Thursday, October 28, 2021

The Morning Call--Our irresponsible national deficit/debt problem

The Morning Call

 

 

10/28/21

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/huge-value-growth-rotation-stocks-bond-market-screams-fed-policy-error

 

            The inflow of net new money into the stock market is not likely to be repeated.

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

           

            I am not the only one confused by the recent pin action in stock and bond markets

            https://www.zerohedge.com/markets/bond-market-paradox

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Weekly jobless claims totaled 281,000 versus consensus of 290,000.

 

Preliminary Q3 GDP growth was 2.0% versus predictions of 2.7%; the price index was 5.7% versus 5.5%; the core price index was 4.5%, in line.

 

                        International

 

September Japanese retail sales rose 2.7% versus a 4.0% decline in August.

 

October German unemployment was 5.4%, in line; October CPI was +0.5%, also in line.

 

October EU consumer confidence was -4.8%, in line; October economic sentiment was 118.6 versus 117.8 in September; October industrial sentiment was 14.2 versus 14.1 in September; October services sentiment was 18.2 versus 15.3 in September; October inflation expectations were 40.0 versus 33.1 in September.

 

                        Other

 

                        Stagnation in the new home market.

                        https://politicalcalculations.blogspot.com/2021/10/stagnation-settling-in-new-home-market.html#.YXmRGhrMKUk

 

$100 oil or yet another example of the stupidity of our political class (by the way, this post is from my favorite liberal, ooops, progressive economist).

                        https://www.nakedcapitalism.com/2021/10/a-global-oil-shortage-is-inevitable.html

 

                                Another lowering of GDP nowcast.

                        https://econbrowser.com/archives/2021/10/updating-nowcasts

 

                        Germany cuts 2021 GDP growth forecast.

                        https://www.zerohedge.com/markets/germany-cuts-2021-gdp-forecast-25-due-soaring-energy-costs

 

            The Fed

 

              The Fed’s challenges.

              https://www.reuters.com/business/fed-faces-showdown-supply-demand-patience-collide-2021-10-27/

 

              Why the Fed continues to implement an irresponsible monetary policy.

              https://www.zerohedge.com/markets/what-federal-reserve-hiding-us

 

              Bank of Canada turns more hawkish.

              https://www.zerohedge.com/markets/loonie-soars-after-bank-canada-ends-qe-early-accelerates-potential-timing-rate-hikes

 

              The Royal Band of Australia just ended its QE.

              https://www.zerohedge.com/markets/australias-2y-bond-just-blew-after-central-bank-unexpectedly-refused-buy-it

 

              But ECB leaves policy unchanged.

              https://www.zerohedge.com/markets/ecb-leaves-policy-unchanged-expected-will-keep-buying-bonds-until-least-march-2022

 

            Fiscal Policy

 

              The growing (irresponsible) national deficit/debt problem.

              https://global-macro-monitor.com/2021/10/25/the-u-s-budget-deficit/

 

              The true cost of government spending (Biden’s plan).

              https://www.project-syndicate.org/commentary/biden-spending-bill-does-not-cost-zero-dollars-by-michael-boskin-2021-10

           

Inflation

 

              Goldman sees light at the end of the supply chain disruption tunnel.

              https://www.zerohedge.com/markets/what-will-it-take-supply-chains-finally-normalize-three-things-watch

 

              Fed governor discusses inflation calculations.

              https://www.zerohedge.com/economics/central-banker-comes-clean-discusses-data-manipulation

 

                  The impact of higher oil prices on other industries.

              https://www.zerohedge.com/markets/global-food-prices-set-soar-oil-and-gas-crunch-continues

 

            China

 

              Taiwanese president confirms US troops in Taiwan.

              https://www.zerohedge.com/geopolitical/president-tsai-confirms-us-boots-ground-taiwan

 

    News on Stocks in Our Portfolios

 

T. Rowe Price (NASDAQ:TROW): Q3 Non-GAAP EPS of $3.27 misses by $0.04; GAAP EPS of $3.31 beats by $0.02.

Revenue of $1.95B (+21.9% Y/Y) misses by $20M.

 

Altria (NYSE:MO): Q3 Non-GAAP EPS of $1.22 misses by $0.04; GAAP EPS of -$1.48 misses by $2.74.

Revenue of $5.53B (-2.5% Y/Y) misses by $200M.

 

Illinois Tool Works (NYSE:ITW): Q3 GAAP EPS of $2.02 beats by $0.01.

Revenue of $3.56B (+7.6% Y/Y) in-line.

 

Mastercard (NYSE:MA): Q3 Non-GAAP EPS of $2.37 beats by $0.18; GAAP EPS of $2.44 beats by $0.25.

Revenue of $5B (+30.2% Y/Y) beats by $50M.

 

W.W. Grainger (NYSE:GWW) declares $1.62/share quarterly dividend, in line with previous.

 

Exxon Mobil (NYSE:XOM) declares $0.88/share quarterly dividend1.1% increase from prior dividend of $0.87.

 

 

What I am reading today

 

            Internal versus external benchmarks.

            https://www.collaborativefund.com/blog/internal-vs-external-benchmarks/

 

 

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