The Morning Call--The US reckless fiscal policy

 

The Morning Call

 

5/3/24

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/markets-chop-wall-street-awaits-apple-earnings-after-bell-nfp-friday-market-direction

 

            Excessive optimism streak broken.

            https://www.advisorperspectives.com/commentaries/2024/05/02/optimism-streak-broken-ned-davis-research

 

            Why are gold prices going up?

            https://www.apolloacademy.com/why-are-gold-prices-going-up/

 

    Fundamental

 

       Headlines

                                                

              The Economy

 

                        US

 

                          Weekly jobless claims totaled 208,000 versus estimates of 212,000.

 

Q1 nonfarm productivity rose 0.3% versus projections of +0.8%; unit labor costs were up 4.7% versus +3.3%.

 

The March trade balance was -$69.4 billion versus consensus of -$69.1 billion.

 

March factory orders were up 1.6%, in line; ex transportation, they were up 0.5%, also in line.

 

                        International

 

The April UK services PMI was 55.0 versus predictions of 54.9; the April composite PMI was 54.1 versus 54.0.

 

                        Other

 

            The Fed

 

For those of you who didn’t see the Q&A at Powell’s presser, here are the important parts.

https://www.nakedcapitalism.com/2024/05/oh-deary-where-did-my-rate-cuts-go-feds-wait-and-see-now-entrenched-and-suddenly-lots-of-talk-about-rate-hikes.html

 

              Right for the wrong reasons.

              https://www.ft.com/content/aa8c68f7-9dad-465f-ab92-c64c38337a84

 

            Fiscal Policy

 

              On raising the minimum wage.

              https://www.aier.org/article/they-can-afford-it/

 

              Trump is mistaken about tariffs (warning: part of this is political commentary)

              https://www.msnbc.com/opinion/msnbc-opinion/trump-biden-inflation-time-magazine-interview-rcna150006

 

              And.

              https://cafehayek.com/2024/05/bonus-quotation-of-the-day-1028.html

 

              The US reckless fiscal policy is a danger to its own and the global economy.

              https://www.economist.com/leaders/2024/05/02/americas-reckless-borrowing-is-a-danger-to-its-economy-and-the-worlds

 

            Inflation

 

              Higher for longer?

              https://mrzepczynski.blogspot.com/2024/04/inflation-yes-there-was-transitory.html

 

              More on the impact of Owners’ Equivalent Rent on inflation.

              https://ritholtz.com/2024/05/fed-cutting-oer/

       

Bottom line

 

            The mention of ‘sticky inflation’ in Q1 earnings calls hits a high.

            https://www.zerohedge.com/markets/sticky-inflation-mentions-earnings-calls-hits-new-high-big-brands-warn-about-buckling

 

            Goldman says that the Fed and Treasury are both in full stock support mode.

            https://www.zerohedge.com/markets/goldman-explains-why-fed-and-treasury-are-now-both-stock-support-mode

 

            How actionable are leaks?

            https://klementoninvesting.substack.com/p/leaking-like-a-sieve

 

            How important are ‘catalysts’ in the investment process?

            https://behaviouralinvestment.com/2024/05/01/the-curious-case-of-catalysts/

 

            April dividends by the numbers.

            https://politicalcalculations.blogspot.com/2024/05/dividends-by-numbers-in-april-2024.html

 

            More on valuations.

            https://www.advisorperspectives.com/dshort/updates/2024/05/02/buffett-valuation-indicator-april-2024

            https://www.advisorperspectives.com/dshort/updates/2024/05/01/market-valuation-is-the-market-still-overvalued

 

News on Stocks in Our Portfolios

 

Apple press release (NASDAQ:AAPL): Q2 GAAP EPS of $1.53 beats by $0.03.

Revenue of $90.8B (-4.3% Y/Y) beats by $190M.

 

Apple (NASDAQ:AAPL) declares $0.25/share quarterly dividend, 4.2% increase from prior dividend of $0.24.

 

EOG Resources press release (NYSE:EOG): Q1 Non-GAAP EPS of $2.82 beats by $0.24.

Revenue of $6.12B (+1.3% Y/Y) beats by $1.78B.

 

 

What I am reading today

 

            The empty rhetoric of the current presidential campaign.

            https://www.realclearmarkets.com/articles/2024/05/02/every_election_is_the_most_consequential_in_our_lifetime_1028503.html

 

 

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