Morning Briefings
Expert market analysis delivered every morning. Stay informed with comprehensive research and data-driven insights.
Topical Topics
(1) Reviving our Topical Studies. (2) More thoughts on the yield curve. (3) Yield-Curve Rules for the Fed’s money-meisters. (4) The Fed pauses just as suggested by Rule #2. (5) More upside for stocks if Fed pause averts a (meaningful) yield-curve inversion. (6) Labor market is golden for Goldilocks. (7) Running out of workers? Not yet. (8) Wages still rising ahead of price inflation. (9) Rooting for a rebound in productivity. (10) Movie review: “The Highwaymen” (+).
Health Care’s Maladies
(1) From best to worst. (2) Trump attacks Obamacare and will fix it in 2021, maybe. (3) Drug pricing has become a political piñata. (4) Taking out some benefits from pharma-benefits managers. (5) AI will start suggesting you have fries with your order based on your license plate. (6) AI is micromanaging inventories. (7) Unlike Google, AI can do evil. (8) Mark Cuban keeps a book on AI for dummies next to his water closet.
Room with a View
(1) A CEO summit. (2) Avoiding cabin fever. (3) Anxiety about an imminent recession turns to concerns about high valuations. (4) S&P 500 revenues and earnings growth rates may be starting to bottom. (5) What about the earnings recession? (6) Flying to record highs with the Blue Angels. (7) Sentiment on outlook for China and the global economy improving. (8) What’s the matter with Germany? (9) Green regulations cause German auto sales to skid.
Another ‘Eureka!’ Moment on Buybacks
(1) Why does a senator from Wisconsin want to ban buybacks? (2) The Baldwin report is a fundamentally flawed analysis of corporate finance. (3) Are corporate executives looters? (4) We calculate that since 2011, S&P 500 companies repurchased 72 billion shares. So why is share count down only 22 billion? (5) Roughly 2/3 of buybacks may be offsetting share dilution from employee stock plans. (6) TCJA reduced incentive to pay employees with stock. (7) Meet the intellectual godfather behind the progressive movement to limit or ban buybacks.
Bonds Are from Venus, Stocks Are from Mars
(1) Bond yields showing signs of gravitational pull, while stock prices are on verge of escape velocity. (2) Mixed message from bond market. (3) Latest relief rally led by cyclical stocks (again). (4) Are stocks discounting a “peace dividend?” We think so. (5) The next recession could start on Election Day 2020, or not. (6) Q1 seasonality may still be an issue. (7) Commodity prices set for lift-off, maybe. (8) Forward earnings starting to look skyward. (9) MMT combines fiscal and monetary policies to take care of old people. (10) Is the bond market looking forward to AOC’s greener pastures with fewer humans? (11) Movie review: “Hotel Mumbai” (+ +).
FANG Fight
(1) More pie or just more whipped cream from Apple? (2) Do consumers value their privacy? (3) How much content is too much content even at $9.99/month? (4) Apple’s fan base: 1.4 billion is a big number. (5) Battle of the entertainment and media disruptors. (6) Lots of digital players want to play with our wallets.
Tossing a Curveball
(1) A hedged warning about rising recession risk in updated Fed study. (2) Recession risk up from 14% last summer to 50% now. (3) Then again, maybe the yield curve is forecasting monetary policy more than anything else. (4) Credit crunches cause recessions, not inverted yield curves! (5) A false positive signal, again? (6) Guess what the yield curve is predicting the Fed will do next: Nothing! (7) Buffett likes companies that buy back their shares. (8) We agree, as long as they don’t offset that with employee stock compensation.
The New Abnormal & the 4Ds
(1) Lots of global angst. (2) The 4Ds (Demography, Debt, Disruption, and Deflation) all weighing on global growth. (3) Industry analysts haven’t gotten the recession memo. (4) Global trade indicators still on uptrends. (5) Powell is right about the global economy. (6) Blame China for Europe’s weakness, or Uber? (7) Japan is in a soft patch. (8) In US, trucks and trains are cruising along just fine, and existing homes are selling well again. (9) The services sector is also fine in the US, and overseas too.
Sense of Humor
(1) The yield inversion show-and-tell. (2) A funny thing happened on the way to the next recession. (3) Lots of good material for Seinfeld. (4) Two-ring circus under the bond tent. (5) Trump is half right. (6) Meet Steve Moore, a fan of Abbott & Costello. (7) Comparing the yield curve to the business, monetary, and stock-market cycles. (8) Flat world, flat yield curve. (9) Fed study on yield curve yields less fear about a recession. (10) The secrets behind Powell’s pivot. (11) Movie review: “The Mustang (+ +).
Disrupting the Disruptors
(1) Internet pioneers circling the wagons. (2) Arrows, barbs, tar, and feathers. (3) Is sharing data criminal? (4) EU slaps Google with another big speeding ticket. (5) Horror in New Zealand. (6) Trust-busters on the warpath. (7) Chinese offering US semiconductor companies a raw deal. (8) Hybrids may be the next fashion statement in computing.
Dodging an Earnings Recession?
(1) 2018: A good year for earnings, and bad one for stocks. (2) 2019: So far so good for stocks despite weak earnings. (3) Q2 earnings growth still (barely) positive, while Q1 likely to be down slightly. (4) Weekly data on forward revenues, earnings, and margins turning more upbeat for comparable quarterly data—maybe. (5) Joe explains growth vs value styles. (6) Melissa explains how Baby Boomers are weighing on one popular measure of wage inflation.
G-Star Astrology
(1) Wish upon an r-star and g-star. (2) Ranting about Fed’s reliance on astrology. (3) Business output outpacing real GDP by a full percentage point. (4) More potential for growth if labor shortages stimulate labor-saving innovations. (5) Fed’s pause may be justified even if economic growth picks up over the rest of the year. (6) Not much cost-push inflation from labor markets. (7) Pensions are underfunded, especially government-sponsored ones. (8) Lots more millionaires hiding in public sector. (9) Life is exceptionally good if you can retire at 50 and live until 90.
Bond Yields: Failure To Launch
(1) Lots of bonds. (2) Predicting the bond market is more about global inflation and monetary policies than about supply and demand. (3) Bearish bond gurus wrong so far. (4) Demography, debt, and deflation weighing on global growth, and keeping a lid on bond yields. (5) A world of hurt. (6) Yield curve spread signaling recession, while credit yield spreads sending all-clear message. (7) Fed data show big drop in US direct investment abroad led by plunge in reinvested earnings. (8) Are Trump’s “America First” policies working?
Disconnecting the Dots
(1) Forecasting oil prices gets slippery when the biggest users and producers shift. (2) As autos use less oil, plastics use more. (3) There’s a new king of production. (4) Energy sector’s 2019 earnings expected to tumble. (5) Tesla holds its lead in the electric car race. (6) But EV competitors have the pedal to the metal.
Following the Money
(1) Don’t miss seeing the data for the dots, warns Powell. (2) Defining “normal,” for the balance sheet at least. (3) The new normal fed funds rate remains nebulous. (4) The pause that refreshes (markets). (5) Did the bull make it to 10? (6) The past decade has favored Growth over Value.
Peace & Productivity Dividends Ahead?
(1) The Fed’s cornucopia of data. (2) US direct investment abroad turns negative in reaction to Trump’s trade policies. (3) Last year, foreigners were sellers of US stocks and corporate bonds. They bought some Treasuries. (4) Bears have more corporate debt to be bearish about. (5) Leveraged loans at record high. (6) Lots of private equity available to purchase distressed assets. (7) Supply-and-demand credit analysis not very rewarding for predicting bond yield. (8) The truth about households.
Peace & Productivity Dividends Ahead?
<p><em>See the <a href="https://archive.yardeni.com/premiumdata/mb_190311.pdf">pdf</a> and the <a href="https://archive.yardeni.com/pub/cc_20190311.pdf">collection</a> of the individual charts linked below. </em></p> <p>(1) Bad vs good data. (2) Rules for forecasters. (3) Draghi’s new mantra. (4) Remember Eurosclerosis? It’s back. (5) All we are saying is give peace a chance. (6) How the moon impacts Chinese trade. (7) Don’t put much weight on latest payroll stat. (8) Upward revisions to payrolls matter. (9) DC shutdown boosted January’s employment and depressed February’s number. (10) Blaming the weather too. (11) Earned Income Proxy at record high. (12) Tightening labor market could produce productivity dividend.</p>
Getting Loopy
(1) Slicing and dicing the S&P 500 sectors. (2) Last year’s tax cut boosted profit margins of some sectors more than others. (3) Winners emerging from Retail Apocalypse. (4) Shrinking can make a store stronger. (5) Going loopy over hyperloops.
Yesterday, Today & Tomorrow
(1) S&P 500 revenues at new record high. (2) The revenues growth cycle is turning down. (3) S&P 500 earnings and profit margin dip from recent record highs. (4) The tax cut was a big earnings booster last year. (5) The current “earnings recession” reflects last year’s tax cut rather than this year’s weakness. (6) Weekly market fundamental indicators looking toppy after big run-up. (7) Shaving our EPS forecasts. (8) Record-high dividends.
Will There Be a Peace Dividend?
(1) Another bout of irrational exuberance? (2) Will there be a peace dividend after trade war ends? (3) Stocks rally despite recession-like readings for M-PMIs in China and Europe. (4) Negative economic surprises. (5) Can old age kill a bull market and an economic expansion? (6) Joe devised an alternative to S&P 500 divisor. (7) Joe’s share count confirms that buybacks haven’t boosted earnings per share by much. (8) Drilling down to the sectors’ share counts. (9) Melissa reports that TCJA may reduce stock compensation.
The Truth About Buybacks
(1) Older, but wiser. (2) A simple model of the bull market driven by share buybacks. (3) Why aren’t earnings per share growing much faster than aggregate earnings? (4) Goldman says corporations will continue to be biggest buyers of stocks. (5) Contrary to popular belief, few buybacks benefit shareholders. (6) Buybacks are mostly offsetting the dilution resulting from stock grants. (7) Three measures of shares outstanding down only modestly during current bull market. (8) Dividend payouts are the only true cash return to investors and remain around 50% of after-tax profits. (9) Fed’s data on buybacks widely misinterpreted. (10) Progressive politicians should leave buybacks alone. (11) Movie review: “Free Solo” (+ + +).
Intrusive Disruptive Technology
(1) Holding onto gains. (2) Hot cyclicals. (3) Waiving a deadline. (4) Downturn in interest rates helps too. (5) About Facebook. (6) Our smart devices are spying on us. (7) Smile for the cameras. (8) Alexa feels your pain. (9) Your DNA can be easily traced. (10) Governments’ Big Brothers have our numbers.
Fed Heads Galore
(1) Frustrated bears. (2) More recessionary indicators. (3) Chauncey Gardiner predicts: “There will be growth in the spring.” (4) Industry analysts on verge of calling an earnings recession for H1-2019, yet they are turning more upbeat on 2020. (5) A sunnier disposition for consumers. (6) A funny thing happened on the way to the forum. (7) Fed officials pontificate on Fed’s balance sheet and inflation targeting.
From MOU to MAMU?
(1) Extending the deadline. (2) Open issues include how to enforce a deal. (3) Trump has a tiff with Lighthizer. (4) Both Xi and Trump need a deal. (5) Once again, “it’s the economy, stupid.” (6) Diverging labor markets: Strong in US, weak in China. (7) The Cheerleader-in-Chief: Trump likes meltups more than meltdowns in the stock market. (8) Global stock and commodity markets discounting a trade deal and better global growth. (9) The forex and bond markets are sitting on the fence. (10) No recession in credit yield spreads.
Stocks Go from Doom to Vroom!
(1) More concern about the extinction prediction. (2) The rest of the world is catching up to Japan’s birth dearth problem. (3) A new book predicts an “empty planet.” (So it should be easier to make a reservation at good restaurants.) (4) Hungary running out of goulash eaters. (5) It’s official: China’s maternity wards are emptying out as its nursing homes fill up. (6) Chinese producing more debt, fewer babies. (7) Stimulating baby-making with incentives in Russia. (8) Round up the usual suspects: US DOJ has a long rap sheet on Chinese spies.