The Morning Call--Not bad assets, just bad prices

 

The Morning Call

 

6/9/21

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/bonds-black-gold-big-shorts-bid-bitcoin-breaks-down

 

            Ten year yields plunge.

            https://www.zerohedge.com/markets/10y-yields-plunge-below-150-record-short-squeeze-accelerates

 

            The dollar---down but not out.

            https://econbrowser.com/archives/2021/06/everything-is-relative

 

            Oil approaches critical level.

            https://www.zerohedge.com/commodities/speculators-brace-commodity-prices-surge-open-interest-hits-125-trillion

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications fell 3.1% but purchase applications were up 0.3%.

 

The April job openings report (JOLTS) showed 9.3 million available jobs versus consensus of 8.3 million.

                          https://alhambrapartners.com/2021/06/06/weekly-market-pulse-looking-for-workers/

 

                        International

 

The April German trade balance was E15.9 billion versus estimates of E16.3 billion.

 

May YoY Japanese machine tool orders rose 140.9% versus +120.8% in April.

 

May Chinese CPI came in at -0.2% versus predictions of -0.1%; YoY PPI was +9.0% versus +8.5%.  In response, the Chinese government imposed price controls.

https://www.zerohedge.com/economics/traders-alert-china-inflation-shock

 

                        Other

 

                          America (and China) is driving the global economy.

                              https://www.nytimes.com/2021/06/08/upshot/pandemic-economy-trade.html

 

            The Fed

 

This analysis is likely very reflective of what the Fed wants (thinks that it can do) to do with respect to the timing and execution of tapering.  The question is, will it be successful?  As a possible answer, I remind you that the Fed has never, ever got the transition to normalized monetary policy right.  Indeed, it has a history of being dead wrong at the most critical of times.

              https://www.cnbc.com/2021/06/07/the-fed-is-in-the-early-stages-of-a-campaign-to-prepare-markets-for-tapering-its-asset-purchases.html

 

              This as a counterpoint.

              https://www.zerohedge.com/markets/one-bank-goes-apocalyptic-inflation-about-explode-leaving-global-economies-sitting-time

 

            Biden’s Plan

 

How big an impact would the global corporate minimum tax have on S&P earnings?

https://www.zerohedge.com/markets/how-will-15-global-minimum-tax-impact-sp500-earnings

 

             US and EU agree to lift tariffs.

              https://www.zerohedge.com/geopolitical/biden-and-eu-leaders-unravel-trumps-18-billion-america-first-tariff-fight

 

            Inflation

 

              What is not transitory.

              https://thereformedbroker.com/2021/06/08/it-cant-be-transitory/

 

              The relative affordability of new homes continues to decline.

              https://politicalcalculations.blogspot.com/2021/06/relative-affordability-of-us-new-homes.html#.YL-qrflKiUk

 

              But a couple of hopeful signs that inflation may be peaking soon.

              http://www.capitalspectator.com/is-the-recent-surge-in-us-inflation-peaking/

 

              Wednesday morning humor: stripper shortage.

              https://www.zerohedge.com/political/national-exotic-dancer-shortage-forces-new-orleans-strip-club-offer-signing-bonuses

 

            The coronavirus

 

              It is not a recovery because there was never a recession.

              https://americanconsequences.com/there-was-never-any-recession-john-tamny/?utm_source=RCM&utm_medium=Traffic&utm_campaign=Tamny

 

              China involved in massive coverup.

              https://www.zerohedge.com/covid-19/watch-who-advisor-says-china-engaged-massive-cover-covid-outbreak

                 

              Fauci pal describes how Chinese developed killer coronaviruses.

              https://www.zerohedge.com/covid-19/watch-fauci-pal-daszak-describes-chinese-colleagues-developing-killer-coronaviruses

 

 

    Bottom line.

 

            No bad assets, just bad prices.

            https://www.advisorperspectives.com/commentaries/2021/06/08/there-are-no-bad-assets-just-bad-prices

 

    News on Stocks in Our Portfolios

 

Brown-Forman (NYSE:BF.B): Q4 GAAP EPS of $0.25 misses by $0.07.

Revenue of $812M (+14.5% Y/Y) beats by $37.8M.

 

Franklin Resources (NYSE:BEN) declares $0.28/share quarterly dividend, in line with previous.

 

What I am reading today

 

            Getting the goalpost to stop moving.

            https://www.collaborativefund.com/blog/goalpost/

 

            A thought piece, not necessarily because I agree with all of it.

            https://unclenap.com/china-china-china/

 

            A sad commentary on the credibility of science.

            https://marginalrevolution.com/marginalrevolution/2021/06/why-are-the-less-educated-in-democracies-especially-anti-science.html

                       

More (enlightening) detail on yesterday’s story that the rich skated on paying taxes.

            https://www.powerlineblog.com/archives/2021/06/will-biden-prosecute-this-leak.php

 

 

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