The Morning Call---What are the odds of a recession?

 

The Morning Call

 

3/31/22

 

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/bonds-bullion-black-gold-bid-putin-sparks-stock-skid

 

            A short squeeze in the long Treasury?

            https://www.zerohedge.com/the-market-ear/cvgvvk-5zj

 

            Expectations are for higher rates, but…………(see below).

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

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

February personal income was up 0.5%, in line; February personal spending was up 0.2% versus +0.5%; the February PCE price indicator was up 0.6% versus 0.8%.

https://www.zerohedge.com/economics/feds-favorite-inflation-indicator-surges-40-year-high-feb-real-spending-shrinks

 

Weekly jobless claims totaled 202,000 versus predictions of 197,000.

 

                        International

 

The final Q4 UK GDP growth rate was 1.3% versus forecasts of 1.0%; final Q4 business investment was up 1.0% versus 0.9%.

 

February Japanese industrial production was up 0.1% versus estimates of +0.5%; February YoY construction orders fell 2.3% versus +8.1%; February YoY housing starts were up 6.3% versus +1.1%.

 

The February EU unemployment rate was 6.8% versus projections of 6.7%.

 

February German retail sales were up 0.3% versus consensus of +0.5%; the February unemployment rate was 3.1%, in line.

 

The March Chinese manufacturing PMI was reported at 49.5 versus expectations of 49.9; the nonmanufacturing PMI was 48.4 versus 50.2; the composite PMI was 48.8 versus 49.9.

 

                        Other

 

                          The monetary/fiscal policy dilemma.

    https://www.project-syndicate.org/commentary/stagflationary-environment-putins-war-no-optimal-policy-response-by-nouriel-roubini-and-   brunello-rosa-2022-03

 

                          A look at housing affordability.

                          https://www.calculatedriskblog.com/2022/03/real-house-prices-price-to-rent-ratio.html

 

                The Fed

 

              The BOJ is trapped; will the Bank of China be forced to follow suit (must read).

              https://www.zerohedge.com/markets/yen-risk-explosive-downward-spiral-kuroda-trapped-and-why-china-may-soon-devalue

 

                Inflation

 

              The release of oil reserves will do nothing to solve the structural supply problems.

              https://www.zerohedge.com/political/oil-slides-biden-admin-mulls-huge-spr-release-again

 

            Recession

 

              An argument for no recession.

              https://scottgrannis.blogspot.com/2022/03/bond-market-says-no-recession-in-cards.html

           

              More on the probability of recession.

              https://econbrowser.com/archives/2022/03/plain-vanilla-term-spread-forecasts-of-recession

 

              Still more.

              https://www.zerohedge.com/the-market-ear/cpabbki7mx

 

              Still more---from Pimco and Jeffrey Gundlach.

               https://www.bloomberg.com/news/articles/2022-03-30/pimco-says-curve-inversion-may-be-unreliable-recession-signal?sref=loFkkPMQ

 

              Allocators are investing like recession is on the way.

https://www.institutionalinvestor.com/article/b1xchxpx59st90/Allocators-Are-Investing-Like-a-Recession-Is-on-the-Way-Despite-the-Fed-s-Promise-of-a-Soft- Landing

 

           

            The coronavirus

 

              An update on the new strain now reaching the US.

              https://www.cnn.com/2022/03/29/health/ba-2-dominant-us/index.html

 

    Bottom line.

 

            This kind of doom and gloom article makes me want to nibble at bonds.

            https://www.bloomberg.com/news/articles/2022-03-30/corporate-bonds-lost-1-trillion-and-there-s-more-trouble-ahead?sref=loFkkPMQ

 

            If you are worried about bonds, you are not focusing.

            https://www.zerohedge.com/markets/blain-why-you-shouldnt-panic-about-bonds

 

    Buyer Alert

 

Accordingly, the ETF Portfolio is increasing its positions in the Van Kampen municipal opportunity ETF (VMO) and the Yieldshares high income ETF (YYY) by roughly 10%.

 

    News on Stocks in Our Portfolios

 

Paychex press release (NASDAQ:PAYX): Q3 Non-GAAP EPS of $1.15 beats by $0.10.

 

Revenue of $1.28B (+15.3% Y/Y) beats by $60M.

 

What I am reading today

 

           

                        Working with our body clock.

            https://www.axios.com/night-owl-early-bird-sleep-internal-clock-6d732c94-f4e7-4992-8f0a-ca5a14a80415.html

 

            Use a measuring tape to assess your health.

            https://politicalcalculations.blogspot.com/2022/03/how-to-use-measuring-tape-to-assess.html#.YkSOUerMKUk

 

 

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