Friday, October 1, 2021

The Morning Call---Showtime for the Fed

 

The Morning Call

 

10/1/21

 

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/slumptember-big-tech-bonds-bitcoin-bullion-dumped-dollar-jumped

 

The S&P finished below its 100 DMA (now support; if it remains there through the close on Monday, it will revert to resistance).  The long bond ended below its 100 DMA for the third day, reverting to resistance.

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

August personal spending was up 0.8% versus forecasts of +0.6%; personal income was up 0.2% versus +0.3%; the core PCE was up 0.3% versus +0.2%.

                          https://www.zerohedge.com/personal-finance/feds-favorite-inflation-signal-surges-fastest-pace-30-years-savings-slump

 

                          The September Chicago PMI came in at 64.7 versus expectations of 65.0.

                          https://www.advisorperspectives.com/dshort/updates/2021/09/30/september-chicago-pmi-lowest-since-february

 

                        International

 

The August Japanese unemployment rate was 2.8% versus projections of 2.9%; Q3 large manufacturers index was 18 versus 13, the small manufacturers index was -3 versus -9, the nonmanufacturers index was 2 versus 0; the September manufacturing PMI was 51.5 versus 52.7 reported in August.

 

August German retail sales rose 1.1% versus consensus of +1.5%; its September manufacturing PMI was 58.4 versus 58.5.

 

The September EU manufacturing PMI came in at 58.6 versus estimates of 58.7; the September flash CPI was +0.5% versus +0.4% in August.

 

                        Other

 

                          Our enlightened political class’s impact on the global supply chain.

                          https://www.linkedin.com/in/edward-yardeni/detail/recent-activity/

           

            The Fed

           

How many times have I said in these pages that the Fed has never, ever   successfully managed the transition from easy to stable money?  Now it appears that it is show time for the unwinding of QE.

              https://www.nytimes.com/2021/09/29/business/central-bankers-supply-chains-inflation.html

 

                Biden’s Plan

 

              Another winner, Joe.

              https://www.zerohedge.com/political/bidens-top-banking-nominee-earned-lenin-award-praised-ussr-and-wants-eliminate-banks-shed

 

                Inflation

 

              Stagflation fears intensify.

              https://www.ft.com/content/323f4d9f-016c-4510-aa55-ff2c50c8d9a8

 

                  Another prominent economist joins the stagflation camp.

              https://www.zerohedge.com/economics/stagflation-risk-stephen-roach-latest-economist-sound-alarm-70s-style-inflation

 

                  China orders firms to secure energy supplies ‘at all costs’.

              https://www.zerohedge.com/commodities/china-orders-top-energy-firms-secure-supplies-all-costs-oil-surges

 

                The coronavirus

 

              Game changer.

              https://www.zerohedge.com/markets/game-changer-merck-releasing-phenomenal-test-results-experimental-covid-pill

 

     Bottom line

 

            Anatomy of a bubble.

            https://www.advisorperspectives.com/commentaries/2021/09/30/anatomy-of-a-bubble

 

    News on Stocks in Our Portfolios

 

Paychex (NASDAQ:PAYX): FQ1 Non-GAAP EPS of $0.89 beats by $0.09; GAAP EPS of $0.92 beats by $0.11.

Revenue of $1.08B (+15.9% Y/Y) beats by $40M.

 

What I am reading today

 

In yesterday’s Morning Call, I linked to an article discussing property rights and the fall of a society.  Speaking of which…………….

            https://www.zerohedge.com/political/now-theyve-crossed-line

 

            Media bulls**t.

            https://www.zerohedge.com/geopolitical/bullhit

 

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