Friday, September 30, 2022

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/

 

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

 

 

 

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