chinese suppliers into competitors. (6) Down on the farm: Robots killing weeds and picking fruit. (7) Autonomous tractors can work day and night.
Fed vs Virus Waves
(1) The meltup of the day. (2) Is a two-month lockdown recession a recession or just a natural disaster? (3) Index of Coincident Economic Indicators peaked during February, troughed during April. (4) Both S&P 500 forward revenues and forward earnings seem to be bottoming already. (5) Powell’s Put dwarfs predecessors. (6) Corporate bond investors get a Fed Put too. (7) Fed pumping waves of liquidity to offset virus waves. (8) The Fed: Savior of Fallen Angels and Zombies. (9) Now we know how Powell intended to fix corporate debt crisis. (10) Five characteristics of virus-proof companies.
Sensitive Prices
(1) Commodities showing less manic depression than stocks. (2) Less dramatic swings in commodity prices than in stock prices. (3) Commodity prices have actually held up surprisingly well under the circumstances. (4) Boom-Bust Barometer goes bust. (5) Copper didn’t crash along with global auto production. (6) S&P 500 forward revenues is down, but not out. (7) Gasoline demand leading the rebound in petroleum usage, but inventories continue to build. (8) Lumber price prospects turning bullish. (9) Why isn’t gold soaring even higher?
Crazy Year
(1) 2020: Is it over yet? (2) Longest expansion followed by shortest recession. (3) Monetary and fiscal responses for the record books. (4) Huge pile of savings could finance V-shaped recovery in consumption. (5) Record-setting meltup follows record-setting meltdown. (6) Sentiment turns too bullish too fast. (7) Rooting for churning. (8) Biden’s nightmares. (9) Biden’s savior. (10) Second wave already, or more of the first wave? (11) Viral statistics can be sickening and misleading. (12) Mobility stats showing more mobility. (13) Vaccines to the rescue? (14) Movie: King of Staten Island (+ +).
Green Shoots
(1) Cooped-up Americans hit the road and buy homes. (2) Vacationers cancel overseas travel plans and see the US instead. (3) Forward earnings may be bottoming. (4) Tech earnings push Nasdaq across the 10,000 threshold. (4) Vegas opened its doors, and people walked through. (5) Battle over the electric vehicle market breaks out. (6) Tesla becomes most valuable car company as it pushes forward with electric trucks. (7) Nikola bets on fuel cells. (8) Ford is in the EV game too.
The Shortest Recession On Record
(1) Free Kindle book on the Fed. (2) Meet the Dating Committee. (3) The longest economic expansion followed by the shortest recession on record. (4) Did the economy bottom in May or in June? (5) Tracing out a swoosh. (6) Tracking mobility as the economy reopens. (7) Bull market broadening in recent days. (8) Remarkable rebound for both LargeCaps and SMidCaps. (9) Value doing some catching up to Growth. (10) Growth’s natural advantage is growth.
Across the Pond
(1) Free Fed Kindle book. (2) TINA is driving meltup. So is rebalancing. (3) TINA + MMT = MAMU. (4) Fed and ECB join forces to carpet-bomb their economies and financial markets with cash. (5) Lagarde’s whatever-it-takes moments: APP-Forever + PEPP two-step. (6) Going down the credit-quality curve. (7) PEPP rally in Eurozone credit spreads and stock prices. (8) Eurozone economic indicators remain depressing, while business surveys may be bottoming. (9) 2021 has to be better than 2020.
MAMU! (Mother of All Meltups)
(1) A trillion here, a trillion there; it adds up to real money. (2) Fed’s B-52 bombing campaign killed the bear market. (3) Was it really a bear market, or just Panic Attack #66? (4) From meltdown to meltup in a heartbeat. (5) Is the stock market heartless, or just optimistic at heart? (6) May’s employment report fits the V-shaped recovery scenario, sort of. (7) PPP might have brought back some paychecks, but not jobs in May. (8) Lots of unemployed expecting to get their jobs back soon. (9) Still a long way to go to repair damage in labor market. (10) BLS bean counters admit that counting beans has been hard during pandemic, resulting in a “misclassification error.” (11) Were nonworking PPP workers employed or unemployed? (12) The billion-dollar question: Will jobs be there when PPP isn’t?