The Morning Call
12/16/21
The
Market
Technical
Wednesday in the
charts.
https://www.zerohedge.com/markets/turbo-taper-sparks-market-turmoil-yield-curve-yells-policy-error
What is the pain trade now?
https://www.zerohedge.com/the-market-ear/moreupside
Fundamental
Headlines
The
Economy
US
Weekly jobless
claims were up 206,000 versus predictions of 200,000.
https://www.zerohedge.com/personal-finance/initial-jobless-claims-rebound-52-year-lows
November housing
starts rose 11.8% versus forecasts of +4.3%; building permits were up 3.6% versus
flat.
https://www.zerohedge.com/economics/us-housing-starts-surged-november
The December Philadelphia
Fed manufacturing index was reported at 19 versus estimates of 27.
The December
housing index came in at 84 versus consensus of 83.
International
The October EU trade
balance was +E3.6 billion versus projections of +E7.6 billion.
The November
Japanese trade balance was -Y954.8 billion versus expectations of -Y675
billion.
The December flash
Japanese manufacturing PMI was 57.0 versus predictions of 54.6; the flash
services PMI was 51.1 versus 53.1; the flash composite PMI was 51.8 versus
52.6; the December flash German manufacturing PMI was 57.9 versus 56.8; the
flash services PMI was 49.4 versus 51.0; the flash composite PMI was 50.0
versus 51.1; the December flash EU manufacturing PMI was 58.0 versus 57.8; the
flash services PMI was 53.3 versus 54.1; the flash composite PMI was 53.4
versus 54.0; the December flash UK manufacturing PMI was 57.5, in line; the
flash services PMI was 53.2 versus 57.0; the flash composite PMI was 53.2 versus
56.4.
Other
The global economy continues to cool.
China’s economic
activity slowed in November.
Germany on the brink of recession.
https://www.cnn.com/2021/12/14/economy/germany-recession-omicron/index.html
The appreciation
in the dollar threatens the global economy.
https://www.zerohedge.com/markets/dollar-appreciation-threatens-global-economy
Economic zombification.
https://www.zerohedge.com/markets/covid-19-economic-zombification
The
Fed
Unless
you have been camping in the outback, you know that the FOMC met Tuesday and Wednesday. A change in policy
was expected and that is what we got (1) tapering beginning in January, (2)
rates rising as soon as next year. While those moves had been well telegraphed,
judging by the Market’s very positive reaction, investors apparently feared a
more hawkish policy.
As you know, I believe
this move toward monetary policy normalization is way overdue. As such I don’t
think that the inequities (the misallocation of resources, the mispricing of
risk) that QEForever created in the economy/Market are going to be fixed
anytime soon. So, my forecast of a struggling economy hasn’t changed. In addition,
I think that there is still a decent probability of stagflation---though I am
less confident in this prediction.
The FOMC statement:
https://www.calculatedriskblog.com/2021/12/fomc-statement-accelerate-taper.html
The dot plot:
https://www.calculatedriskblog.com/2021/12/fomc-projections-and-press-conference.html
The Fed has some heavy lifting to do.
https://global-macro-monitor.com/2021/12/14/consumers-spending-at-the-fastest-pace-weve-ever-seen/
The ECB maintains its dovish policy.
Bank of England raises rates.
https://www.zerohedge.com/markets/cable-spikes-after-bank-england-unveils-surprise-rate-hike
Fiscal
Policy
The high price of Bidenomics.
https://spectator.org/the-high-price-of-bidenomics/
The lies our ruling class tells.
https://nypost.com/2021/12/14/the-cost-of-bbb-isnt-fake-because-washington-lies-about-spending/
Bottom line
Update on S&P earnings, revenues and
margins.
https://www.linkedin.com/in/edward-yardeni/detail/recent-activity/
Financial misinformation.
https://ofdollarsanddata.com/the-age-of-financial-misinformation/
News on Stocks in Our Portfolios
What
I am reading today
The
pluses and minuses of blockchain technology.
https://www.stephendiehl.com/blog/blockchainism.html
As you know, I normally
try to avoid political narratives; but this author, in my opinion, makes some
good points on the role wokism has played in the widening wealth gap in this
country.
https://edwest.substack.com/p/how-the-chinese-trade-deal-led-to?r=yuhn3
Quote
of the day.
https://cafehayek.com/2021/12/quotation-of-the-day-3741.html?utm_source=feedburner&utm_medium=email
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