The Morning Call---The Fed is on the path to failure

 

The Morning Call

 

3/30/22

 

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/russia-reversal-report-routs-oil-gold-bonds-signal-recession-inevitable

 

            Breadth.

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

 

            The latest from BofA.

            https://www.zerohedge.com/markets/one-bank-spots-imminent-selloff-trigger-hidden-within-historic-market-divergence

 

            2s10s curve inverts.

            https://www.zerohedge.com/economics/hard-landing-virtually-inevitable-countdown-recession-begins-2s10s-curve-inverts

 

            The Fed owned the bond market; now it is breaking it.

            https://www.zerohedge.com/markets/fed-owned-bond-market-now-its-breaking-it

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications declined 6.8% while purchase applications were up 0.6%.

 

Month to date retail chain stores sales grew slightly faster than in the prior week.

 

(Final) Q4 GDP growth was 6.9% versus predictions of 7.1%; corporate profits were +0.2% versus +3.0%; the PCE price deflator was +6.4% versus +6.3%

 

The January Case Shiller home price index rose 1.4% versus estimates of 1.0%.

https://www.calculatedriskblog.com/2022/03/comments-on-january-case-shiller-and.html

 

February job opening (JOLTS) totaled 11.2 million versus projections of 11.0 million.

https://www.advisorperspectives.com/dshort/updates/2022/03/29/february-job-openings-labor-turnover-little-changed

 

March consumer confidence came in at 107.2 versus forecasts of 107.0.

                          https://www.advisorperspectives.com/dshort/updates/2022/03/29/consumer-confidence-rebounds-in-march

 

The March ADP private payroll report showed an increase in employment of 455,000 versus expectations of 450,000.

                                  https://www.zerohedge.com/personal-finance/adp-shows-broad-based-job-gains-march-services-jobs-soaring

 

                        International

 

                          February Japanese retail sales fell 0.8% versus consensus of -1.0%.

 

The preliminary March German CPI was reported at +2.5% versus predictions of +1.6%.

 

March EU economic sentiment was 108.5 versus expectations of 109.0; industrial sentiment was 10.4 versus 9.0; services sentiment was 14.4 versus 10.0; consumer confidence was -18.7, in line.

                                     

 

                        Other

 

                          The cure for high prices.

                          https://alhambrapartners.com/2022/03/27/weekly-market-pulse-the-cure-for-high-prices/

 

                          Odds of a recession (from one analyst).

                          https://econbrowser.com/archives/2022/03/recession-talk

 

                          Interesting housing statistics.

                          https://politicalcalculations.blogspot.com/2022/03/market-cap-of-us-new-home-sales-flat-in.html#.YkNCd-rMKUk

 

                          Global supply chains brace for more problems.

                          https://www.bloomberg.com/news/articles/2022-03-29/fed-pivots-toward-jumbo-hikes-after-being-slammed-as-too-slow?sref=loFkkPMQ

 

                          The data still suggest a low probability of recession.

                          https://www.capitalspectator.com/will-low-us-recession-risk-rise-in-the-months-ahead/

 

            The Fed

 

              The Fed pivots towards jumbo rate hikes.

              https://www.bloomberg.com/news/articles/2022-03-29/fed-pivots-toward-jumbo-hikes-after-being-slammed-as-too-slow?sref=loFkkPMQ

 

              But already on the path to failure.

              https://www.zerohedge.com/markets/trouble-ahead-fed-policy-preset-course-fail

 

              The Fed admits that fiscal stimulus is the culprit behind soaring inflation.

              https://www.zerohedge.com/economics/fed-finally-admits-covid-stimulus-responsible-hottest-inflation-generation

 

            Fiscal Policy

 

              More (or less) details on Biden’s 2023 budget proposal.

              https://www.nytimes.com/2022/03/28/upshot/budget-biden-policy-agenda.html

 

              Club for Growth’s response.

              https://www.clubforgrowth.org/club-for-growth-statement-on-bidens-bankrupt-budget/

 

            Inflation

 

              The perils of inflation.

              https://www.adamsmith.org/blog/the-perils-of-inflation

 

     Bottom line.

 

            The latest from John Hussman (must read).

            https://www.advisorperspectives.com/commentaries/2022/03/28/quit-while-youre-ahead

 

            Ed Yardini’s thoughts on stock performance in 2022.

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

 

            Bear squeeze or return of the Bull?

            https://www.zerohedge.com/markets/bear-squeeze-or-return-bull

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

New clues on the extent of the devastation from a six mile wide meteor that hit the earth 66 million years ago.

https://www.nationalgeographic.com/science/article/new-clues-reveal-the-devastation-the-day-the-dinosaurs-died

 

 

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