The Morning Call---Liquidity in the credit market is becoming a problem

 

The Morning Call

 

9/30/22

 

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/crash-just-wont-stop-today-something-changed

 

Note: despite all the hair raising volatility, the S&P remains above the 6/13 low---which I inaccurately called minor support. It has proven a stiff battle line so far. Could this be a double bottom in the making? Perhaps, but I wouldn’t bet money on it until/unless we get a strong bounce.

 

            NASDAQ sitting on 200 DMA.

            https://www.zerohedge.com/markets/nasdaq-selloff-brings-technology-gauge-back-long-term-average

 

            Liquidity in the credit markets is becoming a problem.

            https://www.zerohedge.com/markets/another-market-breaks-sofr-swap-spreads-rocked-biggest-swings-record

 

            Signs are pointing towards capitulation.

            https://www.zerohedge.com/markets/signs-are-pointing-toward-equities-capitulation

 

            Sanford Bernstein says it has a short term buy signal.

            https://www.zerohedge.com/the-market-ear/cwq2zio1q3

 

            Goldman says stocks are very oversold but there is more pain to come.

            https://www.zerohedge.com/markets/stocks-more-oversold-covid-crash-goldman-traders-see-even-more-pain-heres-how-theyll-trade

 

            What is needed to end this bear market.

            https://www.zerohedge.com/markets/when-well-know-bear-market-over

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Weekly initial jobless claims totaled 193,000 versus forecasts of 215,000.

                          https://www.calculatedriskblog.com/2022/09/weekly-initial-unemployment-claims_29.html

 

Final Q2 GDP growth came in at -0.6%, in line; core PCE was 4.7% versus 4.4%; corporate profits were up 6.2% versus +9.1%.

                          https://www.advisorperspectives.com/dshort/updates/2022/09/29/q2-real-gdp-per-capita-0-8-versus-the-0-6-headline-real-gdp

 

August personal income rose 0.3%, in line; August personal spending was    +0.4% versus +0.2%; the August PCE price index was up 0.3% versus +0.1%;     August core PCE price index was up 0.6% versus up 0.5%.

 

                        International

 

                          Final Q2 UK GDP growth was +0.2% versus estimates of -0.1%.

 

The August Japanese unemployment rate was 2.5%, in line; preliminary August industrial production was 2.7% versus 0.2%; August retail sales were up 1.4% versus +0.6%; August YoY housing starts were up 4.6% versus -4.0%; August YoY construction orders were up 17.9% versus +1.1%; September consumer confidence was 30.8 versus 34.0.

 

The August EU unemployment rate was 6.6%, in line; the September flash CPI was 1.2% versus 1.0%.

                                                    https://www.zerohedge.com/economics/red-hot-european-inflation-hits-new-record-rising-double-digits-first-time

 

The September Chinese manufacturing PMI was reported at 50.1 versus predictions of 49.6; the September nonmanufacturing PMI was 50.6 versus 52.8; the September composite PMI was 50.9 versus 52.0; the September Caixin (small business) manufacturing PMI was 48.1 versus 49.5.

 

The September German unemployment rate was 5.5%, in line.

                              

                        Other

 

                          Developing nations face stiff economic headwinds.

                          https://www.wsj.com/articles/developing-countries-face-stiff-economic-headwinds-world-bank-chief-says-11664422212

 

            Inflation

 

              Return of inflation makes government deficits more dangerous.

              https://www.wsj.com/articles/the-return-of-inflation-makes-deficits-more-dangerous-11664366538

 

            Geopolitics

 

              The problem with politicians.

              https://unherd.com/2022/09/the-eu-is-sleepwalking-into-anarchy/

 

              More speculation on the Nord Stream II pipeline explosion.

              https://www.nakedcapitalism.com/2022/09/the-bornholm-blow-up-repeats-the-bornholm-bash-poland-attacks-germany-and-blames-russia.html

 

  OPEC+ considering major production cut.

  https://www.zerohedge.com/commodities/oil-rises-opec-considering-substantial-production-cut

 

              Russia annexes eastern Ukraine.

              https://www.zerohedge.com/geopolitical/watch-live-putin-declares-annexation-eastern-ukraine

 

     Bottom line

 

            Dividend watch.

            https://politicalcalculations.blogspot.com/2022/09/future-dividend-watch-at-end-of-2022-q3.html#.YzXVf3bMKUk

 

    News on Stocks in Our Portfolios

 

Nike press release (NYSE:NKE): FQ1 GAAP EPS of $0.93 beats by $0.01.

Revenue of $12.69B (+3.6% Y/Y) beats by $410M.

 

EOG Resources (NYSE:EOG) declares $0.75/share quarterly dividend, in line with previous.

 

What I am reading today

 

           

                        Engaging with history.

            https://collabfund.com/blog/engaging-with-history/

 

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The Morning Call---Note to Fed: you are not good at this

 

The Morning Call

 

9/29/22

 

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/bonds-stocks-bitcoin-bullion-soar-after-brits-save-world

 

            Less than 10% of NASDAQ stocks are above their 200 DMA.

            https://theirrelevantinvestor.com/2022/09/27/washout/

 

            Short squeeze.

            https://www.zerohedge.com/markets/big-short-squeeze-coming

 

            Extreme volatility is disrupting the US Treasuries market.

            https://www.ft.com/content/ea41ce6d-e8b2-465e-8dff-8b7fa71dc7b4

 

            Crashing liquidity and exploding volatility in the bond market.

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

 

            2022 bond carnage.

            https://quantifiableedges.com/some-views-of-the-2022-bond-carnage/

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          August pending home sales were down 2.0% versus consensus of -0.5%.

                          https://www.advisorperspectives.com/dshort/updates/2022/09/28/pending-home-sales-waned-in-august

 

                        International

 

                          September EU economic sentiment was 93.7 versus estimates of 95.0;

September industrial sentiment was -0.4 versus -1.0; September services    sentiment was 4.9 versus 7.0; September consumer confidence was -28.8, in line.

 

Preliminary September German CPI was 1.9% versus predictions of 1.3%.

 

                        Other

 

                          Inside the recent new home sales data.

                          https://politicalcalculations.blogspot.com/2022/09/us-new-homes-market-cap-peaks-in-july.html#.YzRfTnbMKUk

 

                          The latest Q3 nowcast.

                          https://econbrowser.com/archives/2022/09/q3-growth-vs-revisions

 

                          The Chinese yuan continues to drop against the dollar.

                          https://www.bbc.com/news/business-63056680

 

            The Fed

 

              Is the Fed making a(nother) mistake?

              https://www.yardeniquicktakes.com/two-spooky-charts/

 

              Note to FOMC: you are not good at this (must read).

              https://thereformedbroker.com/2022/09/23/youre-not-good-at-this/

 

              A similar opinion from Mohamed El Erian but delivered a bit more politely.

              https://www.zerohedge.com/markets/el-erian-cost-feds-challenged-credibility

 

              In the spirit of ‘piling on’ here is Stanley Druckenmiller’s two cents.

              https://www.zerohedge.com/markets/druckenmiller-we-are-deep-trouble-i-dont-rule-out-something-really-bad-happening-next

 

              The Bank of England just bailed out the big banks once again.

              https://www.zerohedge.com/markets/behind-boes-panic-billions-margin-calls-death-spiraling-complete-bond-market-collapse

 

            Inflation

 

              The argument for declining inflation (must read).

              https://scottgrannis.blogspot.com/2022/09/everythings-down-except-inflation.html

 

              The pace of rent increases continues to slow.

              https://www.calculatedriskblog.com/2022/09/pace-of-rent-increases-continues-to-slow.html

 

              Lumber prices fall back to pre-covid levels.

              https://www.wsj.com/articles/lumber-prices-fall-back-to-around-their-pre-covid-levels-11664239652

 

              Recession

 

                Larry Summers thinks a hard landing is ‘substantially’ more likely.

               https://www.wsj.com/video/larry-summers-says-hard-landing-ubstantially-more-likely/4725F18B-A0BC-464F-920F-FD6F98FCA4AA.html

 

 

     Bottom line

 

            Stocks still are not cheap.

            https://www.morningstar.com/articles/1115121/have-stocks-become-cheap

 

            Farewell, TINA.

            https://ritholtz.com/2022/09/farewell-tina/

 

    News on Stocks in Our Portfolios

 

Paychex press release (NASDAQ:PAYX): Q1 Non-GAAP EPS of $1.03 beats by $0.06.

Revenue of $1.21B (+12.0% Y/Y) beats by $40M.

 

What I am reading today

 

           

 

 

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The Morning Call---Bank of England folds like a cheap umbrella

 

The Morning Call

 

9/28/22

 

 

The Market

         

    Technical

 

Tuesday in the charts.

https://www.zerohedge.com/markets/1932-1974-2008-and-today-stocks-enter-meltdown-crash-pattern

 

Messages from the Market.

https://econbrowser.com/archives/2022/09/messages-from-the-market

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

                           

Weekly mortgage applications declined 3.1% while purchase applications were down 0.4%

 

                          August new home sales rose 28.8% versus projections of -0.5%.

                          https://www.calculatedriskblog.com/2022/09/new-home-sales-increase-to-685000.html

 

Preliminary August retail inventories were up 0.6% versus forecasts of up 0.1%; preliminary August wholesale inventories were up 1.3% versus +0.3%.

                               

                          September consumer confidence came in at 108 versus forecasts of 104.5.

                           https://www.advisorperspectives.com/dshort/updates/2022/09/27/consumer-confidence-improved-in-september

                                                                        

The September Richmond Fed manufacturing index was reported at 0 versus expectations of -3.

 

                        International

 

Final July Japanese leading economic indicators were 98.4 versus consensus of 99.6.

 

The October German consumer confidence index was -42.5 versus predictions of -37.8.

                         

                        Other

 

                          Jobs are a cost, not a benefit.

                          https://www.adamsmith.org/blog/jobs-are-a-cost-not-a-benefit-2

 

                          OECD warns of pervasive global slowdown.

                          https://www.oecd.org/newsroom/oecd-interim-economic-outlook-warns-of-pervasive-global-economic-slowdown.htm

 

                          China growth to fall behind the rest of Asia.

                          https://www.ft.com/content/ef425da7-0f94-484a-9f0c-40991be70ccc

 

            The Fed

 

              Sins of the Fed.

              https://alhambrapartners.com/2022/09/26/weekly-market-pulse-jerome-powell-tough-guy/

 

              The bond vigilantes are back.

              https://www.yardeniquicktakes.com/the-bond-vigilantes-theyre-baaaack/

 

              The Bank of England capitulates. (must read)

              https://www.zerohedge.com/markets/bank-england-capitulates-restarts-qe-due-significant-dysfunction-bond-market-material-risk

           

            Fiscal Policy

 

              The federal government is spending trillions and losing trillions.

              https://thehill.com/opinion/finance/3658178-the-government-is-not-only-spending-trillions-its-losing-trillions/

 

              An  analysis of the cost of the student loan forgiveness program.

              https://www.powerlineblog.com/archives/2022/09/analyze-this-44.php

 

            Geopolitics

              More on the Nord Stream II pipeline incident.

              https://www.nakedcapitalism.com/2022/09/the-war-on-germany-just-entered-its-hot-phase.html

 

     Bottom line

 

            Update on the Buffett indicator.

            https://www.advisorperspectives.com/commentaries/2022/09/27/buffett-indicator-says-markets-are-going-to-crash

 

            Surging interest rates are a critical risk factor.

            https://www.capitalspectator.com/surging-real-yields-are-a-critical-risk-factor-again/

 

            Jeffrey Gundlach starts nibbling at bonds.

            https://www.bloomberg.com/news/articles/2022-09-27/gundlach-starts-buying-as-10-year-us-yields-set-for-record-spike?srnd=premium&sref=loFkkPMQ

 

           Accepting a negative metric in order to achieve a positive outcome.

           https://behaviouralinvestment.com/2022/09/27/something-has-to-hurt/

 

          What is in your control and what is not.

          https://ritholtz.com/2022/09/what-is-in-your-control/

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

 

 

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