The Morning Call--Mohammed El Erian doubts the 'transitory' narrative

 

The Morning Call

 

7/1/21

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/stocks-bonds-soared-q2-bitcoin-buck-broke-down

 

            Important trends in the markets.

            https://compoundadvisors.com/2021/tuesday-trends-6-29-21

 

The most positive time of the year---the only problem may be that everybody and their brother have been talking about it.

            https://www.zerohedge.com/the-market-ear/cjn-jeobln

 

            And to be sure, the long side is crowded.

            https://www.zerohedge.com/the-market-ear/cepn0p8qik

 

Are lower treasury yields signaling the waning of investor exuberance over economic growth?

            https://www.wsj.com/articles/treasury-yields-signal-investors-waning-economic-exuberance-11625024471?mod=hp_lead_pos2

                       

            More on bad breadth.

            https://sentimentrader.com/blog/own-any-stocks-theres-a-70-probability-youre-underperforming/

 

                        Time to start buying protection.

            https://www.zerohedge.com/the-market-ear/timeforprotection

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly jobless claims were reported at 364,000 versus consensus of 390,000.

                          https://www.zerohedge.com/personal-finance/almost-15-million-americans-remain-government-dole-despite-initial-claims-drop

 

                          May pending home sales rose 8.0% versus estimates of -0.8%.

                          https://www.advisorperspectives.com/dshort/updates/2021/06/30/pending-home-sales-above-pre-pandemic-levels-up-8-in-may

 

                          The June Chicago PMI came in at 66.1 versus predictions of 70.0.

                          https://www.advisorperspectives.com/dshort/updates/2021/06/30/chicago-pmi-slips-in-june

 

                        International

 

May German retail sales grew 4.2% versus expectations of +5.0%; the June manufacturing PMI was 65.1 versus 64.9.

 

The May EU unemployment rate was 7.9% versus projections of 8.0%; the June manufacturing PMI was 63.4 versus 63.1.

 

June Japanese manufacturing PMI was 52.4 versus 53.0 in May; the June large nonmanufacturing index was reported at 1 versus 3; the June small manufacturing index was -7 versus -5.

 

The June UK manufacturing PMI was 7.9 versus consensus of 8.0.

 

The June Chinese manufacturing PMI was 51.3 versus estimates of 51.8.

 

                        Other

 

                          The new home market is shrinking.

                          https://politicalcalculations.blogspot.com/2021/06/booming-new-home-market-has-been.html#.YNyPB-hKiUk

 

                          Seven reasons to be optimistic about the economy.

                          https://slate.com/business/2021/06/economy-optimism-inflation-wages-hiring-jobs.html

 

            The Fed

 

              The Fed’s unity cracks.

              https://www.nytimes.com/2021/06/30/business/economy/inflation-federal-reserve.html

 

              Economists predict at least two rate increases by the end of 2023.

              https://www.ft.com/content/de778e1b-3876-4999-942e-186c2a692a1a

 

Mohammed El Erian doubts the ‘transitory’ narrative.  This is a huge call. (must read)

              https://www.zerohedge.com/markets/forget-goldilocks-el-erian-doubts-transitory-narrative-fears-increasing-risk-instability

 

            Biden’s Plan

 

              SEC to companies: go woke or go broke.

              https://www.realclearmarkets.com/articles/2021/06/30/the_sec_to_public_companies_go_work_or_go_broke_783551.html

 

            Inflation

 

              Goldman’s take on inflation.

              https://www.zerohedge.com/markets/how-average-inflation-hit-red-hot-24

 

              Oil prices surge on OPEC decision.

              https://www.zerohedge.com/markets/brace-shock-gas-pump-wti-surges-above-75-opec-raises-output-less-expected

 

            The coronavirus

 

              The CDC claims too much power.

              https://nypost.com/2021/06/29/courts-need-to-slap-down-cdcs-claim-to-have-more-power-than-president/

                   

              But it doesn’t think masks are necessary for the delta variant.

              https://www.zerohedge.com/covid-19/cdc-director-vaccinated-people-dont-need-wear-masks-amid-delta-covid-19-variant-fears

 

    Bottom line.

 

            ESG investing---the great Wall Street heist.

            https://www.advisorperspectives.com/commentaries/2021/06/30/esg-investing-the-great-wall-street-money-heist

 

            The problem with free money.

            https://alephblog.com/2021/06/30/the-rules-part-lxx/

 

            Why we should focus on process not outcome.

            https://behaviouralinvestment.com/2021/06/30/how-should-we-judge-the-quality-of-a-sell-decision/

 

            The institutional interest in crypto keeps growing.

            https://www.zerohedge.com/markets/steve-cohen-hiring-head-crypto

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

            How to ask good questions.

            https://marginalrevolution.com/marginalrevolution/2021/06/how-do-you-ask-good-questions.html

 

 

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