No Longer Biding His TimeIt's hard to imagine, but this time next week (all being well) the U.S. will have a new president. This changes a lot. But American presidents don't get everything their way, as the incumbent is learning. Joe Biden's critical first move, on which much political capital for the rest of his four-year term will depend, should be regarded as the opening bid in a very complicated game. We now have the outlines of the "stimulus" that he will present to Congress. He plans to ask for $1.9 trillion, in a package that will include $400 billion in measures directly tied to fighting the pandemic, plus another round of checks for all Americans, regardless of income, as well as a doubling of the federal minimum wage, extension of unemployment benefits, and aid for states, cities and rapid transit systems. With wafer-thin majorities in both houses of Congress, the chance that the entire package passes in its current form is minimal. But Biden may be learning a tactical lesson from his bruising experience in 2009 when he and President Barack Obama arguably settled for too little in similar circumstances, in an unsuccessful attempt to bring Republican votes on board. The American Recovery and Reinvestment Act raised $787 billion in an attempt to administer a Keynesian stimulus in the wake of the financial crisis the previous year — but of this, 37% went to tax cuts and incentives, and 18% went in relief to cities and states. Less than half was devoted to a true attempt at pump-priming. The measure still failed to gain any Republican support. This time, it looks as though he is starting the bidding rather higher, which should please progressive economists who hold that he and Obama aimed too low last time. He also seems to have the intellectual heft of both the progressive and the pro-Wall Street moderate wings of his party behind him for now. Even if some measures fail — with the minimum wage and extra stimulus checks of $1,400 each being most contentious — the likelihood is that the package will be bigger and more stimulative than its 2008 predecessor. The more Biden can win on those most contentious issues, the more worried the bond market will grow about the possibility of inflation. As it stands, that worry still remains within reasonable limits. Bond yields have risen sharply since the U.S. Senate elections in Georgia increased the chance of expansive fiscal policy. As the Biden team fed his proposals to journalists during the day, there was no obvious sign of "bond vigilantes" taking fright. This is how the 10-year yield has moved so far this year:  Amid so much noise, the relative calm with which the bond market has greeted the announcement that the government wants to spend another $1.9 trillion will be encouraging for the Biden team. Meanwhile, he is lucky to have the Federal Reserve behind him. Probably the most market-sensitive event of the day saw Fed Chairman Jerome Powell take questions online. Many — myself included — have pointed to the risk of a repeat of 2013's Taper Tantrum, when the Fed's plans to withdraw support caused a spike in bond yields. Such an event could be much more damaging now. But Powell went out of his way to nix that possibility: We know we need to be very careful in communicating about asset purchases. Now is not the time to be talking about exit. I think that is another lesson of the global financial crisis, is be careful not to exit too early.
If the Fed makes a mistake, it looks like it will be to wait too long before preparing to exit. Going too early is highly unlikely to be a factor in the fiscal politics of the coming year. In recognition of this, stock markets are continuing to position for a "reflation trade," with energy and financial stocks leading the way since Pfizer Inc. announced its vaccine test results on Nov. 9:  In the very long term, Biden's determination to throw money at getting vaccine distribution right may be most important. It is on this, more than anything else, that long-term reflation depends. It is hard to imagine that this part of the plan will fail politically; but it could easily fail logistically. It will take time for that success or failure to become apparent. In the shorter term, expect the battle over the minimum wage and stimulus checks to dominate attention. Earnings SeasonWith the impeachment process under way, a presidential transition coming next week, and the coronavirus continuing to rampage through the West, often in new variants, it is easy to ignore corporate earnings. However, Friday sees the start of the most important reporting season, when companies issue full-year, more rigorously audited numbers and offer CEOs to speak about their prospects. It shouldn't be ignored. That said, the traditional "expectations game" in which companies talk down their performance ahead of results, and then reap good publicity and a ramp in the share price on beating those expectations, isn't likely to be played, for the second earnings season in a row. The third quarter saw more companies beating forecasts for both sales and profits than ever before, as BofA Securities Inc. catalogs here:  Part of this was due to the scrambling of perceptions caused by the pandemic; nobody quite knew what to think, and had little conviction in their forecasts. Further, third-quarter results arrived during the concluding weeks of the U.S. presidential election campaign and its immediate aftermath. As a result, nobody wanted to play. This summary is from Savita Subramanian, equity strategist at BofA Securities: 3Q marked the highest proportion of beats in our data history since 2000, but big beats were overshadowed by election headlines - companies that beat on both EPS and sales outperformed the S&P 500 by just 0.3ppt the following day, the smallest "beat alpha" since the Tech Bubble. Elections risk is behind us, but we still see signs that focusing on earnings results (what happened) is less profitable than what is going to happen (guidance). Since 2006, companies with upward guidance have outperformed the S&P 500 by almost 3ppt over the subsequent 5 days, ~2X the average beat alpha.
Disinclined to try again, the number of companies issuing new guidance during the fourth quarter was the lowest since 2000:  In other words, we probably won't notice how many companies beat their expectations bar, and will instead listen to what their managements are prepared to say about current conditions and the year ahead. This is healthy. That doesn't mean we will learn nothing. Current expectations suggest that earnings this year will almost recover to their pre-pandemic level for the beginning of 2019. And given the extraordinary way in which the S&P 500 has come untethered from its companies' earnings in recent years, it would be nice if they could start growing a bit more than that. A lot of growth is implicitly being priced in:  In this context, it is reassuring that the comfortable consensus at present is that this year should be good for earnings but bad for earnings multiples. There is also some optimism that profits can do a lot better than expected, on the basis of macro data that slowed noticeably in the last few weeks of 2020 but still appeared significantly stronger for the quarter as a whole than when many analysts drew up their forecasts. Bankim Chadha of Deutsche Bank AG shows that this is the third successive quarter for which expectations have improved as the results season approached, but that the estimate is still that fourth-quarter numbers will be lower than the third quarter:  Chadha's own forecast is that earnings can do considerably better than currently estimated: Strong macro growth and a weaker dollar both point up. On the growth side, a variety of indicators continued to strengthen from Q3 to Q4, rising to new cycle highs: PMIs in the US and globally; the levels of GDP, industrial production and retail sales. The US dollar also weakened significantly in Q4, with positive direct and indirect implications for most sector groups. EPS revisions have trailed global data surprises which continued to surprise massively to the upside through the quarter.
There will be much to learn from the data companies provide over the next few weeks. Perhaps the most interesting numbers will cover profit margins, which widened drastically in the early years of the last decade (thus increasing the great discontent with capitalism), only to tighten as companies attempted to weather the pandemic. In the third quarter, margins unexpectedly widened again. As this chart from Subramanian of BofA Securities shows, current forecasts call for margins to have tightened again in the fourth quarter, though to remain high by historical standards:  It will be fascinating to watch how companies restore their margins, or fail to do so, over the next year. Politically, they might feel under much less pressure from a new and potentially antagonistic U.S. government if margins narrowed — but that would be hard for the market to take given the giddy multiples at which stocks are now trading. For all the uncertainty, there is plenty of extreme behavior going on. It's possible to debate whether this is indicative of a bubble, or merely of speculative froth at the margin, but the signs of excess not seen in 20 years are unmistakable. My favorite new indicator of this is the Bespoke Investment "ludicrous" indicator. This adds up the total number of U.S. companies that have a market cap of $500 million or more (so they're not tiny), trade at a multiple of 10 or more times last year's sales, and have doubled in the last three months. Even Tesla Inc. didn't quite make all these criteria. But the number of companies that did is startlingly high:  The fact that more than 600 companies meet all of these ludicrous requirements, and that this number dwarfs anything seen in a decade, is deeply alarming. On the other hand, this is still less than half the number of stocks that met all of these criteria at the top of the dot-com bubble 21 years ago. That suggests we are still a way from matching such insanity. This could be January 1999, with much more money to be made before the crash, rather than February 2000. Presumably, such thinking motivates the people prepared to buy such stocks. However construed, these numbers are both ludicrous and perilous. Survival TipsThose of us who live in the U.S. have a long weekend to look forward to, thanks to Martin Luther King Jr. A Monday in the middle of January isn't a great time for a day off, so it still isn't universally observed, and generated some controversy when first designated a holiday. It has still sparked plenty of celebratory music wishing King a happy birthday, and over the years the songs about him have spread far beyond the U.S. If you have the time, it is worth watching the "I have a dream" speech in its entirety. It's only 17 minutes. King was a more political and less saintly figure than his current reputation suggests; but this speech is as great a piece of advocacy as there has ever been. His remarkable voice, honed in the pulpit, gives it a musical quality. His cadences and rhythms take a series of injustices about which his audience was deeply angry and created an inspirational and positive message instead. The issues for which King gave his life are still with us, and it would be commendable if politicians of all stripes could aspire to do something even half as good. Have a good (long) weekend. | 
⇉〖OpenLoad〗 2020 Superintelligence PelÃcula Completa En LÃnea released 2020. story: La vida de Carol Peters se trastorna cuando es selecci...
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