Dr. Ed's Blog

June 07 (Tuesday)

Latest Morning Briefing Executive Summary: Jamie’s Hurricane
Jamie Dimon spooked the financial markets last week with his forecast of an economic hurricane headed straight for us. Today, we take a balanced look at Dimon’s three big worries—the Fed’s quantitative tightening bursting financial asset bubbles, the Ukraine war driving commodity prices skyward, and consumers using up their stimulus savings. … Our perspective: Don’t be alarmed by the metaphor; hurricanes come and go. What matters is their magnitude, which Dimon admits is unknown. … However, the term “self-fulfilling prophecy” is bound to apply to some extent when the head of the nation’s largest bank says it’s going to batten down the credit hatches to prepare for a storm.
(subscribers’ link)

YRI
Daily Markets Overview
Replay of Dr. Ed’s webinar on June 6.

Markets
Investors Get Back Into Corporate Bonds | W
Nasdaq rises slightly to start week, shaking off jump in bond yields | C

US
Housing wealth sets unprecedented gain, but signs suggest market is cooling | C
Biden’s inflator in chief Brian Deese is an awful pick | P
Inflation, Political Division Put U.S. in a Pessimistic Mood, Poll Finds | W
Biden Administration to Waive Solar Import Tariffs for Two Years | W

Europe
UK’s Boris Johnson wins confidence vote but suffers big rebellion | | R

China
Beijing Cautiously Reopens After Covid-19 Wave | W
Human Rights Concerns in Xinjiang Are Redefining Entire US-China Relationship | B
 
Geopolitics & trade
DOJ moves to seize 2 planes from Russian oligarch Roman Abramovich | C
 
Industries & companies
Autos: Solid Power begins pilot production of solid-state EV battery | C
Media: Paramount sued over ‘Top Gun’ copyright as ‘Maverick’ soars at box office | C
Pharma: Pfizer and Moderna Won’t Get a Shot in the Arm From Toddlers | W
Tech: Amazon executive encourages sellers to oppose Big Tech antitrust bill | C

Corporate finance
Musk threatens to drop Twitter deal if fake-account data not provided | | R

Climate & food
Why the global soil shortage threatens food, medicine and the climate | C

Crypto
How Binance became a hub for hackers, fraudsters and drug sellers | R

June 06 (Monday)

Latest Morning Briefing Executive Summary: Altitude Sickness
As analysts’ earnings estimates have scaled new heights this year, investors have experienced valuation altitude sickness, which may soon be resolved by the drop in P/Es since the start of the year. Or it may resolve in a much more sickening fashion if a recession sends earnings expectations—and valuations—hurtling downward. …. A recession still isn’t our base case; we give it 40% odds. Notably, our forecasts for S&P 500 earnings and price targets assume that no recession is coming anytime soon. … To us, the latest economic indicators suggest a slowly growing economy headed for a soft landing, not a hard one. … Also: Wage inflation may be peaking.
(subscribers’ link)

YRI
Daily Markets Overview
Replay of Dr. Ed’s webinar on May 31.

Markets
Natural-gas prices Will Stay High as Demand Outpaces Supply | BR
Dollar’s Climb Stalls Amid Mixed Economic Signals | W

Commodities
Ukraine Is Struggling to Export Its Grain, and Here’s Why | W

US
The Wedding Craze Is No Baby Boom. What’s at Stake for the Economy. | BR
The changing American consumer | E
Individual Income Tax Payments on Pace to Reach Record Level | W
There’s a push in Congress for a new national retirement savings plan | C
Yellen Says She Never Urged Smaller Rescue Package Over Inflation Concerns | W
 
China
Xi Jinping bans grumbling inside the Communist Party | E
China’s dilemma over a curious breed of financial firm | E
Beijing to allow indoor dining, further easing Covid curbs | C

Geopolitics & trade
South Korea, U.S. launch missiles after North Korea’s missile firings | C
How the U.S. Space Force plans to police outer space | C
Ukraine Counterattack Takes Back Parts of Strategic Donbas City | W
U.S. Urged to Step Up in the Pacific After China’s Whirlwind Trip | W
A new nuclear era | E
 
Industries & companies
Autos: Rivian’s Great EV Expectations Meet the Harsh Reality of Manufacturing | W
Financials: Power Play | BR
Retail: Changing shopping habits are transforming America’s malls | E
Retail: Macy’s, Gap and Other Clothing Stores Are Stuck With the Wrong Items | W

Beyond markets
Abbott Nutrition restarts baby formula production in reopened Michigan plant | C

June 04 (Saturday)

Latest Morning Briefing Executive Summary: Oil Trade & AI
Ever wonder why the US is still dependent on oil imports even though fracking has boosted the amount of oil produced domestically to about the same as that consumed? And with that being the case, why does the US bother exporting oil anyway? The answers involve both a mismatch between the kind of oil America produces and consumes as well as a 100-year-old shipping law that has outlived its usefulness. Eliminating the Jones Act could not only help the US oil industry but could also revive US shipping and improve supply chains. … Also: How Nvidia and others hope to capitalize on AI and high-performance computing.
(subscribers’ link)

YRI
Daily Markets Overview
Replay of Dr. Ed’s webinar on May 31.

Markets
Dow falls 300 points, Nasdaq drops 2%, as major indexes notch weekly losses | C
Global stock markets fall, U.S. yields rise after strong employment data | R
U.S. Stocks Are Trading at a Rarely Seen Discount | Morningstar

Energy
U.S. gas production must accelerate to meet LNG export demand: Kemp | R
Oil settles up despite OPEC+ output hike plan; supply still tight | R
EPA Trims Ethanol Fuel Mandate for 2020-21 But Raises It for 2022 | W
Pumped-Up Prices | N
The End of Energy Free Trade | W

Global
Russia’s War on Ukraine at 100 Days Has No End in Sight, Threatening Global Costs | W

Central banks
Fed’s Mester says inflation hasn’t peaked and multiple half-point rate hikes are needed | C

US
Hiring Remains Strong Even as Fed Tries to Cool Economy | N
U.S. labor market keeps Fed on aggressive rate hike path | R
Employers Added 390,000 Jobs in May; Unemployment Steady at 3.6% | C
Retailers Cut Jobs in May With Consumers Facing Inflation, Pivoting to Services | W
Corporate Executives Assess U.S. Economy as Clouds Form | W
Why a Not-So-Hot Economy Might Be Good News | N
Gen Z Workers Want Mission-Driven Jobs. A Big Paycheck Would Be Nicer. | W

China
Beijing Sticks to Xi’s Covid-19 Stance While Endorsing Premier as Economic Fixer | W

Geopolitics & trade
Ukraine says its troops have retaken ground from Russia in eastern city | R
 
Industries & companies
Autos: Tesla to Cut 10% of Salaried Staff, Musk Tells Employees | N
Communications Services: Who Is Mark Zuckerberg’s New No. 2? It’s a Trick Question. | N
Retail: Stores Are Stocked Like We’re All Still Working From Home | W

Corporate finance
Bristol-Myers to Buy Turning Point Therapeutics for $4.1 Billion | W

Crypto
Crypto firms say thousands of digital currencies will collapse, compare market to early dotcom days | C
 
Beyond markets
Is ‘Greedflation’ Rewriting Economics, or Do Old Rules Still Apply? | N

June 03 (Friday)

Latest Morning Briefing Executive Summary: Oil Trade & AI
Ever wonder why the US is still dependent on oil imports even though fracking has boosted the amount of oil produced domestically to about the same as that consumed? And with that being the case, why does the US bother exporting oil anyway? The answers involve both a mismatch between the kind of oil America produces and consumes as well as a 100-year-old shipping law that has outlived its usefulness. Eliminating the Jones Act could not only help the US oil industry but could also revive US shipping and improve supply chains. … Also: How Nvidia and others hope to capitalize on AI and high-performance computing.
(subscribers’ link)

YRI
Daily Markets Overview
Replay of Dr. Ed’s webinar on May 31.

Markets
S&P 500, Nasdaq Finish Higher in Volatile Session | W
Dow jumps 400 points, Nasdaq adds more than 2% to cut two-day losing streak | C
OPEC+ raises output faster as Russia’s war roils global energy markets | C
Cloud stocks mount rally led by UiPath, as investors see market bottom | C

Global
The world may be careening toward a 1970s-style energy crisis — or worse | NN

Central banks
Federal Reserve’s Portfolio Runoff Has Begun | W
Fed’s Loretta Mester Sees Need for Aggressive Rate Hikes at Next Two Meetings | W
Fed’s Logan Says Digital Money Could Affect Central Bank Operations | W
Fed Vice Chair Lael Brainard says it’s ‘very hard to see the case’ for the Fed pausing rate hikes | C

US
Job growth seen cooling in May but wage increases were still hot | C
U.S. Jobless Benefits Fell Last Week, Extending Stretch of Low Filings | W
White House weighs oil profits tax to fund consumer rebate | R
Social Security Reserves Expected to Be Depleted in 2035, Year Later Than Prior Projection | W
 
Geopolitics & trade
White House praises Saudi royals on Yemen truce before expected Biden trip | R
As Shanghai reopens, California ports prepare for cargo surge | R
Russia limits exports of noble gases, a key ingredient for making chips | R
 
Industries & companies
Autos: GM draws target on Tesla with EV price cut | R

Corporate finance
Ford to Create Thousands of Factory Jobs, Invest $3.7 Billion in EV, Gas-Engine Production | W
 
Climate & sustainability
Why hydropower is the world’s most overlooked renewable | C

June 01 (Wednesday)

Latest Morning Briefing Executive Summary: Braking Energy & Breaking China
The Biden administration’s energy policy is worrying us. The plan it’s pursuing—a.k.a. “the transition”—is to pry Americans off fossil-fuel dependence by forcing up oil and gas prices. Such a crude plan is bound to have unintended consequences that put the overall economy at risk. Notably, the past six pre-pandemic recessions coincided with rapidly rising oil prices. This is one of the reasons that last week we raised our odds of a recession scenario to 40% from 30%. … And: More investors are agreeing with us that China is uninvestible. Amid economic woes, some self-inflicted, China is losing its foreign investors. We take a look at what’s scared them away.
(subscribers’ link)

YRI
Daily Markets Overview
Replay of Dr. Ed’s webinar on May 31.

Markets
Dow drops 200 points, finishes month little changed in turbulent May | C
Global stocks fall, U.S. yields rise as oil prices reach new highs | R

Central banks
Biden vows to give Fed Chair Powell ‘space’ to fight inflation | R
President Biden, Fed Chairman Jerome Powell Meet With Inflation at Its Highest in 40 Years | W
Yellen says she was ‘wrong’ about inflation path, Biden supports Fed actions | R
ECB’s de Cos Sees Natural Rate Around or Slightly Above 1% | B

Energy
Gas Wars Deepen as Russia Curbs Supplies to More European Buyers | B
EU Sets Harshest Russian Sanctions, Targeting Oil and Insurance | W

US
Home prices surged over 20% in March as interest rates also rose, according to S&P Case-Shiller | C
Fed Fears Hit Mortgage Bonds, Attracting Investors | W
25% of Americans are delaying retirement due to inflation, survey finds | C
‘This is not the retirement I envisioned.’ How retirees are getting hit by inflation | NN

Geopolitics & trade
Russia takes most of Sievierodonetsk city in eastern Ukraine | R

Industries & companies
Autos: How a cheap component could help kill off combustion cars | R
Energy: Engine No. 1 opts for accommodation over confrontation with Big Oil and big banks | ImpactAlpha

Beyond markets
Adam Neumann’s blockchain-based redemption story now sponsored by a16z | TechCrunch
Opinion | Omicron Reveals the Need for Better Sick Leave | N

May 31 (Tuesday)

Latest Morning Briefing Executive Summary: Valuation Meltups & Meltdowns
Valuation is in the eye of the beholder, but the economic outlook that influences it isn’t as subjective or hard to forecast, with lots of data available to help. … We think forward P/Es may be range bound this year and next and the S&P 500 may remain volatile below its January 3 high before climbing to new highs in 2023 and 2024. … Recession fears are weighing on valuations. We raised the odds of a mild recession to 40%, up from 30%, last week and again explain why. … Also: We discuss the variables suggesting a moderation of inflation ahead, led by consumer durables. … Finally: Dr. Ed reviews “Benjamin Franklin” (+ + +).
(subscribers’ link)

YRI
Daily Markets Overview
Replay of Dr. Ed’s webinar on May 23.

Markets
Stocks Fall, Oil Prices Gain as EU Commits to Partial Russian Crude Ban | W
China’s Tentative Reopening Gives Boost to Markets | W

Energy
Oil prices jump after EU leaders agree to ban most Russian crude imports | C
Russia hits back at the EU’s partial oil embargo, says it will find other importers for its crude | C
EU’s Ban on Russian Oil Adds Stress to Region’s Economies | W
 
Central banks
Bernanke: Why the Fed Didn’t Act Faster to Rein In Inflation | BR
Fed Fears Hit Mortgage Bonds, Attracting Investors | W
Fed Governor Christopher Waller says he’s prepared to take rates past ‘neutral’ to fight inflation | C
Biden, Fed Chair Powell to meet as inflation continues to weigh on consumers | R

US
Home-Price Growth Hit Record in March | W
Facing Inflation-Weary Shoppers, Grocers Fight Price Increases | W
Biden Pledges to Back Fed in Effort to Combat High Inflation | W
Inside a Biden White House adrift | C

Europe
Euro zone inflation hits yet another record high as food and energy prices soar | C

China
How Xi Jinping is damaging China’s economy | E
China’s Economic Downturn Shows Signs of Easing | W
China faces a nearly $1 trillion funding gap. It will need more debt to fill it. | C
As China’s Private Developers Retreat, State-Backed Rivals Gain Ground | W

Geopolitics & trade
Russia Extends Control Over Key Ukraine City as U.S. Plans to Boost Kyiv’s Firepower | W
China and the U.S. Are Arranging an In-Person Meeting Between Heads of Defense | W
 
Industries & companies
Financials: Big Banks Are Seeing Deal-Making Income Dry Up | BR
Financials: German police raid Deutsche Bank’s DWS unit | C

Crypto
Crypto’s Future Is Even More Exciting, and Maybe More Volatile, Than Its Present | BR
Top crypto firms go on the hunt for acquisition targets as market crashes | C
The luna cryptocurrency has been resurrected after its $40 billion collapse. It’s already crashing | C

Technology
Robots Pick Up More Work at Busy Factories | W
World Economic Forum Pushes Facial Recognition Technology | Brownstone Institute
Web3 Was Supposed to Save the Internet. It Has a Long Way to Go. | BR

Beyond markets
Britain urges people with monkeypox to abstain as cases rise | C
Americans who work from home are getting more productive | Vox

May 28 (Saturday)

Latest Morning Briefing Executive Summary: Energy, Retailing & Hydrogen
Spending on stuff was so yesterday. Long-cooped-up consumers now want to spend on experiences and have fun! Not even stratospheric gasoline pump prices will keep them home this holiday weekend. Today, Jackie examines the factors driving energy prices skyward. … Also, some retailers’ Q1 earnings reports revealed a have/have-not dichotomy in the consumer discretionary space. Specifically, high-end Nordstrom made out far better last quarter than did retailers to the masses. … And: An update on the expanding use of hydrogen to fuel trucks, trains, and even factories.
(subscribers’ link)

YRI
Daily Markets Overview
Replay of Dr. Ed’s webinar on May 23.

Markets
S&P 500, Dow snap losing streaks for best week since November 2020 | C
World stock markets rally, treasury yields fall on inflation data | R
Bets Against U.S. Treasurys Rake In Gains as Fed Raises Rates | W

Central banks
The Fed’s favorite inflation measure rose 4.9% in April in a sign that price increases could be slowing | C

Commodities
Column: Drought adds to pressure on U.S. gas inventories | R
Column: Prevent plant scenarios creep back in with clock ticking on northern U.S. | R

US
Households Boosted Spending in April but Drew Heavily on Savings | W
Goldman sees signs inflation is peaking, could be positive for stocks | C
A Federal Budget Warning for Joe Manchin | W
Memorial Day weekend car shopping is ‘looking pretty bleak’ | C

Europe
Boris Johnson Goes Bernie Sanders | W

China
China Tops Google, YouTube Results on Covid Origins and Beijing’s Human-Rights Record | W

Geopolitics & trade
Ukraine says troops may retreat from eastern region as Russia advances | R
Ukraine Is Accusing Russia of Again Using Thermobaric Weapons. Here’s What Makes Them So Devastating. | W
Keep the South China Sea free, Biden tells Navy graduates | R

Industries & companies
Airlines: Flight Cancellations Pile Up Heading Into Memorial Day Weekend | W
Consumer Discretionary: Amazon investor proposal to review plastic use narrowly fails to clear | R
Retail: Big Lots, Hibbett Become Latest Retailers to Show Inflation Pain | W
Retail: Glam makeup and dressing up are back, boosting Macy’s and Ulta | C

Virus
Why a Massive New Covid Wave Has Escaped the Data | W

Beyond markets
How Influencers Hype Crypto, Without Disclosing Their Financial Ties | N
U.S.’s Baby-Formula Shortage Further Snarled, This Time by Ukraine War | W

May 27 (Friday)

Latest Morning Briefing Executive Summary: Energy, Retailing & Hydrogen
Spending on stuff was so yesterday. Long-cooped-up consumers now want to spend on experiences and have fun! Not even stratospheric gasoline pump prices will keep them home this holiday weekend. Today, Jackie examines the factors driving energy prices skyward. … Also, some retailers’ Q1 earnings reports revealed a have/have-not dichotomy in the consumer discretionary space. Specifically, high-end Nordstrom made out far better last quarter than did retailers to the masses. … And: An update on the expanding use of hydrogen to fuel trucks, trains, and even factories.
(subscribers’ link)

YRI
Daily Markets Overview
Replay of Dr. Ed’s webinar on May 23.

Markets
U.S., world stocks toast earnings, U.S. rate outlook | R
Gas Prices Are Surging, Demand Is Slipping Ahead of Memorial Day Weekend | W
Little-Known Commodity Traders Help Russia Sell Oil | W

Central banks
Digital Dollar Could Coexist With Stablecoins, Fed Vice Chairwoman Says | W

US
Home listings suddenly spike as sellers worry they’ll miss out on red hot market | C

China
China’s Xi urges infrastructure spending as Covid lockdowns hit | NN
No work and nowhere to live: a rural migrant’s ordeal in locked-down Shanghai | R
China Excels in Google Rankings on Xinjiang and Covid-19 Searches | W

Industries & companies
Airlines: Expect more flight delays this summer — thank the government-driven pilot shortage | P
Consumer Discretionary: First Look: Amazon’s first-ever physical clothing store opens | Chain Store Age
Retail: U.S. retailer earnings show chasm among shoppers as inflation surges | R
Retail: American Shoppers Boost Retailers With Spending on Work Clothes, Discount Staples | W

Geopolitics & trade
Russian proxies claim control of key town in east Ukraine | R
Europe lambasted for failing to deter Putin’s war | C
How the U.S. and South Korea Predict a North Korean Weapons Test | W
India needs to fill China gaps to become the “pharmacy of the world” | C

Corporate finance
EXCLUSIVE Evergrande discussing staggered payments, debt-to-equity swaps for $19 bln offshore bonds-sources | R

Virus
Why Covid Pandemic’s Daily Case Count Comes Up Short in the U.S. | W
Opinion | It’s Still Covid’s World. We’re Just Living In It. | N

Technology
Airbus sets up UK facility to focus on hydrogen tech for aircraft | C

Beyond markets
In home of world’s biggest nuclear plant, a vote may shape Japan’s atomic future | R
National Baby-Formula Stockpile Is Urged by FDA Commissioner | W
How to protect yourself against monkeypox, what to do if you catch it | C

May 26 (Thursday)

Latest Morning Briefing Executive Summary: Energy, Retailing & Hydrogen
Spending on stuff was so yesterday. Long-cooped-up consumers now want to spend on experiences and have fun! Not even stratospheric gasoline pump prices will keep them home this holiday weekend. Today, Jackie examines the factors driving energy prices skyward. … Also, some retailers’ Q1 earnings reports revealed a have/have-not dichotomy in the consumer discretionary space. Specifically, high-end Nordstrom made out far better last quarter than did retailers to the masses. … And: An update on the expanding use of hydrogen to fuel trucks, trains, and even factories.
(subscribers’ link)

YRI
Daily Markets Overview
Replay of Dr. Ed’s webinar on May 23.

Markets
Stocks rise after Fed signals further rate hikes, Dow jumps nearly 200 points | C

Global
World Bank’s Malpass says war in Ukraine may trigger global recession | R

Central banks
Fed minutes point to more rate hikes that go further than the market anticipates | C
Fed embraces 50-basis-point rate hikes in June, July to curb ‘very high’ inflation | R
Fed Minutes Show Urgency for Raising Rates to Tame High Inflation | W
ECB Signals Delayed Bond Runoff, Diverging From Fed | W
Kansas City Fed Leader Esther George to Retire in January | W

US
CBO boosts U.S. GDP growth estimates, says inflation has topped and will cool to 2% by 2024 | C
Natural gas surges above $9, hits the highest since 2008 as inventories stay low | C
Orders for Long-Lasting Goods Rose Modestly in April | W
The lack of small-dollar mortgages is preventing Americans from purchasing affordable homes | C
A major cause of inflation may have peaked; that’s good news for consumers but bad news for trucking companies
Why Has the Inflation Calculation Changed Over Time? | N

China
China’s economy in battle to keep growing, says premier | FT
China’s Top Two Leaders Diverge in Messaging on Covid Impact | W
China’s Covid-19 Lockdowns Hurt Sales of Starbucks Coffee, Adidas Sneakers | W
Shanghai Scientists Have Adapted to Regime Priorities | Brownstone

Geopolitics & trade
Russia’s Absence at Davos Marks Unraveling of Globalization | W
The Middle East’s Indifference to Ukraine Is a Warning | CSIS
Iran Used Secret U.N. Records to Evade Nuclear Probes | W

Industries & companies
Energy: Tesla battery research group unveils paper on new high-energy-density battery that could last 100 years
Retail: Amazon CEO Andy Jassy says he’s focused on returning to ‘healthy’ level of profitability | C

Climate & sustainability
Ukraine War Threatens Transition to Cleaner Energy, Leaders Warn at Davos | W
Don’t write off coal. We need it to ensure power grid reliability | The Hill
The plant-based future of food doesn’t always taste that great | Vox
SEC unveils rules to prevent misleading claims and enhance disclosures by ESG funds | C

Beyond markets
Why Isn’t New Technology Making Us More Productive? | N

May 25 (Wednesday)

Latest Morning Briefing Executive Summary: The Recession Question: Raising the Odds to 40%
Might the only recession we have to fear be one triggered by recession fear itself? It’s possible that we could talk ourselves into one. So while we still expect the economy to grow through the end of next year, we are raising the odds we assign to a recession scenario from 30% to 40%. That lowers our stock-market sights for this year and next. … We have new estimates for S&P 500 revenues, earnings, profit margins, P/Es, and price targets, which we still see at a new high late next year. … Also, we explain what has caused recessions in the past and why we don’t see those dynamics developing now. We’re far from alone in our optimism: Analysts keep raising their earnings estimates, and insider buying has been on fire.
(subscribers’ link)

YRI
Daily Markets Overview
Replay of Dr. Ed’s webinar on May 23.

Markets
S&P 500 falls, Snap warning drags tech as Nasdaq loses 2% | C
Stocks slump on growth concerns, bond yields slip | R

Central banks
Fed Searches for the Magic Number to Cool a Red-Hot U.S. Housing Market | W

Global & food
Inflation, Rising Rates Curb Global Economic Growth | W
Food crisis fuels fears of protectionism compounding shortages | R

US
Sales of newly built homes tumbled over 16% in April while prices soared | C
Is the spike in gas prices good for America? | The Hill
U.S. Births Increase for First Time Since 2014 | W
What to Know About Gen Z in the Workplace | US News
Biden administration says it has not ruled out export curbs to ease fuel prices | R
 
Industries & companies
Autos: Electric vehicles are in short supply. Here’s what you can find as gas prices soar | C
Tech: Tech Stocks Continue to Fall After Snap’s Profit Warning | W

Geopolitics & trade
Biden says his Taiwan comments don’t reflect a change in U.S. policy after drawing ire from China | C
Russian and Chinese jets deliver pointed send-off on last day of Biden Asia trip | R
Russia wages all-out assault to encircle Ukraine troops in east | R
U.S. bars Russia from paying bondholders through American banks, increasing default risk | C
China Faces Growing Pressure to Iron Out Audit Deal With the U.S. | W