Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Will Trade Winds Blow Away Earnings?
(1) Q1 earnings tick up y/y. (2) Q2 earnings consensus showing y/y downtick. (3) Escalating trade war starting to weigh on revenues? (4) Forward earnings moving higher. (5) Forward profit margin bottoming at 12%? (6) Boom-Bust Barometer drops along with CRB commodity index. (7) Earnings growth momentum due for a rebound. (8) Still expecting a peace dividend by the end of the summer. (9) Our new comprehensive study on buybacks. (10) Counting shares for the S&P 500 since Q1-2011. (11) Powell’s unalarming speech on corporate debt.
US Consumers: Still Born To Shop?
(1) The United States of Consumers. (2) Blaming the winter weather. (3) We are all minimalists now. (4) Soft patch for consumer spending? (5) Auto sales and gasoline usage may have peaked. (6) Home improvement sales likely to improve. (7) Consumer sentiment at new cyclical high in May. (8) Don’t count on Millennials to buy your house. (9) Buddy, can you spare $400 in an emergency?
Global Economy Dropping Like Lead?
(1) CRB raw industrials spot price index drops on escalating US-China trade war. (2) Another global growth recession, or worse? (3) Global forward revenues on uptrends. (4) Steel price down sharply as European auto production staggers in wake of new auto emissions standard. (5) Still expecting Chinese to cave. (6) Rail freight traffic stalling in China. (7) Six weeks from the longest US economic expansion on record. (8) Home, sweet home. (9) The Fed’s semi-existential crisis. (10) Fed Governor Brainard says Phillips curve is not flat but broken. (11) Brainard begs to differ with her colleagues on low inflation: It may not be transient.
Yin and Yang
(1) A smaller earnings hook. (2) Not a good year for pigs. (3) The Chinese don’t want to be bullied. (4) China’s Orwellian state and Gulag. (5) Real retail sales growth falling as China turns into world’s biggest nursing home. (6) Xi needs a trade deal with US and Trump needs a deal with China. (7) Digital payments system disrupting financial system. (8) Lots of competition to deliver caffeine.
The Recession Question
(1) US economy dwarfs trade flows. (2) Higher tariffs on Chinese goods not likely to boost inflation much. (3) Iran launches a proxy war against the US and its Gulf allies. (4) No recession for earnings during Q1. (5) Expecting double-digit earnings growth in 2020. (6) Remarkably optimistic outlook for S&P 500 revenues. (7) Profit margin getting squeezed, but remains historically high. (8) The Fed is monitoring financial stability. (9) A few signs of stress in credit system, but no cracks.
M*A*S*H
(1) No laughing matter. (2) PTSD from the Trauma of 2008. (3) Latest panic attack (#63) about more than just China trade tensions. (4) Sabotage in the Persian Gulf. (5) Apple’s bad day in court. (6) Flattening yield curve flattens Financials. (7) VIX rising. (8) Too many bulls charged up by trade deal assurances. (9) Commodity prices take a hit. (10) Oil price slips despite attack on tankers. (11) The soybean story. (12) Round trip for lumber.
Trade War & Peace
(1) Miss Piggy, Roger Moore, and trade. (2) Tit for tat. (3) Will Chinese change their laws to protect US trade interests? (4) China selling in US almost four times more than US selling in China. (5) Trump’s tariffs aimed at moving manufacturing out of China rather than at raising US prices of Chinese imports. (6) Not much inflation showing up in US non-oil imports. (7) Weaker yuan offsetting some of the US tariff effect. (8) Our hawks vs their hawks. (9) The Year of the Swine Flu. (10) Other fronts in Trump’s trade war. (11) Movie review: “Tolkien” (+ +).
2020 Vision for Semis
(1) Investors look beyond the semi slump. (2) Hello 2020. (3) Who’s afraid of a trade war? (4) Tech invades real estate. (5) Marriott loving Home Sweet Home. (6) How to sell your home for cash in 24 hours. (7) The We Company makes going to work cool and fun. (8) Free coffee and beer for everyone. (9) Traditional landlords upping their game.
Slowing But Growing
(1) A global soft patch, or something worse? (2) Still counting on a “peace dividend” and on a global productivity boom. (3) Neither boom nor bust in April global PMIs. (4) No recession in commodity prices or in global forward revenues. (5) US transportation indicators may be slowing, or stalling at record highs. (6) Is the US trucking industry downshifting? (7) The Q1 earnings recession has been called off.
Productivity Rebound: Why Now?
(1) Geopolitical crises tend to create buying opportunities. (2) Disorderly world. (3) Iran is between Iraq and a hard place. (4) From community organizers to dealmakers. (5) Trump threatens more tariffs on China to close the trade deal. (6) If productivity is making a comeback, as we expect, potential output growth is higher and NAIRU is lower than CBO estimates. (7) Fed officials, focusing on “transient” disinflation story, may be missing secular one again. (8) Tight labor markets may be triggering faster productivity growth. (9) The “productivity-compensation gap” is a statistical mirage.
Productivity Is Making a Comeback!
(1) Another Powell gaffe, or just a market overreaction? (2) Still bullish on earnings, a China trade deal, and a rebound in productivity. (3) Word game: From “patient” to “transient.” (4) Powell says persistently low interest rates possible. (5) The pragmatic case for one or two rate hikes before Election Day 2020. (6) Powell says “transient.” We say “persistent.” (7) The “Amazon Effect.” (8) Guiding inflationary expectations. (9) Room to grow if productivity continues to rebound with enough slack in labor market. (10) Productivity growth is looking up.
FANGs’ Rivalry Heating Up
(1) FANGs eyeing each other’s turf. (2) Hey, when you’ve gotta grow, you’ve gotta grow. (3) FANGs’ rivalry hasn’t fazed investors much so far. (4) Collectively, FANGs make up a tenth of the S&P 500’s market cap. (5) Facebook’s next act: e-commerce and payments. (6) Amazon’s non-retail businesses—e.g., web services and advertising—growing faster than the core store. (7) Google elbows into video streaming à la Prime and Netflix. (8) Only Netflix is sticking to its knitting.
It’s a Slow World After All
(1) No boom, no bust. (2) An ideal scenario for staying home. (3) Commodity markets waiting for a peace dividend when Trump’s trade war ends with China. (4) Global revenues continue to rise slowly. (5) China dips, while Europe turns weaker. (6) Not enough Tiger cubs in Asia. (7) Q1 real GDP was an upside surprise. (8) Business capital spending remains solid. (9) Consumers coming out of winter hibernation. (10) Confidence among consumers younger than 35 years old is soaring. (11) Obituary for inflation makes the front cover. (12) The PCED inflation rate is back below Fed’s 2.0% target. (13) Setting the stage for lower-for-longer federal funds rate.
Abigail vs Scrooge McDuck
(1) Abigail’s complaint. (2) How much is too much? (3) The ultra-rich are different than the rest of us. (4) In 2016, the “1%” included 1.3 million taxpayers earning $500,000 or more. (5) Either round them all up, or make them pay more taxes. (6) Stiglitz’s complaint. (7) Have incomes stagnated for 90% of Americans since 1989? (8) A very flawed measure of income. (9) Using PCED rather than CPI eliminates a great deal of stagnation. (10) Households with singles have fewer mouths to feed than those with married couples and their children. (11) Lots of measures of income and consumption confirm that the standard of living is at a record high for many, if not most, Americans.
Sound of Silence
(1) The good old days are back for bonds. (2) Falling in love with bonds again? (3) Turning up the volume. (4) The bond yield’s two quirky components. (5) Oil greases the widely followed 10-year expected inflation yield spread. (6) US bond yields still tethered to overseas yields. (7) Bond yields driven by fertility rates? (8) Central banks stuck in a rut. (9) Flat yield curves predicting no change in monetary policies of the Fed, ECB, and BOJ. (10) The TIPS yield is unreal.
Health Care for Socialists
(1) Health care stocks sickened by “Medicare for All,” which investors fear is “traditional insurance for none.” (2) Single-payer health care is an old idea getting new legs. (3) Bernie’s Buddies: Lots of Dem POTUS candidates are for socialized medicine. (4) The disruptive impacts on insurers and other health care industries could be HUGE. (5) Two new health care technologies have disruptive potential as well: drug compounding and 3D joint printing.
Run, Bull, Run!
(1) Run, Forrest, run! (2) Earnings leading the charge to record highs. (3) The bears grumble that the Fed is feeding the bull. (4) Two charts that have been the downfall of the bears so far. (5) Our Boom-Bust Barometer at record high lending support to record high for stocks. (6) S&P 500 forward earnings is the comeback kid. (7) Fairly valued again. (8) Lots of black-and-blue PMIs during April in the US, Europe, and Japan.
Tale of Two Countries
(1) Bull market appears in two recent cover stories. Time to worry? (2) Bull/Bear Ratio staged V-shaped recovery since last Xmas. (3) There was growth in the winter, and there will be more of it in the spring. (4) Will Trump save China? (5) China is getting less bang per yuan for its fiscal and monetary stimulus. (6) OECD report says China has some homegrown, structural problems that need to be fixed. (7) Chinese trade data was weaker than widely perceived during Q1-2019. (8) Latest Chinese GDP and production stats were strong thanks to government stimulus. (9) Explosion in Chinese bank loans is cushioning the decline in economic growth with less effect.
Financials Going High Tech
(1) Bankers upbeat on economy. (2) Financials: From laggard to leader? (3) Nothing to fear but shadowy fintech upstarts. (4) Old bankers learning new tricks. (5) JayDee watching shadows. (6) A by-the-way comment on leveraged loans. (7) Spending big bucks on high tech. (8) Marcus and Siri getting hitched. (9) Drones are already on the job, and helped Parisian firefighters fight Notre Dame fire. (10) Look up in the sky: More industries using drones to cut costs and increase productivity.
Many Unhappy Returns?
(1) “Tax Return” is a non sequitur for more Americans this year. (2) Failure to increase withholding rate boosted take-home pay for many last year, reducing refunds this year. (3) Pleasant surprise for high-income earners. (4) Rising personal saving offsetting the stimulus from tax cuts. (5) Corporate tax rate falls to 13.2% on “kitchen-sink” transactions. (6) S&P 500 capital spending during 2018 back at 2014 record high. (7) Buybacks widely misunderstood, though tech companies did boost EPS last year with buybacks.
Hipsters and Oldsters
(1) Overweight replacement parts for knees and hips. (2) No shortage of seniors. (3) Health care equipment may be more popular than gym equipment for a while. (4) Medicare for all would be bad for the health of working stiffs. (5) The Age Wave continues to be disinflationary and bullish for bonds. (6) Are Millennials finally starting to buy homes? (7) Homebuilders and homeowners could get squeezed by dearth of demand for big homes. (8) Millennials want to live where homes are cheap, while Baby Boomers want to live where taxes are low.
The Fed Is Listening
(1) The Fed’s review of the Fed. (2) Open minds. (3) Despite renewed commitment to data dependence, FOMC folks can’t resist forecasting interest rates. (4) Clarida suggests Fed’s review is focusing on alternative ways to target inflation. (5) Trying to find something to do when the federal funds rate is at the effective lower bound. (6) Targeting the price level vs the inflation rate. (7) Inflation misses: Should bygones be bygones? (8) Bernanke and Yellen still matter.
Trouble Spots
(1) Manufacturing employment slipped in March—blip or inkling of trouble? (2) If Captains of Industry suffer, so do their supply-chain crews. (3) Are new cars getting too pricey in an Uber-enabled world? (4) GM and Ford both rerouting themselves operationally. (5) Drones finally deliver. (6) Alphabet-owned Wing beats Amazon to the skies.
Is the Earnings Recession Over?
(1) Stock market looks forward, not backward. (2) Green shoots popping up in revenues and earnings estimates. (3) S&P 500 forward earnings may be starting to bottom. (4) Consensus Q1 earnings estimate is down y/y, but actual results could be up slightly thanks to the “hook.” (5) Lots of angst about income inequality despite record readings for labor market indicators. (6) Income inequality seems to be worst during boom times. (7) Still more job openings than jobless workers. (8) Real hourly wage at record high. (9) The income stagnation myth is based on one flawed data series. (10) Consumption equality: We all eat about the same every day.
Global Growth Dearth
(1) Everybody is easing, so why is the global economy so weak? (2) Still expecting a peace dividend once Trump wins his trade wars. (3) The 1990s all over again with a few differences. (4) There are signs of life in the commodity pits. (5) Global PMIs are mixed. (6) OECD leading indicators are awful. But are they accurate? (7) Is Germany a big canary? (8) Good and bad news for fans of Phillips curve tradeoff. (9) Wages rising fastest in industries that can’t pass costs on into prices.