The Morning Call--Will inflation cause a recession?

 

The Morning Call

 

5/19/22

 

 

The Market

 

    Technical

 

Wednesday in the charts.

https://www.zerohedge.com/markets/american-consumer-strong-narrative-implodes-stocks-bond-yields-crater

 

Note: on Tuesday, the S&P rose to touch a very short term downtrend. Yesterday, it bounced hard to the downside (1) creating a third lower high and (2) pushing through the lower boundary of its short term downtrend---the last time it did that, that boundary provided some support. Let’s see if it does it again. That said, I still think that ~3800 is in the cards.

 

It is just as volatile in the bond market.

https://www.zerohedge.com/markets/treasuries-start-new-norm-between-inflation-and-recession-fears

 

Gold at technical support.

https://www.zerohedge.com/the-market-ear/c7hsn0gshy

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                        International

 

                          March EU construction output rose 3.3% versus estimates of +2.2%.

 

March Japanese machinery orders rose 7.1% versus projections of +3.7%; the April trade balance came in at Y-839.2 billion versus Y-1150.0 billion. .

 

                        Other

           

                          Goldman warns of consumer spending collapse.

                          https://www.zerohedge.com/markets/goldman-economist-warns-us-consumers-maxing-out-credit-cards-will-lead-late-2022-spending

 

                          European auto sales plunge.

                        https://www.zerohedge.com/markets/european-auto-sales-plunge-20-april-extending-10-month-losing-streak

 

 

            The Fed

 

              Can the Fed break inflation’s momentum near term?

              https://www.capitalspectator.com/can-the-fed-break-inflations-momentum-in-the-near-term/

 

            Inflation

 

              Will inflation cause a recession?

              https://www.project-syndicate.org/commentary/us-inflation-now-signs-of-economic-slowdown-recession-by-michael-r-strain-2022-05

 

            Buyer Alert

 

At the open this morning, the Aggressive Growth Portfolio will initiate one third positions in Intuit (INTU-$353) and Nvidia (NVDA-$169); the Dividend Growth Portfolio will initiate a one third position in Starbucks (SBUX-$71) and Add to its municipal bond ETF’s (VMO: NEA); the High Yield Portfolio will Add to its high yield ETF (YYY).

 

     Bottom line

 

            Bear market playbook.

            https://blairbellecurve.com/bear-market-playbook/

 

            Or go read a book.

            https://thereformedbroker.com/2022/05/18/what-part-of-rangebound-didnt-you-understand/

 

    News on Stocks in Our Portfolios

 

Cisco press release (NASDAQ:CSCO): Q3 Non-GAAP EPS of $0.87 beats by $0.01.

Revenue of $12.84B (+0.3% Y/Y) misses by $500M.

 

What I am reading today

 

            Information hygiene.

            https://ritholtz.com/2022/05/dont-read-this-blog-post/

 

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.