The Morning Call---The retail sales number will the the topic du jour

 

The Morning Call

 

8/14/26

 

The Market

         

    Technical

 

            Thursday in the charts.

https://www.zerohedge.com/markets/disinflation-deal-doubts-doubling-down-bond-yields-drop-oil-slop-tech-pops?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTIxNDE1Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4NjY1MzE3MiwiZXhwIjoxNzg5MjQ1MTcyLCJhdWQiOiJ6aC1naWZ0In0.WtoZT6WXrfm_zM4vWAxDNLTuhkXQeYjmHpA5iiBsllI

 

            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

 

            S&P futures near a critical breakout point.

            https://talkmarkets.com/article/extreme-peril-1786638737

 

            Calm on the surface, but….

https://www.zerohedge.com/the-market-ear/why-3-4-pullback-could-turn-violent?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTIxNTA4Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4NjcxMTkxMSwiZXhwIjoxNzg5MzAzOTExLCJhdWQiOiJ6aC1naWZ0In0.W7zbSw0wBnC0gNY2cbczNps0x3rVWEQimlpnRRh6PDk

 

 

Friday morning set up (this was written before the retail sales surprise): Futures are fractionally higher, as they have been much of this supercharged week which pushed stocks to new all-time highs, amid quiet news flow this morning. As of 8:00am ET, S&P futures are up 0.1% after the index closed at a record on Thursday. Nasdaq 100 futures advanced 0.2%, with the tech benchmark set for a 1.2% gain in the week. Momentum darling Sandisk rallied almost 6% in premarket trading after surging double digits yesterday and is now up 60% from its lows less than two weeks ago;  Mag 7 stocks mostly unchanged with MSFT and META showing some modest declines as investors continued to focus on OpenAI’s plans for a Wall Street debut. Bond yields are 1-2bp higher, led by 30y. A Reuters article reported that BOJ is eyeing September rate hike and faster pace of tightening, affirming the recent hawkish bias: OIS now sees 81% probability of a September hike (vs. ~65% last Friday). Commodities are modestly higher: oil moved 0.6% higher; gold added 0.1% this morning. US economic data calendar include July retail sales (8:30am), August preliminary University of Michigan sentiment and June business inventories (10am). No Fed speakers scheduled for the session

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

July retail sales fell 0.6% versus estimates of +0.1%; ex auto, they were down 0.3% versus +0.2%.

                          https://www.zerohedge.com/markets/world-cup-hangover-triggers-retail-sales-slump-july-k-shaped-economy-waning

 

                        International

 

Q2 (2^nd est.) EU GDP growth was +0.1%; in line; the June EU trade balance was +E8.6 billion versus -E2.2 billion.

 

July German PPI came in at +0.2% versus predictions of +0.4%.

 

                        Other

 

                          The Yen bailout won’t fix Japan’s bond problem.

                          https://www.city-journal.org/article/yen-japan-us-bond-yields-debt

 

                          Inflation adjusted wages.

                          https://econbrowser.com/archives/2026/08/inflation-adjusted-wages-through-july

 

            Iran

 

              Iran’s dangerous mid-term strategy.

              https://www.dailysignal.com/2026/08/11/irans-dangerous-midterm-strategy/

 

              How much oil is getting through the Strait of Hormuz?

  https://www.bloomberg.com/opinion/articles/2026-08-13/for-the-oil-market-the-strait-of-hormuz-isn-t-closed?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc4NjY0Mzk1NiwiZXhwIjoxNzg3MjQ4NzU2LCJhcnRpY2xlSWQiOiJUSk9UT0dSS1YyVUUwMCIsImJjb25uZWN0SWQiOiJCMzFCNTRDQTI3MTE0NjAxOUQxMURCN0IxRUM4NTE2MyJ9.DPwqxG_QqCX9o3qFDfsgXf6S2vNEkIY3FeD6w-XKg7M

 

 

                        Inflation

 

              Disinflation gains traction but the bond market isn’t buying it.

              https://www.capitalspectator.com/disinflation-gains-traction-but-bond-market-isnt-buying-it/

 

                          Counterpoint.

              https://bonddad.blogspot.com/2026/08/producer-prices-indicate-continued.html

 

 

            AI

           

              An investment theory for an AI economy.

  https://richardvigilante.substack.com/p/an-investment-theory-for-the-ai-economy-8e3?utm_source=post-email-title&publication_id=677554&post_id=210899903&utm_campaign=email-post-title&isFreemail=true&r=67wdy&triedRedirect=true&utm_medium=email

 

 

              Banning open weight AI models could cost the US the AI race.

              https://www.realclearmarkets.com/articles/2026/08/13/banning_open-weight_ai_models_could_cost_america_the_ai_race_1199984.html

 

              AI hype is running into reality.

                          https://www.nytimes.com/2026/08/12/opinion/ai-bubble-economy-crash.html?unlocked_article_code=1.5FA.Gp1S.5jBMMVRVpn-D&smid=url-share

 

              Big tech meets Milton Friedman.

              https://www.semafor.com/article/08/11/2026/big-tech-meets-milton-friedman

 

            Tariffs

 

              Trump puts 100% tariffs on drone components.

              https://www.zerohedge.com/markets/unusual-machines-jumps-after-trump-slaps-100-drone-tariff-hard-decoupling-china

 

            The Financial System

 

              The state of the home mortgage market remains sound.

                          https://wolfstreet.com/2026/08/12/here-come-the-helocs-mortgages-housing-debt-to-income-ratio-serious-delinquencies-and-foreclosures-in-q2-2026/

 

     Investing

 

            How important is cash in your investment strategy?

            https://ritholtz.com/2026/08/lets-talk-about-cash/

 

            The Treasury market is facing a reckoning.

https://www.marketwatch.com/story/the-30-trillion-treasury-market-is-facing-a-painful-reckoning-how-rising-yields-could-squeeze-your-portfolio-8fa9edd8?st=tAzYd5

 

 

    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---Back to your regularly scheduled bull market

 

The Morning Call

 

8/13/26

 

The Market

         

    Technical

 

            Wednesday in the charts.

https://www.zerohedge.com/markets/all-greed-no-fear-bonds-stocks-bid-cooling-cpi-big-tech-bitcoin-keep-sliding?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTIxMjU5Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4NjU2NjQzMywiZXhwIjoxNzg5MTU4NDMzLCJhdWQiOiJ6aC1naWZ0In0.h59M-4_XdrSn_excaUF_hBWrM-P2fp04dFMBm8HR_S4

 

            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

 

            The latest from Citadel’s desk.

https://www.zerohedge.com/markets/retail-buying-again-trillion-dollar-buybacks-bullish-flows-back-big-august-citadel?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTIxMjMxIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4NjU2MTg0NSwiZXhwIjoxNzg5MTUzODQ1LCJhdWQiOiJ6aC1naWZ0In0.nBHtyXZoQN3kU7K3I5XYOuYCgj_fDeutpUSBEq84jO8

 

                        The latest from Goldman’s desk.

https://www.zerohedge.com/markets/goldmans-pasquariello-path-least-resistance-sp-higher?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTIxMjgwIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4NjU2NTc2NSwiZXhwIjoxNzg5MTU3NzY1LCJhdWQiOiJ6aC1naWZ0In0.XiPbDM7x5-aPv-5IoOdi2RjV6GspySjK-uj9rluZVXw

 

 

            Volatility tumbles as investors shrug off Middle East risks.

            https://giftarticle.ft.com/giftarticle/actions/redeem/4b18f26c-196b-434e-aed8-f9a51a65e552

 

Thursday morning setup: Futures are higher again, although trading in a narrow range for the past week just below all-time highs, with Tech flat following disappointing earnings from CSCO. As of 8:00am ET, S&P 500 futures add 0.2% while Nasdaq futures are unchanged as Cisco shares dropped 6.4% in premarket trading after earnings failed to impress. Elsewhere, Semis are flat, Memory is lower, with Mag7 / Software trading up. Cyclicals and Defensives are trading higher with weakness in Energy / Materials; AI theme remains bid. Price action in Asia was upbeat and again characterized by bubbly tech enthusiasm just days after the last Korean bubble popped, with benchmarks in South Korea, Japan and Taiwan all advancing, and the Kospi re-entering a bull market, up 20% from its late July lows. European stocks are grinding higher with the Stoxx 600 up 0.2%. Brent crude is down 1.7%, pausing its recent rally. News flow remains light and the impasse over the Strait of Hormuz is dragging on. Weaker energy prices are dragging US yields lower across the curve with more price data due today via PPI metrics. The Bloomberg Dollar Spot Index is flat as the low vol environment in FX markets continues. USD/JPY is steady following a report that the government is supportive of a faster BOJ hike. Spot gold is down 0.6% and back on a $4300/oz handle. JPM says to keep an eye on the Retail investor as the bank's flows data show an uptick from 4%-ile to 64%-ile but with a shift away from Tech to macro themes, e.g., gold. Today's US economic data calendar includes weekly jobless claims and July PPI (8:30am). Fed speakers scheduled include Cleveland Fed’s Hammack (8:15am) and Richmond Fed’s Barkin (8:40am).

 

As Bloomberg notes, investors are increasingly discerning between companies already turning the data-center boom into revenue and those where they are still being asked to look further out. The reaction to Cisco and Cerebras suggests the next batch of AI earnings may face a higher bar. Headline orders and exposure to the capex boom may no longer be enough on their own, with investors likely to focus more closely on how quickly demand converts into revenue, what it does to margins and whether earnings can keep pace.

 

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Weekly initial jobless claims totaled 209,000 versus forecasts of 202,000.

 

July PPI was flat versus expectations of up 0.2%; core PPI was up 0.2% versus +0.3%.

                          https://www.zerohedge.com/markets/rate-hike-odds-remain-low-us-producer-prices-print-cooler-expected-july

 

                        International

 

Q2 QoQ UK GDP grew 0.4%, in line; Q2 construction orders declined 18.1% versus +11.8%; June GDP was up 0.3% versus 0.0%; June industrial production fell 0.2% versus +0.1%; the June trade balance was -L5.5 billion versus -L3.6 billion.

 

                          June EU industrial production was flat versus estimates of -0.1%.

 

                          July Japanese PPI came in at +0.1% versus +0.6%.

 

                        Other

 

                          Trade between US and China increased in June.

                          https://politicalcalculations.blogspot.com/2026/08/trade-between-us-and-china-increases.html

 

                          Global oil deficit continues to rise.

                          https://www.zerohedge.com/markets/global-oil-deficit-hit-18-million-bpd-quarter-iea-forecasts

 

                          Hormuz shock manifesting itself in cracks not crude.

                          https://www.zerohedge.com/energy/hormuz-shock-manifesting-itself-cracks-not-crude-jefferies-says

 

Monetary Policy

 

I recently linked to an article outlining a major shift in the outlook from one of the premier bond market experts in which he made a 180 degree turn from forecasting lower interest rates/inflation to higher interest rates/inflation.  Here is an analysis of his analysis.

https://talkmarkets.com/article/lacy-hunt-turns-bearish-bonds-studying-his-reversal-1786532279

 

            Fiscal Policy

 

              Unchecked fiscal irresponsibility.

              https://townhall.com/columnists/terryjeffrey/2026/08/12/federal-debt-per-working-couple-tops-median-home-price-n2681071

 

            Inflation

 

              An in depth look at yesterday's CPI number.

              https://bonddad.blogspot.com/2026/08/july-consumer-inflation-second-gift.html

 

            AI

 

              Credit market signaling rising doubts about AI buildout.

  https://www.zerohedge.com/markets/credit-markets-signal-rising-doubts-over-ai-buildout?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTIxMjQ2Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4NjU2NzI5NSwiZXhwIjoxNzg5MTU5Mjk1LCJhdWQiOiJ6aC1naWZ0In0.zW67BsGPQq8H4BV523rUZrqBaEluw9FebIDIevEGqJY

 

 

     Investing

 

            The Market is broadening.

            https://trendlabs.com/more-than-half-the-stocks-are-winning/

 

            Back to your regularly scheduled bull market.

            https://www.carsongroup.com/insights/blog/back-to-your-regularly-scheduled-bull-market/

 

            But a word of caution….

            https://www.pimco.com/us/en/insights/the-credit-market-lens-the-return-of-financial-engineering-not-2008-but-not-nothing

 

            Financial markets, oil prices and supply side risks.

            https://www.frbsf.org/research-and-insights/publications/economic-letter/2026/08/financial-markets-oil-prices-and-supply-side-risks/

 

            Equity diversification in an era of concentration.

            https://www.advisorperspectives.com/commentaries/2026/08/12/equity-diversification-era-concentration

 

            How levered ETFs benefit from volatility.

            https://www.wealthmanagement.com/etfs/leveraged-etf-boom-creates-new-ways-to-profit-from-sudden-bursts-of-volatility

 

            The best way to sell a concentrated position.

            https://ofdollarsanddata.com/the-best-way-to-sell-a-concentrated-position/

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

                        When power, policy and capital go wrong.

            https://www.realclearmarkets.com/articles/2026/08/12/when_power_policy_and_capital_go_wrong_1199775.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---What Wall Stree isn't teling investors about AI credit risk

 

The Morning Call

 

8/12/26

 

The Market

         

    Technical

 

            Tuesday in the charts.

https://www.zerohedge.com/markets/mideast-malaise-ai-angst-batter-big-tech-bitcoin-bonds-shrug-oils-gains?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTIxMTUxIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4NjQ3OTk3MiwiZXhwIjoxNzg5MDcxOTcyLCJhdWQiOiJ6aC1naWZ0In0.jvRNVXGkDpNcm0nwJ4kzDs_OY0E2Sd-laPMiDkm7AeI

 

            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

 

Wednesday morning setup: US: Futures are higher, led by Tech as AI infra earnings boost the theme while the Semis trade was bid overnight led by a surge in Korea's Kospi. As of 7:45am ET, S&P futures are up 0.2% ahead of today's CPI report, while Nasdaq futures gain 0.7% as investors react positively to updates from US technology firms. Semis / Memory are outpacing broader markets with Mag7 trading higher, too. Software is lower, so watch to see if the +Semi / -Software dynamic returns after a significant reversal. CoreWeave shares are up ~17% in premarket on stronger-than-expected sales growth. Super Micro Computer shares have climbed 9% after their revenue forecast topped estimates. Tech stocks also outperformed in Asia where the Kospi climbed 3.7%. European stocks are inching higher. The market has seen muted volumes this week into today’s CPI print, with PPI and Retail Sales tomorrow, providing more details on the growth / inflation dynamic. Consensus sees Headline CPI MoM of +0.1% and Core MoM of +0.2%, which is 3.4% YoY for Headline and 2.5% YoY for Core (our preview is here). A dovish print today may remove Sept hike expectations, boosting stocks.Broader risk sentiment has improved as Brent crude futures turned negative and fell back below $89 a barrel after another well-time headline by Pakistan which said the 60-day deadline for a US-Iran MoU may be extended, but the larger peace process has stalled. Earlier, Donald Trump said the US “totally” controls the Strait of Hormuz. Treasuries extend gains ahead of the US CPI report, with US 10-year yields down 2 bps at 4.66%. European government bonds followed suit. The Bloomberg Dollar Spot Index is little changed. Precious metals are advancing, with spot silver up almost 3%. Looking at today's economic data calendar we get July CPI data at 8:30am and July federal budget balance at 2pm. Fed speaker slate is blank; Cleveland Fed’s Hammack and Richmond Fed’s Barkin have appearances slated Thursday

 

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Month to date retail chain store sales were up 8.3% versus up 8.7% in the prior week.

 

Weekly mortgage applications rose 3.6% while purchase applications were up 3.0%.

         

July existing home sales were down 1.7% versus consensus of -0.7%.

 

July CPI was up 0.1%, in line; core CPI was up 0.2%, also in line.

 

                        International

 

July YoY Japanese machine tool orders increased 50.4% versus estimates of +42.0%.

 

July German CPI came in at +0.9%, in line.

 

                        Other

 

 

                          US household debt dropped in Q2.

                                      https://www.zerohedge.com/economics/despite-record-surge-subprime-car-loan-originations-us-household-debt-dropped-q2-first

 

                          Nothing has changed.

                          https://alhambrapartners.com/monthly-macro-monitor-status-quo/?src=news

 

                          The housing recession is over.

                          https://conorsen.substack.com/p/the-housing-recession-is-over-8b6?r=1y6w9

 

            Overnight News

 

The oil market faces a severe supply deficit of 1.8 million b/d this quarter due to renewed Middle East conflict, despite high prices cutting demand by half to 1.6 million b/d.

 

            Monetary Policy

 

              Warsh faces a host of problems.

  https://www.bloomberg.com/opinion/articles/2026-08-11/fed-chair-kevin-warsh-s-problems-go-deeper-than-his-rocky-start?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc4NjQ2NTIwNiwiZXhwIjoxNzg3MDcwMDA2LCJhcnRpY2xlSWQiOiJUSkxMMEdLR1pBSzAwMCIsImJjb25uZWN0SWQiOiJCMzFCNTRDQTI3MTE0NjAxOUQxMURCN0IxRUM4NTE2MyJ9.wfVBwrHLfWhqcih6nfjGPA5vVMnhNFwkpBRDzLF2t24

 

 

            Fiscal Policy

 

              The mistaken notion that a balanced budget is a worthy goal.

              https://www.realclearmarkets.com/articles/2026/08/11/balanced_budget_hagiography_plays_into_the_hands_of_big_government_1199113.html

 

            AI

 

              What Wall Street isn’t telling investors about AI credit risk.

 https://www.zerohedge.com/markets/rebalancing-odds-heres-what-wall-street-wont-tell-you-about-ai-credit?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTIxMTQ2Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4NjU0MDAxOSwiZXhwIjoxNzg5MTMyMDE5LCJhdWQiOiJ6aC1naWZ0In0.WJVvQNPCKNrHImFm7y3ccxzAurWlamZKlnA7WQGXCa8

 

 

              AI buyers still waiting for the payoff.

              https://www.apollo.com/wealth/insights-news/insights/daily-spark/the-buyers-of-ai-are-still-waiting-for-the-payoff

 

              AI follows other boom and bust cycles.

              https://mrzepczynski.blogspot.com/2026/08/ai-investment-follows-other-boom-and.html

 

              Counterpoint.

              https://www.riskhedge.com/outplacement/the-750-billion-ai-question

 

            The Financial System

 

              Private credit’s ‘redemption crisis’.

              https://talkmarkets.com/article/private-credits-redemption-crisis-never-actually-ended-it-just-stopped-making-headlines-1786454963

 

     Investing

 

            Earnings drive both bull and bear markets.

            https://www.advisorperspectives.com/commentaries/2026/08/11/earnings-drive-both-bull-bear-markets

 

            The risks associated with a concentrated market.

            https://www.advisorperspectives.com/commentaries/2026/08/11/why-dont-own-it

 

            Your portfolio’s biggest threat.

            https://www.realclearmarkets.com/articles/2026/08/11/your_portfolios_biggest_threat_isnt_the_market_its_you_1199465.html

 

            Why the bond market is so important.

https://www.nytimes.com/2026/08/07/business/bonds-stocks-federal-reserve-interest-rates.html?unlocked_article_code=1.4lA.h_Bn.ZAtQIChjKFe2&smid=url-share

 

            Corporate earnings growth is broadening out.

                        https://www.marketwatch.com/story/good-news-for-stock-market-bulls-corporate-earnings-growth-is-no-longer-being-driven-just-by-tech-ddac973b?st=Ai3WTi

 

            The economics of the prediction market.

            https://trendlabs.com/they-dont-want-you-to-invest/

 

    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.