The Morning Call---The K shaped economy: the narrative versus the reality

 

The Morning Call

 

3/5/25

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/stocks-software-soar-oil-snores-traders-forget-about-war

 

Note: another perplexing performance (at least for me) from the stock market. The S&P is back above its 100 DMA, keeping that narrow (ing) trading range intact. My bottom line hasn’t changed---do nothing until the Market gives us some direction.

           

            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

 

            Bond volatility just woke up.

            https://www.zerohedge.com/the-market-ear/bond-volatility-just-woke-stocks-usually-dont-it

 

            The Street is massively long semis and massively short software.

            https://www.zerohedge.com/the-market-ear/wall-street-massively-long-semis-and-massively-short-software

 

            Citadel desk turns positive.

            https://www.zerohedge.com/markets/bear-camp-has-become-too-popular-citadels-rubner-turns-bullish-gives-10-reasons-why

           

            Gold down on proposed sale by Poland.

            https://www.zerohedge.com/precious-metals/precious-metals-plunge-poland-weigjs-gold-sales-fund-defense

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly initial jobless claims totaled 213,000 versus projections of 215,000.

https://www.zerohedge.com/personal-finance/no-hire-no-fire-economy-rolls-job-cuts-plunge-jobless-claims-hover-near-multi-year

 

Q4 nonfarm productivity rose 2.8% versus estimates of 1.9%; unit labor costs were up 2.8% versus +2.0%

 

The February services PMI was 51.7 versus expectations of 52.3; the February composite PMI was 51.9 versus 52.3.

 

The February ISM services index was 56.1 versus consensus of 53.5.

                               https://bonddad.blogspot.com/2026/03/strongly-positive-ism-services-report.html

 

                        International

 

                          January EU retail sales were down 0.1% versus predictions of +0.3%.

 

The February EU construction PMI came in at 46.0 versus forecasts of 45.9; the February German construction PMI was 43.7 versus 45.4; the February UK construction PMI was 44.5 versus 47.0.

 

                        Other

 

            Iran

 

              The Iran war’s most precious commodity is not oil.

              https://www.bloomberg.com/opinion/articles/2026-03-04/iran-war-the-most-precious-commodity-is-water-not-oil?sref=loFkkPMQ

 

              How long will soaring energy prices last?

              https://www.capitalspectator.com/energy-prices-are-soaring-how-long-will-it-last/#more-25352

 

              Why isn’t oil $100 a barrel?

              https://www.ft.com/content/1ca535f4-d4a6-480b-b2da-f5b05ad8dd5d

 

              Qatar declares force majeure.

              https://www.zerohedge.com/energy/qatarenergy-declares-force-majeure-one-fifth-global-lng-supply-goes-dark

           

              Rumor that Iran was willing to give up nuclear stockpile.

              https://www.zerohedge.com/markets/futs-jump-old-news-recirculated-about-irans-willingness-give-uranium-stockpile

 

            Inflation

 

              The Strait of Hormuz, energy and inflation.

              https://www.apolloacademy.com/strait-of-hormuz-energy-demand-and-supply/

 

            Recession

 

              The K shaped economy: the narrative versus the reality.

              https://www.axios.com/2026/02/26/us-economy-stock-market

 

            Tariffs

 

              Bessent says Trump likely to raise tariffs to the 15% level this week.

  https://www.bloomberg.com/news/articles/2026-03-04/bessent-says-trump-s-tariff-hike-to-15-likely-coming-this-week?srnd=homepage-americas&sref=loFkkPMQ

 

 

                        AI

 

              More thoughts on the future of AI.

              Some Guesses about AI in 2026 - by Arnold Kling

                       

 

            The Financial System

 

              Big lenders risky loans are rattling Wall Street.

              https://www.nytimes.com/2026/03/03/business/private-credit-crisis-blue-owl-capital.html

           

 

     Investing

 

            Rotation into hard assets.

            https://www.gspublishing.com/content/research/en/reports/2026/02/08/531d73dd-fd3f-4647-9841-46e2261e4f4c.pdf

 

            Update on valuation.

            https://www.advisorperspectives.com/dshort/updates/2026/03/04/market-valuation-is-the-market-still-overvalued

 

            Incorporating dividend yield into your investment strategy.

            https://www.advisorperspectives.com/commentaries/2026/03/04/lpl-research-thinks-dividends

           

            Ten rules for dealing with uncertainty.

            https://awealthofcommonsense.com/2026/03/10-rules-for-dealing-with-uncertainty/

 

            The tokenization of gold.

            https://www.zerohedge.com/markets/gold-digital-asset-space-are-increasingly-interlinked-goldman

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

 

 

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The Morning Call--How high do oil prices have to go to create a recession?

 

The Morning Call

 

3/4/26

 

The Market

         

    Technical

 

            Before the open.

            https://www.zerohedge.com/markets/hedge-fund-bloodbath-biggest-crash-liberation-day-here-are-3-biggest-risks

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/everyone-getting-pounded

 

Note: a rough day in stock land, though the late afternoon proposal by Trump to provide insurance to ships transiting the Hormuz Straits kept prices off the bottom of the day’s trading range. Nonetheless, the S&P did close below the lower boundary of that ever tightening gap between the 100 DMA (~6834) and the all-time high (~6924)---but not by much. Givern that it has tested the 100 DMA and bounced on three prior occasions, I don’t think that one day’s negative pin action is sufficient to get beared up just yet. Though clearly any negative follow through would likely spell much lower prices---the next visible support level being the 200 DMA (~6569).

            https://www.zerohedge.com/markets/weve-broken-box-these-are-key-levels-watch-stocks-slump

 

                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

 

            The Market performance following the first cannon shot.

https://www.riskhedge.com/outplacement/update-from-Abu-Dhabi/rcm?utm_campaign=RH-144&utm_content=RH144OP870&utm_medium=ED&utm_source=rcm

 

            Keep an eye on the dispersion trade.

            https://www.zerohedge.com/markets/dispersion-trade-unwind-fastest-route-higher-index-vol

 

            Volatility shock.

            https://www.zerohedge.com/the-market-ear/volatility-shock-panic-spreading

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications were up 11% while purchase applications were up 6.1%.

 

The February ADP employment change report showed job increases of 63,000 versus consensus of 50,000.

 

                        International

 

The January EU unemployment rate was 6.1% versus predictions of 6.2%; January PPI was up 0.7% versus +0.2%.

 

The February Japanese services PMI came in at 53.8, in line; the February composite PMI was 53.9 versus 53.8; the February Chinese manufacturing PMI was 49.0 versus 49.1; the February services PMI was 49.5 versus 49.8; the February composite PMI was 49.5 versus 50.2; the February German services PMI was 53.5 versus 53.4; the February composite PMI was 53.2 versus 53.1; the February EU services PMI was 51.9 versus 51.8; the February composite PMI was 51.9, in line; the February UK services PMI was 53.9, in line; the February composite PMI was 53.7 versus 53.9.

 

                        Other

 

                          January median household income.

                          https://politicalcalculations.blogspot.com/2026/03/median-household-income-in-january-2026.html

 

            Iran

 

              Vessel struck in Straits of Hormuz.

              https://www.zerohedge.com/geopolitical/unknown-projectile-strikes-container-ship-strait-hormuz-maritime-crisis-explodes

 

            Inflation

 

              Iran, oil prices and inflation.

              https://www.nytimes.com/2026/03/03/business/us-iran-israel-economic-fallout.html

 

            Recession

 

              How high do oil prices need to go to create a recession?

              https://bonddad.blogspot.com/2026/03/the-potential-of-us-war-with-iran-for.html

 

            AI

 

              SaaS; Is there opportunity in destruction?

              https://talkmarkets.com/article/saas-is-there-opportunity-in-the-destruction-1772463015

 

              AI’s impact on interest rates.

              https://www.zerohedge.com/markets/citadel-warns-ai-will-displace-feds-view-neutral

 

            Tariffs

 

The price we pay for tariffs. I have noted several times that I believe that there are some perfectly valid reasons for using tariffs as a political tool (Chinese theft of US intellectual property; EU not paying its way for its defense). But as an all-encompassing strategy designed to raise vast amounts of money, it has been a failure.

              https://www.realclearmarkets.com/articles/2026/03/03/will_another_wave_of_tariff_uncertainty_hold_economy_back_1167562.html

 

            The Dollar

 

              The dollar reclaims its safe haven role.

                          https://www.bloomberg.com/news/articles/2026-03-03/dollar-set-for-biggest-surge-in-a-year-as-inflation-fears-mount?srnd=homepage-americas&sref=loFkkPMQ

 

     Investing

 

            Keep calm and carry on.

            https://alhambrapartners.com/weekly-market-pulse-keep-calm-and-carry-on/?src=news

 

            The long term benefit to exploiting myopia.

            https://alphaarchitect.com/long-term-investing/

 

            More on valuation.

            https://www.advisorperspectives.com/dshort/updates/2026/03/03/regression-to-trend-s-p-composite-196-above-trend-in-february

 

            Three red flags that you can’t ignore.

            https://talkmarkets.com/article/three-red-flags-you-cant-ignore-why-this-bull-market-may-be-over-1772561215

 

            Near term risks are elevated.

            https://www.zerohedge.com/the-market-ear/grand-old-man-strategy-warns-near-term-risks-are-more-elevated

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

 

 

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---World's largest private credit firm hit iwth record redemptions

 

The Morning Call

 

3/3/26

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/bond-yields-black-gold-bitcoin-blast-amid-mideast-maelstrom

 

Note: most investors (including me) were surprised by the Markets seeming lack of concern over the Iran conflict. I don’t know if it has already been fully discounted or if the Market likes wars (it has in the past). The bond market actually sold off (in other words, it did not act as a safe haven) which may be a function of what is occurring in the private credit market (none of it good---see below). Whatever the reason for the Market’s seeming indifference, the bottom line technically is that it remains in a very tight trading range and until there is follow through in one direction or the other, I am doing nothing.

 

            Twelve charts you need to see this morning.

            https://www.zerohedge.com/the-market-ear/largest-amount-put-protection-ever

 

            Monday 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

 

            The latest from Goldman.

            https://www.zerohedge.com/markets/growing-number-problems-market

 

            The latest from JP Morgan.

            https://www.zerohedge.com/markets/what-gets-us-7000-what-drags-us-6700-jpmorgans-desk-lays-out-two-market-scenarios

 

            Did gold just print a blowoff top?

            https://www.zerohedge.com/the-market-ear/did-gold-just-print-blow-top

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

The February manufacturing PMI was reported at 51.6 versus forecasts of 51.2.

https://www.advisorperspectives.com/dshort/updates/2026/03/02/sp-global-manufacturing-pmi-february-2026

 

The February ISM manufacturing Index was 52.4 versus projections of 51.8.

https://bonddad.blogspot.com/2026/03/ism-manufacturing-in-february-positive.html

 

 

                        International

 

Q4 Japanese YoY capital spending increased 6.5% versus consensus of +3.0%; the January unemployment rate was 2.7% versus 2.6%.

 

The February EU flash CPI was +0.8% versus expectations of +0.2%.

 

                        Other

 

                          Inside the construction spending data.

                          https://www.zerohedge.com/economics/construction-spending-data-centers-factories-powerplants-and-office-buildings-boom-bust

 

            Overnight News

 

              Iran update.

              https://www.zerohedge.com/geopolitical/israel-opens-second-front-day-4-trumps-iran-war-irgc-refuses-back-down

 

            Monetary Policy

 

              Why the Fed is so unimportant.

              https://www.forbes.com/sites/johntamny/2026/03/01/the-fed-if-youre-thinking-about-it-your-mind-is-wandering-aimlessly/

 

              Chances of a rate cut are evaporating.

  https://www.marketwatch.com/story/any-chance-the-fed-cuts-rates-this-year-is-evaporating-before-our-very-eyes-as-iran-tensions-raise-oil-prices-18978691?st=Yg5Q1R

 

            AI

 

              Good things are good.

              https://scottsumner.substack.com/p/good-things-are-good

 

              The problem AI may not be able to solve.

              https://spyglass.org/ai-taste/

 

            The Financial System

 

              Finance in the dark.

              https://www.phenomenalworld.org/analysis/finance-in-the-dark/

 

              World’s largest private credit firm hit with record redemptions.

              https://www.zerohedge.com/markets/private-credit-panic-goes-11-worlds-largest-private-credit-fund-hit-record-redemptions

 

     Investing

 

            It is never too late.

            https://humbledollar.com/forum/its-never-too-late/

 

            Sentiment belies strong economic estimates.

            https://www.advisorperspectives.com/commentaries/2026/03/02/economic-sentiment-strong-economic-estimates

 

This is an interesting piece on how crashes occur and that they are unpredictable. But we already know crashes occur unpredictably.

            https://www.advisorperspectives.com/commentaries/2026/03/02/coming-crisis-fingers-instability

 

            Being cautious on software.

            https://www.ft.com/content/c71d1039-8134-433c-bf96-5d14f3bbfdc3

           

    News on Stocks in Our Portfolios

 

What I am reading today

 

            Whatever happened to checks and balances?

https://www.bloomberg.com/opinion/articles/2026-03-02/iran-strikes-congress-let-presidents-ignore-the-war-powers-act-for-decades?srnd=homepage-americas&sref=loFkkPMQ

 

                        The right to say no.

            https://www.theargumentmag.com/p/anthropic-and-the-right-to-say-no

 

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