Investing for Survival

Q4 Chinese YoY GDP growth was 5.4% versus projections of 5.0%: December industrial production was up 6.2% versus 5.4%; December retail sales were up 3.7% versus +3.5%.

December UK retail sales fell 0.3% versus forecasts of +0.4%; ex fuel, they were down 0.6% versus +0.1%.

December EU CPI was up 0.4%, in line.

Other

Update on big four recession indicators.

The Big Four Recession Indicators: Real Retail Sales Up 0.1% in December - dshort - Advisor Perspectives

Retail sales as a recession indicator.

https://bonddad.blogspot.com/2025/01/real-retail-sales-remain-positive-for.html

Fiscal Policy

Trump versus the bond vigilantes.

https://www.reuters.com/markets/rates-bonds/how-bond-vigilantes-could-check-trumps-power-2025-01-16/

Treasury Secretary nominee Bessent thoughts on the economy.

https://www.zerohedge.com/markets/no-across-board-tariffs-and-weak-dollar-what-trumps-treasury-secretary-really-wants

Inflation

The only path out of the inflation quagmire.

https://www.creators.com/read/veronique-de-rugy/01/25/the-only-path-leading-all-the-way-out-of-our-inflation-quagmire#google_vignette

Bond market premium indicates investors still worried about inflation.

https://www.capitalspectator.com/10-year-us-treasury-yield-fair-value-estimate-16-january-2025/

As they should be.

https://www.zerohedge.com/markets/doves-might-be-caught-guard-after-inflation-gods-smiled-week

Investing

Benjamin Graham and how to invest like a legend.

https://thedailyeconomy.org/article/benjamin-graham-and-how-to-invest-like-a-legend/

What if stocks only rise 3%?

https://www.theretirementmanifesto.com/what-if-stocks-only-rise-3/?

News on Stocks in Our Portfolios

Fastenal (NASDAQ:FAST) declares $0.43/share quarterly dividend, 10.3% increase from prior dividend of $0.39.

What I am reading today

Another great insight from Morgan Housel: the dumber the disagreement, the better the world is.

https://collabfund.com/blog/minimum-levels-of-stress/

What the LA fires mean for your insurance bill.

https://thehill.com/opinion/finance/5084605-los-angeles-wildfires-insurance-costs/

More: this article likely overstates the case, but you still get the point.

https://www.zerohedge.com/personal-finance/catalyst-next-financial-crisis-homeowners-insurance

The growing retirement crisis.

https://www.zerohedge.com/personal-finance/18-incredible-statistics-about-americas-rapidly-growing-retirement-crisis-will

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

Thursday, January 16, 2025

The Morning Call---Slimmming down a top heavy market

The Morning Call

1/16/25

The Market

Technical

Wednesday in the charts.

https://www.zerohedge.com/market-recaps/buy-all-things-soft-cpi-bullish-bank-eps-sparks-risk-rip

Three bond charts to watch.

https://www.zerohedge.com/the-market-ear/3-rate-charts-we-are-watching-0

The dollar: Too much, too fast?

https://www.zerohedge.com/the-market-ear/dollar-too-much-too-fast

Fundamental

Headlines

The Economy

Weekly initial jobless claims totaled 217,000 versus estimates of 210,000.

https://www.zerohedge.com/personal-finance/initial-jobless-claims-hit-3-year-high-despite-post-election-surge-hiring-plans

December retail sales rose 0.4% versus projections of +0.6%; ex autos, they were up 0.4%, in line.

https://www.zerohedge.com/markets/us-retail-sales-disappoint-december-despite-surge-auto-sales-gas-costs

The January Philadelphia Fed manufacturing index was 44.3 (no misprint) versus consensus of -5.

International

The November EU trade balance was +E16.4 billion versus expectations of +E8.5b billion.

November UK GDP growth was +0.6% versus forecasts of +0.2%; the November trade balance was -L4.7 billion versus -L3.9 billion; November industrial production fell 0.4% versus +0.1%.

December Japanese PPI was up 0.3% versus predictions of +0.4%.

December German CPI was up 0.5% versus estimates of +0.4%.

Other

The latest Fed Beige Book doesn’t tell us anything new.

https://www.calculatedriskblog.com/2025/01/feds-beige-book-economic-activity.html

Inflation

Inside Tuesday’s PPI number.

https://wolfstreet.com/2025/01/14/ppi-inflation-accelerated-to-3-3-driven-by-core-services-ppi-4-0-both-the-worst-readings-in-nearly-2-years/

Inside Wednesday’s CPI number.

https://bonddad.blogspot.com/2025/01/december-cpi-rebounds-in-gas-and-car.html

How the CPI is constructed.

https://www.advisorperspectives.com/dshort/updates/2025/01/15/inside-the-consumer-price-index-december-2024

The effect of wildfires on the CPI.

https://dailyshotbrief.com/the-daily-shot-brief-january-15th-2025/

The Financial System

Potential problems in the private credit market.

https://www.ft.com/content/62a40125-0f58-4855-b443-f3385c16a604

Tariffs

The impact of tariffs on small businesses.

https://thedailyeconomy.org/article/crafting-a-crisis-the-unseen-impact-of-tariffs-on-artisans-at-home/

Investing

Slimming down a top heavy market.

https://www.advisorperspectives.com/commentaries/2025/01/15/slimming-top-heavy-market

Two big risks facing investors.

https://www.ft.com/content/13eb35f1-b82c-41a7-9804-06ec34e34e59

Gold in the 21^st century.

https://www.indexologyblog.com/2025/01/09/the-king-of-the-21st-century-wears-a-golden-crown/

News on Stocks in Our Portfolios

What I am reading today

David Stockman on climate change.

https://www.zerohedge.com/political/stockman-wildfires-and-hoary-hoax-burning-planet

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

Wednesday, January 15, 2025

The Morning Call--Becoming more tactically bearish

The Morning Call

1/15/25

The Market

Technical

Tuesday in the charts.

https://www.zerohedge.com/market-recaps/bitcoin-bullion-bid-bear-market-bullish-sentiment-continues-stocks

From Goldman’s trading desk.

https://www.zerohedge.com/markets/goldmans-final-thoughts-ahead-most-important-cpi-print-long-time

Market dislocations too big to ignore.

https://www.zerohedge.com/the-market-ear/market-dislocations-too-big-ignore

Tick pattern.

https://markettells.com/2025/01/14/tick-pattern/

Fundamental

Headlines

The Economy

Weekly mortgage applications soared 33.3% (not a misprint) while purchase applications were up 26.9%.

Month to date retail chain store sales grew slower than in the prior week.

The December budget deficit was $87 billion versus projections of $75 billion.

December CPI was up 0.4% versus forecasts of +0.3%; core CPI was up 0.2%, in line.

https://www.zerohedge.com/personal-finance/consumer-prices-soared-over-21-under-biden

The January NY Fed manufacturing index was -12.6 versus predictions of +3.0.

International

November EU industrial production rose 0.2% versus estimates of +0.3%.

December Japanese machine tool orders were up 11.2% versus expectations of +3.0%.

December UK CPI came in at +0.3% versus consensus of +0.4%; core CPI was +0.3% versus +0.5%.

2024 German GDP contracted 0.2%, in line.

Other

Updated Q4 nowcasts.

https://www.capitalspectator.com/us-q4-gdp-on-track-to-post-2-plus-growth/

PPI joins the parade of yellow flags.

https://bonddad.blogspot.com/2025/01/producer-prices-join-parade-of-yellow.html

Not too cold; not too hot.

Not Too Cold, Not Too Hot

Tariffs

As you know, I have been very critical of Trump’s new proposed tariff regime. This is an article from an economist that I respect provides some sound justification for increasing tariffs---assuming they are implemented along the lines detailed in the article. While I am not totally convinced, I think that the points made bear consideration.

https://wolfstreet.com/2025/01/13/some-basics-about-u-s-tariffs-and-what-trumps-new-economic-team-said-about-tariffs/

China

China’s central bank: stuck between supporting the economy and fighting deflation.

https://www.wsj.com/economy/central-banking/chinas-central-bank-reiterates-easing-pledges-amid-policy-dilemmas-1f88ac61?mod=economy_lead_story

Investing

Good news is good news.

https://alhambrapartners.com/weekly-market-pulse-good-news-is-good-news-3/?src=news

Becoming more tactically bearish.

Tactically Bearish As Risks Increase - RIA

Are valuations too high or is it different this time?

https://www.zerohedge.com/the-market-ear/666-times-thanks-playing

The latest from Goldman’s trading desk.

https://www.zerohedge.com/markets/goldman-trader-tightening-financial-conditions-just-starting-cuts-resume-h2-2025

Asset managers turn more defensive.

https://www.ft.com/content/1b219cb4-8779-4d4e-bfd8-5f7c6c0116cf

The latest from Howard Marks.

https://www.oaktreecapital.com/insights/memo/on-bubble-watch

The best and worst of times to be an investor.

https://behaviouralinvestment.com/2025/01/14/it-was-the-best-of-times-it-was-the-worst-of-times-to-be-an-investor/

Ten breakthrough technologies.

https://www.technologyreview.com/2025/01/03/1109178/10-breakthrough-technologies-2025/

Pain is coming for emerging markets.

https://www.ft.com/content/93741af5-3f31-4136-9e9b-3da34a659db5

News on Stocks in Our Portfolios

BlackRock press release (NYSE:BLK): Q4 Non-GAAP EPS of $11.93 beats by $0.71.

Revenue of $5.68B (+22.7% Y/Y) beats by $100M.

What I am reading today

Quote of the day.

https://cafehayek.com/2025/01/quotation-of-the-day-4889.html

Aphrodite and the ancients attitude about love and desire.

What the cult of Aphrodite reveals about ancient attitudes towards love—and desire

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