Investing for Survival

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Tuesday, April 1, 2025

The Morning Call---Negative earnings revisions hit decade high

The Morning Call

4/1/25

The Market

Technical

Monday in the charts.

https://www.zerohedge.com/market-recaps/oil-gold-soar-us-stocks-suffer-worst-quarter-versus-rest-world-23-years

Fundamental

Headlines

The Economy

The March Chicago PMI came in at 47.6 versus estimates of 45.2.

https://www.advisorperspectives.com/dshort/updates/2025/03/31/chicago-pmi-hits-highest-level-since-november-2023

The March Dallas Fed manufacturing index was reported at -16.3 versus predictions of -12.0.

https://www.advisorperspectives.com/dshort/updates/2025/03/31/dallas-fed-manufacturing-conditions-worsen-to-8-month-low

International

The February Japanese unemployment rate was 2.4% versus forecasts of 2.5%; the Q1 large manufacturers index was 12, in line; the Q1 large nonmanufacturers index was 35 versus 33; the Q1 small manufacturers index was +2 versus -1; Q1 all industry cap ex was up 3.1% versus +11.0%; the March manufacturing PMI was 48.4 versus 48.3.

The February EU unemployment rate was 6.1% versus consensus of 6.2%; the March flash CPI was +0.6%, in line.

The March Chinese Caixin manufacturing PMI was 51.2 versus expectations of 51.1; the March German manufacturing PMI was 48.3, in line; the March EU manufacturing PMI was 48.6 versus 48.7; the March UK manufacturing PMI was 44.9 versus 44.6.

Other

Uncertainty impacting consumption.

https://econbrowser.com/archives/2025/03/consumption

March consumer sentiment versus consumer confidence.

https://www.advisorperspectives.com/dshort/updates/2025/03/31/two-measures-of-consumer-attitudes-march-2025

Goldman raises 2025 forecast for inflation and lowers it for economic growth.

https://www.wsj.com/economy/central-banking/goldman-sachs-lifts-u-s-recession-probability-to-35-ce285ebc?mod=economy_lead_pos1

Monday in the economic charts.

https://dailyshotbrief.com/the-daily-shot-brief-march-28th-2025/

Overnight News

President Trump said that he had settled on a plan for his latest batch of tariffs expected this week but didn’t reveal what he had decided, after his economic team struggled to coalesce around a remade U.S. trade strategy. He wants to both raise revenue with tariffs and use them as leverage to get other nations to lower their own duties, or make other policy changes.

EU Commission President von der Leyen says the bloc has the power to push back against US tariffs; all instruments are on the table for countermeasures; EU is open to negotiations on trade. Says EU needs to take down the remaining barriers in the single market. Adds, EU has a strong plan to retaliate if necessary and will use it.

UK PM Starmer says discussions on an economic deal with the US are "well advanced".

Monetary Policy

M2 update.

https://fred.stlouisfed.org/series/WM2NS

Fiscal Policy

The weak dollar is MAGA’s silent killer.

https://www.realclearmarkets.com/articles/2025/03/31/the_weaker_us_dollar_is_magas_silent_killer_1100789.html

Fraud in the social security system.

https://www.powerlineblog.com/archives/2025/03/inside-social-security.php

Inflation

Inflation galore.

https://wolfstreet.com/2025/03/28/inflation-galore-now-fed-started-rate-cuts-at-the-low-point-6-months-ago-just-as-inflation-began-to-resurge/

Counterpoint.

https://bonddad.blogspot.com/2025/03/why-i-am-not-concerned-by-february.html

February CPI versus PCE price index.

https://www.advisorperspectives.com/dshort/updates/2025/03/31/two-measures-of-inflation-february-2025

Tariffs

How the trade war damages Apple.

https://www.realclearmarkets.com/articles/2025/03/31/trumps_trade_war_is_damaging_one_of_the_uss_most_valuable_companies_1100452.html

Tariffs repel foreign investment.

https://www.wsj.com/opinion/tariffs-repel-foreign-investment-trade-policy-economy-833d4d2a?mod=opinion_lead_pos11

Do trade deficits matter?

https://www.advisorperspectives.com/commentaries/2025/03/31/trade-deficits-matter-do

Investing

Invest based on what is happening not what will or should happen.

https://traderfeed.blogspot.com/2025/03/the-psychology-of-playing-big-market.html

Investors are demanding a higher risk premium as uncertainty spikes.

https://www.capitalspectator.com/equities-demand-higher-risk-premium-as-uncertainty-spikes/

The latest from JP Morgan.

https://www.zerohedge.com/markets/tactical-tariff-thoughts-must-read-april-2-primer-jpmorgans-trading-desk

Too many uncomfortable things are converging.

https://www.zerohedge.com/geopolitical/too-many-uncomfortable-things-are-converging

Negative earnings revisions hit decade high.

https://www.zerohedge.com/the-market-ear/fundamentals-dont-lie-negative-revisions-hit-decade-highs

News on Stocks in Our Portfolios

What I am reading today

Europe: why crisis and decline lie ahead.

https://www.nakedcapitalism.com/2025/03/satyajit-das-european-mirages-why-crises-and-decline-lies-ahead.html

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

Monday, March 31, 2025

Monday Morning Chartology

The Morning Call

3/31/25

The Market

Technical

The S&P tried to push up through its 200 DMA but failed. While it made a second higher high, it also torched a very short term uptrend off its March 13 low. All in all, not a very encouraging week. Let’s see how it handles that March 13 low (~5503). If it holds, then the case for that level as a bottom strengthens somewhat. If not………. Until we know the results, I think doing nothing is the right long term strategy.

Does this look bullish to you?

https://www.zerohedge.com/the-market-ear/does-look-bullish-you

Beginning of the end?

https://www.zerohedge.com/the-market-ear/spx-rejected-200dma-beginning-end

Despite Friday’s decent pin action, the long bond’s weekly performance wasn’t all that great. It made a lower high followed by lower low---clearly giving the impression of rolling over after the brief rally off its January 14 low (lower boundary of its very short term trading range). The good news is that it tested both its 50 and 100 DMAs to the downside and failed. Like the S&P, I find it hard to make the call that a bottom has been made.

GLD made yet another a new higher high last week. It remains well within a very short term uptrend and in uptrends across all other time frames as well as above all DMAs. If you held on to it, (unlike me), congratulations. Hang in there.

Elliott Wave analysis of gold.

https://talkmarkets.com/content/commodities/gold-is-finishing-an-extended-wave-5-of-iii-elliott-wave-analysis?post=488948

The dollar closed higher for a second week in a row; but, nonetheless, remains in a confirmed downtrend---below all DMAs and in a very short term downtrend. That is generally supportive of higher gold prices.

Friday in the charts.

https://www.zerohedge.com/market-recaps/gold-surges-best-start-year-1986-stagflation-scare-slams-stocks-q1

Fundamental

Headlines

The Economy

Last week’s stats were overwhelmingly upbeat as were the primary indicators (five plus, one neutral, one negative). This is the fourth week in a row of relatively positive data offsetting that four week run of poor numbers. So, I am going to downgrade the flashing red light to yellow.

There were two inflation stats---one favorable, one neutral---plus one upbeat datapoint from overseas. That keeps my inflation forecast at risk.

Of course, overshadowing all was the latest move in Trump’s trade war with the rest of the world, especially our closest allies. Given his generally erratic behavior, I have no clue how much of these actions are negotiating and how much firm policy. So it is almost impossible to figure what the ultimate quantitative impact will be on the US or any other country’s economy. What we do know is that he is not making any friends (not that he cares) and someday that could come back and bite us.

https://www.nytimes.com/2025/03/27/us/politics/trump-car-tariffs-trade-strategy.html

How Trump tariffs are hitting major auto exporters.

https://www.wsj.com/business/autos/how-trumps-tariffs-are-hitting-the-worlds-biggest-auto-exporters-17b2dd12?st=XHJeh3

A more positive view of Trump’s tariffs.

https://www.project-syndicate.org/commentary/democrats-misguided-criticism-of-trump-tariffs-by-lori-wallach-2025-03

How uncertainty undermines business investment.

https://www.aei.org/economics/how-uncertainty-undermines-business-investment/

Bottom line, I am holding to my ‘muddle through’ economy and maintaining my conviction that inflation has seen its lows---though I would caution that this forecast and any other that you see or hear is tenuous at best.

International

February Japanese YoY housing starts were up 2.4% versus consensus of down 1.4%; February YoY construction orders declined 3.3% versus +15.0%.

February German retail sales rose 0.8% versus projections of 0.0%; March preliminary CPI was +0.3% versus +0.4%.

Other

How Americans spend their money.

https://politicalcalculations.blogspot.com/2025/03/how-much-and-on-what-do-american.html

Some concern in one nowcast.

https://econbrowser.com/archives/2025/03/2024q4-gdp-gdo-gdp-and-nowcasted-consumption-crash

But less so in another.

https://www.capitalspectator.com/us-economic-growth-remains-on-track-to-slow-in-q1/

Real income, spending, savings, and sales continue to expand.

https://bonddad.blogspot.com/2025/03/real-income-spending-saving-and-sales.html

Q4 GDP per capita.

https://www.advisorperspectives.com/dshort/updates/2025/03/27/gdp-per-capita-q4-2024-third-estimate

Fiscal Policy

The government’s fiscal mess.

https://wolfstreet.com/2025/03/27/us-government-fiscal-mess-debt-deficit-interest-payments-and-tax-receipts-q4-2024-update-on-an-ugly-situation/

Inflation

The case against stagflation.

Stagflation Panic: A Misdiagosed Media Spin - RIA

Investing

Trump policies lead to total no confidence.

https://www.zerohedge.com/the-market-ear/reign-trump-tariff-terror-leads-total-non-confidence

Th case for owning international stocks.

https://disciplinefunds.com/2025/03/26/why-is-international-investing-working-again/

Saleable rally of buy the dip?

Sellable Rally Or "Buy The Dip" - RIA

Latest from BofA.

https://www.zerohedge.com/markets/hartnett-ignore-april-2-date-will-set-markets-next-direction

Latest from Goldman’s trading desk.

https://www.zerohedge.com/markets/goldman-trading-desk-three-topics-dominated-all-conversations-week

News on Stocks in Our Portfolios

What I am reading today

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Wednesday, April 2, 2025

The Morning Call--Valuation evaluation

Tuesday, April 1, 2025

The Morning Call---Negative earnings revisions hit decade high

Monday, March 31, 2025

Monday Morning Chartology

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