The Morning Call---More on the potential year end rally

 

The Morning Call

 

10/25/22

 

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/us-stocks-uk-bonds-soar-china-chunders-yen-tervention-fails

 

            Say hello to 3800.

            https://www.zerohedge.com/the-market-ear/chapwr8s

 

            More on the technical argument for a year-end rally.

            https://www.zerohedge.com/markets/here-comes-next-leg-higher-ctas-momentum-flips-bullish-buybacks-restarting-4-days

 

     Fundamental

 

            Headlines

 

              The Economy

 

                        US

 

Month to date retail chain store sales grew slightly faster than in the prior week.

 

The August Case Shiller home price index fell 1.6% versus predictions of -0.7%.

 

The October flash manufacturing PMI was reported at 49.9 versus expectations of 51.0; the flash services PMI was 46.6 versus 49.2; the flash composite PMI was 47.3 versus 50.1.

 

                        International

 

The October UK industrial trends orders index came in at -4 versus estimates of -12; the Q4 UK business optimism index was -48 versus -40.

 

The October German business climate index was 84.3 versus consensus of 83.3; the October German current conditions index was 94.1 versus 92.4.

 

                        Other

                           

                          October vehicle sales show signs of life.

                          https://www.calculatedriskblog.com/2022/10/october-vehicle-sales-forecast-signs-of.html

 

                          Update on four high frequency economic indicators.

                          https://www.calculatedriskblog.com/2022/10/four-high-frequency-indicators-for_24.html

 

                          Ocean shipping costs decline 84%.

                          https://www.zerohedge.com/economics/ocean-shipping-costs-decline-84-truckers-verge-losing-money

 

            The Fed

 

              More on the problem of ‘lag’ time.

              https://www.wsj.com/articles/higher-interest-rates-can-take-a-long-time-to-bring-down-inflation-11666517405

               

               Anticipating the next Fed meeting---from the Fed whisperer.

              https://www.wsj.com/articles/fed-set-to-raise-rates-by-0-75-point-and-debate-size-of-future-hikes-11666356757

 

 

            Recession

           

              Survey of economists suggests that the US may already

              https://www.bloomberg.com/news/articles/2022-10-24/most-in-nabe-survey-say-us-already-in-recession-or-may-be-soon?sref=loFkkPMQ

 

            Geopolitics

 

              The Western narrative about Ukraine.

https://www.nakedcapitalism.com/2022/10/western-narrative-escalation-over-ukraine-war-a-warning-of-coming-strong-countermeasures-or-a-  sign-of-  desperate-impotence.html

 

              Xi tightens his grip on China.

              https://www.nytimes.com/2022/10/23/business/china-gdp-economy.html

 

The coronavirus

 

  Sorry seems to be the hardest word.

  https://brownstone.org/articles/sorry-seems-to-be-the-hardest-word/

 

     Bottom line

 

            Make money or gossip about the Fed?

            https://allstarcharts.com/make-money-or-gossip-about-fed-policy/

 

Gundlach CIO says that it is the best time for bonds in a decade.

https://www.thinkadvisor.com/2022/10/24/its-the-best-time-for-bonds-in-more-than-a-decade-gundlachs-deputy-cio-says/

 

            Junk bond yields surge over 11%.

            https://www.axios.com/2022/10/24/average-cost-of-high-yield-bonds-october-surges

 

            A decade of no returns.

            https://www.zerohedge.com/markets/druckenmiller-decade-no-returns

 

    News on Stocks in Our Portfolios

 

Illinois Tool Works press release (NYSE:ITW): Q3 GAAP EPS of $2.35 beats by $0.10.

Revenue of $4.01B (+12.6% Y/Y) beats by $110M.

 

Sherwin Williams press release (NYSE:SHW): Q3 Non-GAAP EPS of $2.83 beats by $0.26.

Revenue of $6.05B (+17.5% Y/Y) beats by $270M.

 

3M press release (NYSE:MMM): Q3 Non-GAAP EPS of $2.69 beats by $0.10.

Revenue of $8.6B (-3.8% Y/Y) misses by $100M.

 

What I am reading today

 

            What the US Africa command does not want you to know.

            https://www.nakedcapitalism.com/2022/10/what-u-s-africa-command-doesnt-want-you-to-know.html

 

 

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