Unhealthy Developments
(1) Powell is no Santa. (2) Bonds rally as stocks sink. (3) Mnuchin suspects HFTs adding to volatility. (4) Judges making Health Care sick. (5) Autonomous cars hit the road but still need driver’s ed. (6) Manufacturers to China: “We’re outta here.”

European Disunion
(1) Analysts starting to cut earnings estimates for 2019 and 2020. (2) Tough comps ahead. (3) Analysts still remarkably upbeat about revenues outlook. (4) But they are lowering their earnings estimates for Q4-2018 through Q4-2019. (5) After 20 years of monetary unification, Eurozone faces lots of challenges. (6) The Brits may be leaving the EU at a good time if forces of disunion mount. (7) Bad timing: ECB moving to normalize policy as Eurozone economy weakens. (8) Brexit is hard to do. (9) Political agitations in France, Germany, and Italy.

European Disunion
(1) Analysts starting to cut earnings estimates for 2019 and 2020. (2) Tough comps ahead. (3) Analysts still remarkably upbeat about revenues outlook. (4) But they are lowering their earnings estimates for Q4-2018 through Q4-2019. (5) After 20 years of monetary unification, Eurozone faces lots of challenges. (6) The Brits may be leaving the EU at a good time if forces of disunion mount. (7) Bad timing: ECB moving to normalize policy as Eurozone economy weakens. (8) Brexit is hard to do. (9) Political agitations in France, Germany, and Italy.

The True Story
(1) Druckenmiller and Warsh speak for the Dow Vigilantes. (2) Jerome, Virginia, and Santa. (3) Yield curve has a good track record excluding the false alarms. (4) Focusing on bank net interest margin. (5) No credit crunch in banking sector. (6) Capital spending is at a record high despite record buybacks plus dividends. (7) Net bond borrowing by nonfinancial corporations is falling fast. (8) Fed vice chair is a folk-rock singer and about to take the Fed on a magical mystery tour of monetary policy. (9) Alternative ways to target inflation under Fed consideration.

Deflationary Demographics
(1) No relief yet for latest panic attack. (2) The new worry is that China’s weak data suggest global growth at risk. (3) Investors accentuating the negatives, ignoring the positives. (4) GDPNow now at 3%. (5) Jobless claims drop. (6) ECB ready to end QE, but not ready to lift interest rates. (7) China’s real retail sales growth continues to fall as a result of rapidly aging demography. (8) Baby Boomers are turning into minimalists, like the Millennials. (9) Demographic trends suggest consumer-led boom unlikely in US. (10) No boom, no bust. (11) Movie review: “The Mule” (+).

Unloved Industrious Industrials
(1) Industrials will fall or rise depending on whether US-China trade war does or does not escalate. (2) So far, trade war with China may be boosting US imports before tariffs are raised and spread. (3) US production remains strong. (4) GE weighs on Conglomerates. (5) Barron’s likes CAT. (6) Housing hammered. (7) Industrial services providers serving well. (8) Amazon is both a great disruptor and a great motivator for its competitors. (9) Did you take your pills today? (10) Walmart’s robots.

HFT Algos
(1) Can Capitalism exist without HFT algorithms? (2) Information in a free market. (3) Leveling the playing field with supervision and regulation. (4) No answers, but lots of (rhetorical) questions. (5) Keynes on casinos. (6) Professor Gary Smith weighs in on HFT algos: Tax ’em. (7) Cooperman wants some answers from the SEC. (8) A short history of the uptick rule for short sellers. (9) Computers can’t read between the headlines.

Bonds, Stocks & the Latest Recession Scare
(1) Some irony in the bond yield’s recent drop. (2) The curse of the yield-curve curse. (3) Explaining the divergence between bond yield and nominal GDP growth with the help of the Bond Vigilante Model. (4) The Dow Vigilantes saddle up. (5) No recession signal yet in official yield-curve spread. (6) Inflation is moderating. (7) US bonds mighty attractive compared to comparable foreign alternatives. (8) Seeing eye-to-eye with Leon Cooperman on algos. (9) Transportation indicators remain robust, as does M-PMI.

Optimistic Analysts vs Pessimistic Investors
(1) Is the party over? (2) Analysts are still in a party mood. (3) S&P 500 forward revenues at another record high. (4) Analysts may finally be starting to curb their enthusiasm for earnings and profit margins. (5) Investors aren’t in a party mood. (6) Is the most widely anticipated recession imminent? (7) Fed’s expected rate pause is flattening yield curve and raising recession anxiety. (8) Tenuous trade ceasefire with China is also flattening yield curve. (9) Trump is a loose cannon. (10) Trump is glued to the tape. (11) Record full-time jobs. (12) Beige Book: Take this job and shove it.

Humans vs Machines
(1) Still Grinchy. (2) The algos that stole Christmas. (3) Do algos ever capitulate? (4) When algos sell ETFs, they sell everything. (5) The big problem for next year’s earnings is that the profit margin has been making record highs this year. (6) 2019’s earnings seasons: Not much to look forward to. (7) News flash: Trump is a “Tariff Man.” (8) The yield curve isn’t a problem yet. (9) Diamonds in the coal mine. (10) Taking sides in oil markets tug of war.

Trump Put
(1) Santa’s workshop. (2) Two-year Treasury yield suggests one less rate hike next year. (3) Powell, Trump, and Xi are Santa and his two helpers. (4) Two corrections in 2018 about Fed and trade fears. (5) Dow Vigilantes. (6) Discussing the long good buy in London. (7) Hard to see more upside in profit margin. (8) Drilling down to the sectors. (9) The Fed’s new report on financial stability finds lots of it.

Restricting ‘Restrictive’
(1) Disinflating. (2) One more rate hike, then done until mid-2019? (3) Core consumer goods prices still deflating. (4) In consumer services inflation, rent looks toppy, while health care remains subdued. (5) Record-high real wages suggests productivity is fine. (6) So does record profit margin. (7) The Fed is less accommodative and also less restrictive. (8) A brief history of the Fed since late September. (9) Data dependent again. (10) Movie review: “Widows” (- – -).

Powell Put
(1) Fed getting the message. (2) Powell takes it back: Rates no longer a long way from neutral. (3) Buffett’s big buffet of financials. (4) Financials are cheap, and should be overweighted. (5) The debanking of America. (6) Biggest mortgage lender isn’t a bank. (7) Nonbank middle-market lenders are proliferating. (8) The Fed’s financial stability report isn’t raising a red flag about CLOs yet. (9) Deep pockets. (10) Car wreck, housing slump. (11) Faster 3D printing.

Brexiting Is Hard To Do
(1) Touring London. (2) The short-term case for Go Global. (3) Around the world, around the luncheon table. (4) Taxi and informed opinion for hire. (5) Can a deal that is not too hard and not too soft get enough votes? (6) The upfront costs are set, while the trade deals are TBD. (7) Brexit with lots of regulatory strings attached. (8) Moving out of the UK. (9) Churchill weighs in.

Corporate Debt Bombs?
(1) Record nonfinancial corporate debt. (2) Revisiting the bubble question. (3) Alarming headlines not supported by actual stories. (4) Yellen and Warren both worrying about CLOs. (5) Fed Governor’s lame response. (6) Meanwhile, the US economy continues to have the pedal to the metal. (7) “We bring good things to life”: GE dropped its famous slogan in 2013, and now is on life support. (8) Defaults remain low thanks to previous refinancings at low interest rates. (9) AA-rated CLOs have a solid credit history. (10) Distressed asset funds are the credit markets’ shock absorber.

Turbulence
(1) A week in London. (2) Pence attacks China again. (3) Xi expects to outlive Trump politically. (4) Powell is Trump’s regrettable. (5) The Dow Vigilantes may not matter to Powell, but credit market stress cracks should get his attention. (6) Plunging oil prices depressing inflationary expectations. (7) Stock prices could stall along with our Boom-Bust Barometer. (8) Panic Attack #62 similar to #61, but with more of an attack on FAANGs. (9) Value likely to outperform Growth for a while. (10) Movie review: “Green Book” (+ + +).

Thanksgiving
(1) Thank you. (2) An abundance of earnings. (3) Tax cut, revenues, and repatriated earnings all boosting earnings this year. (4) Q3 profit margins at record highs across the board, implying solid productivity gains offsetting rising costs. (5) Still not expecting price inflation to jump, but on the lookout. (6) ECI-based measure of unit labor costs remains remarkably subdued. (7) Strong dollar keeping a lid on import price inflation. (8) In the CPI, rent inflation is looking toppy, while medical care inflation remains below 2.0%. (9) Fed Governor Brainard discusses AI.

On Your Mark, Get Set, Pause
(1) Trump, Kudlow, Cramer, and moi. (2) Is neutral federal funds rate a long way off or getting closer? (3) Powell, Clarida, and Bostic weigh in. (4) Fed putting monetary policy under review until mid-2019. (5) Getting ready to do nothing? (6) Treasury yields fall on Clarida statement and drop in oil price. (7) Three and done? (8) During Q3, S&P 500 revenues and earnings jump 8.5% y/y and 27.5%, sending profit margin to yet another record high. (9) Joe sorts out the Q3 data for the S&P 500 sectors.

Better To Be Healthy Than Techie
(1) Old dog, new tricks. (2) A social media star is born, maybe. (3) Sonogram showing investors in fetal position. (4) Companies that build new headquarters are often cursed. (5) OPEC reports that oil supply exceeds demand. So does a chart of the price of oil. (6) For Energy industry analysts, it may be 2015 déjà vu all over again. (7) Quantum computing solves problems fast.

Volatile Situations
(1) Stock market volatility reflects bullish and bearish mix of Trump’s policies. (2) Meanwhile, Fed still tapping on the brakes. (3) An escalating trade war with China and an increasingly uncivil war at home. (4) Curbed enthusiasm. (5) Meet trade warrior Peter Navarro again. (6) “Globalists” to the rescue? (7) Lots of homegrown problems in China. (8) Lots of debt turning bad fast. (9) 50 million empty apartments. (10) Capital flight remains a big risk. (11) M2 confirming slowdown in real retail sales, which may be reflecting rapidly aging population. (12) One-day shopping spree.

Slowdown Ahead
(1) Bullish earnings and bearish guidance. (2) Nevertheless, analysts’ consensus estimates for S&P 500 earnings growth are 9.4% in 2019 and 10.2% in 2020. (3) We are projecting 4.9% and 5.3% comparable growth rates. (4) Revenues growth rates are bound to slow to 4.0% trend. (5) Profit margin very unlikely to move to new record highs, as implied by analysts’ revenues and earnings projections. (6) Crude oil is dropping, and back in sync with other declining commodity prices and stronger dollar. (7) Another sign of global slowdown on the demand side. (8) On the supply side, American and Canadian crude output is soaring.

The Hysteresis Hypothesis
(1) Deep recessions can damage economy’s potential output and weaken recoveries. (2) In 2016 speech, Yellen explained the benefits of running a “high-pressure economy” to reverse the damage done to potential output by severe recessions. (3) Powell isn’t convinced about benefits of “positive hysteresis.” (4) Five main channels of hysteresis. (5) Labor force participation rate showing signs of recovering finally, especially for prime-age workers. (6) Job openings exceed unemployed workers by 1.0 million. (7) A good explanation for flat yield curve and punk productivity growth. (8) Potential output has the potential to be greater again. (9) Trump to Powell: Stop tapping on the brakes! (10) A Powell press conference after every FOMC meeting should give Fed more flexibility in scheduling rate hikes.

‘Don’t Be Evil’
(1) Holiday treats following October’s tricks? (2) Consumers are ready to do what they do best during the holidays. (3) Consumer Optimism Index highest since 2000. (4) Consumer Discretionary sector among the leaders this year so far, and probably through year-end. (5) Tariffs will be next year’s problem. (6) Google’s don’t-be-evil mantra falls to bottom of its code of conduct. (7) Google has disgruntled employees, and is under scrutiny by the White House and EU. (8) League of Legends shows off AR on live stage.

Europe Splintering
(1) The party is over for Merkel. (2) Immigration is a top issue in Germany. (3) Chancellor through 2021? Unlikely. (4) Three contenders. (5) Macron alone trying to keep EU from disintegrating? (6) Germany’s economic indicators rapidly losing their oomph. (7) German stocks may stay weak as long as political uncertainty remains a problem.

All About Inflation
(1) Faster pay increases heighten price inflation concerns. (2) Is the Phillips curve finally in gear? (3) Tight labor market boosting productivity and real wages perhaps? (4) Wage vs price curves. (5) Inflation has been subdued for a very long time, and may remain so. (6) Disinflation remains a global trend. (7) Latest employment gains belie labor shortage fears. (8) More rapid increases in wages for goods producers aren’t showing up in goods prices. (9) In services, rent inflation is looking toppy thanks to multifamily house-building boom. (10) Healthcare inflation remains very low even excluding impact of government programs, which tend to keep a lid on pricing.

Relief Rally #62?
(1) Center-stage worries. (2) Still bullish but curbing our enthusiasm. (3) Whether Fed is turning from neutral to restrictive remains a worry. (4) Lots of confusion about Trump’s China policy should clear up after mid-terms. (5) Santa vs the two Grinches. (6) Goldilocks was a moocher with bad taste. (7) When wage “inflation” isn’t really inflation. (8) Productivity may finally be heating up, which is heating up economic growth while cooling price inflation. (9) No pickup in unit labor cost inflation. (10) Lowest short-term unemployment rate on record! (11) Bonds are not having fun. (12) Movie review: “Bohemian Rhapsody” (+ + +).

FANG Bite
(1) Aspirin sales rose last month. (2) FANG holders had the biggest headaches in October. (3) A Facebook that’s hard to forget. (4) Zuckerberg admits he needs to spend more on security, less on emojis. (5) The EU puts FANGs in the Peoples’ Republic of GPDR. (6) The EU wants to pick FANGs’ deep pockets. (7) Aging is a drag. (8) Growth at a price. (9) How fitting: Semis crawl back from the dead on Halloween. (10) Blob material feeds on CO2.

Consumers Getting Older
(1) Is 3M stock price a reliable indicator of global economic activity? (2) Not a perfect barometer, though it is correlated with M-PMI in US and Eurozone. (3) Is the global slowdown Trump’s fault? (4) Can’t blame Trump for aging demographics. (5) China’s slowing retail sales growth showing country’s aging trend. (6) Italians want to retire earlier. (7) Brazilians are retiring young. (8) Happy consumers once meant high P/Es. Not this year. (9) Misery Index remains near cyclical lows. (10) Investors fear low jobless rate will lead to higher inflation and interest rates. (11) Despite plentiful jobs, wage inflation remains subdued.

Lowering Our Targets
(1) Powell did say what he reportedly said on Oct. 3. (2) It was a big mistake, since he contradicted 9/26 FOMC statement and suggested Fed had a ways to go in raising rates. (3) Powell gets the most blame for having triggered October stock market rout, in our book. (4) Year-over-year comps for real GDP, revenues, and earnings will be lower in 2019. (5) Good earnings, bad guidance. (6) Analysts’ optimistic outlook for earnings doesn’t add up given likely slower growth of revenues and prospect of flat profits margin. (7) Lowering our outlook for earnings growth for the next two years. (8) Now shooting for S&P 500 at 2900 by year-end, 3100 next year, and 3500 in 2020. (9) Escalating trade war with China worsening the correction.

Trump’s Regrettables
(1) Kashkari’s plea. (2) What’s the rush to raise interest rates? (3) Slower GDP growth ahead in response to recent rate hikes. (4) Regional surveys mostly show inflation topping. (5) Trump probably regrets not reappointing Yellen. (6) Did Powell really say that? (7) New Fed vice chairman is yet another fan of r-star who admits it’s unobservable. Says rates still accommodative. (8) What is normal? What is neutral? What is the meaning of life? (9) Yield curve has flattened, so why does FOMC still estimate NAIRU at 4.5%? Why not 3.7%? (10) Fed’s Beige Book still has plenty of green. (11) Movie review: “Beautiful Boy” (+).

‘Something Has To Give’
(1) Awful close. (2) Ugly technical picture. (3) Not too late to sell, or buying opportunity? (4) The accelerator and the brakes analogy. (5) Analysts remain bullish on S&P 500 revenues! (6) Earnings outlook remains upbeat according to analysts. (7) Investors seeing more trick than treat in earnings outlook. (8) Forward P/Es fall to fair value around 15 for S&P 500/400/600. (9) Uncivil war. (10) Cyclicals lead the way down on prices and up on analysts’ earnings expectations. (11) Back to the future.

Geopolitics Matters
(1) Panic Attack #62 isn’t over just yet. (2) October has been a spooky month for stocks around the world, even in the US. (3) More geopolitical worries than usual unnerve investors. (4) Quadruple whammy for emerging markets: interest rates, the dollar, oil prices, and trade war. (5) Halloween and the mid-term elections will come and go. (6) Stocks are cheap in the US if economy continues to grow. (7) IMF report about global financial stability finds that current emerging markets crisis is relatively contained. (8) Our net capital flows proxy remains bullish for the dollar. (9) IMF sees relatively stable banking systems around the world. (10) Fed Chairman Powell says he isn’t worrying about emerging market economies.

Crouching Tiger, Hidden Dragon
(1) Trump is a tiger. (2) China’s dragon has lots of secrets hidden in plain sight. (3) China’s most obvious syndrome is aging demographics. (4) China’s Q3 real GDP growth at 5.8%, (saar), lowest since Q4-2008. (5) Getting less bang per yuan. (6) Real retail sales growth showing China’s aging demographics. (7) Breaking China: Trump team rooting for and getting lower Chinese stock prices. (8) Trump’s policies boosting US, while depressing the rest of the world. (9) Good as gold?

The Fed: Mind Games
(1) Goldilocks growth, especially on y/y basis. (2) No recession here: Both CEI and LEI at record highs during September. (3) Yield curve spread still positive contributor to LEI. (4) Two identical strangers: The yield curve spread and the unemployment rate. (5) Stock market confused by conflicting fiscal and monetary policies and mixed Q3 corporate earnings reports. (6) Fed’s confidence in the economy spooking investors, who now fear that 3.40% fed funds rate is more likely in 2020. (7) Fed replaces “accommodative” with “restrictive” lingo. (8) FOMC remarkably gloomy about long-run economic growth. (9) We pick a quarrel with Fed Governor Quarles.

Bankers, Truckers & Fakers
(1) Taking it to the Street: JPM’s Dimon and BAC’s Moynihan have much good to say about their banks’ Q3s. (2) Expanding bank behemoths with cheery CEOs can’t be bad for the rest of us. (3) S&P 500 Diversified Banks’ earnings expectations are up and share prices down: Does opportunity knock? (4) S&P 500 Trucking index has been lagging its Railroad counterpart; 3Q earnings reports confirm why. (5) Reading between the line items. (6) When deepfakes stop being funny.

Brazil & Italy: From Right to Left
(1) Hot, hot, hot: Brazilian stock market is world’s only gainer mtd. (2) Gains reflect high hopes for Latin America’s biggest economy. (3) High hopes rest on fiery, ultra-right presidential frontrunner Jair Bolsonaro, “Trump of the Tropics.” (4) Yet a Bolsonaro administration’s economic policy remains uncertain. (5) Debating Brazil’s stock market runup: “Bolsonaro bump,” fundamentals, or both? (6) Spaghetti western: Stay tuned for a Rome-vs-EU showdown over Italy’s 2019 budget. (7) Proposed budget would hike social spending, cut taxes, and boost the deficit in defiance of EU rules. (8) Rising Italian bond yields threaten a dangerous debt spiral, pressuring euro.

Stepping on the Accelerator and the Brakes
(1) A most bullish and bearish fellow. (2) The accelerator: deregulation plus tax cuts. (3) The brakes: deficits, interest rates, oil prices, and tariffs. (4) A very big bet on supply-side economics. (5) A 15% boost to earnings. (6) Small business sentiment soars on deregulation and tax cuts. (7) A big boost to corporate cash flow from Trump’s expansion of depreciation allowance. (8) Monetary and fiscal policies clashing. (9) A long-term conflict with China. (10) Bad news for emerging economies. (11) Still recommending “Stay Home.”

Panic Attack #62?
(1) Panic Attack #62 or something more bearish? (2) Unlike past selloffs, there are lots of explanations but the main cause is elusive. (3) A broad consensus: the 10-year US Treasury yield is going to 4.00%. (4) Dow Vigilantes vs Bond Vigilantes. (5) Policies in conflict: Supply-side fiscal stimulus vs Fed’s monetary tightening. (6) Saturday morning with Jim Cramer, who blames the Fed for last week’s selloff. (7) PPG earnings warning set stage for last week’s stock market plunge. (8) Threat to supply chains running through China could be troublesome for tech hardware companies. (9) ETFs didn’t have a meltdown, but they spread the pain. (10) FANG ache. (11) Valuation multiples get Banksy-ed. (12) Movie review: “First Man” (-).

Respecting the Tape
(1) Triple whammy: rising interest rates, oil prices, and the dollar. (2) China’s spooks are spooking supply chains. (3) Trump stepping on accelerator and brakes at the same time. (4) Bad vibrations in auto industry. (5) Homebuilding has the shakes. (6) Building overcapacity in hotel industry. (7) Canary is gasping in the copper mine. (8) Too much capacity in semi equipment industry. (9) Mind reading.

Looking for Stress Cracks in Corporate Debt
(1) Cool-Hand Jay not too worried about NFC debt. (2) Corporate debt rising to record highs, led by bond debt. (3) Corporate cash flow in record-high territory, boosted by depreciation allowance. (4) NFC liquid assets at record high, with or without equity holdings. (5) NFCs have spent the past several years refinancing and borrowing at record-low bond yields. (6) Fed study sanguine about the impact of a 3% federal funds rate on corporate debt. (7) Credit quality is a mounting issue for NFC debt. (8) Are leveraged loans the new subprime problem? (9) Any credit market blowup would be more likely in private lending than public banking, taking down just rates of return, not the financial system.

Trump’s Poison Pills
(1) Gift for the holidays. (2) Short wait to get confirmation of our China thesis. (3) Veep Pence is Trump’s new hit man on China. (4) US has a long list of grievances over trade and many other issues with China. (5) There’s a poison pill in trade deal with Canada and Mexico. (6) Trump’s bullets hitting one of his targets: Chinese stock market. Will they ricochet to the US? (7) The Big Hack likely to alter global supply chains. (8) Trump’s sanctions against North Korea and Iran seem to be hitting their marks too. (9) Lots of poison pills out there!

Stocks Tracking Earnings Higher
(1) Bonds: Six reasons to fold them and one reason to hold them. (2) US bonds’ tether to bunds and JGBs may be fraying. (3) Bond Vigilantes model is most bearish of them all. (4) Latest wage inflation data remain subdued. (5) Industries with highest wage inflation are among most competitive. (6) Phillips curve on life support. (7) Powell says Fed remains on course. (8) Fed is adding an annualized $360 billion to Treasury supply. (9) Fed data show big buyers of Treasuries so far this year have been households, foreigners, and pension funds. (10) US PMIs outpacing the rest of the world’s PMIs. (11) Will bond yield top out at 3.50% or 4.00%? (12) Movie review: “A Star Is Born” (+ +).

On the Road Again
(1) Why have rail stocks been leaving trucking stocks in the dust? (2) Business is brisk for both, but labor costs and fuel-efficiency favor rails. (3) Amazon materializes, bursting into the “real” world with stores, smart homes, and delivery trucks (for starters). (4) Internet retail industry is a projected 80% 2018 earnings grower valued at a forward P/E in the 50s—add to cart? (5) Elon Musk, Houdini of the business world, escapes from self-made scrapes again. (6) Tesla says it met Q3 production goals—defying critics.

Stocks Tracking Earnings Higher
(1) USAF and the S&P 500. (2) Bull market’s jets fueled by earnings. (3) Remarkably strong revenues since mid-2016 still remarkably strong. (4) Could profit margins possibly go any higher? (5) What if the supply-side fairy tale comes true? (6) Animal spirits remain spirited. (7) Nothing to fear but wage inflation? (8) Powell says don’t worry, be happy about higher wages. (9) Buybacks rose to record high during Q2.

The World According to Jay
(1) FOMC is no longer accommodative, as interest rates gradually have normalized. (2) Normal may be a 3.00% federal funds rate. (3) Brainard says that shifting from headwinds to tailwinds might blow neutral rate higher for a short while. (4) Williams says that r-star’s light is getting “fuzzy.” (5) Powell has a short worry list: escalating trade war, high asset valuations, too much corporate debt, and unstable emerging markets with dollar-denominated debt. (6) Powell endorses supply-side economics, sort of. (7) FOMC’s forecasts suggest Phillips curve is dead at the Fed. (8) National and regional price surveys show September dip from high readings during the summer. (9) Everyone agrees that labor market is tight.

China’s Syndromes
(1) Downgrading outlook for China’s economy. (2) Trump’s trade war with China is really about slowing China’s advance to becoming a superpower. (3) Moving out of China into Vietnam. (4) Peter Navarro’s protectionist agenda isn’t just about trade. (5) Trump is shopping around for fairer trade. (6) Arms race in and around the South China Sea. (7) After China entered WTO, manufacturers left the US. (8) Aging demographics may already be weighing on real retail sales in China. (9) Less and less bang per yuan. (10) Urbanization and legacy of one-child policy depressing China’s fertility rate and economy. (11) Movie review: “A Simple Favor” (+ + +).

Home in the Range
(1) Consumers feeling fine, homebuilders not so much. (2) Home unaffordability hurts. (3) Home buyers out of juice or just catching their breath? (4) Dour homebuilder stocks worth a look. (5) Quantum computers make data vulnerable. (6) Cryptographers have job security for years.

The Next Gen
(1) Introducing Generation Z! (2) Post-Millennials are not mini-Millennials. (3) Gen Zers are motivated self-directed doers. (4) Predicting good things for US labor force with career-minded Gen Zers headed up the ladder. (5) Lots of Gen Zers want to start a business. (6) Forget traditional education, say Gen Zers; hack online school instead! (7) Will Gen Zers eschew Millennials’ minimalism? (8) Attention: Gen Z shoppers want cool products with no hassle, in hand fast. (9) Not just tech savvy, Gen Zers are “always on” digital natives. (10) Future Gen Z households to be full of “framilies.” (11) Watch out for pre-K Gen Alpha kids flying drones!

See You in 2020!
(1) Smoking hot pot stocks. (2) Second-hand smoke making industry analysts high? (3) No Wile E. Coyote scenario in S&P 500 revenue estimates. (4) Above-trend earnings growth in 2019 and 2020? (5) High on life. (6) Will S&P 500 profits make new record highs over the next two years? Unlikely. (7) Go Global investment strategy outperformed last week. We are sticking with Stay Home for now. (8) Stay Home has been the big winner during the current bull market.

Bear Tracks
(1) Goldman’s Bear-Market Risk Indicator and others like it suggest it may be time to get out of stocks. (2) By our count, there have been 61 panic attacks in this bull market, yet it is still making new highs. (3) The most obvious bear trap for the bull market is a recession. (4) Yet both leading and coincident indicators are still making record highs. (5) Current bull market charged right through 2015 growth recession and this year’s emerging markets crisis (so far). (6) Six good reasons to dump bonds and one really good reason to hold onto them (because doing so is still working!). (7) Movie review: “White Boy Rick” (+ +).

Rotating Tech & Flying Taxis
(1) Bull market rotating again and again. (2) Tech under attack by regulators and protectionists. (3) Semi Equipment industry also feeling pain of protectionism? (4) Tech margins keep notching records. (5) New Communications Services sector: New home for some FANGs. (6) Communications sector offers more offense, less defense. (7) Flying cars?

Remarkable Revenues
(1) Nothing funky about strong revenues growth. (2) The bottom line is that the top line is looking good across the board. (3) Trump’s policies are mostly bullish for business sales, which are at record highs. (4) S&P 500 forward revenues at record high again, and again. (5) There is a divergence between strong S&P 500 revenues and weak OECD leading indicators. (6) The dollar doesn’t seem to matter much. (7) Mario Draghi says ECB’s policy is a work in progress. (8) BOJ still dreaming the impossible dream: A 2% inflation rate. (8) Bottom line: ECB and BOJ will continue to be ultra-easy until further notice.

Debt Roundup
(1) Debt worries making a comeback. (2) Record debt levels may matter again if inflation rebounds, which we don’t expect. (3) Federal government interest payments soaring along with Treasury debt and rising interest rates. (4) Fed’s rate hiking could push government interest payments over $500 billion by 2020. (5) Record bank loans in China. (6) Chinese government wants more babies. (7) Trump’s trade war depressing Chinese stocks despite solid production growth. (8) China’s real retail sales growth is weakening as aging demography weighs on consumer spending. (9) Getting less output bang per yuan of bank debt. (10) Beige Book has lots of green signals about growth, yellow signals about tight labor market, and a few red signals about price inflation.

Countering a Rash of Pessimism
(1) Rash of articles about 2008 financial crisis. (2) Feldstein confident that a bear market is coming. (3) Latest price inflation news fairly benign. (4) Trump’s trade war isn’t boosting import prices so far. (5) Productivity growth finally making a comeback? (6) Trump’s tax cuts making America a great place to do business. (7) Lots of minimalists are bullish for economy and stocks. (8) US federal deficit balloons along with entitlement outlays, defense spending, and interest payments. (9) S&P 500 forward revenues and earnings continue to set records. (10) Outlook for long-term stock returns depends on starting point.

Healthy M&A, Musk’s Potcast & Digital Tulips
(1) A very healthy sector. (2) Lots of winners in Health Care, though Biotech lags. (3) Small is beautiful for takeover targets. (4) Stocks of acquirers also benefit from M&A deals. (5) Is Musk a pothead, or just high on life? (6) Just another quirky genius. (7) We will all be geniuses if Musk’s Neuralink links our brains directly to the Internet. (8) Crypto currencies are like digital tulips.

All About Wages
(1) Labor market tight enough to revive Phillips curve finally? (2) Wage inflation still below Yellen’s “normal.” (3) Labor costs don’t automatically get marked up into prices. (4) Record profit margin implies more productivity growth than official data show. (5) Lots of industries with above-average wage inflation don’t have much pricing power. (6) Real wage and other compensation measures show rising trends, not stagnation. (7) The Council of Economic Advisers posts a useful primer on wages, which confirms upbeat trend. (8) Gene Epstein explains why labor’s share of national income isn’t as bad as shown by official data, and widely reported.

Red, Blue, and Green Waves
(1) Bull-market haters as apoplectic as ever. (2) Lots of reasons to hate this bull market, yet it continues to make new record highs. (3) Is emerging market crisis about to kill the US bull? (4) What if Trump’s red wave is drowned by Democrats’ blue wave? (5) Lots of red ink in federal budget under both blue and red presidents. (6) Despite drop in its commodity price component, our Fundamental Stock Market Indicator remains near recent record high. (7) The green wave: Jobless claims still falling, as consumer confidence continues to soar. (8) Tech’s earnings share at record high, boosting its market-cap share. (9) Financials signaling calm in US, but trouble in Europe.

US Stocks’ Boon Is Global Stocks’ Bane
(1) More good news for US economy, which is bad news for other economies. (2) US economic strength giving confidence to Trump to escalate trade war and to Powell to raise rates. (3) Three whammies for emerging market economies. (4) New factory orders tumbling in Germany. (5) Wage inflation unnerves bond yield, which remains a tad below 3.00%. (6) US yield would be higher but for global influences. (7) No weakness yet in global forward revenues. (8) Global M-PMI is down since late last year. (9) Commodity prices also signaling global weakness.

Inflation, Where Art Thou?
(1) Technology is inherently deflationary. (2) The Gig Economy’s low-fee freelancers are disrupting lots of services businesses. (3) No-fees ETFs and brokerage accounts. (4) How inflationary would tariffs on Chinese imports be for the US consumer? (5) Record-high profit margins could absorb some cost increases. (6) Productivity could be making a comeback. (7) Regional and national prices-paid indexes up sharply since 2015, but looking toppy recently. (8) No sign of inflationary pressure in CPI goods excluding food and energy. (9) CPI services inflation boosted by rent increases, which are starting to slow.

US vs Them
(1) Trump vs Hamlet. (2) Strong US M-PMI bodes well for S&P 500 revenues growth. (3) Consumer Optimism Index is strong, led by current conditions component. (4) Jobless rate on the way to 3.0%. (5) Less exuberance in China. More pain in emerging economies. (6) Stay Home! (7) Sandra goes to Europe. (8) From Greek crisis to an Italian one. (9) Brexit is hard to do. (10) Trump rejects Europe’s generous offer. (11) Weighing on Europe: Italy, immigration, Brexit, and Trump.

A Sustainable Meltup?
(1) The meltup question is back. (2) Nothing to fear but a trade war and an emerging markets crisis. (3) Precisely defining terms. (4) Must a meltup be followed by a meltdown? (5) S&P 500 revenues growth remarkably strong. (6) S&P 500 earnings even stronger. (7) Record profit margin. (8) Trump’s tax cuts boosted after-tax earnings, undistributed profits, and cash flow. (9) US equities have been a risk-off trade compared to equities abroad. (10) Mr. Wonderful’s meltup scenario. (11) Movie review: “Operation Finale” (+ +).

Full Pipelines & Killer Robots
(1) Too much of a good thing in the oil patch. (2) Frackers still fracking. (3) Rigs in search of pipelines. (4) Shipping costs rising along with costs to build pipelines as a result of steel tariffs. (5) Railroads better equipped to bring sand to frackers than to take their oil. (6) Terminators are coming. Can they be stopped? (7) Beautiful swarms can be deadly.

Dancing with the Stars
(1) The yield curve question gets a brief mention at Jackson Hole. (2) It may not be different this time, but the yield curve has yet to actually invert. (3) What’s really different this time is that the federal funds rate is 2%, while the comparable ECB and BOJ rates are slightly negative. (4) The 2-year Treasury is predicting a 2.6% fed funds rate in a year. (5) Italy’s new euroskeptic government may frustrate ECB’s hopes of normalizing policy. (6) How do you say “bond vigilantes” in Italian? (7) The chairman’s first speech: slow and steady. (8) Powell rejects navigating by the stars. (9) Academic portion of Jackson Hole was intellectually interesting, without much practical usefulness.

What If . . . ?
(1) Six bullish “what if” scenarios. (2) What if the trade war results in less protectionism? (3) Trade war escalating with China, deescalating with Mexico. (4) Our guess is that deregulation boosts S&P 500 earnings by $4 a share. (5) Small is beautiful: S&P 600 up 50% since Election Day! (6) Productivity growth could make a comeback. (7) Rapid pace of technological disruption keeping a lid on inflation. (8) Distressed asset funds are acting as shock absorbers. (9) If we are all minimalists now, this expansion may have a ways to go.

Teamsters & the Stock Market
(1) Social media can be downright anti-social. (2) Bull-market haters. (3) How many Teamsters does it take to change a light bulb? (4) Charles Dow is resting in peace. (5) The breadth issue rises again despite record highs for S&P 500/400/600 and several key sectors. (6) Stock buybacks and dividends continue to pump lots of liquidity into stock market. (7) S&P 500 share count is down for the count. (8) Record-high forward revenues and earnings driving stock prices to record highs. (9) Raising our 2019 S&P 500 earnings-per-share estimate by $4 to $173.

Trucks & Batteries
(1) Charles Dow is bullish. (2) Railroads are chugging along. (3) Truck freight index is off the charts again. (4) The next new new thing might be good old batteries. (5) The race to make more and better batteries is charged up. (6) The Tesla connection. (7) Solid-state batteries.

Superstars
(1) Nice view of the Grand Tetons. (2) Hot topic: “Changing Market Structure and Implications for Monetary Policy.” (3) Are multinationals getting too much market power? (4) And what about online shopping? (5) How has banking evolved since financial crisis of 2008? (6) “Superstar firms” are either depressing or boosting productivity. (7) Not enough creative destruction? (8) Expect déjà vu all over again from predictable Powell.

Superpower
(1) Trump, the newsmaker. (2) The Great Disruptor continues to do what he does best. (3) Nations have interests, not friends and enemies. (4) Method in the madness: Flexing America’s muscle. (5) What if he wins? (6) Trade war goes bilateral with ceasefires and some deal-making progress. (7) Trump talks loud and carries a big stick. (8) Tariffs and sanctions as economic artillery.

The Long Good Buy
(1) Benchmark framework remains bullish on economic expansion. (2) The longest bull market in history? Sure, why not? (3) Discounting what may soon be the longest economic expansion in history. (4) Age of bulls doesn’t predict their DOD. (5) Stock prices high on record-high revenues, earnings, and profit margin. (6) The yield curve is just one of 10 leading indicators. (7) Coincident economic indicators showing moderate growth. (8) What if they call a trade war and everyone declares a ceasefire? (9) Might productivity be making a comeback? (10) Movie review: “BlacKkKlansman” (+ + +).

Consumers Unchained
(1) As tax-cut-happy consumers go to town, retailers have been raking it in. (2) Amazon threat? So last year! (3) S&P 500 Consumer Discretionary sector’s earnings and revenue forecasts reflect the strength. (4) So do stock valuations, near historical highs, boosted by Amazon and Netflix. (5) In telecom, the 5G race is on—among countries and companies. (6) But does who comes in first really matter?

Trump vs Xi: Tiger vs Dragon?
(1) China more vulnerable in trade war with US. (2) Xi aspires to Mao’s power. (3) Xi’s “new era” off to a bad start. (4) Deng nostalgia. (5) US targets Xi’s “Made in China 2025.” (6) Bad medicine. (7) Stress cracks in China’s economy. (8) Chinese stocks coming under pressure. (9) Birth dearth. (10) Banking on more credit.

Big Revisions, Small Net-Net
(1) An old joke that remains relevant today. (2) Lots of offsetting benchmark revisions in real GDP that don’t add up to much. (3) Shift to more first-half annual growth and less second-half growth. (4) BEA concedes that seasonally adjusting quarterly real GDP is hard to do. (5) Revisions give real tech spending and real imports (like cell phones) a boost. (6) Personal saving data revised up sharply. (7) Lots of components of personal income revised up sharply.

Trump’s World
(1) No place like home. (2) Stay Home isn’t just about trade war; tax cuts also giving the US an edge. (3) The strong dollar isn’t just about trade war but also central bank policies—i.e., Fed normalizing while ECB and BOJ policies remain abnormally easy. (4) Copper price isn’t just about strong dollar but also reflects some global weakness. (5) Forward earnings of US MSCI outpacing rest of the world since start of current bull market. (6) So far this year, cyclical stocks beating interest-rate-sensitive ones. (7) SmallCap outperformance isn’t just about less exposure to trade war.

Robot Advisors & the Magic Kingdom
(1) New, new thing in passive asset management, robo-advisors. (2) Assets under management growing fast. (3) AI-enabled investment allocation also enables low to no minimums, low to no fees. (4) Big traditional players: “Can’t beat ’em, join ’em.” (5) Robo segment hopping with new mergers, partnerships, and offerings. (6) Flavor of the month or here to stay? (7) Let the investor beware: Know what’s under your algorithms’ hood. (8) Vacation-happy consumers shoring up hotel industry stats. (9) Beneficiaries include Marriott and Disney. (10) Even so, S&P 500 Hotel, Resorts & Cruise Lines stock price index is down ytd-undervalued?

Tuning Out the Noise
(1) Two remarkable back-to-back quarters for earnings. (2) Two more to go. (3) Getting closer to our year-end S&P 500 target of 3100. (4) Three happy earnings hooks. (5) Forward earnings converging to higher 2019 estimates. (6) Lots of earnings power in S&P 500 sectors. (7) Jamie Dimon is bearish on bonds. (8) Bears warn that corporate pensions’ tax-related bond-buying will end in September. (9) Inflationary pressures are mounting, but broad inflation measures remain subdued. (10) US bond yield tethered to German and Japanese yields. (11) Noise about escalating trade war weighing on global manufacturing.

Slowing? Not So Fast!
(1) Watch our first video podcast. (2) The pre-tariffs scramble to export boosted Q2 real GDP. (3) Y/y growth rates in real GDP, along with consumer and capital spending, nothing out of the ordinary. (4) Signs of weakness may be misleading. (5) Pay little attention to surprise index and NM-PMI. (6) Minimalist Millennials may be depressing demand for homes and autos. (7) Haven’t run out of human workers yet, while rent-a-robot may be the next new, new thing.

Babies & Help Wanted
(1) Demographic collaborators. (2) From Generation Z to Generation Zero. (3) Marriage continues to lose market share. (4) Singles outnumbering married couples. (5) Getting married later in life. (6) Birth dearth getting worse. (7) Signs of life in household formation and homeownership. (8) Record full-time employment. (9) Payroll employment revisions series is timely business-cycle indicator, which is upbeat currently. (10) Quitters at record high, yet wage inflation remains subdued. (11) Some Millennial quitters doing so to see the world rather than to get a better job with more pay. (12) Movie review: “Three Identical Strangers” (+ + +).

Artificial vs Material Worlds
(1) AI will power the next Industrial Revolution, or kill us all. (2) Fritz Lang saw it coming in 1927. (3) Racist robots. (4) Algos have a “black box” problem. (5) From virtual to fake reality. (6) Weaponized drones and Terminators turning war into a video game. (7) Kissinger says the end is near for the Enlightenment. (8) FANG workers of the world unite! (9) High fives in China. (10) Materials sector has winners and losers. (11) More on prime-working-age males: vets and ex-cons.

New York, Tokyo, and Mumbai
(1) Earnings hotter than expected. (2) Forward revenues and earnings of S&P 500/400/600 rising to fresh record highs at end of July. (3) Lots of good reasons to be bearish on bonds, yet yield of 10-year Treasury remains calm just under 3.00%. (4) US bond yield is tethered to near-zero yields in Germany and Japan. (5) Trade uncertainties depressing Germany. (6) BOJ keeps priming inflation pump, which continues to run dry. (7) Inflation remains relatively subdued in US. (8) One person’s debt is another’s asset. (9) A guided tour of the latest developments in India.

Growth & Inflation in Trump World
(1) Is there an internal contradiction in Trump’s agenda? (2) Over-the-top growth. (3) Donald Trump vs. Adam Smith. (4) Is Trump a mercantilist or not? (5) Donald Trump vs. Charles Koch. (6) Trump’s ceasefire with Europe. (7) Exports boosted by beating the tariffs. (8) Strong capital spending. (9) Five regional business surveys showing lots of strength. (10) Trump’s tax cuts and tariffs stress-testing our low-inflation scenario. (11) Record profit margins may be inflationary shock-absorber. (12) Regional, national, and Beige Book surveys all seeing more cost pressures.

Why Work?
(1) Despite not much slack in labor market, wage inflation likely to remain subdued. (2) A depressing trend: Men without work. (3) Baby Boomers are no longer “prime.” (4) Lots of prime-working-age male dropouts are disabled, ill, and/or on pain meds. (5) Government welfare programs providing incentive not to work. (6) As the proverb states: “Idle hands are the devil’s workshop.” (7) Powell’s justification for gradual tightening: He is hoping more adult men drop back into labor force. (8) No 9-5 jobs for them: Wi-Fi allows Millennials to combine less work with more play. (9) Movie review: “Mission: Impossible—Fallout” (+).

Industrials Under Some Duress
(1) Tax receipts dropping relative to GDP. (2) Supply-siders may take credit for rising individual income tax receipts despite (or because of) tax cuts. (3) Consumers saving less. (4) TCJA giving big boost to profits. (5) Weekly fundamental indicators remain bullish for stocks. (6) Forward earnings at another record high. (7) What’s better (or worse): Inverting yield curve or rising bond yield? (8) 2-year Treasury yield closely tracking 12-month forward federal funds futures. (9) Rumored change in BOJ policy putting upward pressure on bond yield, confirming our globalized bond market thesis. (10) A really great review of my book in CFA Institute’s Financial Analysts Journal.

Ahead & Behind Schedule
(1) Same old story. (2) S&P 500 forward revenues still soaring. (3) S&P 500 forward earnings jumps to $170 per share, six months ahead of schedule. (4) An 18 P/E now would put S&P 500 at 3100! (5) Happy hook in Q2 earnings. (6) Four S&P 500 sectors with forward revenues ascending in record-high territory. (7) Smaller is beautiful thanks to less exposure to trade war and better revenues and earnings growth. (8) Contrary to urban legend, real wages have been on a uptrend since mid-1990s. (9) Baby Boomers who refuse to retire may be keeping a lid on overall wage measure.

The Big Boost
(1) Tax receipts dropping relative to GDP. (2) Supply-siders may take credit for rising individual income tax receipts despite (or because of) tax cuts. (3) Consumers saving less. (4) TCJA giving big boost to profits. (5) Weekly fundamental indicators remain bullish for stocks. (6) Forward earnings at another record high. (7) What’s better (or worse): Inverting yield curve or rising bond yield? (8) 2-year Treasury yield closely tracking 12-month forward federal funds futures. (9) Rumored change in BOJ policy putting upward pressure on bond yield, confirming our globalized bond market thesis. (10) A really great review of my book in CFA Institute’s Financial Analysts Journal.

Color War
(1) Green light: New record highs for LEI and CEI. (2) Yield curve spread in LEI remains solidly positive. (3) Amber light: Weak payroll employment growth-from slow recovery to labor shortages. (4) Fed’s Beige Book showing moderate wage gains despite tight labor supply. (5) “Shortage” mentioned 26 times. (6) Relaxing drug testing and training ex-cons. (7) Black & blue: The trade war morphs into currency war. (8) “Tariff” mentioned 31 times. (9) South of the Border: Incoming President ALMO not as radical as feared, so far. (10) Movie review: The Equalizer 2 (+ +).

Fancy Fintech & Punxsutawney Powell
(1) So far, Q2 earnings looking good for Financials. (2) Talking about Fintech on earnings calls. (3) Banking on apps. (4) Goldman wants us to bank with Marcus. (5) BofA wants us to talk to Erica. (6) PNC using Fintech to go national. (7) A preview of 2019 earnings. (8) Fed Chairman Powell’s 10 talking points.

Happy World Revenues
(1) Staying ahead of the pack in the technology race. (2) More frequent mentions of trade concerns in Fed’s Beige Books since early this year. (3) Trade also mentioned as a worry in June ISM report, yet M-PMI remained strong. (4) Same old story: Industry analysts raising estimates for 2018 and 2019 S&P 500 revenues. (5) Outperforming SmallCaps: Not just more immune to trade; revenues and earnings outlooks are strong too. (6) US leading MSCI forward revenues recovery since early 2016. (7) EMU and Japan have been catching up since 2017, but are still lagging.

Happy Sales
(1) Retail sales boosted by solid employment gains and tax cuts. (2) GDPNow now at 4.5%. (3) Business sales jump to record high, remaining bullish for S&P 500 revenues. (4) No sign of supply-chain worries in real inventory-to-sales (I/S) ratios. (5) Remarkable decline in retailing I/S ratio attributable to Amazon. (6) Big divergence between real GDP outlook at the Fed and the White House. (7) Kudlow crosses the line. (8) Will tighter monetary policy offset stimulative fiscal policy? (9) Powell skirts trade policy issues. (10) Known unknown: Fiscal multiplier in bad vs good times.

The Kindness of Strangers
(1) Blanche DuBois vs Donald Trump. (2) Stagflation debate: Will tariffs depress growth and boost inflation? (3) Bond yields remain eerily subdued. (4) So do inflationary expectations implied by TIPS. (5) Dr. Copper bearish on China. (6) Fed data show foreigners buying lots of US bonds. (7) Weakening yuan could offset inflationary consequences of Trump’s tariff on Chinese goods. (8) Fed, not trade, is driving the US stock market, as S&P 500 cyclicals beating interest-rate sensitive ytd.

Pills & Chips
(1) Worldwide semiconductor sales at record high. (2) Trade war over “Made in China 2025” spells trouble for chip equipment makers. (3) China could short-circuit M&A. (4) Controlling drug prices with presidential tweets. (5) SmidCap Health Care stocks in feverish rally mode as investors seek trade-immune equities. (6) M&A driving Health Care Equipment prices up. (7) Good prognosis for Health Care services. (8) Managing to cut costs. (9) Amazon is popping pills.

Is the Yield Curve Bearish for Stocks?
(1) Google Trends shows flattening “yield curve” is trending higher. (2) 10-year minus 2-year Treasury yield spread close to zero. (3) Hard to argue with success. (4) Yield curve spread is just one of 10 leading indicators. (5) Credit cycle has yet to enter crunch phase. (6) The bond market has gone global, and near-zero bond yields in Germany and Japan are making US bonds awfully attractive. (7) The Bond Vigilantes have been kept in check by the major central banks. (8) Another Fed Model: This one tracks a near-term yield spread, which is showing just a 14% chance of recession. (9) Why are S&P 500 revenue estimates so strong? (10) A very brief primer on quantum computers.

Trade Wall of Worry
(1) Channeling the chart of the S&P 500. (2) Market top or the pause that refreshes? (3) Climbing a trade wall of worry. (4) MEGA = Making Earnings Great Again. (5) Leading the Q2 earnings pack are Energy, Materials, IT, and Financials. (6) Analysts remarkably bullish on 2018 and 2019 S&P 500 revenues. (7) Fed officials see downside risks (flattening yield curve, escalating protectionism, European discord, and EM turmoil) and upside ones (fiscal stimulus and overheating economy). (8) Fed study questions usefulness of yield curve as recession warning signal. (9) No recession signal in “near-term forward spread.”

Somebody Had Better Blink Soon
(1) Trump’s dogs of war are no longer just barking. They are biting. (2) Trump considering tariff on all Chinese imports. (3) Hedge clause (“barring a trade war”) is no longer a hypothetical threat. (4) Markets are saying China has more to lose than US. (5) Dr. Copper raising odds of recession in China. (6) US imports from China are three times greater than US exports to China. (7) Emerging market economies suffer collateral damage. (8) US yield curve reflects global flight to US quality. (9) Will Europeans blink on auto tariffs? (10) Is there method to Trump’s madness on trade? (11) Trucking index rose to record high in US during May. (12) Movie review: “Won’t You Be My Neighbor?” (+ + +).

Animal Spirits Update
(1) An upset victory upsets “The Resistance.” (2) Meanwhile, animal spirits remain spirited for the most part. (3) S&P 500 sectors’ performance driven more by bond yield than protectionism since Trump’s election win. (4) GDPNow back over 4.0%. (5) M-PMI remains upbeat. (6) M&A is also bullish for stocks. (7) Powell is even handed. (8) More on the corporate debt threat.

Buybacks, Inflation Targets, and CLOs
(1) Buybacks by the numbers and the sectors. (2) Buybacks explain overall market performance better than sector performance. (3) No contest: Stay Home beating Go Global since start of bull market. (4) Trade issues weighing on EU, China, and Mexico. (5) Strong dollar (attributable to Fed’s rate hikes and Trump’s “America First” campaign) is weighing on EMs. (6) Fed and ECB hit their inflation targets. Now what? (7) Should we worry about CLOs? (8) Movie review: “Sicario: Day of the Soldado” (+).

Auto Imports & DNA Storage
(1) Tariff message: Baby, you can’t drive my car. (2) US is world’s largest importer of cars. (3) US tariffs are low on cars but high on trucks. (4) US autos sold in Europe are mostly made in Europe. (5) Germany may be ready for a deal on autos. France, not so much. (6) Moody’s warning. (7) S&P 500 Autos remain in a ditch. (8) DNA: Nature’s hard drive set to blow away current data storage technology.

Grazing Bulls
(1) Buybacks booming. (2) A corporate finance model explaining buybacks. (3) S&P 500 buybacks + dividends = $6.9 trillion since start of bull run. (4) Beware of fake news on trade. (5) No sign of global slowdown in S&P 500 forward revenues. (6) Forward earnings at yet another record high. (7) Animal spirits remain animated. (8) Four regional Fed surveys upbeat in June. (9) CEOs remain upbeat. (10) Small business owners say best outlook for expansion on record. (11) Mirror, mirror on the wall: Is the US the fairest trader of them all? (12) Aluminum and steel tariffs aren’t negotiable since they are a matter of national security. (13) Not just about tariffs. (14) A correction on Google’s P/E.

Protectionist Fever
(1) Beach tug of war: Yardeni vs Clinton and Patterson. (2) Trump stoking protectionist fever. (3) Bullish for the dollar. (4) Bearish for commodity currencies. (5) Even the Stay Home stocks could be hurt by a trade war, but less so than Go Global ones. (6) Bond market sends conflicting signals on recession outlook. (7) Yield curve turning more bearish on economy, but credit quality spread isn’t. (8) Fed officials may have to taper monetary normalization if trade policy turns more abnormal. (9) FANGs grow by disrupting other business models, but could be ripe for profit-taking. (10) Lots of hot spots in US stock market, though protectionist fever could cause occasional chills.

Europe’s ‘Meltdown Pot’
(1) Niall nails it. (2) Hooray, Greece is fixed (maybe)! (3) Anti-immigration fervor spreading in Europe, with talk of formation of an “axis” to combat the problem. (4) Merkel’s coalition government could uncoalesce. (5) Closing up some borders. (6) The Bavarian connection. (7) Italy’s new populist government wants to give immigrants the boot. (8) Eurozone PMIs, production, and orders looking toppy. (9) Darker days ahead? (10) Movie: “Jurassic World: Fallen Kingdom” (- -).

Weighty Matters
(1) Dropping GE. (2) IT and Health Care have been earnings-share gainers. (3) Four earnings-share losers. (4) S&P 500 Telecom Services will morph into Communication Services after September 28. (5) Time to go shopping for REITs? (6) REITs are depressed, so largest buyers in the real estate industry are snapping them up. (7) Apple hires Oprah and other celebs to catch up with Netflix. (8) Red Bull is bullish on gamers.

Tit for Tat
(1) A chronology of the US-China trade dispute. (2) Some threats, a few concessions, and some tariffs. (3) Upping the ante. (4) Risk of public tiff over tariffs is global slowdown, or a recession if tiff leads to war. (5) Will the smoke clear, or is it the fog of war? (6) Seeking peace and quiet. (7) S&P 500/400/600 continue to send strong bullish signals, which are hard to hear over all the noise about protectionism. (8) Trump risks losing mid-term congressional elections to the “resistance” if he doesn’t resolve major trade disputes soon.

Mother of All Credit Bubbles?
(1) Imaginative bears. (2) Pearlstein’s dire prophecy for the “Buyback Economy.” (3) Credit bubbles tend to be followed by a crisis, then a contagion, and finally a recession-causing credit crunch. (4) Is corporate debt the epicenter of the next economic and financial disaster? (5) Debt ratios look relatively conservative actually. (6) Corporations have extended the maturities of their debt at record-low interest rates. (7) Buybacks + dividends = 100% of after-tax profits. So what? (8) Retained earnings and buybacks are tiny compared to cash flow from tax-sheltered capital consumption allowance. (9) Capital spending looks normal, not abnormally weak. (10) Corporate credits may be junkier, but don’t ignore vultures ready to scoop them up at distressed prices. They may be credit markets’ shock absorbers. (11) Melissa does some fact checking on a few of Pearlstein’s sources.

The Strange Case of Dr. Jekyll and Mr. Hyde
(1) Trump’s split personality driving stock investors bonkers. (2) Uptrend of monthly indicators suggests Q2 real GDP growth over 4.0%. (3) Jobless claims near record lows. (4) Boom-Bust Barometer at record highs. (5) Forward earnings still rising vertically to record highs. (6) Tariffs: From saber-rattling to shooting bullets. (7) Tariffs boosting prices of steel and washing machines. (8) Stocks holding up remarkably well thanks to earnings. (9) Bonds ignoring inflationary signals that may be mostly attributable to rising oil prices, which fell sharply on Friday. (10) The Fed is neither dovish nor hawkish. It is on course. (11) ECB is both hawkish and dovish. (12) BOJ is dovish. (13) Movie review: “Gotti” (- -).

Equilibrium Oil?
(1) Tug of war in the oil patch. (2) Miracle on oil: US producing a record 10.8 mbd. (3) OPEC meets next week as Saudis and Russians up output. (4) Venezuela is a mess, and Iran is facing renewed sanctions. (5) Tipping point for renewables. (6) Cheaper batteries. (7) That’s entertainment. (8) Tug of war between cost-push inflation and robots.

Growling Bears
(1) Out of hibernation. (2) S&P 500 200-dma remains on uptrend in record territory. (3) Setting the stage for new record highs, or a bear market? (4) Bad breadth comes and goes. (5) Sentiment isn’t too hot or too cold. (6) Broken records for forward revenues and earnings. (7) SmallCaps at record highs as investors come back home. (8) Small business owners ecstatic about their earnings. (9) Fewer complaining about taxes and government regulations. (10) Three growling bears.

Do US Budget Deficits Matter?
(1) Swelling deficits are baked in the cake. (2) How to avoid shutting down the government: Spend more! (3) US budget deficit goes from automatic stabilizer to late-expansion booster. (4) Social Security trust fund is an accounting fiction. (5) From surpluses to deficits as the Baby Boomers retire. (6) Lots of retiring old NILFs. (7) Fed’s balance-sheet tapering adding to supply of Treasuries. (8) A report full of mumbo-jumbo about a fake trust fund. (9) So why aren’t bond yields higher? (10) Don’t go with the flows.

Tuning Out the Noise
(1) The most bullish and bearish President ever. (2) S&P 500 cyclical sectors performing best ytd despite protectionism. (3) S&P 500 defensive sectors notch worst performance ytd because of rising bond yield. (4) SMidCaps outperforming LargeCaps on fears about global economic outlook. (5) Yet Dr. Copper may be turning more bullish on global economy. (6) Q1 data for nonfinancial corporations shows a 36% drop in effective tax rate. (7) A short users’ guide for the GDPNow model. (8) Mary Meeker’s excellent slide show.

Vertical Earnings
(1) Handful of S&P 500 industries showing moonshot earnings. (2) Tax cut provided most, but not all, of the rocket fuel. (3) Industries with out-of-this-world earnings mostly in Tech, Consumer Discretionary, Industrials, Materials, and Energy. (4) Amazing Amazon! (5) Entertaining earnings in Movies & Entertainment industry. (6) CAT earnings expectations are hot despite threats of protectionism. (7) Rising commodity promises boosting Energy and Materials earnings, confirming solid global economy. (8) Sandra explains the art of Italian politics. (9) As shown in the opera Pagliacci, comedies can end tragically.

Around the World
(1) Trump’s monkey wrench. (2) Commodities holding their regained ground. (3) Fed’s gradual normalization and Trump’s protectionism lift dollar. (4) Higher US interest rates and stronger US dollar is a bad cocktail mix for some emerging economies. (5) Our international capital flows indicator could soon be signaling outflows from the rest of the world to the US if dollar remains strong. (6) Global M-PMI is down from recent peak, but still solid. (7) Some signs of weakness in global exports. Blame Trump? (8) Forward revenues for major MSCI global stock composites showing strength, not weakness. (9) Stay Home may trump Go Global as long as Trump goes rogue on protectionism.

Corporate Finance Extravaganza
(1) Diving into the data to see how TCJA impacts corporate finance. (2) Tax on repatriated earnings treated as capital transfer from business to Treasury. (3) Moving from worldwide to territorial corporate tax system still leaves taxes to be paid on GILTI and BEAT. (4) Tax cut and capital consumption adjustment lift after-tax profits from current production and cash flow to record highs. (5) TCJA already lifting capital spending significantly among S&P 500 companies. (6) Protectionism is a potential wet blanket.

Keep on Trucking
(1) So far this year, S&P 500 has held up reasonably well despite lots of bearish noise. (2) Cyclical sectors mostly outperforming, while interest-rate-sensitive mostly underperforming. (3) SmallCaps at record high because they are less exposed to the global economy, which may be challenged by the strong dollar and protectionism. (4) Sounding the retreat alarm: Going back to Stay Home investment recommendation. (5) GDPNow now predicting 4.8% growth this quarter. (6) Record-high truck freight index belies shortage-of-truckers scare, as does truckers’ modest pay gain. (7) Our Earned Income Proxy at record high again. (8) Movie Review: “Adrift” (+ +).

Soap & Apple Chips
(1) Lots of soaps and stocks to choose from. (2) Consumer Staples got cheaper as bond yield rose this year. (3) Lots of M&A in the Consumer Staples space. (4) Getting hipper. (5) Pepsi goes organic. (6) Others going to the dogs. (7) This is your brain on stem cells. (8) Meet the organoid.

The Italian Job
(1) The same Old Normal for Italian politics. (2) Eurosceptics ascending in Italy. (3) How much more can Draghi do to save the euro? (4) ECB likely to postpone monetary normalization till next year. (5) ECB has failed to revive inflation and to stimulate much lending…and now this! (6) TARGET2 payments system shows mounting imbalance between Germany’s surplus and PIIGS deficit. (7) Italian crisis flattens US yield curve in a way that might pause the Fed’s gradual normalization. (8) Another summertime crisis in Eurozone.

Recession Watch List
(1) Second longest day’s journey into the longest day. (2) Fielding questions in North Carolina and Texas. (3) Is it monetary “normalization” or tightening? (4) In the past, rising interest rates rose until they caused a financial crisis, a credit crunch, and a recession. (5) Slicing and dicing the yield curve. (6) Will credit markets start to crack in the corporate bond sector this time? (7) Trump makes a deal with the Saudis by breaking Obama’s Iran deal. (8) Rounding up the usual troublemakers in the Eurozone. (9) Trade war…yada, yada, yada. (10) Fed officials worrying about flattening yield curve. (11) Is it the third mandate?

Surviving In Amazon World
(1) Widening 2018 performance gaps among the sectors. (2) Kohl’s, Macy’s, and TJX repairing their business models. (3) Zuckerberg goes to Brussels. (4) Zuck beats the clock in bizarre one-hour session with EU legislators. (5) EU’s General Data Protection Regulation aims to protect online privacy. (6) Facebook giving European users take-it-or-leave-it option.

Focusing on the Signal
(1) Backward vs forward looking P/Es. (2) Too bearish vs too bullish. (3) Stay bullish as long as no recession in sight. (4) Stripping down the Blue Angels into a noise-to-signal model. (5) Fed’s Williams is passionate about r-star, and wouldn’t mind higher inflation. (6) Fed Chairman Powell claims he isn’t worried about impact of tightening US monetary policy on EMEs. (7) So why did he give a speech on the topic?

Some Like It Hot
(1) Another relief rally following another panic attack? Probably. (2) Declaring a ceasefire before trade war has even started! (3) Chatter about shortage of liquidity is drying up. (4) Going forward, profits earned abroad will no longer be taxed in US. (5) Record year ahead for sum of buybacks and dividends. (6) Q1 S&P 500 earnings up 24%! (7) Latest economic indicators indicating no boom, no bust.

Bond Market’s Message
(1) Fed, not inflation, is driving bond yields higher. (2) Fed isn’t behind the curve on inflation. (3) Peak bond yield likely to be 3.50% over next 12-18 months. (4) Bond Vigilantes Model compares nominal GDP growth and bond yield. (5) Fewer reasons to be vigilant since 2008 as central bankers eased to avert deflation. (6) Inflation Premium Model based on unmeasurable r*. (7) Yield Curve Model posits that shape of yield curve indicates outlook for short-term interest rates. (8) Bond yield discounting not only investors’ inflationary expectations but also Fed’s perceived inflationary expectations and policy response. (9) Does the federal budget deficit matter? (10) Foreign bond yields matter.

Google’s World
(1) AI: The good, the bad, and the ugly. (2) Want a robot personal assistant to schedule your appointments? Just don’t get it mad. (3) Fear grips Industrials sector after a CAT call—buying opportunity? (4) Korean deal far from a done deal.

Capital Ideas
(1) From giddy about tax cut to confused about full impact, while worrying about trade war. (2) Short wait-and-see period? (3) CEO survey is more bullish for capex than are capex indicators. (4) Capex as a percentage of cash flow is down from previous highs. (5) Business spending on high tech is flying high, not counting computer hardware, stalled by the cloud. (6) Plenty of cash for capex and buybacks. (7) Will NAFTA exist mañana? (8) Italy remains ungovernable and a thorn for EU.

Revisiting the Phillips Curve
(1) Commercial break. (2) Yellen was a fan of Phillips Curve Model while she was Fed chair. Powell not so much. (3) When is a flat curve not a curve? (4) Phillips curve not totally dead, but with jobless rate at 3.9%, wage inflation should be closer to 4.0% than to 2.5%. (5) Wage inflation showing more lift in goods than in services. (6) Price inflation showing more lift in services than in goods. (7) Rent inflation boosting services inflation. (8) Low price inflation (resulting from disinflationary structural forces) may be driving, and keeping a lid on wage inflation.

What Are They Smoking?
(1) High on life, revenues, and earnings. (2) Revenues are strongest among cyclical sectors. (3) As latest earnings season unfolds, Q1 beat expectations, yet remaining quarters remain unchanged. (4) Analysts now predicting earnings will grow 21% this year and 10% next year. (5) Profit margins at record highs. (6) Margins could get squeezed by more outlays on labor and capital. (7) Our earnings estimates are upbeat, but not as much as analysts’ consensus. (8) Alternative earnings scenarios are mostly bullish for stock prices.

AlterEgo
(1) S&P 500 unfazed by 3% bond yield. (2) No sign of tightening credit in junk bond yield spread. (3) Forward P/E has much more noise and less signal than does forward earnings. (4) Our Boom-Bust Barometer is at a record high. (5) Consumer Discretionary R&R companies reporting solid results at their various resorts. (6) Tech companies continue to mess with our heads. (7) AI may soon help you find the keys you lost.

Cautiously Optimistic Central Bankers
(1) More caution than optimism. (2) Fed’s Williams and Dudley wouldn’t mind a brief inflation overshoot. (3) Fed’s 2% inflation target is viewed as a tight range around this mean. (4) Fed officials conceding Phillips curve is flat-lining. (5) Draghi dragging his feet, saying “patience, persistence and prudence” will drive monetary policy. (6) Eurozone’s economy is debatable at the ECB. (7) Eurozone’s flash CPI not very bright. (8) ECB sticking with its asset-buying program for now. (9) Kuroda will tell you where inflation is going, but won’t say when it will get there.

Worldly Matters
(1) Slowdown chatter picking up. (2) Diffusion indexes are cyclical and trendless. (3) Global PMI remains on solid ground. (4) CRB index, especially its metals component, confirming global strength. (5) Oil price remarkably strong despite lots of oil supplies, suggesting global demand is strong. (6) All Country World MSCI forward revenues setting records. (7) Phillips curve is flat on its back. (8) Price disinflation keeping a lid on wage inflation. (9) Wage gains continue to outpace price increases. So real wages are at a record high.

Zigzagging Markets
(1) Insane volatility. (2) Stocks fall on some better-than-expected earnings, but rise on other positive surprises. (3) No recession out there unless trade wars break out. (4) Investors aren’t sure whether rate hikes and yield curve flattening are bearish or not. (5) If the Fed is ahead of inflation, then expansion can continue for a long while. (6) Deregulation is bullish, while regulation is bearish. But what if they happen at the same time? (7) The Trump reality show: We are all in it together, like it or not. (8) The dollar’s recent strength may be signaling weaker global economy, or reflecting divergence in central bank policies. (9) Firm commodity prices suggest global economy growth remains firm.

Winds of Change
(1) Turbulent stock market has brought P/Es back to reasonable levels. (2) S&P 500 forward P/E now stands at 20-year historical average. (3) Certain sectors look particularly attractive. (4) Telecom faces volatile business environment, disrupted by consumer choice. (5) Telcos’ response: M&A. (6) Disruptor extraordinaire Jeff Bezos casts his sights beyond Earth.

Peak Earnings Sense & Nonsense
(1) Has the market discounted “peak earnings?” (2) An important distinction between growth and level of earnings. (3) Forward earnings continue to make record highs. (4) Earnings giveth, while P/Es taketh away. (5) The earnings trend is our friend. (6) 2019 earnings at $166 per share a solid bet … now go figure year-end 2018 P/E to get S&P 500 price target. (7) Comparing dividend yield and interest rates to time recessions and bear markets doesn’t work very well. (8) The second-longest expansion could be the longest next July. (9) Watching out for the next financial crisis and recession.

Fed on Course
(1) Victory dance at the Fed as inflation approaches 2.0% target. (2) Three more rate hikes this year, in June, September, and December. (3) Federal funds rate hasn’t exceeded core PCED inflation since March 2008. (4) No inverted yield curve in our outlook. (5) Mounting cost pressures more likely to come out of record profit margins than to push prices higher. (6) Regional surveys of “prices paid” reflecting higher commodity costs. (7) Employment Cost Index showing more of an upward trend in wage inflation than average hourly earnings. (8) Fed was right to expect reversal in transient factors that depressed inflation last year. (9) Rent inflation might have peaked, as the number of owner-occupied households has been increasing while renting ones decline.

Trade Talk
(1) China’s IDAR approach is major source of trade tensions. (2) Protectionism is mostly talk for now. (3) China and US have plenty of time to negotiate trade deal. (4) Keeping a timeline on trade developments. (5) China offering some concessions already, but they don’t add up to much. (6) Often it helps to have a Chinese partner in China. (7) Mexico’s production stalls at record high awaiting NAFTA outcome and mounting political risk from a leftist presidential candidate called “AMLO.” (8) Other than NAFTA talks, Canadians face challenges, with an inflated housing market and uncertainty about commodity prices and currency value. (9) Movie review: “A Quiet Place” (- -).

CAT on a Hot Tin Roof
(1) CAT’s CFO learns that loose lips sink stocks. (2) CAT’s CEO walking back on peaking talk. (3) CAT’s major customers are running hot or at least hotter. (4) Mixed bag of earnings for Industrials. (5) Electric cars are coming. (6) Tesla misses production targets and plans to open plant in China (without Chinese partner!). (7) Volkswagen paying the price for diesel scandal by installing electric-car charging stations in US. (8) Clock is ticking for fast NAFTA deal.

Earnings: New Highs
(1) Impact of TCJA on earnings is a work in progress. (2) Back to old normal growth for earnings next year. (3) Analysts expecting S&P 500 profit margin to rise from 10.5% in 2017 to 11.8% this year and 12.4% next year. (4) S&P 500/400/600 forward revenues and earnings still making record highs. (5) Boom-Bust Barometer and Fundamental Stock Market Indicator remain in record-high territory. (6) So far, corporate managements not as giddy about earnings as they were during previous earnings season. (7) A few examples of DJIA companies talking about the impact of TCJA on earnings.

The Longest Expansion
(1) A short review of the supply-side religion. (2) The central dogma: Tax cuts pay for themselves. (3) Fact-based vs faith-based economics. (4) Some of the supply-side stimulus leaks out through the widening trade deficit. (5) Supply-side stimulus in a fully employed economy can increase net interest cost for the government. (6) Fed officials thinking out loud about fiscal policy stimulus. (7) Index of Coincident Economic Indicators shows economy still growing around 2.0%. (8) Yield curve is just one of 10 components of Index of Leading Economic Indicators. (9) No boom, no bust. (10) This expansion has a shot at the record books.

Lots of Commotion
(1) What’s worse: a flattening yield curve or rising bond yields? (2) By raising federal funds rate, Fed is signaling confidence in economy and storing up ammo to fight next recession. (3) The Fed is on top of the curve, neither behind nor ahead of it. (4) Bond yield target for rest of year: 3.00-3.50%. (5) Inflationary expectations rising along with oil and other commodity prices. (6) Despite flat US yield curve, no recession in global economy according to commodity prices. (7) No recession in credit quality spread or LEI. (8) German and Japanese bond yields remain near zero as ECB and BOJ balance sheets continue to swell. (9) Peak oil demand vs peak oil supply. (10) Remarkable strength in oil prices given soaring US and Canadian oil output. (11) Movie Review: “The Death of Stalin” (+ +).

Behavior Modification Empires
(1) Tech and Consumer Discretionary lead the pack ytd. (2) Latest relief rally includes interest-rate-sensitive sectors. (3) Flattening yield curve flattens Financials. (4) Zuckerberg has been in our Facebooks. (5) Loyalty prediction AI tools know who they can and cannot trust. (6) Self-breeding AI. (7) AI will be in the hands of the good, the bad, and the ugly soon. (8) Tech guru says that Google (motto: “Do no evil”) and Facebook (Like or not) have become mind-control vampires. (9) Time to require pay-to-play, instead of sell-my-privacy model. (10) Modern Monetary Theory says federal government budget deficits don’t matter until they do matter (when inflation makes a comeback).

Lots of Debt
(1) China’s engine running on bank loans. (2) No credit crunch for China as long as inflation remains subdued. (3) Chinese bank loans funded by Chinese depositors. (4) Less and less bang per yuan? (5) CBO projecting $1.2 trillion per year, on average, in federal budget deficit through 2028. (6) Public debt set to double again over next 10 years. (7) CBO not drinking supply-side Kool-Aid. (8) Interest paid by federal government set to triple over next 10 years. (9) Will tax cuts lift potential GDP’s growth rate? (10) Budget deficit may or may not matter when inflation is low, but will definitely matter if inflation rises.

More Ups Than Downs
(1) Retail sales is one of the three components of business sales. (2) Monthly business sales is a good leading indicator of S&P 500 revenues. (3) The revenues growth cycle may be peaking. (4) The Energy-led growth recession and recovery may have run their courses. (5) After exuberant upward revisions, analysts may be starting to curb their enthusiasm about revenues. (6) US PMIs remain upbeat on S&P 500 revenues growth. (7) GDPNow down to 1.9%. (8) Three explanations for why retail sales were so weak during Q1. (9) Online retail sales now at record 31.0% of GAFO sales.

Inflating Inflation
(1) The “fret level.” (2) Trade War Watch: Xi concedes a little, while Trump has second thoughts about TPP. (3) Trump channeling Reagan rather than Hoover on trade. (4) Our fearless leader is impetuous on trade as on other matters. (5) Next fret: Back to worrying about inflation? (6) Rising PPI costs likely to pinch profit margins fattened by tax cuts rather than getting pushed up into CPI. (7) Rising costs mostly attributable to rising commodity prices, particularly oil prices. (8) The Fed sends a memo about inflation to investors: Don’t fret. (9) Overshooting inflation target might not change Fed’s gradual pace of normalization. (10) “Beirut” (+).

Earnings, Genes & Brazil
(1) What do earnings, genes, and Brazil have in common? They’re all remarkable. (2) Get ready for a great Q1 reporting season. (3) Q1 earnings growth in high teens expected; analysts see roughly 20% growth in 2Q, 3Q, and 4Q. (4) Analysts have been upping earnings sights dramatically, for Q1 and 2018, across nearly all sectors. (5) Novartis pays up to beef up its gene-editing capabilities with acquisition of AveXis. (6) Brazil’s MSCI Index has stumbled in April as presidential contender Lula heads off to the clinker. (7) A lulu of a buying opportunity?

Trade War Over Already?
(1) Trade war and peace. (2) The Chinese President’s speech. (3) A perfectly reasonable emperor for life. (4) Xi has turned into one of globalization’s biggest defenders. (5) Trump’s bilateral approach to making free trade fairer may be working. (6) Is Panic Attack #60 over yet? If so: Here comes another relief rally. (7) The best late-cycle earnings season ever. (8) Shortage of truck drivers hasn’t stopped ATA Truck Tonnage Index from making new highs. (9) Record-high tonnage per truck driver: productivity or overtime?

Meet John Williams
(1) A big promotion at the Fed. (2) A voter for all seasons. (3) Williams is a gradualist. His dots are in the middle of the pack. (4) Fed aiming for 3.50% by 2020. (5) Fed study says new normal for real GDP growth is 1.6%. (6) Williams agrees that’s the trend, which is counter to the projections of Trump’s supply-siders. (7) Demography is determining weak labor force growth. (8) Waiting for technology to boost productivity growth. (9) Why aren’t wages up 3%-4% by now? (10) Baby Boomers aren’t retiring and aren’t getting paid more.

One-Man Plunge-Protection Committee
(1) Chronology of recent trade war of words (TWW). (2) China and US playing tit for tat. (3) It takes two to tango. (4) Kudlow playing role of good cop on trade. (5) Kudlow hopes he can beat the Mooch. (6) Never a dull moment in the Trump House. (7) Noise vs signal and signal vs signal. (8) Corrections are followed by rebounds or they turn into bear markets. (9) Counting on better-than-expected earnings to offset TWW. (10) Fundamental Stock Market Indicator remains fundamentally strong. (11) “Chappaquiddick” (+ + +) is a remarkable movie reminding us that the Kennedy clan’s Camelot was anything but.

Margin Pressures
(1) Is the market-cap weight of the Tech sector too high? (2) Tech earnings justify high market-cap share, but not if the sector’s profit margins are at risk. (3) Why is Walmart eyeing Humana? (4) While overall inflation remains subdued, there are a few signs of mounting inflationary pressures. (5) Striking teachers and shortage of truck-driving Teamsters. (6) USTR report says China doesn’t play fair.

Trump’s Bumps, Slumps, and Thumps
(1) Still looks like a solid global synchronized boom. (2) The world’s economies are too interdependent for protectionism to prevail. (3) Good growth in global trade stats. (4) Lots of upbeat M-PMIs in March around the world. (5) Forward revenues of All Country World MSCI rising rapidly in record-high territory, led by the US. (6) Net Revenues Revisions Indexes remain positive, with lots of the upward revisions in the US. (7) Is Trump bullish or bearish for the stock market?

Record Corporate Cash Flow
(1) April is a big month for dividend payouts. (2) That might explain “Go away in May.” (3) TCJA likely to provide one-time boost to level of dividends. (4) Repatriated earnings likely to boost buybacks more than dividends. (5) February outflows from equity funds surprisingly small given the selloff in stocks that month. (6) US-based ETFs still seeing large net inflows, especially to global ones. (7) Foreign investors warmed up to US stocks last year. (8) Solid gains in NIPA profits from current production last year. (9) Plenty of corporate cash available from internal funds and bond issuance to fund lots of share buybacks and capital spending.

Speed Bump for Tech
(1) Assessing the tech wreck. (2) In the future, there will be more innovation. (3) Nvidia’s man in a black leather jacket is bullish on the future. (4) A terrible accident won’t stop self-driving cars. (5) A reasonably valued sector with some outliers. (6) Safe havens are less stormy now that the bond yield has edged lower. (7) Food fight among grocers. (8) Takeout meals delivered to your front door. (9) Fulfilling is getting more costly. (10) What’s the difference between the business practices of China and the Corleones? Scale.

In the Spring, There Will Be Growth
(1) Goldilocks likes spring best of the four seasons. (2) Chauncey’s economic forecast. (3) Q1 earnings season is coming, and it could be better than expected despite upward earnings revisions. (4) S&P 500/400/600 revenues outlook continues to improve. (5) Analysts still revising S&P 500 revenues higher on balance. (6) Earnings expected to grow around 20% for S&P 500 this year. (7) Still plenty of buybacks and dividend payouts to fuel bull market. (8) Consumers have the means to spend more. They also have the confidence to do so. (9) The unemployment rate is likely to fall further.

Meet Jerome Powell
(1) Hotcakes gum up Amazon’s algorithms. (2) Cheaper by the half dozen. (3) Six fed funds rate hikes since start of “normalization.” How many more to go? (4) 3.00% fed funds rate may be the new normal. (5) A refreshing change: Jerome Powell is a lawyer, not an economist. (6) Giving less weight to unobservable measures of slack. (7) The yield curve is neither here nor there. (8) Powell is a low-key middle-of-the-road fellow. (9) Taking a deep dive into the USTR’s case against China’s unfair trade practices. (10) The Chinese government wants more high-tech

Trade: War-Making or Deal-Making?
(1) US declares that China doesn’t play fair. (2) USTR issues 215-page report on China’s abusive trade practices, focusing on technology. (3) Trump likes to negotiate in public, which unnerves stock investors. (4) Trump aspires to be like Reagan, not Hoover, on trade. (5) “A treacherous path on trade.” (6) Panic Attack #60 isn’t over yet. (7) Remarkable divergence between forward earnings and forward P/E. (8) Not much happening in bond and commodity markets. (9) Major exporters already exempted from Trump’s tariffs on steel and aluminum. (10) Reading Trump’s temperament on trade: He likes to negotiate and win. (11) Like it or not, Trump is delivering on his campaign promises on trade.

Correcting Tech & Editing Genes
(1) Trifecta of bad headlines for Tech sector. (2) Facebook is in our faces. (3) Tech M&A will continue. (4) Earnings remain bullish for Tech, and valuations are reasonably high. (5) Tech IPOs still attracting buyers. (6) Crispr 101. (7) Cutting diseases out of our DNA. (8) Is there method in Trump’s March tariff madness?

Head Count
(1) Fed officials watch prime-age male dropouts. (2) Nonparticipating slackers. (3) Fed study finds that technology is creating “job polarization.” (4) Vanishing “middle-skills” jobs. (5) Education level matters more than ever. (6) Almost half of nonparticipating prime-age males are on daily pain medication. (7) Fed study explains productivity slowdown resulting from retiring older workers being replaced by younger ones. (8) Technology could overcome Age Wave in productivity equation. (9) Only immigration can halt America’s evolution to same aging profile as Japan’s current geriatric society.

The Animals Remain Spirited
(1) Animal spirits remain elevated following Trump’s Election Day upset. (2) Hard data on earnings are bullish for stocks, while other hard data are mixed. (3) CEOs are ecstatic. (4) Small business owners are euphoric. (5) Purchasing managers are upbeat. (6) Consumer optimism and our Boom-Bust Barometer are boosting our Weekly Leading index, which is bullish for stocks. (7) Weird Q1 weakness in GDP showing up again. (8) Truckers have the pedal to the metal. (9) Widening trade deficit may offset some of Trump’s fiscal stimulus.

Fair Is Foul, and Foul Is Fair
(1) Meet Ambassador Lighthizer, the US trade czar. (2) USTR’s report card on China’s trade fairness likely to show lots of “F”s. (3) Section 301 making a comeback as US weapon in trade negotiations, or trade war if deals aren’t made. (4) China’s government has big ambitions for state-run economy by 2025. (5) Imposing a price on trade theft. (6) WTO benefits China more than US! (7) Trump’s “America First” puts multilateral trade organizations second. (8) National security becomes a trade issue under Trump, or at least a negotiating position. (9) Steel tariffs may be a sideshow compared to trade conflict with China over technology and intellectual property. (10) Reagan’s team of supply-siders is back.

Retailing: Survival of the Fittest
(1) For the birds. (2) Doves, hawks, and cranes at the Fed. (3) Two FOMC voters see gradual rate hikes. (4) Two FOMC nonvoters see less and more gradual paths. (5) Last department stores standing do so by selling space. (6) Strategic partners are a survival strategy for retailers. (7) Toys Were Us. (8) Blockchain could solve Trump’s trade problem. (9) Maersk keeping track of shipping containers with blockchain. (10) US trade deficit problem worsening, especially with China, as US economy expands.

Slicing & Dicing TCJA Earnings Windfall
(1) More TCJA good news ahead in Q1-2018 earnings season. (2) Revenues also boosting earnings on better global growth, higher oil prices, and weaker dollar. (3) Upward earnings revisions for 2018 driven much more by TCJA than by better rvenues. (4) Profit margins jump as a result of TCJA. (5) Corporations likely to use TCJA windfall for capacity expansion, labor compensation, buy backs, and dividends. (6) While statutory tax rate was cut by 40%, effective rate was cut by 34%. (7) Repatriated earnings should bring back lots of cash, i.e., $1.9 trillion after taxes.

From Headwinds to Tailwinds
(1) Top Fed heads now seeing tailwinds rather than headwinds. (2) The Powell/Brainard tag team. (3) “Gradual” remains the word for rate hikes. (4) Transitory vs structural forces keeping a lid on inflation. (5) Fed is focused on still-depressed labor force participation rate of prime-aged males. (6) House of dollars built on stronger foundation than house of cards. (7) Record net worth for households, with new highs for stocks and homes. (8) Solid rebound in owners’ equity in homes. (9) Ratio of mortgage debt to disposable personal income is down sharply.

Following the Money
1) #1 Amazon Hot New Release in Investing. (2) Monthly data on equity mutual funds and ETFs showing record inflows into ETFs and lots pouring into all funds investing globally. (3) Nonfinancial corporations continue to buy back shares. (4) The Buffett ratio is looking as rich as it was when the tech bubble burst, but inflation and interest rates are lower. (5) Lots more people working full time. (6) Earned Income Proxy rises to yet another record high. (7) Wage inflation remains subdued, but continues to outpace price inflation. (8) The Phillips curve remains flat. (9) No shortage of bank loans in China. (10) Movie: “Red Sparrow” (+).

Meet Peter Navarro
(1) Navarro is a controversial fellow. (2) Trade as a national security issue rather than an economic one. (3) He is opposed to foreign direct investments fueled by US trade deficits. (4) Focusing on trade deficit in goods and ignoring surplus in services. (5) Free and fair trade is the goal. (6) Will Navarro get Cohn’s job? (7) Jackie reviews the regulatory unshackling of the Financials. (8) The latest sensation among gamers: Fortnite.

Eurozone Seems Unruly
(1) Eurozone stocks remain as cheap as ever relative to US stocks. (2) It took six months to form a weak German coalition government. (3) There is actually an anti-bailout party in Germany. (4) Merkel’s fourth term will be as a lame duck. (5) German liberals will have more power to spend money. (6) German IFO and M-PMI dip, but remain high. (7) Italy’s latest election produced the usual political circus. (8) Euroskeptics are gaining power in Germany and Italy.

Known Knowns & Unknowns
(1) Tight labor market in US. (2) Global Growth Barometer trending higher. (3) Exports are booming and so are imports, resulting in wider trade deficit. (4) Global export indicators are booming. (5) Revenues per share of All Country World MSCI is at a record high. (6) Analysts now expect TCJA to add almost $12 per share to S&P 500 earnings this year. (7) Protectionism may or may not be a problem. (8) Inflation may or may not remain subdued. (9) The Bond Vigilantes may or may not saddle up.

Dow Vigilantes
(1) The 61st panic attack or more of the 60th? (2) Bearishness about monetary tightening and protectionism offset bullishness of TCJA. (3) One day, a panic attack will be followed by a bear market rather than a relief rally. (4) Trump-led protectionism is a cause for concern. (5) Is Trump going to be like Reagan or like Hoover on trade? (6) Whirlpool got taken to the cleaners. (7) The WTO might temper Trump’s trade tantrum. (8) The Dow Vigilantes could do the same. (9) US economy is cruising so nicely. Why spoil it in time for the mid-term elections? (10) Fed Chairman Powell likely to pursue course of gradual normalization of monetary policy. (11) Movie: “Black Panther” (+).

Phones & Homes
(1) Ready or not: 5G is coming fast. (2) The running of the telecom bulls in Barcelona. (3) Phone service for the IoT. (4) Billions of dollars of new telco infrastructure spending. (5) Washington wants to help. (6) A major facelift coming for S&P Telecom sector. (7) Disappointing housing stats reflect bad weather in Northeast and supply shortage. (8) Toll’s happy tale.

Giddy Up!
(1) Mini-version of 1987. (2) Déjà vu all over again. (3) Updating the bullish impact of TCJA on earnings. (4) Giddy talk on CNBC resulting from giddy talk during latest earnings season conference call. (5) Melissa tunes in to the conference calls of the 30 DJIA corporations. (6) “[D]oggone good!” (7) Tax reform making US companies more competitive, with greater “capital flexibility.” (8) TCJA windfall likely to boost capital spending, buybacks, dividends, and employee benefits. (9) Lots of talk about funding organic growth rather than M&A.

Earnings Are Great Again
(1) Earnings in outer space. (2) Earnings were on course to be great again before Trump, and now will be even greater after TCJA. (3) Revenues growth above 9% y/y during Q4. (4) Forward revenues at record high. (5) Double-digit earnings growth during 2017 will be followed by more of the same in 2018. (6) Forward earnings signaling $160 per share in 2018. (7) Profit margin rose to new record high during Q4, and that was before TCJA will push it higher! (8) Lots of new record highs for revenues and earnings among the 11 sectors of the S&P 500.

Fed on Inflation Watch
(1) Panic attacks come and go. (2) Was the 60th panic attack really a correction since it was so short? (3) Wish came true for correction hunters. (4) The latest flash crash was an abridged version of Black Monday (October 19, 1987). (5) No sign of imminent recession in LEI or CEI. (6) Growth rate of CEI suggests real GDP growth remains around 2% y/y. (7) No boom, no bust. (8) Will the Bond Vigilantes spoil the party? (9) Bond yields are normalizing. (10) Fed officials rooting for inflation to rise to their 2% target. (11) Fed staff conceding macro inflation models aren’t working, yet Fed officials continue relying on them.

Deflating & Inflating Industries
(1) Amazon is eating the lunch of brand names. (2) Walmart’s disappointing counterattack. (3) Squeezing the ketchup makers. (4) Materials companies have pricing power. (5) Trump’s infrastructure spending planning is a starting point. (6) Trump administration considering limiting imports of steel and aluminum. (7) Robots are learning to knit. (8) Swedes go cashless. (9) BP boosting its forecast for number of electric cars.

Soarin’ Fundamentals for Stocks
(1) The Magic Kingdom. (2) FastPass+ is the way to go. (3) Our Boom-Bust Barometer is soaring to new highs. (4) The same goes for our Weekly Leading Index, as weekly consumer confidence soars. (5) Forward earnings has been flying. (6) Analysts raised S&P 500 earnings for 2018 by over $11 since TCJA. (7) A year’s increase in 9 weeks for 2018 earnings of S&P 500/400/600. (8) Joe drills down to the S&P 500 sectors and industries to determine impacts of TCJA.

Living with Lowflation
(1) The 60th panic attack. (2) The 60th relief rally. (3) Learning to live with slightly higher lowflation. (4) Inflation indicators mostly show mounting inflation pressures, or maybe not. (5) Liquidity is a fluid concept. (6) Combined balance sheets of Fed, ECB, and BOJ still expanding. (7) Chinese banks are flooding China with liquidity. (8) Flood of repatriated earnings heading back to US. (9) TCJA adding lots of bucks to earnings. (10) Watching out for inflation.

Life on the Edge
(1) Will the cloud lose to the edge? (2) More devices connected to the Internet. (3) Every millisecond counts. (4) Disrupting the disruptors. (5) Internet of Things requires lots of semiconductors. (6) Powell won’t take the punch bowl away, but he won’t be adding any more punch. (7) The value of the trade-weighted dollar is mostly determined by relative growth of US to the rest of the world. (8) ECB seeing expansion rather than recovery in Eurozone. (9) Chinese currency has been strong. (10) The dollar has its ups and downs.

Ups & Downs of the Dollar
(1) Will the weak dollar boost earnings and inflation too? (2) The stock market’s tug-of-war between earnings and valuation. (3) Dollar bulls have been surprised by dollar’s weakness since early 2017 despite three Fed rate hikes. (4) Dollar inversely correlated with Global Growth Barometer. (5) Dollar inversely correlated with S&P 500 revenues and earnings. (6) Dollar’s impact on inflation is fuzzy. (7) Go Global has made more sense than Stay Home since dollar peaked in early 2017. (8) Sandra’s scorecard for Italy’s political and economic scene.

Huge Jump in Earnings
(1) Analysts now saying TCJA adding $11-$12 per share to S&P 500 earnings this year. (2) Joe says $14-$15 is likely. (3) Earnings meltup should trump P/E meltdown. (4) Even revenue estimates seem to have gotten a big TCJA boost. (5) Raising our 2018 and 2019 S&P 500 earnings estimates to $155 and $166 based on trend growth plus TCJA bump. (6) Following TCJA upward earnings revisions, earnings forecasts should resume usual downward drift. (7) Sticking with 3100 year-end forecast for S&P 500 thanks to strong earnings tailwind. (8) Lots of upbeat earnings indicators.

Algorithms Behaving Badly
(1) Get a neck brace. (2) ETF-led flash crash. (3) S&P 500 down slightly from when taxes were cut at the end of last year. (4) The differences between the 2016 and 2018 tightening tantrums. (5) Bouncing off the 200-dma. (6) Consensus expected S&P 500 earnings for 2018 now almost $11 more than before tax cut. (7) Latest correction wasn’t a Black Swan event, strictly speaking. (8) Bond Vigilantes are saddling up. (9) Dudley’s small potatoes. (10) Fed is starting to taper its balance sheet just as fiscal policy is ballooning the federal budget deficit. (11) Raising our bond yield forecast to 3.00%-3.50%.

More Tax Windfalls
(1) The 1970s are back for US oil output. (2) US oil trade deficit is tiny. (3) US frackers may be about to put a lid on oil prices. (4) Energy earnings have been energized. (5) Exxon planning on spending more to make America even greater in oil production. (6) Exxon has been paying its taxes on foreign earnings. (7) Valero planning to buy back shares with extra cash. (8) Mickey’s effective tax rate will fall from 35% to 21%. (9) MaBell used cash windfall to pay bonuses and for medical plan, and will spend more on capital equipment.

Panic Attack #60
(1) Stock market still suffering from PTSD. (2) Counting the number of panic attacks on 12 hands. (3) A few Fed tapering and tightening tantrums along the way. (4) From FOMO to LIFO. (5) Missing Yellen already. (6) Asking to see the Powell Put. (7) No ETF flash crash so far. (8) Valuation correction leaves stocks pricey, but not excessively so. (9) It may be too late to panic.

Fundamentally Strong
(1) While valuation may be an issue, earnings are no problem for stock prices. (2) Measures of business revenues growth are strong. (3) S&P 500/400/600 forward revenues rising in record territory. (4) January M-PMIs confirm that global economy is strong. (5) TCJA has boosted analysts’ 2018 EPS consensus for S&P 500/400/600 by 6.2%, 5.1%, and 6.0% so far. (6) Each quarter of 2018 likely to show double-digit growth rates for S&P 500 earnings. (7) TCJA likely to reduce federal corporate income taxes from $283 billion last year to $211 billion this year.

666 Again!
(1) Robert Langdon, where are you? (2) A repeating number. (3) Another Black Monday today? (4) Analysts have raised S&P 500 EPS estimate for 2018 by $9.00 since tax cut! (5) Despite Friday’s wage-led panic attack, wage inflation remains subdued for most workers. (6) Higher wage inflation won’t necessarily beget higher price inflation. (7) Tightening tantrum started in the bond market earlier this year. (8) Welcome, Jerome Powell. Hope it isn’t 1987 all over again. (9) Fed’s Williams says stay calm. (10) Adieu, Fairy Godmother, we will miss you. (11) Can the bull charge ahead without fairy dust?

How To Spend Tax Windfalls
(1) Industrial sector was mighty strong even before tax cut. (2) Next boosters for sector could be infrastructure and defense spending. (3) Looking even better ex-GE. (4) Notes from three conference calls: Honeywell, Lockheed Martin, and Illinois Tool Works. (5) Repatriated earnings will be used for share buybacks, dividends, M&A, capital spending, and to increase matches for 401(k)s. (6) Simpler global tax structures will reduce accounting and legal costs. (7) The best offense is more defense spending. (8) Paying pension plans forward. (9) More R&D. (10) Hint of inflation. (11) Quacks disrupting healthcare.

Looking Under GDP’s Hood
(1) Growth is good and getting better. (2) The Q1 curse hitting Citigroup Economic Surprise Index. (3) Year-over-year growth in real GDP still more like 2.5% than 3.0%. (4) Will Trump’s tax cuts boost economy’s cruise speed? (5) Capital spending rebounding smartly, led by equipment spending. (6) Information processing equipment and software among the strongest components of capital spending. (7) Transportation equipment spending recovering from recent dip. (8) R&D at record high. (9) Inflationary pressures remain subdued in GDP

Profits: Us vs Them
(1) Profits growth during recoveries and expansions. (2) TCJA bumps earnings growth above 7% long-term trend line. (3) Analysts are predicting much higher earnings from tax cut than we are. (4) Stocks are more fairly valued if the analysts are right about earnings. (5) Analysts’ estimated tax-cut impact on corporate profits implies big hit to corporate taxes collected by US Treasury. (6) The Bond Vigilantes Model has been too bearish on bonds since the start of the current expansion. (7) Central banks’ QE programs and weak economic growth have kept yields down. (8) Fed rate hikes and normalization of ECB and BOJ monetary policies, along with faster US growth, could push US yields higher.

Don’t Worry, Be Wealthy
(1) Meltups don’t have to be followed by meltdowns if they are fundamentally based. (2) A brief chronology of our meltup call. (3) Let’s try a different analogy: simmering and boiling water. (4) HUGE increase in stock market wealth y/y. (5) Trickling up and down. (6) One-shot bonuses won’t boost wage inflation. (7) Sentiment as bullish as in early 1987. (8) The next bear market could be like 1987, when stocks recovered rapidly because there was no recession in earnings. (9) Movie Review: “Hostiles” (+).

Upward Revisions
(1) Drilling down to assess TCJA’s impact on S&P 500 sectors’ earnings estimates. (2) Big jump in S&P 500’s NERI, led by Financials sector. (3) Consensus earnings growth higher in 2018 than 2017 for most sectors! (4) Drilling down deeper to the industries showing biggest TCJA earnings spikes. (5) Financials 2018 earnings expectations broadly up in double-digits across all major industries. (6) US Bancorp working on four-minute loans. Do you want fries with that? (7) Fintech is in the Wild West.

Off the Charts
(1) The teetotaler-in-chief. (2) High on tweets. (3) Stocks are high on after-tax earnings. (4) Since the TCJA, industry analysts have been scrambling to boost earnings estimates. (5) Forward earnings rising faster than forward revenues, sending forward profit margins higher. (6) A good problem to have: stock prices going through the roof and our charts’ scales. (7) Adding another angel to Blue Angels. (8) Lovefest in Davos as IMF raises world economic outlook.

Commodity & Currency Review
(1) Stocks having more fun. (2) The length of a mile is getting shorter for stocks’ marathon runners. (3) DJIA’s 5000 markers. (4) Commodity prices signal global growth. (5) Dr. Copper is too busy making money to make house calls. (6) Oil prices rising despite lots of US oil production. (7) The trade-weighted dollar is inversely correlated with our Global Growth Barometer. (8) The former is weak, while the latter is strong.

Many Happy Returns
(1) The longest Santa Claus rally on record. (2) Trump vs FDR. (3) Market says: “Love him or hate him, don’t bet against him.” (4) Lots of happy returns as stock market soars. (5) Biggest corporate tax-cut winners are spreading the love to their workers. (6) US Treasury projected to collect more than $300 billion from more than $2 trillion of repatriated earnings. (7) Great Rotation beginning as money leaves bonds for stocks. (8) Political turmoil in Germany. (9) Germany’s economy booming. (9) Movie Review: “The Shape of Water” (+ +).

Autonomous Auto World
(1) Showing off auto technologies. (2) Hurricanes can be good for auto sales. (3) New cars competing with lots of cheaper used ones. (4) Driverless cars will arrive soon. (5) Wirelessly networked cities. (6) The big debate: will driverless cars decrease or increase traffic congestion? (7) We are all Ubers now. (9) Amazon on wheels.

Valuation: Beauty & the Beast
(1) More on earnings-led vs P/E-led meltups. (2) The former is more sustainable than the latter. (3) Is the “Great Rotation” finally starting? (4) Buffett Ratio is going higher, according to S&P 500 price-to-sales ratio. (5) Forward earnings soaring while forward revenues are flying. (6) REY and MAPE models show fairly valued market. (7) More on impact of TCJA on earnings. (8) DTA vs DTL.

Earnings-Led Meltup
(1) Meltup odds rising. (2) Odds of a meltdown haven’t increased. (3) Bullishness is over the top. (4) Is an earnings-led meltup a meltup? (5) Analysts are just starting to boost their earnings estimates in response to tax cuts. (6) Revenue and profit margin estimates are also rising. (7) Companies are starting to share their windfalls with workers. (8) A bull market within a bull market. (9) Global economic indicators continue to heat up. (10) 666 again! (11) Movie review: “The Post” (+).

FANG-dango
(1) Taking a shower with Alexa. (2) FANGs gaining market cap share. (3) Say “hi” to Alexa Voice Services. (4) Semiconductor firms are big winners. (5) Volocopters are coming. (6) FANGs cannibalizing FANGs. (7) FANGs under attack by regulators and critics. (8) Show biz has turned into a blood sport.

Revisiting Animal Spirits
(1) Animal spirits higher today than a year ago. (2) The “hard” data is looking harder than a year ago. (3) Remarkable reversal in surprise index. (4) No more chatter about “secular stagnation.” (5) Consumer and business surveys showing that jobs are plentiful and available workers are not. (6) Fewer small businesses complaining about government regulations. (7) M-PMI orders index through the roof. (8) TCJA is jacking up consensus earnings forecasts. (9) Q1 data likely to be firmer than during the previous Q1s of current expansion.

Tax Reform: What’s Really in this Sausage?
(1) TCJA is the sausage de jour coming out of DC’s sausage factory. (2) $1.3 trillion in corporate tax windfall over next 10 years has some sizeable offsets. (3) Net interest deduction is capped. (4) It doesn’t pay to have lots of debt anymore. (5) NOL deduction is also limited. (6) New rules for R&E amortization. (7) Big bonus for depreciating assets. (8) Different strokes for different folks. (9) Will the repatriated profits windfall go to buybacks, dividends, bonuses, or capital spending? Or all of the above? (10) Very interesting earnings conference calls ahead!

Crying Wolff
(1) Author Wolff cries that “wolf” is in the White House. (2) Beware of psychiatrists offering free analysis. (3) Tweets from the genius with the biggest button. (4) Investors see more upside in global economy than downside from latest Washington circus. (5) Global PMIs are hot. (6) Dr. Copper is upbeat. (7) Earnings expectations are pumped up for earnings season. (8) Bulls showing no fear of bears or wolves. (9) Despite mismatch between lots of job openings and jobless workers, wage inflation remains subdued. (10) A match made in Heaven for stock investors: solid growth with low inflation. (11) Double Feature Movie Review: “Molly’s Game” and “I, Tonya” are both rated (+ +).

2018: More Happy Returns?
(1) Earnings expected to keep on trucking. (2) Higher oil prices and a weaker dollar are tailwinds for earnings. (3) Lots of positive earnings revisions leading up to corporate tax cut. (4) Reinsurance should bounce back, barring more disasters. (5) No disasters for other insurers last year, or this year. (6) Falling inventories and turmoil in Iran could give Energy sector an earnings boost, offset some by falling P/Es. (7) Outlook for Tech earnings winners still bright with reasonable P/Es. (8) Drone spotting.

Happy New Year!
(1) Back from abroad, and back to work. (2) Invest in Chinese tourists. (3) 2018: Continuation of the global synchronized boom. (4) Global trade growing solidly. (5) US economic surprise index very strong. (6) Housing may be starting to boom. (7) Trucking index off the chart. (8) Tax cuts could fuel a stock market meltup this year. (9) Deferred tax assets make analyzing effective tax rate a taxing exercise. (10) Movie Review: “All the Money in the World” (+ +).