Wednesday, September 10, 2025

Bloomberg chief economists says the US entered a recession in Q2 2024. Bear in mind this is one economist hinging her opinion on one datapoint; although it doesn’t mean she is wrong.

https://www.zerohedge.com/markets/bloomberg-chief-economists-stunning-admission-job-revisions-confirm-recession-started-mid

Investing

Equity duration and predictability.

https://alphaarchitect.com/equity-duration/

Goldman makes the case for commodities as a hedge.

https://www.zerohedge.com/commodities/goldman-makes-case-commodities-macro-tail-hedge

News on Stocks in Our Portfolios

Oracle press release (NYSE:ORCL): Q1 Non-GAAP EPS of $1.47 misses by $0.01.

Revenue of $14.93B (+12.3% Y/Y) misses by $110M.

What I am reading today

Twelfth grade reading and math scores in US hit new low.

https://www.wsj.com/us-news/education/test-scores-low-reading-math-naep-d87099b6?mod=hp_lead_pos5

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Tuesday, September 9, 2025

The Morning Call---Extreme concentration in the S&P

The Morning Call

9/9/25

The Market

Technical

Monday in the charts.

https://www.zerohedge.com/market-recaps/gold-surges-new-record-high-big-tech-bitcoin-pumpndump

Monday in the technical stats.

https://www.barchart.com/stocks/momentum

https://www.barchart.com/stocks/sectors/rankings

https://www.barchart.com/stocks/signals/new-recommendations

What happens next?

https://talkmarkets.com/content/stocks--equities/major-us-equity-indices-sitting-on-tons-of-gains-post-april-lows?post=521007

Gold goes parabolic.

https://www.zerohedge.com/the-market-ear/gold-goes-parabolic-feds-credibility-burns

Fundamental

Headlines

The Economy

The August small business optimism index came in at 100.8 versus forecasts of 100.7.

International

August Japanese YoY machine tool orders were up 8.1% versus projections of up 3.9%.

Other

The labor market warning light is flashing red.

https://www.carsongroup.com/insights/blog/the-labor-market-is-flashing-a-big-red-sign/

Update on big four recession indicators.

https://www.advisorperspectives.com/dshort/updates/2025/09/08/the-big-four-recession-indicators-august-2025-employment

Lumber crashing.

https://www.zerohedge.com/the-market-ear/lumberrrr-crash-3-charts-were-watching

Overnight News

After two federal courts have found that many of the steep emergency tariffs imposed by Trump are illegal, if the Supreme Court rules that Trump did not have the authority to impose the tariffs, the U.S. government could be obligated to refund importers anywhere from $750 billion to $1 trillion, Treasury Secretary Scott Bessent warned. This could potentially place upward pressure on yields.

Monetary Policy

The Fed can’t alter reality.

https://www.forbes.com/sites/johntamny/2025/09/07/the-fed-as-a-source-of-economic-growth-is-a-monstrous-delusion/

The Avignon Federal Reserve.

https://www.ft.com/content/a6b2dd2e-6bfb-4aea-9d7b-f04f068da704

The Fed’s fiscal irresponsibility.

https://wolfstreet.com/2025/09/05/bessent-blasts-the-fed-for-qe-its-perverse-incentives-for-fiscal-irresponsibility-its-wealth-effect-policies-that-widened-clas/

Counterpoint.

https://www.bloomberg.com/opinion/articles/2025-09-08/bessent-s-fed-critique-misses-the-big-picture?srnd=homepage-americas&sref=loFkkPMQ

The triple whammy on rates scenario.

https://wolfstreet.com/2025/09/07/scenario-of-a-triple-whammy-for-long-term-treasury-yields/

Trump’s risky game with the Fed.

https://www.wsj.com/opinion/trumps-risky-game-with-the-fed-1d727c53?st=a1QY2A&reflink=desktopwebshare_permalink

Fiscal Policy

So far, MAGA economics is losing.

https://reason.com/2025/09/05/maga-economics-is-losing/

Recession

Is the economy already in a recession?

https://econbrowser.com/archives/2025/09/is-the-us-already-in-recession

The wave of layoffs has just begun (21 minute video).

https://talkmarkets.com/content/economics--politics/the-largest-wave-of-layoffs-since-2020-has-begun?post=521041

Recession watch metrics.

https://www.calculatedriskblog.com/2025/09/recession-watch-metrics.html

Inflation

Why people aren’t happy?

https://mishtalk.com/economics/actual-vs-predicted-consumer-sentiment-is-a-big-hoot/

Investing

Earnings led meltup?

Earnings-Led Meltup?

How to think about bitcoin allocations.

https://www.advisorperspectives.com/commentaries/2025/09/08/how-think-bitcoin-allocations

Bitcoin supply shock.

https://www.zerohedge.com/crypto/bitcoins-hidden-scarcity-lost-coins-and-silent-supply-shock

Diversification is failing in the age of passive investing.

https://talkmarkets.com/content/stocks--equities/why-diversification-is-failing-in-the-age-of-passive-investing?post=521020

Extreme concentration in S&P.

https://www.apolloacademy.com/extreme-concentration-in-the-sp-500-3/

Small caps making a comeback.

https://www.zerohedge.com/the-market-ear/mighty-russell-years-pain-now-payback

News on Stocks in Our Portfolios

What I am reading today

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Monday, September 8, 2025

Moday Morning Chartology

The Morning Call

9/8/25

The Market

Technical

The S&P tried for a second time to close above its prior all time high and failed. I said last week that the ‘first failure’ was ‘not in and off itself a reason for concern.’ However, while the second time may not be a charm, it is enough to put one on the alert---that this may be a top, at least for a little while. That said, the index is (1) above all three DMAs and (2) in uptrends across all timeframes. So, a lot more damage needs to be done to prompt real concern. Indeed, this may be nothing more than the negative seasonals kicking in. Still valuations are in nosebleed territory. I remain of the opinion that this is a market to trade not invest in long term. If you do, be sure to have close in stops. I still hold GDX.

The latest from Goldman’s trading desk.

https://www.zerohedge.com/markets/bond-market-suddenly-more-concerned-about-jobs-inflation

The bond market clearly loved the Friday’s job reports which cemented a Fed rate cut and perhaps more than one. TLT is now in the upper range of a pennant formation dating back almost a year and has (1) confirmed a break above its 50 DMA, (2) will confirm a reset of its 100 DMA if it remains there through the close today, (3) will confirm a reset of its 200 DMA if it remains above it through the close on Wednesday and (4) is about to the test the upper boundary of the aforementioned pennant formation. While this is a one day performance, it does suggest a wholesale revision in the bond boys playbook---suggesting a major change in the direction of interest rates. All that said, as always follow through is the most important thing to watch.

My lead in last week was: ‘Gold is giving a break above its quadruple high the old college try. As always follow through is key at this stage.’ And follow though it did, largely reflecting the same sentiment gripping the bond boys. Certainly encouraging holders of GLD.

Like all the above indices, the dollar’s pin action reflected a major shift in investor perceptions, i.e., that the coming rate cut may be larger than 25 basis points and/or that there may be more cuts to come. You can see that there is support at the 50 and 100 DMA’s. Let’s see if they can halt the down move. Even if they do, it is still an ugly chart. I remain hard pressed to think that the worst is over.

https://talkmarkets.com/content/currenciesforex/us-dollar-index-sinks-below-9800-as-fed-rate-cut-bets-pick-up-pace?post=520506

Friday in the charts.

https://www.zerohedge.com/market-recaps/buy-all-things-bad-data-sparks-big-week-bonds-bullion-bitcoin

Friday in the technical stats.

https://www.barchart.com/stocks/momentum

https://www.barchart.com/stocks/sectors/rankings

https://www.barchart.com/stocks/signals/new-recommendations

Fundamental

Headlines

The Economy

The US stats last week were quite negative though the primary indicators were only marginally so (one neutral, one minus). No inflation numbers. Overseas, the data was fairly balanced with one positive and one neutral price stat.

Remember in the prior week, the US measures were overwhelmingly positive; so I am not inclined to read too much into this latest data. That said, the most important number of the week was the negative primary indicator which was the nonfarm payrolls report. While this is only one datapoint, it is one that the Market (and the Fed) were focused on; and hence, one that (the Market certainly thinks) is likely to be a major determinant of monetary policy, i.e., substantially increasing not only the likelihood of a rate cut at the Fed’s September meeting but also (1) the size of the September cut as well as (2) the number and frequency of subsequent reductions.

https://bonddad.blogspot.com/2025/09/august-jobs-report-recession-watch-as.html

However, I still believe that an aggressive easing of monetary policy will only increase the likelihood of my ‘inflation is as good as it is going to get’ forecast. Indeed, as I opined last week, with the onset of tariffs and the deficits from the BBB, inflation could become an even larger problem than I previously thought.

International

Q2 Japanese GDP growth was +0.5% versus forecasts of +0.3%; Q2 capital expenditures were up 0.6% versus +1.3#; Q2 private consumption was +0.4% versus +0.2%.

The July German trade balance was +E14.7 billion versus predictions of +E21.4 billion; July industrial production rose 1.3% versus +1.1%.

The August Chinese trade balance was $102.3 billion versus consensus oof $95.0 billion.

Other

What the yield curve is telling us.

https://evergreengavekal.com/blog/convictions-and-concerns/

Update on the Fed’s balance sheet.

https://wolfstreet.com/2025/09/04/fed-balance-sheet-qt-39-billion-in-august-2-36-trillion-from-peak-to-6-60-trillion/

Monetary Policy

Fed independence doesn’t matter.

https://www.realclearmarkets.com/articles/2025/09/05/the_markets_will_speak_regardless_of_the_feds_so-called_independence_1132853.html

Investing

Wall Street’s march into crypto.

https://www.riskhedge.com/outplacement/wall-streets-march-into-crypto-and-what-comes-next/rcm?utm_campaign=RH-144&utm_content=RH144OP809&utm_medium=ED&utm_source=rcm

Five investing convictions.

https://evergreengavekal.com/blog/convictions-and-concerns/

Is the Market overbought?

https://www.capitalspectator.com/is-the-stock-market-overbought/

The latest from BofA.

https://www.zerohedge.com/markets/1970s-nixon-rerun-why-hartnett-betting-it-all-gold-crypto-and-yield-curve-control

The bond market is suddenly more concerned about jobs than inflation.

https://www.zerohedge.com/markets/bond-market-suddenly-more-concerned-about-jobs-inflation

News on Stocks in Our Portfolios

AbbVie declares $1.64 dividend

What I am reading today

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Wednesday, September 10, 2025

The Morning Call--The recession started last year?

Tuesday, September 9, 2025

The Morning Call---Extreme concentration in the S&P

Monday, September 8, 2025

Moday Morning Chartology

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