The Morning Call--Are we getting any value from the government's debt fueled spending?

 

                     The Morning Call           

 

1/26/23

 

The Market

         

    Technical

 

Wednesday in the charts.

https://www.zerohedge.com/markets/wash-out-rinse-weak-hands-repeat-squeeze-gold-rips-equity-traders-buy-fking-dip

 

Note: the S&P intraday fell below its 200 DMA but reversed and ended above it for the fourth day, resetting it from resistance to support.  That puts the index in the narrow range between that MA and the upper boundary of its short term downtrend.  A break of either would likely portend future direction.

 

The stock market just triggered a bullish ‘golden cross’.

https://investorplace.com/hypergrowthinvesting/2023/01/the-stock-market-just-triggered-a-bullish-golden-cross-signal/

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

                        

 Weekly initial jobless claims totaled 186,000 versus predictions of   205,000.

 

  Q4 GDP growth was 2.9% versus consensus of 2.6%; consumer spending     rose 2.1% versus +1.9%; the price index was +3.5% versus +3.3%.

 

  December durable goods orders were up 5.6% versus expectations of +2.4%; ex transportation, they were -0.1% versus -0.2%.

                           https://www.zerohedge.com/economics/us-core-durable-goods-order-growth-weakest-2-years-aircraft-orders-surge

 

  The December trade balance was -$90.3 billion versus forecasts of -$82.5 billion.

 

                           December building permits fell 1.0% versus estimates of -1.6%.

 

                        International

 

                        Other

 

                          The mortgage delinquency rate increased in December.

                          https://www.calculatedriskblog.com/2023/01/black-knight-mortgage-delinquency-rate.html

 

                          Architecture billings continued to decline in December.

                          https://www.calculatedriskblog.com/2023/01/aia-architecture-billings-index.html

 

The Fed

 

  The latest M2 statistics.

  http://scottgrannis.blogspot.com/2023/01/m2-news-continues-to-impress.html

 

              The Bank of Canada raises rates but says the hikes may be over.

              https://www.zerohedge.com/markets/first-pause-bank-canada-hikes-25bps-expected-will-hold-rates-it-assesses-impact

 

            Fiscal Policy

 

Here is a review of some of the provisions in the recently passed Inflation Reduction Act.  Don’t bother with the What Should Be Done section; it is just a lot of ‘shoulds’ which will likely never happen.

              https://www.heritage.org/budget-and-spending/commentary/combat-the-inflation-reduction-acts-central-planning

 

              Are Americans’ getting any value from government’s debt fueled spending?

              https://politicalcalculations.blogspot.com/2023/01/are-americans-getting-real-value-from.html#.Y9F1anbMKUk

 

            Inflation

 

              Inflation maybe cooling, but prices on some items will remain high.

  https://www.cnbc.com/2023/01/25/inflation-is-cooling-but-high-prices-will-stick-around.html?utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=243173116&_hsenc=p2ANqtz-8DyP9P3fYc_FrXuMnAFqW4KxUZsCcE9oZ30ok3WsnMIgZNjjuE-lwR_GwVXAvkxMBtJao4ePPYpCP_-OWvNYqDR2kp5A&utm_content=243173116&utm_source=hs_email

 

            Geopolitics

 

              There is nothing intelligent, strategically important, altruistic, etc., etc. about this.

              https://www.zerohedge.com/geopolitical/german-foreign-minister-just-said-quiet-part-out-loud-ukraine

 

     Bottom line

 

            Hedge fund sees risk in US markets.

            https://www.bloomberg.com/news/articles/2023-01-23/hedge-fund-that-got-china-right-sees-risk-in-us-credit-stocks?sref=loFkkPMQ

 

    News on Stocks in Our Portfolios

 

Mastercard press release (NYSE:MA): Q4 Non-GAAP EPS of $2.65 beats by $0.07.

Revenue of $5.8B (+11.5% Y/Y) beats by $10M.

 

T. Rowe Price press release (NASDAQ:TROW): Q4 Non-GAAP EPS of $1.74 beats by $0.03.

Revenue of $1.52B (-22.4% Y/Y) misses by $10M.

Sherwin Williams press release (NYSE:SHW): Q4 Non-GAAP EPS of $1.89 beats by $0.04.

Revenue of $5.23B (+9.9% Y/Y) misses by $30M.

 

What I am reading today

 

            The lunacy of our political class.

            https://pjmedia.com/vodkapundit/2023/01/25/report-putin-wants-to-buy-u-s-weapons-biden-left-in-afghanistan-but-theres-even-more-n1664501

 

US military trying to ‘box out’ China and Russia from strategic resources in South America.

https://www.nakedcapitalism.com/2023/01/the-us-looks-to-escalate-its-war-with-russia-and-china-in-latin-america.html

 

 

 

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