The Morning Call---What to watch from the FOMC meeting today

 

The Morning Call

 

9/21/22

 

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/stocks-bonds-bullion-bitcoin-dump-usd-jumps-fed-looms

 

Note: Yesterday, the S&P unsuccessfully tested

the lower boundary of its intermediate term uptrend for the fifth time since mid-June. Clearly the bulls are making a big stand. I have no idea what happens next. The Fed narrative today could well determine direction.

 

            Who is buying and who is selling.

            https://www.institutionalinvestor.com/article/b1zvvhdyw9xs7v/Institutional-Investors-and-Hedge-Funds-Are-Selling-Their-Stocks-Retail-Is-Buying

 

            Two year Treasuries headed for 4% yield.

            https://www.bloomberg.com/news/articles/2022-09-20/treasury-two-year-yields-climb-relentlessly-toward-4-before-fed?srnd=premium&sref=loFkkPMQ

           

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications rose 3.8% while purchase applications were up 1.0%.

 

                        International

 

The September UK industrial tends orders index came in at -2 versus estimates of -11.

 

                        Other

 

                          Some encouraging stats (must read).

                          https://www.aier.org/article/some-pictures-are-indeed-worth-a-thousand-words/

 

                          US, EU and China GDP.

                          https://econbrowser.com/archives/2022/09/us-euro-area-and-china-gdp-over-the-pandemic-and-recovery

 

                          The latest Atlanta Fed Q3 nowcast.

                          https://www.zerohedge.com/economics/atlanta-fed-cuts-q3-gdp-estimate-just-03-after-housing-data

 

            The Fed

 

              Four things to watch from the Fed meeting today.

              https://www.zerohedge.com/markets/four-things-traders-will-be-watching-fed-today

 

I have harped endlessly on the inefficiencies brought on by QE---one of which was misallocation of artificially cheap capital to companies that should be bankrupt (creative destruction). The chickens may now be coming home to roost.

https://www.reuters.com/markets/us/overstretched-us-companies-feel-pinch-higher-borrowing-costs-2022-09-20/

 

Speaking of which (must read).

https://www.zerohedge.com/markets/debt-and-why-fed-trapped

 

            Inflation

 

              More predictors of lower inflation.

              https://scottgrannis.blogspot.com/2022/09/more-predictors-of-lower-inflation.html

 

              This analyst sees inflation flatlining in six months.

              https://www.advisorperspectives.com/commentaries/2022/09/19/our-inflation-nightmare-will-flatline-in-6-months

 

              Climbing housing costs could prop up inflation for a while.

              https://www.wsj.com/articles/climbing-housing-costs-could-prop-up-inflation-for-a-while-11663641828

 

            Recession

 

              Recession on the horizon?

              https://econbrowser.com/archives/2022/09/recession-on-the-horizon

 

     Bottom line

 

            Was the June low The bottom?

            https://alhambrapartners.com/2022/09/18/weekly-market-pulse-what-changed/

 

            Money is flooding into the US from overseas.

            https://www.yardeniquicktakes.com/money-flooding-into-us-from-overseas/

 

            Some interesting tax facts about muni bond investing.

            https://www.wsj.com/articles/municipal-bonds-suddenly-look-cheap-some-are-tax-traps-11662735718

 

            High valuations generally lead to low future returns.

            https://www.zerohedge.com/markets/buffett-indicator-says-markets-are-going-crash

 

    News on Stocks in Our Portfolios

 

Microsoft Corporation (NASDAQ:MSFT) declares $0.68/share quarterly dividend, 10.0% increase from prior dividend of $0.62.

Will FedEx cut its dividend? I am sticking with it.

https://politicalcalculations.blogspot.com/2022/09/will-fedex-dividend-crash.html#.YynymXbMKUk

 

            Counterpoint.

            https://www.advisorperspectives.com/commentaries/2022/09/20/can-fedex-deliver-long-term-gains-after-todays-short-term-pain

 

What I am reading today

 

            The latest data from the Mars rover.

            https://www.nasa.gov/press-release/nasa-s-perseverance-rover-investigates-geologically-rich-mars-terrain

 

 

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