Wednesday, October 5, 2022

The Morning Call--Peak pessimism?

 

The Morning Call

 

10/5/22

 

 

The Market

         

    Technical

                

            Tuesday in the charts.

             https://www.zerohedge.com/markets/stocks-bonds-bitcoin-bullion-jump-dollar-dumps

 

 Note: two observations regarding yesterday's pin action: (1) in addition to the S&P, about 75% of the stocks in our Portfolio made gap up opens on the day; about 10% had two successive days of gap up opens. That kind of action invariably reverses itself and those gaps get filled, (2) resistance exists at ~3831 on the S&P which is the downtrend off its 8/16 trading high. Until that level is successfully challenged, the current rally is nothing more than a rally in a downtrend.

 

            The jitters are not gone.

            https://www.zerohedge.com/markets/funny-thing-happened-under-surface-yesterdays-equity-market-melt

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications fell 14.2% while purchase applications                      were down 12.6%.

                       

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

 

August job openings (JOLTS) totaled 10.1 million versus predictions of 10.8 million.

https://www.advisorperspectives.com/dshort/updates/2022/10/04/august-job-openings-labor-turnover

 

August factory orders were flat with July, in line; ex transportation, they were up 0.2% versus consensus of -0.6%.

 

The August trade balance was -$67.4 billion versus anticipated -$67.7 billion.

 

The September ADP private payroll report showed an increase in jobs of 208,000 versus estimates of 200,000.

https://www.zerohedge.com/personal-finance/adp-reports-better-expected-jump-jobs-september-wage-growth-accelerates

 

                        International

                       

The August German trade balance was E0.6 billion versus forecasts of E7.3 billion.

 

The final September Japanese services PMI came in at 52.2 versus projections of 51.0;    the final composite PMI was 51.0 versus 50.9; the final September German services PMI was 45.0 versus 45.4; the final composite PMI was 45.7 versus   45.9; the final September EU services PMI was 48.8 versus 48.9; the final composite PMI was 48.1 versus 48.2; the final September UK services PMI was 50.0 versus 49.2; the final composite PMI was 49.5 versus 48.4.

 

September UK YoY new car sales were up 4.6% versus expectations of +0.8%.

 

                        Other

                           

                            Update on median household income.

                            https://politicalcalculations.blogspot.com/2022/10/median-household-income-in-august-2022.html#.YzxuIHbMKUk

 

                            Update on business cycle indicators.

                            https://econbrowser.com/archives/2022/10/business-cycle-indicators-at-octobers-start

 

                            Currency chaos in Asia.

                            https://www.nytimes.com/2022/10/04/business/asia-currency-dollar.html

 

                            Global manufacturing PMI edges below 50.0.

                            https://www.pmi.spglobal.com/Public/Home/PressRelease/3760cf0d3e5f449dbfe06bdb7ca1933d

                                   

            Fiscal Policy

 

              $600 million in covid fraud.

              https://nypost.com/2022/10/02/how-600-billion-was-stolen-from-the-american-people/

 

            Geopolitics

 

              UN advisor shreds Ukraine narrative.

              https://www.zerohedge.com/geopolitical/watch-top-un-adviser-interrupted-exasperated-bloomberg-hosts-wrongthink-russia-ukraine

 

    Bottom line

 

            Peak pessimism?

            https://alhambrapartners.com/2022/10/03/weekly-market-pulse-peak-pessimism/

 

            Ray Dalio no longer thinks that cash is trash.

            https://www.bloomberg.com/news/articles/2022-10-03/ray-dalio-no-longer-thinks-cash-is-trash?sref=loFkkPMQ

 

            IMF warns funds with illiquid assets pose risk to financial stability.

            https://www.ft.com/content/a0556d64-985d-4b2f-ad83-8196afc89a51

 

            BofA warns of Bear Stearns moment.

            https://www.zerohedge.com/markets/5-lessons-crisis-bofa-warns-uk-turmoil-can-spill-over-tail-risks-arent-dead

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

           

 

 

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