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2021-09-06

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Can The Bulls Defy The Odds Of September Weakness?<blockquote>多头能否挑战九月疲软的可能性？</blockquote>

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However, as discussed in our&nbsp;Daily Market Commentary&nbsp;on Wednesday:<blockquote>虽然我们之前讨论过 8 月份往往是一年中最疲软的月份之一，但多头将这种疲软定义为上涨了近 3%。然而，正如我们在每日市场评论周三：</blockquote> “August seasonality was a bust with the market advancing 2.6%. Will September seasonality prove to be more accurate?” <img src=\"https://static.tigerbbs.com/c476595aaa36e3658acd7c6b2458a4f3\" tg-width=\"533\" tg-height=\"371\" width=\"100%\" height=\"auto\"><blockquote>“8 月份的季节性表现不佳，市场上涨了 2.6%。9 月份的季节性会更准确吗？”</blockquote> For now, the bullish bias remains strong as a barrage of weaker than expected economic data from GDP to manufacturing and employment give hope the Fed may forestall their&nbsp;“tapering”&nbsp;plans. But, as we will discuss in a moment, we think the bulls may be correct for a different reason.<blockquote>目前，看涨偏见依然强烈，因为从 GDP 到制造业和就业等一系列弱于预期的经济数据给美联储可能阻止其“锥形”计划。但是，正如我们稍后会讨论的，我们认为多头可能出于不同的原因是正确的。</blockquote> However, in the meantime, the&nbsp;“stairstep”&nbsp;advance continues with fundamentally weak companies making substantial gains as speculation displaces investment in the market.&nbsp;Thus, while prices remain elevated, money flows weaken, suggesting the next downturn is roughly one to two weeks away.So far, those corrections remain limited to the 50-dma, which is approximately 3% lower than Friday’s close, but a 10% correction to the 200-dma remains a possibility.<blockquote>然而，与此同时，“楼梯”随着投机取代市场投资，基本面疲软的公司大幅上涨，市场继续上涨。因此，尽管价格仍然高企，但现金流却在减弱，这表明下一次经济衰退大约还有一到两周的时间。到目前为止，这些修正仍仅限于 50-dma，比周五收盘价低约 3%，但对 200-dma 进行 10% 的修正仍有可能。</blockquote> <img src=\"https://static.tigerbbs.com/3d1ab015b2782edccd8f71c842786623\" tg-width=\"900\" tg-height=\"534\" width=\"100%\" height=\"auto\">While there seems to be little concern relative to the market’s advance over the last year, maybe that should be the concern given the sharpness of that advance. I will discuss the history of “market melt-ups” and their eventual outcomes in an upcoming article. However, what is essential to notice is the corresponding ramp in valuations as earnings failto keep up with bullish expectations.<blockquote>虽然市场在过去一年中的上涨似乎没有什么令人担忧的地方，但鉴于市场上涨的幅度，也许这应该是令人担忧的地方。我将在即将发表的文章中讨论 “市场融化 ”的历史及其最终结果。然而，需要注意的是，随着盈利失败，估值也会相应上升to 跟上看涨预期。</blockquote> <img src=\"https://static.tigerbbs.com/32446c1ed4942c292051ab6f2646826f\" tg-width=\"836\" tg-height=\"460\" width=\"100%\" height=\"auto\">Significantly, investors never realize they are in a&nbsp;“melt-up”&nbsp;until after it is over.<blockquote>值得注意的是，投资者从未意识到他们正处于“融化”直到一切结束。</blockquote> Breadth Remains Weak As Market Advances<blockquote>随着市场的推进，广度仍然疲软</blockquote> At the moment, the bullish trend continues, and we must respect that trend for now. However, there are clear signs the advance is beginning to narrow markedly, which has historically served as a warning to investors.<blockquote>目前看涨趋势仍在继续，我们暂时必须尊重这一趋势。然而，有明显迹象表明，领先优势开始明显缩小，这在历史上一直是对投资者的警告。</blockquote> ”&nbsp;As shown in the chart below, although the S&amp;P 500 traded at an all-time high as recently as last week, the cumulative advance/decline (A/D) line for the broader NYSE universe peaked on June 11 this year. The divergence between the two looks similar to early-September last year—the point at which it was mostly the “big 5” stocks within the S&amp;P 500 (the “generals”) that had powered the S&amp;P 500 to its September 2, 2020 high.” – Charles Schwab <img src=\"https://static.tigerbbs.com/3bec2406de602b799eed4c8cda45840c\" tg-width=\"713\" tg-height=\"280\" width=\"100%\" height=\"auto\">“The percentage of S&amp;P 500 stocks trading above their 50-day moving averages peaked in April, troughed in June, improved until recently, but has come under pressure again. The same can’t be said for the NASDAQ and Russell 2000, which both peaked in early February, since which time they’ve generally been descending.”<blockquote>“如下图所示，尽管标普500上周还处于历史高位，但纽约证券交易所整体的累计涨跌幅线在今年6月11日达到峰值。两者之间的背离看起来与去年 9 月初相似--当时主要是标普500内的 “五大 ”股票（“将军”）推动标普500达到 2020 年 9 月 2 日的高点。查尔斯·施瓦布“标普500股票交易高于 50 天移动平均线的比例在 4 月份达到顶峰，在 6 月份达到低谷，直到最近才有所改善，但又再次面临压力。纳斯达克和罗素 2000 指数的情况就不一样了，这两个指数都在 2 月初达到顶峰，此后普遍呈下降趋势。”</blockquote> <img src=\"https://static.tigerbbs.com/80c475204276754086f148219d6f0947\" tg-width=\"688\" tg-height=\"284\" width=\"100%\" height=\"auto\">“Relative to their 200-day moving averages (DMA), all three indexes have been generally trending lower since April, as shown in the second chart below.” – Charles Schwab<blockquote>“相对于 200 天移动平均线 (DMA)，这三个指数自 4 月份以来总体呈下降趋势，如下图第二张图表所示。”查尔斯·施瓦布</blockquote> <img src=\"https://static.tigerbbs.com/e880f82c99840963c1b4fb2f95b915ec\" tg-width=\"713\" tg-height=\"299\" width=\"100%\" height=\"auto\">Of course, as we repeat each week, while we are pointing out the warning signs, such does not mean selling everything and going to cash. However, it does serve as a visible warning to adjust your risk exposures accordingly and prepare for a potentially bumpy ride.<blockquote>当然，正如我们每周重复的那样，当我们指出警告信号时，这并不意味着卖掉所有东西并去兑现。然而，它确实是一个明显的警告，相应地调整你的风险敞口，并为潜在的颠簸旅程做好准备。</blockquote> “Just because you put on a seatbelt when the plane is landing, doesn’t mean you are going to crash. But is a logic precaution just in case.” Can The Fed Really Taper?<blockquote>“飞机降落时系上安全带并不意味着你会坠毁。但这是一种合理的预防措施，以防万一”。美联储真的能缩减规模吗？</blockquote> We have noted the rising number of Fed speakers discussing the need to begin&nbsp;“tapering”&nbsp;the Fed’s balance sheet purchases in recent weeks. With employment returning well into what is historically considered “full employment,” surge in job openings, and rising inflation, the need to taper is evident. As noted&nbsp;in our daily market commentary:<blockquote>我们注意到越来越多的美联储发言人讨论开始“锥形”美联储最近几周的资产负债表购买。随着就业恢复到历史上被认为的 “充分就业 ”水平，职位空缺激增，通货膨胀上升，缩减就业规模的必要性显而易见。如前所述在我们的每日市场评论中：</blockquote> “PCE, met expectations rising 0.4% in July. The level was 0.1% below the June reading.&nbsp; The year-over-year rate is 4.2%, which is more than double the Fed’s 2% inflation target. &nbsp;Importantly&nbsp; it suggests the Fed should be moving to tighten monetary policy. However, the trimmed-mean PCE was inline at 2% giving the Fed some&nbsp;“wiggle-room”&nbsp;for now, but likely not for long.“ <img src=\"https://static.tigerbbs.com/f8bb27150d54a104d64668f5f4306208\" tg-width=\"829\" tg-height=\"514\" width=\"100%\" height=\"auto\">While the Fed may have some wiggle room short-term, the trimmed-mean PCE will catch up with PCE over the next month.<blockquote>“个人消费支出 7 月份增长 0.4%，符合预期。该水平比 6 月份低 0.1%。同比增长率为 4.2%，是美联储 2% 通胀目标的两倍多。重要的这表明美联储应该采取行动收紧货币政策。然而，经修正后的平均 PCE 为 2%，这给了美联储一些 “回旋余地”，但可能不会持续太久。“虽然美联储短期内可能有一些回旋余地，但调整后的平均PCE将在下个月赶上PCE。</blockquote> The point is that the Fed is now getting pushed into needing to tighten monetary policy to quell inflationary pressures. However, a rising risk suggests they may be&nbsp;“trapped” in continuing their bond purchases and risking both an inflationary surge and creating market instability.<blockquote>关键是，美联储现在被迫收紧货币政策以平息通胀压力。然而，不断上升的风险表明它们可能是被困住了继续购买债券，冒着通胀飙升和造成市场不稳定的风险。</blockquote> That risk is the&nbsp;“deficit.”<blockquote>这种风险是“赤字。”</blockquote> Who Is Going To Fund The Deficit<blockquote>谁将为赤字提供资金</blockquote> As discussed recently, the current mandatory spending of the Government consumes more than 100% of existing tax revenues. Therefore, all discretionary spending plus additional programs such as&nbsp;“infrastructure”&nbsp;and&nbsp;“human infrastructure”comes from debt issuance.<blockquote>正如最近所讨论的，政府目前的强制性开支消耗了现有税收收入的100%以上。因此，所有可自由支配支出加上额外计划，例如“基础设施”和“人力基础设施”来自债务发行。</blockquote> <img src=\"https://static.tigerbbs.com/5f74a7c9f8392d4c3c6d366934b42511\" tg-width=\"768\" tg-height=\"688\" width=\"100%\" height=\"auto\">As shown, the 2021 budget will push the current deficit towards $4-Trillion requiring the Federal Reserve to monetize at least&nbsp;$1 Trillion of that issuance per our previous analysis.<blockquote>如图所示，2021 年预算将把当前赤字推向 4 万亿美元，要求美联储至少货币化根据我们之前的分析，该发行量为 1 万亿美元。</blockquote> The scale and scope of government spending expansion in the last year are unprecedented. Because Uncle Sam doesn’t have the money, lots of it went on the government’s credit card. The deficit and debt skyrocketed. But this is only the beginning.&nbsp; The Biden administration recently proposed a $6 trillion budget for fiscal 2022, two-thirds of which would be borrowed.” – Reason The CBO&nbsp;(Congressional Budget Office) recently&nbsp;produced its long-term debt projection through 2050, ensuring poor economic returns.&nbsp;I reconstructed a chart from&nbsp;Deutsche Bank&nbsp;showing the US Federal Debt and Federal Reserve balance sheet. The chart uses the CBO projections through 2050. <img src=\"https://static.tigerbbs.com/771627893f89b51b37543e28698ed961\" tg-width=\"990\" tg-height=\"637\" width=\"100%\" height=\"auto\">The federal debt load will climb from $28 trillion to roughly $140 trillion at the current growth rate by 2050.<blockquote>去年政府支出扩张的规模和范围是前所未有的。因为山姆大叔没有钱，所以很多钱都进了政府的信用卡。赤字和债务飙升。但这仅仅是开始。拜登政府最近提出了2022财年6万亿美元的预算，其中三分之二是借款。”–理由CBO（国会预算办公室）最近发布了到2050年的长期债务预测，确保了糟糕的经济回报。我重建了一张德意志银行的图表，显示了美国联邦债务和美联储的资产负债表。该图表使用了CBO到2050年的预测。按照目前的增长率，到2050年，联邦债务负担将从28万亿美元攀升至约140万亿美元。</blockquote> The problem, of course, is that the Fed must continue monetizing 30% of debt issuance to keep interest rates from surging and wrecking the economy.<blockquote>当然，问题在于美联储必须继续将30%的债务发行货币化，以防止利率飙升并破坏经济。</blockquote> Let than sink in for a minute.<blockquote>让我们沉浸一分钟。</blockquote> If that is indeed the case, the Fed will not be able to&nbsp;“taper”&nbsp;their balance sheet purchases unless they are willing to risk a surge in interest rates, a collapse in economic growth, and a deflationary spiral.<blockquote>如果情况确实如此，美联储将无法锥形他们的资产负债表购买，除非他们愿意冒利率飙升、经济增长崩溃和通货紧缩螺旋的风险。</blockquote> As Expected Q3-GDP Gets Slashed<blockquote>正如预期的第三季度-GDP被削减</blockquote> Since the beginning of this year, we have penned several articles stating that economic growth would ultimately disappoint when fueled by an artificial stimulus. Specifically, we noted that&nbsp;“bonds were sending an economic warning.”&nbsp;To wit:<blockquote>自今年年初以来，我们已经撰写了几篇文章，指出当人为刺激推动经济增长时，经济增长最终会令人失望。具体来说，我们注意到“债券发出了经济警告”。即：</blockquote> “ As shown, the correlation between rates and the economic composite suggests that current expectations of sustained economic expansion and rising inflation are overly optimistic. &nbsp;At current rates, economic growth will likely very quickly rturn to sub-2% growth by 2022.” <img src=\"https://static.tigerbbs.com/90ec177d9bfda4dab5c1a89f29d93556\" tg-width=\"853\" tg-height=\"549\" width=\"100%\" height=\"auto\">The&nbsp;disappointment of economic growth&nbsp;is also a function of the surging debt and deficit levels, which, as noted above, will have to be entirely funded by the Federal Reserve.<blockquote>“如图所示，利率与经济综合指数之间的相关性表明，当前对经济持续扩张和通胀上升的预期过于乐观。按照目前的速度，到2022年，经济增长可能会很快恢复到2%以下。”这个经济增长失望这也是债务和赤字水平飙升的一个函数，如上所述，债务和赤字水平必须完全由美联储提供资金。</blockquote> On Thursday, both the Atlanta Fed and Morgan Stanley slashed their estimates for Q3 growth as economic data continues to disappoint.<blockquote>周四，由于经济数据继续令人失望，亚特兰大联储和摩根士丹利都下调了对第三季度增长的预期。</blockquote> “The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2021 is&nbsp; 3.7 &nbsp; percent on September 2,&nbsp; down from 5.3 percent on September 1 .” – Atlanta Fed <img src=\"https://static.tigerbbs.com/c4c362937b721d02c854d792606d0166\" tg-width=\"670\" tg-height=\"366\" width=\"100%\" height=\"auto\">Notably, there were significant downward revisions to consumption and investment, declining from 2.6% and 23.4% to 1.9% and 19.3%, respectively. However, as we noted previously, such is not surprising as “stimulus” leaves the system, and the economic drivers return to normalcy.<blockquote>“GDPNow模型对2021年第三季度实际国内生产总值增长（经季节性调整年率）的估计为3.7 百分比9月2日，低于 9 月 1 日的 5.3%亚特兰大联储值得注意的是，消费和投资大幅下调，分别从2.6%和23.4%下降到1.9%和19.3%。然而，正如我们之前指出的，这并不奇怪，因为 “刺激 ”离开了这个体系，经济驱动因素恢复正常。</blockquote> Morgan and Goldman As Well<blockquote>摩根和高盛也是如此</blockquote> As stated, Morgan Stanely also slashed their estimates:<blockquote>如前所述，摩根斯坦利也下调了他们的预期：</blockquote> “ We are revising down 3Q GDP tracking to 2.9% from 6.5%, previously . Our forecast for 4Q GDP remains at 6.7%. The revision to 3Q implies full year 4Q/4Q GDP at 5.6% (5.7%Y) this year – 1.4pp lower than the Fed’s forecast of 7.0% in its June Summary of Economic Projections (SEP), and 0.7pp below Bloomberg consensus of economists at 6.3%. An examination of the data reveals that the slowdown is not broad-based and primarily reflects payback from stimulus spending as well as continued supply chain bottlenecks. &nbsp;The swing factor is largest in spending on big-ticket durable goods that benefited most from stimulus checks and are affected most by lack of inventory and price increases due to supply shortages, for example motor vehicles.” <img src=\"https://static.tigerbbs.com/75e5c5eb2840814e2972c92ab0ef9bf3\" tg-width=\"826\" tg-height=\"487\" width=\"100%\" height=\"auto\">As we discussed previously, these two downgrades were playing catchup to our previous analysis and Goldman’s downgrade two weeks ago. To wit:<blockquote>“我们将第三季度 GDP 跟踪从之前的 6.5% 下调至 2.9%.我们对第四季度GDP的预测维持在6.7%。修正至第三季度意味着今年第四季度/第四季度全年 GDP 为 5.6%（同比增长 5.7%），比美联储在 6 月份经济预测摘要（SEP）中预测的 7.0% 低 1.4 个百分点，比彭博经济学家一致认为的 6.3% 低 0.7 个百分点。对数据的审查显示，经济放缓并不广泛，主要反映了刺激支出的回报以及持续的供应链瓶颈。波动因素最大的是大件耐用品的支出，这些商品从刺激检查中受益最多，但受库存不足和供应短缺导致价格上涨的影响最大，例如汽车。”正如我们之前所讨论的，这两次评级下调是在追赶我们之前的分析和两周前高盛的下调。即：</blockquote> “We have lowered our Q3 GDP forecast to +5.5%, reflecting hits to both consumer spending and production. Spending on dining, travel, and some other services is likely to decline in August, though we expect the drop to be modest and brief. Production is still suffering from supply chain disruptions, especially in the auto industry, and this is likely to mean less inventory rebuild in Q3.”&nbsp;– &nbsp;Goldman Sachs Investors should not overlook the importance of these downgrades.<blockquote>“我们已将第三季度 GDP 预测下调至 +5.5%，反映出消费者支出和生产均受到打击。8月份餐饮、旅游和其他一些服务的支出可能会下降，尽管我们预计下降幅度不大且短暂。生产仍然受到供应链中断的影响，尤其是在汽车行业，这可能意味着第三季度的库存重建减少。” –高盛投资者不应忽视这些评级下调的重要性。</blockquote> Earnings Estimates At Risk<blockquote>盈利预测面临风险</blockquote> In our post on“Peak Economic And Earnings Growth,” we stated that corporate earnings and profits ultimately get derived from economic activity&nbsp;(personal consumption and business investment). Therefore, it is unlikely the currently lofty expectations will get met.<blockquote>在我们关于“经济和盈利增长达到顶峰，“我们指出，企业收益和利润最终来自经济活动（个人消费和商业投资）。因此，目前的崇高期望不太可能得到满足。</blockquote> The problem for investors currently is that analysts’ assumptions are always high, and markets are trading at more extreme valuations, which leaves little room for disappointment. For example, using analyst’s price target assumptions of 4700 for 2020 and current earnings expectations, the S&amp;P is trading 2.6x earnings growth.<blockquote>投资者目前面临的问题是，分析师的假设总是很高，而市场的估值更为极端，这让人失望的余地很小。例如，根据分析师对 2020 年 4700 点的目标价假设和当前的盈利预期，标准普尔指数的盈利增长为 2.6 倍。</blockquote> <img src=\"https://static.tigerbbs.com/c3e58e6641c42d1879c094ce45b2f337\" tg-width=\"896\" tg-height=\"647\" width=\"100%\" height=\"auto\">Such puts the current P/E at 25.6x earnings in 2020, which is still expensive by historical measures.<blockquote>这使得目前的市盈率为 2020 年市盈率的 25.6 倍，按照历史标准来看，这仍然很昂贵。</blockquote> <img src=\"https://static.tigerbbs.com/d4abafc44c03ff687ce87c361a1f1357\" tg-width=\"886\" tg-height=\"637\" width=\"100%\" height=\"auto\">That also puts the S&amp;P 500 grossly above its linear trend line as earnings growth begins to revert.<blockquote>随着盈利增长开始恢复，这也使得标普500远高于线性趋势线。</blockquote> <img src=\"https://static.tigerbbs.com/ec0a0666e57f65c24037d219876028e2\" tg-width=\"988\" tg-height=\"534\" width=\"100%\" height=\"auto\">Through the end of this year, companies will guide down earnings estimates for a variety of reasons:<blockquote>到今年年底，公司将出于多种原因下调盈利预期：</blockquote> <ul> <li>Economic growth won’t be as robust as anticipated.<blockquote><ul><li>经济增长不会像预期的那样强劲。</li></ul></blockquote></li> <li>Potentially higher corporate tax rates could reduce earnings.<blockquote><li>潜在的更高企业税率可能会减少收益。</li></blockquote></li> <li>The increased input costs due to the stimulus can’t get passed on to consumers.<blockquote><li>刺激措施带来的投入成本增加无法转嫁给消费者。</li></blockquote></li> <li>Higher interest rates increasing borrowing costs which impact earnings.<blockquote><li>利率上升导致借贷成本增加，从而影响盈利。</li></blockquote></li> <li>A weaker consumer than currently expected due to reduced employment and weaker wages.<blockquote><li>由于就业减少和工资疲软，消费者比目前预期的疲软。</li></blockquote></li> <li>Global demand weakens due to a stronger dollar impacting exports.<blockquote><li>由于美元走强影响出口，全球需求疲软。</li></blockquote></li> </ul> Such will leave investors once again&nbsp;“overpaying”&nbsp;for earnings growth that fails to materialize.<blockquote>这将再次让投资者“多付”对于未能实现的盈利增长。</blockquote>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; 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However, as discussed in our&nbsp;Daily Market Commentary&nbsp;on Wednesday:<blockquote>虽然我们之前讨论过 8 月份往往是一年中最疲软的月份之一，但多头将这种疲软定义为上涨了近 3%。然而，正如我们在每日市场评论周三：</blockquote> “August seasonality was a bust with the market advancing 2.6%. Will September seasonality prove to be more accurate?” <img src=\"https://static.tigerbbs.com/c476595aaa36e3658acd7c6b2458a4f3\" tg-width=\"533\" tg-height=\"371\" width=\"100%\" height=\"auto\"><blockquote>“8 月份的季节性表现不佳，市场上涨了 2.6%。9 月份的季节性会更准确吗？”</blockquote> For now, the bullish bias remains strong as a barrage of weaker than expected economic data from GDP to manufacturing and employment give hope the Fed may forestall their&nbsp;“tapering”&nbsp;plans. But, as we will discuss in a moment, we think the bulls may be correct for a different reason.<blockquote>目前，看涨偏见依然强烈，因为从 GDP 到制造业和就业等一系列弱于预期的经济数据给美联储可能阻止其“锥形”计划。但是，正如我们稍后会讨论的，我们认为多头可能出于不同的原因是正确的。</blockquote> However, in the meantime, the&nbsp;“stairstep”&nbsp;advance continues with fundamentally weak companies making substantial gains as speculation displaces investment in the market.&nbsp;Thus, while prices remain elevated, money flows weaken, suggesting the next downturn is roughly one to two weeks away.So far, those corrections remain limited to the 50-dma, which is approximately 3% lower than Friday’s close, but a 10% correction to the 200-dma remains a possibility.<blockquote>然而，与此同时，“楼梯”随着投机取代市场投资，基本面疲软的公司大幅上涨，市场继续上涨。因此，尽管价格仍然高企，但现金流却在减弱，这表明下一次经济衰退大约还有一到两周的时间。到目前为止，这些修正仍仅限于 50-dma，比周五收盘价低约 3%，但对 200-dma 进行 10% 的修正仍有可能。</blockquote> <img src=\"https://static.tigerbbs.com/3d1ab015b2782edccd8f71c842786623\" tg-width=\"900\" tg-height=\"534\" width=\"100%\" height=\"auto\">While there seems to be little concern relative to the market’s advance over the last year, maybe that should be the concern given the sharpness of that advance. I will discuss the history of “market melt-ups” and their eventual outcomes in an upcoming article. However, what is essential to notice is the corresponding ramp in valuations as earnings failto keep up with bullish expectations.<blockquote>虽然市场在过去一年中的上涨似乎没有什么令人担忧的地方，但鉴于市场上涨的幅度，也许这应该是令人担忧的地方。我将在即将发表的文章中讨论 “市场融化 ”的历史及其最终结果。然而，需要注意的是，随着盈利失败，估值也会相应上升to 跟上看涨预期。</blockquote> <img src=\"https://static.tigerbbs.com/32446c1ed4942c292051ab6f2646826f\" tg-width=\"836\" tg-height=\"460\" width=\"100%\" height=\"auto\">Significantly, investors never realize they are in a&nbsp;“melt-up”&nbsp;until after it is over.<blockquote>值得注意的是，投资者从未意识到他们正处于“融化”直到一切结束。</blockquote> Breadth Remains Weak As Market Advances<blockquote>随着市场的推进，广度仍然疲软</blockquote> At the moment, the bullish trend continues, and we must respect that trend for now. However, there are clear signs the advance is beginning to narrow markedly, which has historically served as a warning to investors.<blockquote>目前看涨趋势仍在继续，我们暂时必须尊重这一趋势。然而，有明显迹象表明，领先优势开始明显缩小，这在历史上一直是对投资者的警告。</blockquote> ”&nbsp;As shown in the chart below, although the S&amp;P 500 traded at an all-time high as recently as last week, the cumulative advance/decline (A/D) line for the broader NYSE universe peaked on June 11 this year. The divergence between the two looks similar to early-September last year—the point at which it was mostly the “big 5” stocks within the S&amp;P 500 (the “generals”) that had powered the S&amp;P 500 to its September 2, 2020 high.” – Charles Schwab <img src=\"https://static.tigerbbs.com/3bec2406de602b799eed4c8cda45840c\" tg-width=\"713\" tg-height=\"280\" width=\"100%\" height=\"auto\">“The percentage of S&amp;P 500 stocks trading above their 50-day moving averages peaked in April, troughed in June, improved until recently, but has come under pressure again. The same can’t be said for the NASDAQ and Russell 2000, which both peaked in early February, since which time they’ve generally been descending.”<blockquote>“如下图所示，尽管标普500上周还处于历史高位，但纽约证券交易所整体的累计涨跌幅线在今年6月11日达到峰值。两者之间的背离看起来与去年 9 月初相似--当时主要是标普500内的 “五大 ”股票（“将军”）推动标普500达到 2020 年 9 月 2 日的高点。查尔斯·施瓦布“标普500股票交易高于 50 天移动平均线的比例在 4 月份达到顶峰，在 6 月份达到低谷，直到最近才有所改善，但又再次面临压力。纳斯达克和罗素 2000 指数的情况就不一样了，这两个指数都在 2 月初达到顶峰，此后普遍呈下降趋势。”</blockquote> <img src=\"https://static.tigerbbs.com/80c475204276754086f148219d6f0947\" tg-width=\"688\" tg-height=\"284\" width=\"100%\" height=\"auto\">“Relative to their 200-day moving averages (DMA), all three indexes have been generally trending lower since April, as shown in the second chart below.” – Charles Schwab<blockquote>“相对于 200 天移动平均线 (DMA)，这三个指数自 4 月份以来总体呈下降趋势，如下图第二张图表所示。”查尔斯·施瓦布</blockquote> <img src=\"https://static.tigerbbs.com/e880f82c99840963c1b4fb2f95b915ec\" tg-width=\"713\" tg-height=\"299\" width=\"100%\" height=\"auto\">Of course, as we repeat each week, while we are pointing out the warning signs, such does not mean selling everything and going to cash. However, it does serve as a visible warning to adjust your risk exposures accordingly and prepare for a potentially bumpy ride.<blockquote>当然，正如我们每周重复的那样，当我们指出警告信号时，这并不意味着卖掉所有东西并去兑现。然而，它确实是一个明显的警告，相应地调整你的风险敞口，并为潜在的颠簸旅程做好准备。</blockquote> “Just because you put on a seatbelt when the plane is landing, doesn’t mean you are going to crash. But is a logic precaution just in case.” Can The Fed Really Taper?<blockquote>“飞机降落时系上安全带并不意味着你会坠毁。但这是一种合理的预防措施，以防万一”。美联储真的能缩减规模吗？</blockquote> We have noted the rising number of Fed speakers discussing the need to begin&nbsp;“tapering”&nbsp;the Fed’s balance sheet purchases in recent weeks. With employment returning well into what is historically considered “full employment,” surge in job openings, and rising inflation, the need to taper is evident. As noted&nbsp;in our daily market commentary:<blockquote>我们注意到越来越多的美联储发言人讨论开始“锥形”美联储最近几周的资产负债表购买。随着就业恢复到历史上被认为的 “充分就业 ”水平，职位空缺激增，通货膨胀上升，缩减就业规模的必要性显而易见。如前所述在我们的每日市场评论中：</blockquote> “PCE, met expectations rising 0.4% in July. The level was 0.1% below the June reading.&nbsp; The year-over-year rate is 4.2%, which is more than double the Fed’s 2% inflation target. &nbsp;Importantly&nbsp; it suggests the Fed should be moving to tighten monetary policy. However, the trimmed-mean PCE was inline at 2% giving the Fed some&nbsp;“wiggle-room”&nbsp;for now, but likely not for long.“ <img src=\"https://static.tigerbbs.com/f8bb27150d54a104d64668f5f4306208\" tg-width=\"829\" tg-height=\"514\" width=\"100%\" height=\"auto\">While the Fed may have some wiggle room short-term, the trimmed-mean PCE will catch up with PCE over the next month.<blockquote>“个人消费支出 7 月份增长 0.4%，符合预期。该水平比 6 月份低 0.1%。同比增长率为 4.2%，是美联储 2% 通胀目标的两倍多。重要的这表明美联储应该采取行动收紧货币政策。然而，经修正后的平均 PCE 为 2%，这给了美联储一些 “回旋余地”，但可能不会持续太久。“虽然美联储短期内可能有一些回旋余地，但调整后的平均PCE将在下个月赶上PCE。</blockquote> The point is that the Fed is now getting pushed into needing to tighten monetary policy to quell inflationary pressures. However, a rising risk suggests they may be&nbsp;“trapped” in continuing their bond purchases and risking both an inflationary surge and creating market instability.<blockquote>关键是，美联储现在被迫收紧货币政策以平息通胀压力。然而，不断上升的风险表明它们可能是被困住了继续购买债券，冒着通胀飙升和造成市场不稳定的风险。</blockquote> That risk is the&nbsp;“deficit.”<blockquote>这种风险是“赤字。”</blockquote> Who Is Going To Fund The Deficit<blockquote>谁将为赤字提供资金</blockquote> As discussed recently, the current mandatory spending of the Government consumes more than 100% of existing tax revenues. Therefore, all discretionary spending plus additional programs such as&nbsp;“infrastructure”&nbsp;and&nbsp;“human infrastructure”comes from debt issuance.<blockquote>正如最近所讨论的，政府目前的强制性开支消耗了现有税收收入的100%以上。因此，所有可自由支配支出加上额外计划，例如“基础设施”和“人力基础设施”来自债务发行。</blockquote> <img src=\"https://static.tigerbbs.com/5f74a7c9f8392d4c3c6d366934b42511\" tg-width=\"768\" tg-height=\"688\" width=\"100%\" height=\"auto\">As shown, the 2021 budget will push the current deficit towards $4-Trillion requiring the Federal Reserve to monetize at least&nbsp;$1 Trillion of that issuance per our previous analysis.<blockquote>如图所示，2021 年预算将把当前赤字推向 4 万亿美元，要求美联储至少货币化根据我们之前的分析，该发行量为 1 万亿美元。</blockquote> The scale and scope of government spending expansion in the last year are unprecedented. Because Uncle Sam doesn’t have the money, lots of it went on the government’s credit card. The deficit and debt skyrocketed. But this is only the beginning.&nbsp; The Biden administration recently proposed a $6 trillion budget for fiscal 2022, two-thirds of which would be borrowed.” – Reason The CBO&nbsp;(Congressional Budget Office) recently&nbsp;produced its long-term debt projection through 2050, ensuring poor economic returns.&nbsp;I reconstructed a chart from&nbsp;Deutsche Bank&nbsp;showing the US Federal Debt and Federal Reserve balance sheet. The chart uses the CBO projections through 2050. <img src=\"https://static.tigerbbs.com/771627893f89b51b37543e28698ed961\" tg-width=\"990\" tg-height=\"637\" width=\"100%\" height=\"auto\">The federal debt load will climb from $28 trillion to roughly $140 trillion at the current growth rate by 2050.<blockquote>去年政府支出扩张的规模和范围是前所未有的。因为山姆大叔没有钱，所以很多钱都进了政府的信用卡。赤字和债务飙升。但这仅仅是开始。拜登政府最近提出了2022财年6万亿美元的预算，其中三分之二是借款。”–理由CBO（国会预算办公室）最近发布了到2050年的长期债务预测，确保了糟糕的经济回报。我重建了一张德意志银行的图表，显示了美国联邦债务和美联储的资产负债表。该图表使用了CBO到2050年的预测。按照目前的增长率，到2050年，联邦债务负担将从28万亿美元攀升至约140万亿美元。</blockquote> The problem, of course, is that the Fed must continue monetizing 30% of debt issuance to keep interest rates from surging and wrecking the economy.<blockquote>当然，问题在于美联储必须继续将30%的债务发行货币化，以防止利率飙升并破坏经济。</blockquote> Let than sink in for a minute.<blockquote>让我们沉浸一分钟。</blockquote> If that is indeed the case, the Fed will not be able to&nbsp;“taper”&nbsp;their balance sheet purchases unless they are willing to risk a surge in interest rates, a collapse in economic growth, and a deflationary spiral.<blockquote>如果情况确实如此，美联储将无法锥形他们的资产负债表购买，除非他们愿意冒利率飙升、经济增长崩溃和通货紧缩螺旋的风险。</blockquote> As Expected Q3-GDP Gets Slashed<blockquote>正如预期的第三季度-GDP被削减</blockquote> Since the beginning of this year, we have penned several articles stating that economic growth would ultimately disappoint when fueled by an artificial stimulus. Specifically, we noted that&nbsp;“bonds were sending an economic warning.”&nbsp;To wit:<blockquote>自今年年初以来，我们已经撰写了几篇文章，指出当人为刺激推动经济增长时，经济增长最终会令人失望。具体来说，我们注意到“债券发出了经济警告”。即：</blockquote> “ As shown, the correlation between rates and the economic composite suggests that current expectations of sustained economic expansion and rising inflation are overly optimistic. &nbsp;At current rates, economic growth will likely very quickly rturn to sub-2% growth by 2022.” <img src=\"https://static.tigerbbs.com/90ec177d9bfda4dab5c1a89f29d93556\" tg-width=\"853\" tg-height=\"549\" width=\"100%\" height=\"auto\">The&nbsp;disappointment of economic growth&nbsp;is also a function of the surging debt and deficit levels, which, as noted above, will have to be entirely funded by the Federal Reserve.<blockquote>“如图所示，利率与经济综合指数之间的相关性表明，当前对经济持续扩张和通胀上升的预期过于乐观。按照目前的速度，到2022年，经济增长可能会很快恢复到2%以下。”这个经济增长失望这也是债务和赤字水平飙升的一个函数，如上所述，债务和赤字水平必须完全由美联储提供资金。</blockquote> On Thursday, both the Atlanta Fed and Morgan Stanley slashed their estimates for Q3 growth as economic data continues to disappoint.<blockquote>周四，由于经济数据继续令人失望，亚特兰大联储和摩根士丹利都下调了对第三季度增长的预期。</blockquote> “The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2021 is&nbsp; 3.7 &nbsp; percent on September 2,&nbsp; down from 5.3 percent on September 1 .” – Atlanta Fed <img src=\"https://static.tigerbbs.com/c4c362937b721d02c854d792606d0166\" tg-width=\"670\" tg-height=\"366\" width=\"100%\" height=\"auto\">Notably, there were significant downward revisions to consumption and investment, declining from 2.6% and 23.4% to 1.9% and 19.3%, respectively. However, as we noted previously, such is not surprising as “stimulus” leaves the system, and the economic drivers return to normalcy.<blockquote>“GDPNow模型对2021年第三季度实际国内生产总值增长（经季节性调整年率）的估计为3.7 百分比9月2日，低于 9 月 1 日的 5.3%亚特兰大联储值得注意的是，消费和投资大幅下调，分别从2.6%和23.4%下降到1.9%和19.3%。然而，正如我们之前指出的，这并不奇怪，因为 “刺激 ”离开了这个体系，经济驱动因素恢复正常。</blockquote> Morgan and Goldman As Well<blockquote>摩根和高盛也是如此</blockquote> As stated, Morgan Stanely also slashed their estimates:<blockquote>如前所述，摩根斯坦利也下调了他们的预期：</blockquote> “ We are revising down 3Q GDP tracking to 2.9% from 6.5%, previously . Our forecast for 4Q GDP remains at 6.7%. The revision to 3Q implies full year 4Q/4Q GDP at 5.6% (5.7%Y) this year – 1.4pp lower than the Fed’s forecast of 7.0% in its June Summary of Economic Projections (SEP), and 0.7pp below Bloomberg consensus of economists at 6.3%. An examination of the data reveals that the slowdown is not broad-based and primarily reflects payback from stimulus spending as well as continued supply chain bottlenecks. &nbsp;The swing factor is largest in spending on big-ticket durable goods that benefited most from stimulus checks and are affected most by lack of inventory and price increases due to supply shortages, for example motor vehicles.” <img src=\"https://static.tigerbbs.com/75e5c5eb2840814e2972c92ab0ef9bf3\" tg-width=\"826\" tg-height=\"487\" width=\"100%\" height=\"auto\">As we discussed previously, these two downgrades were playing catchup to our previous analysis and Goldman’s downgrade two weeks ago. To wit:<blockquote>“我们将第三季度 GDP 跟踪从之前的 6.5% 下调至 2.9%.我们对第四季度GDP的预测维持在6.7%。修正至第三季度意味着今年第四季度/第四季度全年 GDP 为 5.6%（同比增长 5.7%），比美联储在 6 月份经济预测摘要（SEP）中预测的 7.0% 低 1.4 个百分点，比彭博经济学家一致认为的 6.3% 低 0.7 个百分点。对数据的审查显示，经济放缓并不广泛，主要反映了刺激支出的回报以及持续的供应链瓶颈。波动因素最大的是大件耐用品的支出，这些商品从刺激检查中受益最多，但受库存不足和供应短缺导致价格上涨的影响最大，例如汽车。”正如我们之前所讨论的，这两次评级下调是在追赶我们之前的分析和两周前高盛的下调。即：</blockquote> “We have lowered our Q3 GDP forecast to +5.5%, reflecting hits to both consumer spending and production. Spending on dining, travel, and some other services is likely to decline in August, though we expect the drop to be modest and brief. Production is still suffering from supply chain disruptions, especially in the auto industry, and this is likely to mean less inventory rebuild in Q3.”&nbsp;– &nbsp;Goldman Sachs Investors should not overlook the importance of these downgrades.<blockquote>“我们已将第三季度 GDP 预测下调至 +5.5%，反映出消费者支出和生产均受到打击。8月份餐饮、旅游和其他一些服务的支出可能会下降，尽管我们预计下降幅度不大且短暂。生产仍然受到供应链中断的影响，尤其是在汽车行业，这可能意味着第三季度的库存重建减少。” –高盛投资者不应忽视这些评级下调的重要性。</blockquote> Earnings Estimates At Risk<blockquote>盈利预测面临风险</blockquote> In our post on“Peak Economic And Earnings Growth,” we stated that corporate earnings and profits ultimately get derived from economic activity&nbsp;(personal consumption and business investment). Therefore, it is unlikely the currently lofty expectations will get met.<blockquote>在我们关于“经济和盈利增长达到顶峰，“我们指出，企业收益和利润最终来自经济活动（个人消费和商业投资）。因此，目前的崇高期望不太可能得到满足。</blockquote> The problem for investors currently is that analysts’ assumptions are always high, and markets are trading at more extreme valuations, which leaves little room for disappointment. For example, using analyst’s price target assumptions of 4700 for 2020 and current earnings expectations, the S&amp;P is trading 2.6x earnings growth.<blockquote>投资者目前面临的问题是，分析师的假设总是很高，而市场的估值更为极端，这让人失望的余地很小。例如，根据分析师对 2020 年 4700 点的目标价假设和当前的盈利预期，标准普尔指数的盈利增长为 2.6 倍。</blockquote> <img src=\"https://static.tigerbbs.com/c3e58e6641c42d1879c094ce45b2f337\" tg-width=\"896\" tg-height=\"647\" width=\"100%\" height=\"auto\">Such puts the current P/E at 25.6x earnings in 2020, which is still expensive by historical measures.<blockquote>这使得目前的市盈率为 2020 年市盈率的 25.6 倍，按照历史标准来看，这仍然很昂贵。</blockquote> <img src=\"https://static.tigerbbs.com/d4abafc44c03ff687ce87c361a1f1357\" tg-width=\"886\" tg-height=\"637\" width=\"100%\" height=\"auto\">That also puts the S&amp;P 500 grossly above its linear trend line as earnings growth begins to revert.<blockquote>随着盈利增长开始恢复，这也使得标普500远高于线性趋势线。</blockquote> <img src=\"https://static.tigerbbs.com/ec0a0666e57f65c24037d219876028e2\" tg-width=\"988\" tg-height=\"534\" width=\"100%\" height=\"auto\">Through the end of this year, companies will guide down earnings estimates for a variety of reasons:<blockquote>到今年年底，公司将出于多种原因下调盈利预期：</blockquote> <ul> <li>Economic growth won’t be as robust as anticipated.<blockquote><ul><li>经济增长不会像预期的那样强劲。</li></ul></blockquote></li> <li>Potentially higher corporate tax rates could reduce earnings.<blockquote><li>潜在的更高企业税率可能会减少收益。</li></blockquote></li> <li>The increased input costs due to the stimulus can’t get passed on to consumers.<blockquote><li>刺激措施带来的投入成本增加无法转嫁给消费者。</li></blockquote></li> <li>Higher interest rates increasing borrowing costs which impact earnings.<blockquote><li>利率上升导致借贷成本增加，从而影响盈利。</li></blockquote></li> <li>A weaker consumer than currently expected due to reduced employment and weaker wages.<blockquote><li>由于就业减少和工资疲软，消费者比目前预期的疲软。</li></blockquote></li> <li>Global demand weakens due to a stronger dollar impacting exports.<blockquote><li>由于美元走强影响出口，全球需求疲软。</li></blockquote></li> </ul> Such will leave investors once again&nbsp;“overpaying”&nbsp;for earnings growth that fails to materialize.<blockquote>这将再次让投资者“多付”对于未能实现的盈利增长。</blockquote>\n<div class=\"bt-text\">\n\n\n 来源：<a href=\"https://www.zerohedge.com/markets/can-bulls-defy-odds-september-weakness\">zerohedge</a>\n为提升您的阅读体验，我们对本页面进行了排版优化\n\n\n</div>\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".IXIC":"NASDAQ Composite","SPY":"标普500ETF",".DJI":"道琼斯",".SPX":"S&P 500 Index"},"source_url":"https://www.zerohedge.com/markets/can-bulls-defy-odds-september-weakness","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1136345203","content_text":"While we had previously discussed that August tends to be one of the weaker months of the year, the bulls defined that weakness posting an almost 3% gain. However, as discussed in our Daily Market Commentary on Wednesday:\n\n“August seasonality was a bust with the market advancing 2.6%. Will September seasonality prove to be more accurate?”\n\n\nFor now, the bullish bias remains strong as a barrage of weaker than expected economic data from GDP to manufacturing and employment give hope the Fed may forestall their “tapering” plans. But, as we will discuss in a moment, we think the bulls may be correct for a different reason.\nHowever, in the meantime, the “stairstep” advance continues with fundamentally weak companies making substantial gains as speculation displaces investment in the market. Thus, while prices remain elevated, money flows weaken, suggesting the next downturn is roughly one to two weeks away.So far, those corrections remain limited to the 50-dma, which is approximately 3% lower than Friday’s close, but a 10% correction to the 200-dma remains a possibility.\nWhile there seems to be little concern relative to the market’s advance over the last year, maybe that should be the concern given the sharpness of that advance. I will discuss the history of “market melt-ups” and their eventual outcomes in an upcoming article. However, what is essential to notice is the corresponding ramp in valuations as earnings failto keep up with bullish expectations.\nSignificantly, investors never realize they are in a “melt-up” until after it is over.\nBreadth Remains Weak As Market Advances\nAt the moment, the bullish trend continues, and we must respect that trend for now. However, there are clear signs the advance is beginning to narrow markedly, which has historically served as a warning to investors.\n\n” As shown in the chart below, although the S&P 500 traded at an all-time high as recently as last week, the cumulative advance/decline (A/D) line for the broader NYSE universe peaked on June 11 this year. The divergence between the two looks similar to early-September last year—the point at which it was mostly the “big 5” stocks within the S&P 500 (the “generals”) that had powered the S&P 500 to its September 2, 2020 high.” – Charles Schwab\n\n“The percentage of S&P 500 stocks trading above their 50-day moving averages peaked in April, troughed in June, improved until recently, but has come under pressure again. The same can’t be said for the NASDAQ and Russell 2000, which both peaked in early February, since which time they’ve generally been descending.”\n“Relative to their 200-day moving averages (DMA), all three indexes have been generally trending lower since April, as shown in the second chart below.” – Charles Schwab\nOf course, as we repeat each week, while we are pointing out the warning signs, such does not mean selling everything and going to cash. However, it does serve as a visible warning to adjust your risk exposures accordingly and prepare for a potentially bumpy ride.\n\n“Just because you put on a seatbelt when the plane is landing, doesn’t mean you are going to crash. But is a logic precaution just in case.”\n\nCan The Fed Really Taper?\nWe have noted the rising number of Fed speakers discussing the need to begin “tapering” the Fed’s balance sheet purchases in recent weeks. With employment returning well into what is historically considered “full employment,” surge in job openings, and rising inflation, the need to taper is evident. As noted in our daily market commentary:\n\n“PCE, met expectations rising 0.4% in July. The level was 0.1% below the June reading. \nThe year-over-year rate is 4.2%, which is more than double the Fed’s 2% inflation target.\n Importantly \nit suggests the Fed should be moving to tighten monetary policy.\nHowever, the trimmed-mean PCE was inline at 2% giving the Fed some “wiggle-room” for now, but likely not for long.“\n\nWhile the Fed may have some wiggle room short-term, the trimmed-mean PCE will catch up with PCE over the next month.\nThe point is that the Fed is now getting pushed into needing to tighten monetary policy to quell inflationary pressures. However, a rising risk suggests they may be “trapped” in continuing their bond purchases and risking both an inflationary surge and creating market instability.\nThat risk is the “deficit.”\nWho Is Going To Fund The Deficit\nAs discussed recently, the current mandatory spending of the Government consumes more than 100% of existing tax revenues. Therefore, all discretionary spending plus additional programs such as “infrastructure” and “human infrastructure”comes from debt issuance.\nAs shown, the 2021 budget will push the current deficit towards $4-Trillion requiring the Federal Reserve to monetize at least $1 Trillion of that issuance per our previous analysis.\n\nThe scale and scope of government spending expansion in the last year are unprecedented. Because Uncle Sam doesn’t have the money, lots of it went on the government’s credit card. The deficit and debt skyrocketed. But this is only the beginning. \nThe Biden administration recently proposed a $6 trillion budget for fiscal 2022, two-thirds of which would be borrowed.” –\nReason\n\n\nThe CBO (Congressional Budget Office) recently produced its long-term debt projection through 2050, ensuring poor economic returns. I reconstructed a chart from Deutsche Bank showing the US Federal Debt and Federal Reserve balance sheet. The chart uses the CBO projections through 2050.\n\nThe federal debt load will climb from $28 trillion to roughly $140 trillion at the current growth rate by 2050.\nThe problem, of course, is that the Fed must continue monetizing 30% of debt issuance to keep interest rates from surging and wrecking the economy.\nLet than sink in for a minute.\nIf that is indeed the case, the Fed will not be able to “taper” their balance sheet purchases unless they are willing to risk a surge in interest rates, a collapse in economic growth, and a deflationary spiral.\nAs Expected Q3-GDP Gets Slashed\nSince the beginning of this year, we have penned several articles stating that economic growth would ultimately disappoint when fueled by an artificial stimulus. Specifically, we noted that “bonds were sending an economic warning.” To wit:\n\n“\nAs shown, the correlation between rates and the economic composite suggests that current expectations of sustained economic expansion and rising inflation are overly optimistic.\n At current rates, economic growth will likely very quickly rturn to sub-2% growth by 2022.”\n\nThe disappointment of economic growth is also a function of the surging debt and deficit levels, which, as noted above, will have to be entirely funded by the Federal Reserve.\nOn Thursday, both the Atlanta Fed and Morgan Stanley slashed their estimates for Q3 growth as economic data continues to disappoint.\n\n“The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2021 is \n3.7\n \npercent\non September 2, \ndown from 5.3 percent on September 1\n.” – Atlanta Fed\n\nNotably, there were significant downward revisions to consumption and investment, declining from 2.6% and 23.4% to 1.9% and 19.3%, respectively. However, as we noted previously, such is not surprising as “stimulus” leaves the system, and the economic drivers return to normalcy.\nMorgan and Goldman As Well\nAs stated, Morgan Stanely also slashed their estimates:\n\n“\nWe are revising down 3Q GDP tracking to 2.9% from 6.5%, previously\n. Our forecast for 4Q GDP remains at 6.7%. The revision to 3Q implies full year 4Q/4Q GDP at 5.6% (5.7%Y) this year – 1.4pp lower than the Fed’s forecast of 7.0% in its June Summary of Economic Projections (SEP), and 0.7pp below Bloomberg consensus of economists at 6.3%.\n\n\nAn examination of the data reveals that the slowdown is not broad-based and primarily reflects payback from stimulus spending as well as continued supply chain bottlenecks.\n The swing factor is largest in spending on big-ticket durable goods that benefited most from stimulus checks and are affected most by lack of inventory and price increases due to supply shortages, for example motor vehicles.”\n\nAs we discussed previously, these two downgrades were playing catchup to our previous analysis and Goldman’s downgrade two weeks ago. To wit:\n\n“We have lowered our Q3 GDP forecast to +5.5%, reflecting hits to both consumer spending and production.\nSpending on dining, travel, and some other services is likely to decline in August, though we expect the drop to be modest and brief. Production is still suffering from supply chain disruptions, especially in the auto industry, and this is likely to mean less inventory rebuild in Q3.” –\n  Goldman Sachs\n\nInvestors should not overlook the importance of these downgrades.\nEarnings Estimates At Risk\nIn our post on“Peak Economic And Earnings Growth,” we stated that corporate earnings and profits ultimately get derived from economic activity (personal consumption and business investment). Therefore, it is unlikely the currently lofty expectations will get met.\nThe problem for investors currently is that analysts’ assumptions are always high, and markets are trading at more extreme valuations, which leaves little room for disappointment. For example, using analyst’s price target assumptions of 4700 for 2020 and current earnings expectations, the S&P is trading 2.6x earnings growth.\nSuch puts the current P/E at 25.6x earnings in 2020, which is still expensive by historical measures.\nThat also puts the S&P 500 grossly above its linear trend line as earnings growth begins to revert.\nThrough the end of this year, companies will guide down earnings estimates for a variety of reasons:\n\nEconomic growth won’t be as robust as anticipated.\nPotentially higher corporate tax rates could reduce earnings.\nThe increased input costs due to the stimulus can’t get passed on to consumers.\nHigher interest rates increasing borrowing costs which impact earnings.\nA weaker consumer than currently expected due to reduced employment and weaker wages.\nGlobal demand weakens due to a stronger dollar impacting exports.\n\nSuch will leave investors once again “overpaying” for earnings growth that fails to materialize.","news_type":1,"symbols_score_info":{"SPY":0.9,".DJI":0.9,".SPX":0.9,".IXIC":0.9}},"isVote":1,"tweetType":1,"viewCount":1131,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"CN","currentLanguage":"CN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":6,"subscribersOnly":false,"subscribersOnlyAccessible":false,"xxTargetLangEnum":"ZH_CN"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/817853294"}