The Morning Call
9/18/26
The
Market
Technical
Thursday in the
charts.
Note: the S&P ended
back above its former all-time high and its 50 DMA (negating the recent reset)
but remains in a very short term downtrend.
I will continue to sit on my hands at least until it trades out of that
downtrend.
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
Stocks are
trapped.
But the pain trade
is stocks move higher.
Just not yet.
Friday morning
setup: US stock futures are little changed on Friday, with big tech stocks
rising while sentiment is supported by another modest decline in oil prices; a
near-record $7 trillion quad-witching and index rebalances add to Friday's
set-up. US tariff-delay hopes, a flattening US curve and softer diesel and
WTI prices ease inflation concerns, while AI bulls are back in
charge. As of 8:00am ET, S&P 500 futures rose 0.1% to 7,713.25, erasing
modest gains, while Nasdaq futures rise 0.3% as the market momentum after the
risk-on rally yesterday holding well into today’s session with Tech continuing
its leadership. In premarket trading, Mag 7 stocks are mostly higher led
by GOOG/L (+2.0%); AMZN is flat after the 5% rally yesterday amid a long-term
deal with Generac. Meanwhile, Brent crude traded near $104 a barrel.
The dollar climbed 0.2%, while gold rose toward $4,400 an ounce. Treasuries resumed
losses after a brief rebound, with the 10-year yield up three basis points to
4.97%. Overnight, the BOJ hiked by 25bps as expected, but the vote
split skewed dovish as two Takaishi-appointed members dissented, which sent
the yen sharply lower (USDJPY breaking above 157 for first time since
early Sept) and Japanese stocks rallying (Tech > Banks). The USD is higher
post BOJ decision. Oil is unchanged this morning; both precious and base metals
are higher. Today’s macro data focus is on Industrial Production and Leading
Index which are not expected to be market moving.
Fundamental
Headlines
The
Economy
US
August pending home sales rose 0.3% versus
consensus of +0.2%.
International
July YoY EU construction output fell 2.0%
versus projections of -1.0%.
August Japanese CPI was up 0.1% versus
estimates of up 0.2%.
August German PPI
was up 1.1% versus predictions of +0.4%.
August
UK retail sales increased 0.5% versus forecasts of -0.2%; ex fuel, they were up
0.6% versus -0.2%.
Other
Are yesterday’s
housing starts/building permits numbers a significant warning sign?
https://bonddad.blogspot.com/2026/09/august-new-housing-construction-saying.html
Iran
Trump concedes that he must act soon.
https://www.zerohedge.com/energy/crude-eases-china-reportedly-presses-iran-rein-houthis
Monetary
Policy
A
review of past Fed rate hiking cycles.
What comes next?
The case for not raising rates.
Trump
can’t control bond yields.
https://www.capitalspectator.com/trump-can-pressure-the-fed-he-cant-control-bond-yields/
After a rate pause, will the Bank of England raise
in November?
Inflation
Forget the inflation surveys, watch the bond
market.
https://giftarticle.ft.com/giftarticle/actions/redeem/7d3e4f8b-b80d-4eab-be42-b0a73565eb7a
Recession
The global economy is running out of wiggle
room.
AI
Another proposed
reason for limits on AI. I am getting a bit tired of reading the scare stories
about the harm AI will produce. To be
sure, we have to be careful in managing its development. But this is starting to sound like a repeat of
a long series of supposedly manmade dooms day forecasts generated by our
intellectual elite/ruling class that include population growth (global hunger),
depletion of natural resources, climate cooling, climate change and Covid---the
intellectual elite fabricating the end of mankind so the unwashed will give them
the power to usurp liberty in order to solve the problem---but which in the end
really involved a few tweaks to the system
So I include this not because I agree but as an illustration (in my
opinion) of intellectual fear mongering. (1) the creative part of solving a
mathematical problem is posing the question in the first place. Only a human can do that. (2) what difference
does it make if it takes Einstein fifteen years to solve a mathematical problem
versus a computer in fifteen seconds, the point of training future mathematicians
is studying how the problem was solved.
https://terrytao.wordpress.com/2026/09/11/a-severe-misalignment-of-ai-in-mathematics/
Dems push for data
center moratorium.
House passes bill
to ensure data centers provide for their own energy needs. On the other hand, it makes sense that AI pay
for its consumption of public resources. (a tweak)
Tariffs
Why
is congress about to give Trump additional tariff authority?
Investing
Long bonds are getting
more attractive.
Sheesh,
Bonds! - Wealth Management - Carson Group
The most crowded
hedge fund positions.
Oil bears have one
problem.
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