The Morning Call---the war is starting to make its mark on the US economy

 

The Morning Call

 

5/1/26

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/stocks-thrust-new-all-time-high-amid-powerful-rotations-below-surface

 

Summary: So much for that record month-end pension selling: the size and speed of dip-buying has never been greater. After S&P futures slumped overnight following a report that Trump may launch a new military campaign on Iran (he didn't, and the latest Axios report proved to be a bear trap), dropping as low as 7130, stocks have been a one-way train since the open, rising more than 100 points from the overnight lows and a panic meltup since the open - the only time we saw a modest sell order today - with barely and any retracements or red candles. For those asking, yes - this is what the dot com bubble felt like on many days (and it will get much crazier).

 

            Thursday in the technical stats.

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

            https://www.barchart.com/stocks/market-performance

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

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

 

            Compliancy is back.

            https://www.zerohedge.com/the-market-ear/complacency-back-right-cue

 

            Mutual funds forced to chase.

            https://www.zerohedge.com/markets/mutual-funds-forced-chase-nomuras-mcelligott-explains-meltup-and-how-trade-it

 

Summary:  mutual funds are getting crunched "because they can’t / don’t own enough of what matters, as ten Tech stocks account for ~75% of the 12% SPX rally since March 30th—and officially killing-off the brief 4Q25/1Q26 “Dispersion” out of MegaCap Tech AI into “Everything Else.”  Instead, it’s now “back to the future”: Mag7+ are once again in total control of index returns, where due to the return to “extreme concentration of returns,” these structural underweights in the largest Index market cap stocks see performance pain further compounded by legacy “Funding Shorts” (INTC, AMD, QCOM, analog chip makers, power names) also booming higher, and creating what’s been a nonstop scramble to close the underperformance. 

 

 

            Bitcoin hits resistance.

            https://talkmarkets.com/article/bitcoin-hits-resistance---bulls-are-running-out-of-easy-road-1777572057

 

            On the other hand….

            https://www.zerohedge.com/the-market-ear/gs-bitcoin-shorts-risk-forced-liquidations

 

Friday morning setup: US equity futures are higher, set for a new all-time high, as the rally that’s pushed Wall Street to record highs on strong megacap tech earnings continues, after the S&P posted its best monthly increase since November 2020. As of 8:00am ET, S&P futures are up 0.3% (spiking moments ago on a report that Iran submitted its latest response to US amendments on the ceasefire agreement), while Nasdaq futures are modestly in the red and the Russell underperforms. Pre-market, AAPL is up 3% on healthy guidance and earnings beat even as it warned that memory-chip costs will increase and that shortages of Mac computers will persist for “several months.” NVDA and MSFT are 40bp higher, while AMZN is down 60bp. Headlines since yesterday’s close have been largely quiet, especially given the market holidays across most European and Asian markets. Bond yields dropped 1-2bp, and oil slipped after news that Iran had delivered its response to the latest US ceasefire amendment via Pakistani sources; the news pushed Brent down by about $1 to $110 and WTI dropped to session lows around $103; precious metals and aluminum are lower. The dollar was little changed having wrapped up its worst month since June, after a second intervention to by the BOJ/MOF in Japan pushed the yen sharply higher (although it has again given up most of its gains). Gold traded around $4,600 an ounce. Today's economic data calendar slate includes April manufacturing PMI (9:45am) and ISM manufacturing (10am). Fed speaker slate includes Miran at 8am

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

The February leading economic indicators were up 0.3% versus forecasts of -0.1%; the March leading economic indicators were down 0.6%, predictions provided.

 

The April Chicago PMI came in at 49.2 versus consensus of 53.0.

 

                        International

 

April Japanese YoY CPI was up 1.5% versus expectations of +1.7%; ex food and energy, it was up 1.5% versus 1.7%; the April final manufacturing PMI was 55.1 versus 54.9.

 

                          The April UK final manufacturing PMI was 53.7 versus estimates of 53.6.

 

                        Other

 

                          Products most impacted by higher oil prices.

  https://theweek.com/world-news/products-used-us-impacted-higher-oil-prices?refid=75FFC898AD6883CBB120FC6A86C62323&utm_medium=email&utm_campaign=afternoon_newsletter_20260429&utm_source=afternoon_newsletter

 

                          March real disposable income per capita.

                          https://www.advisorperspectives.com/dshort/updates/2026/04/30/gdp-per-capita-q1-2026-advance-estimate

 

                          The war is starting to make its mark on the US economy.

                          https://bonddad.blogspot.com/2026/04/stagflationary-real-personal-income.html

 

            Overnight News

 

Iran delivered its latest response to US amendments on the agreement to end the war through Pakistani mediators.

 

 U.S.-Iran ceasefire that began in early April has "terminated" hostilities between the two sides for the purposes of an approaching congressional war powers deadline, a senior official of President Donald Trump's ‌administration said on Thursday.

 

The US credit rating is under pressure from a widening deficit, with debt “far above” other AA peers, Fitch warned. It expects further fiscal deterioration, driven by tax cuts.

 

A growing camp of hard-liners believe Iran has to take the military initiative and start a shooting war again to send oil prices soaring higher and increase the pressure on Trump. They argue that the blockade goes beyond the sanctions Iran has faced down in the past and amounts to an act of war that must have a military response.

 

            Monetary Policy

 

              The minefield that awaits Keven Warsh.

              https://www.politico.com/news/2026/04/29/warsh-fed-powell-trump-iran-inflation-00896496

 

              Rising oil prices force EU monetary authorities to consider excruciating choices.

  https://www.nytimes.com/2026/04/30/business/bank-of-england-european-central-bank.html?unlocked_article_code=1.e1A.WDeZ.QRd9Onz_quoK&smid=url-share

 

 

            Fiscal Policy

 

              Congress keeps choosing inflation.

              https://thedailyeconomy.org/article/congress-keeps-choosing-inflation/

 

            AI

 

              More cognitive dissonance around AI.

              https://www.realclearmarkets.com/articles/2026/04/30/as_reliability_gaps_become_more_apparent_prepare_for_ais_dotcom_moment_1179831.html

 

              Even more.

              https://www.realclearmarkets.com/articles/2026/04/30/ais_horrible_economics_arent_the_problem_but_the_plumbing_might_be_1179715.html

 

              And even more.

              https://www.warman.life/blog/2026-04-27-the-apprenticeship/

 

     Investing

 

            Portfolio defense during inflationary growth.

            https://www.carsongroup.com/insights/blog/portfolio-defense-during-inflationary-growth/

 

            Alarm bells ringing in the bond market.

            https://www.capitalspectator.com/inflation-alarms-starting-to-ring-in-the-bond-market/

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

           

                        Do investors accept a lower return on collectibles because it makes them feel good?

            https://behaviouralinvestment.com/2026/04/28/do-investors-accept-lower-returns-from-assets-that-make-them-feel-good/

 

            Eight secrets for a happy retirement.

            https://money.com/secrets-of-the-happiest-retirees/

 

            Excavating a bronze age city.

            Inside Mohenjo Daro, the 5,000-year-old metropolis frozen in time | National Geographic

 

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

 

 

 

The Morning Call--a jaundice view of AI

 

The Morning Call

 

4/30/26

 

The Market

         

    Technical

 

           

Wednesday in the charts.

            https://www.zerohedge.com/markets/fractured-fed-crescendo-ing-crude-trigger-market-mayhem-ahead-mega-cap-tech-tornado

           

Summary: Oil prices exploding higher and the most divided Fed in 34 years sparked some serious moves across asset-classes today (but stocks shrugged it off, hopeful as ever ahead of tonight's earnings extravaganza). Bonds battered, gold and crypto hammered, dollar surged, S&P unch!?

 

Wednesday in the technical stats.

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

https://www.barchart.com/stocks/market-performance

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

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

 

            This analyst sees downside in oil, gold and silver.

            https://talkmarkets.com/article/im-shorting-oil-now-technical-analysis-signals-gold-and-silver-downside-target-1777487061

 

            Goldman’s desk has moved from ‘buy the dip’ to ‘trade the mania’.

            https://www.zerohedge.com/markets/goldman-retail-has-moved-buy-dip-trade-mania

 

Summary: t is in this context that Goldman's Flow of Funds team published their latest note, in which it highlights that "retail has moved from leveraging the market to leveraging the narrative ... from "buy the dip" to "trade the mania" Manias, however, don't last and taken together, Goldman's Lee Coppersmith thinks the market is set to let off steam in the near-term, excising the froth accrued on the rally to ATHs. Looking out to the rest of May, the bank sees moderate tailwinds from corporate buybacks and select systematic strategies (not named CTA) but a continued complex backdrop: "the dynamics can change especially quickly in this environment and will comment as the landscape shifts."

 

Thursday morning setup: Futures erase an overnight slide, and have resumed their ascent trading near all-time highs, despite a hawkish Fed statement but stronger Mag7 earnings. The hawkish Fed followed by a less hawkish press conference, plus the news that Powell is staying on seemingly removing a cut, actually have bond yields lower pre-mkt by 2-4bp as the Dollar weakens on what appears to be BOJ intervention which has sent the USDJPY plunging most since 2022. As of 8:00am ET, S&P futures are up 0.4%, erasing a 0.5% drop earlier in the session; Nasdaq futures gain 0.6%: in premarket trading Alphabet is the big gainer from the major tech companies that reported, with Amazon rising too but Meta and Microsoft falling (META -9% AMZN +2.3%, GOOG +6%, and MSFT -1.8%). Semis continue to trade higher as well as Discretionary, Industrials and Materials while Financials, Healthcare and Staples lower as Cyclicals lead Defensives. Energy names are mostly lower after striking rollercoaster in the price of oil. In commodities, energy is weaker, metals are higher led by precious, and Ags are mostly higher. Today’s US economic data calendar slate includes jobless claims, personal income and spending, 1Q employment cost index and first estimate of Q1 GDP (8:30am), April MNI Chicago PMI (9:45am, several minutes earlier for subscribers) and March Leading Index (10am)

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly jobless claims were reported at 189,000 versus predictions 215,000.

 

Q1 GDP grew 2.0% versus consensus of +2.3%; PCE price index was +4.5% versus +3.8%; real consumer spending was up 1.6% versus +2.6%.

 

March personal income was up 0.6% versus expectations of up 0.3%; personal spending was up 0.9%, in line.

 

March PCE price index was up 0.7% in line; core PCE was up 0.3%, also in line.

 

                        International

 

The Q1 German flash GDP grew 0.3% versus projections of +0.2%; March retail sales fell 2.0% versus -0.1%; the April unemployment rate was 6.4% versus 6.3%.

 

The Q1 EU flash GDP grew 0.1% versus forecasts of +0.2%; the Q1 flash CPI was 1.0%, in line,

 

March Japanese preliminary industrial production declined 0.5% versus predictions of +1.1%; March retail sales were up 1.3% versus +0.8%; March YoY construction orders were down 14.4% versus +33.0%; March YoY housing starts were down 29.3% versus -28.5%; the April consumer confidence index was 32.2 versus 33.1.

 

The April Chinese manufacturing PMI came in at 50.3 versus consensus of 50.1; the April nonmanufacturing index was 49.4 versus 49.9; the April composite PMI was 50.1 versus 50.7.

 

                        Other

 

                          The housing data is sort of positive.

                          https://bonddad.blogspot.com/2026/04/the-quandary-of-housing-almost-all.html

 

            Iran

 

              Overnight news.

 

US CENTCOM is to brief US President Trump on new plans for potential military action in Iran on Thursday, Axios reported citing sources; plan includes a short and powerful strike potentially targeting infrastructure to break the nuclear issue deadlock. Other options expected to be presented include a plan to take over part of the Strait to allow for commercial shipping, which could involve ground forces, and a special forces op to secure Iran's uranium stockpile.US CENTCOM has asked to send the Army's hypersonic missile to the Middle East for possible use against Iran, Bloomberg reported citing sources.US CENTCOM said the US navy has redirected 42 vessels from the blockade in the Strait of Hormuz and that the military is fully committed to enforcing the blockade. Iran lawmaker Mottaki says a naval blockade would amount to a declaration of war, and that fighters could decide as soon as tomorrow or next week to remove such obstacles via military action. Iran’s Navy Commander said the Islamic Republic will soon unveil a new weapon that would deeply terrify the enemy, IRNA reported. He said Iran has closed the strategic Strait of Hormuz from the Arabian Sea. Condemned the US’s illegal seizure of several Iranian vessels as part of the blockade, which he said amounted not only to “piracy” but also “hostage-taking". Khamenei says Iran will closely guard and protect its nuclear and missile capabilities, a clear and direct rejection of President Trump's demand to hand over enriched uranium as the basis for a deal. Iranians will cling to the country's nuclear and missile capabilities "as their national capital and will guard them like water, land and air borders,"

 

              On Friday, the war reaches the 60 day limit set by the War Powers Resolution.

              https://www.zerohedge.com/geopolitical/even-gop-hawks-now-alarmed-over-iran-war-fallout-60-days-hits-friday

 

              Iranians feeling the pain.

                          https://www.wsj.com/world/middle-east/iranians-feel-the-pain-as-their-economy-descends-into-a-death-spiral-47dba669?mod=economy_lead_story

 

              The Iranian oi industry isn’t about to explode.

              https://www.bloomberg.com/opinion/articles/2026-04-29/no-the-iranian-oil-industry-isn-t-about-to-explode?srnd=homepage-americas

 

            Monetary Policy

 

The FOMC wrapped up its April meeting yesterday and left rates unchanged. The press release sounded somewhat dovish despite three members voicing a hawkish tone. Powell’s presser sounded more hawkish than the press release. Further, he has chosen to remain on the FOMC after his retirement as Fed head citing concern over political interference as a primary reason. My overall impression was that the Fed is leaning hawkish and it is sending a message to Warsh to not expect cooperation if he wants to lower rates.

https://www.zerohedge.com/markets/fomc-37

 

              The Fed may be standing still, but the markets aren’t.

              https://www.capitalspectator.com/middle-east-turmoil-fuels-inflation-fears-testing-feds-patience/

 

              ECB holds rates unchanged.

              https://www.zerohedge.com/markets/ecb-holds-rates-2-expected-stagflation-looming

 

              The financial crisis that didn’t happen.

              https://awealthofcommonsense.com/2026/04/the-financial-crisis-that-didnt-happen/

 

            Fiscal Policy

 

              Government debt---what it means and what it doesn’t mean for the economy.

              https://www.advisorperspectives.com/commentaries/2026/04/29/government-debt-not-doom-crowd-thinks

 

            Tariffs

 

              The tariff vindication that isn’t there.

              https://www.realclearmarkets.com/articles/2026/04/29/the_donald_trump_tariff_vindication_that_still_still_isnt_1179557.html

 

            The Financial System

 

Ken Griffin suggests that retail investors don’t understand the private credit market.

https://www.ft.com/content/130a68e2-d8cc-449b-a32a-a0b8e2471e89?syn-25a6b1a6=1

 

Summary: Hedge fund billionaire Ken Griffin has questioned whether wealthy individuals truly understand the risks of investing in private credit and warned that they might struggle to access their money in the event of a downturn. “The real issue here is the liquidity mismatch between the retail investor and the duration of the investments,” Griffin said in an interview with the FT. “We live in a world where retail investors have become accustomed to having immediate liquidity for their investments . . . investing in private credit is a different story.”

 

            AI

 

              A jaundice view of AI. (long but a must read)

              https://www.nakedcapitalism.com/2026/04/russells-teapot-dispatches-from-the-final-stage-of-the-ai-bubble.html

 

     Investing

 

            New highs, bad vibes.

            https://trendlabs.com/new-highs-bad-vibes/

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

           

            Quote of the day.

            https://cafehayek.com/2026/04/quotation-of-the-day-5361.html

 

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

 

 

 

The Morning Call---just how strong is the earnings outlook?

 

The Morning Call

 

4/29/26

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/oil-everything-else-down-horde-headlines-hammers-narratives

 

Summary: Anxiety ahead of the hyperscalers' reporting had traders on edge and there was plenty to trigger FAFO over FOMO as OpenAI's 'miss' triggered one of the biggest momo meltdowns in years. Oil hit its highest since the blockade began (initial ceasefire talks end) and everything else fell (stocks, bond prices, gold, crypto) except the dollar (and VIX). As Goldman's Delta-One desk-head noted earlier, caution is warranted as it's increasingly hard to ignore the fact that stocks are at/near record highs while bonds/oil are defiantly NOT...

 

Tuesday in the technical stats.

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

https://www.barchart.com/stocks/market-performance

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

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

 

            Gold caught in the middle.

            https://www.bespokepremium.com/interactive/posts/think-big-blog/gold-caught-in-the-middle

 

            Charts of the week.

            https://www.carsongroup.com/wp-content/uploads/2026/04/ChartsoftheWeekApr20-24-1.pdf

 

            Counterpoint.

            https://www.advisorperspectives.com/commentaries/2026/04/28/extreme-earnings-forecasts-mask-market-risk

 

Wednesday morning setup: S&P futures are flat with Nasdaq outperforming ahead of a huge day for tech. Alphabet, Amazon, Meta and Microsoft, representing nearly 20% of S&P market cap, report after the close, with traders focused on capex. The group has a combined options implied move of more than $750 billion of market cap in either direction. As of 8:00am ET, S&P futures are unchanged; Nasdaq futures rise 0.3% amid dip buying following strong results from Seagate, after the index slipped more than 1% in the previous session, and the sector outperformed in Europe and Asia. In premarket trading, semis are again seeing a strong bid post-earnings, Mag7 names are flat to down, Cyclicals are leading Defensives driven by Energy / Industrials / Materials. Treasury yields rose along with the dollar ahead of the Fed’s latest interest-rate announcement at what is likely Jerome Powell’s final meeting as chair and where the Fed will keep rates unchanged. WTI crude rose $103 while Brent jumped above $114 a barrel - approaching the highest since the start of the Iran war - after the US signaled it would stick with a naval blockade of Iranian ports, leaving the Strait of Hormuz impassable. The key overnight news came from Trump’s threat of extending the US blockade, which is boosting oil, pushing Brent to the highest in a month, but for now Equities are blissfully interpreting this as an “escalate to de-escalate” situation. Bond yields are near session highs, above 4.36% ahead of today's Fed decision with no changes expected in an 11-1 vote, though there will likely be multiple questions probing Powell’s intent to leave the Board or to finishing his term which runs into 2028, or perhaps stay on until all investigations are concluded. US economic data calendar slate includes March readings for wholesale inventories, durable goods and housing starts are due at 8:30 a.m. ET. FOMC rate decision is at 2 p.m., followed by a press conference at 2.30 p.m. Bank of Canada rate decision is due at 9:45 a.m.

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications declined 1.6% while purchase applications were up 1.1%.

 

Month to date retail chain store sales were up 7.7% versus +6.7% in the prior week.

 

The February housing index was 0 versus consensus of 0.2.

 

The February Case Shiller home price index was up 0.4% versus expectations of -0.2%.

 

February housing starts fell 0.3% versus forecasts of -5.2%; March housing starts were up 10.8% versus -0.7%; February building permits were up 10.9% versus -1.9%; March building permits were -10.8% versus -0.7%

 

March durable goods orders were up 0.8% versus predictions of +0.5%; ex transportation, they were up 0.9% versus +0.4%.

 

The April Richmond Fed manufacturing index came in at 3 versus estimates of 2.

https://www.advisorperspectives.com/dshort/updates/2026/04/28/richmond-manufacturing-index-reaches-20-month-high

 

The April consumer confidence index was 92.8 versus projections of 89.0.

                          https://www.advisorperspectives.com/dshort/updates/2026/04/28/consumer-confidence-edged-up-again-despite-spiking-prices

 

                        International

 

                          April German CPI was up 0.6% versus consensus of +0.7%.

 

The April EU economic sentiment index was 93.0 versus expectations of 95.2; the April industrial sentiment index was -7.7 versus -7.2; the April services sentiment index was 0.9 versus 3.5; the consumer confidence index was -20.6, in line.

 

                        Other

 

                          UAE quits OPEC.

  https://www.bloomberg.com/news/articles/2026-04-28/uae-to-leave-opec-and-opec-next-month-to-pursue-new-strategy?utm_source=website&utm_medium=share&utm_campaign=copy

 

                                                  The farm crisis---problems tend to come in batches.

                          https://www.zerohedge.com/commodities/us-farmers-are-facing-two-historic-catastrophes-same-time-2026

                       

                          Goldman lowers consumer spending outlook.

                          https://www.zerohedge.com/personal-finance/goldmans-state-us-consumer-outlook-gets-more-grim

 

            Iran

 

              Overnight news.

              https://www.zerohedge.com/geopolitical/iran-believes-it-can-outlast-us-based-munitions-markets-midterms-while-trump-not-open

 

            Monetary Policy

 

              A perfect storm awaits Warsh.

              https://www.capitalspectator.com/a-perfect-storm-awaits-warsh-at-the-fed/

 

            Fiscal Policy

 

              Government limited by debt is the ultimate inheritance.

              https://www.realclearmarkets.com/articles/2026/04/28/a_government_hamstrung_by_past_debts_is_the_ultimate_inheritance_1178971.html

 

              Counterpoint.

              https://cafehayek.com/2026/04/tamny-is-mislead-on-government-debt-by-a-collectivist-assumption.html

 

            Inflation

 

              ECB’s latest survey points to stagflationary pressures.

              https://talkmarkets.com/article/ecbs-latest-surveys-point-to-rising-stagflationary-pressures-1777368430

 

              Home sales and rents show almost no inflationary pressures.

              https://bonddad.blogspot.com/2026/04/repeat-home-sales-new-rents-continue-to.html

 

              Treasuries not adhering to the inflation Warsh wants.

              https://www.zerohedge.com/markets/treasuries-are-not-adhering-inflation-warsh-prefers

 

Summary: Ten-year yields are higher today as oil rises and are creeping back towards their recent closing highs around 4.40%-4.43%. Treasuries traders also care about the left of the decimal point of inflation. Except in their view that is much closer to three than the two Warsh would like it to be.

 

            The Financial System

 

              The credit bubble everyone is ignoring.

              https://www.wsj.com/opinion/the-credit-bubble-everybodys-ignoring-e457c0ae?st=hkWe49&reflink=desktopwebshare_permalink

 

     Investing

 

            In praise of dividend paying stocks.

            https://www.morningstar.com/portfolios/why-ive-changed-my-mind-about-dividend-paying-stocks

 

            A short history of bubbles.

            https://www.albertbridgecapital.com/post/til-death-do-us-part

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

            The basics of becoming wise.

            https://dariusforoux.com/the-basics-of-becoming-wise/

 

 

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