Thursday, January 5, 2023

The Morning Call---A soft landing is a wet dream

The Morning Call

 

1/5/23

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/good-jolts-data-hawkish-fed-minutes-stymie-santa-claus-rally

 

            Back to back down years are rare since 1957.

            https://www.zerohedge.com/markets/back-back-down-years-are-rare-stock-market

 

            What the ‘January barometer’ predicts for the rest of 2023.

            https://investorplace.com/tradingopportunities/2023/01/what-the-january-barometer-predicts-for-the-market/

 

            The S&P and the Fed’s balance sheet.

            https://www.yardeniquicktakes.com/the-bears-favorite-chart/

 

            Consumer sentiment is awful.

            https://alhambrapartners.com/2023/01/03/great-news-consumer-sentiment-is-awful/

 

            Don’t forget commodities.

            https://allstarcharts.com/is-trend-over-23/

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

  The November JOLTS report showed new job openings of   10.5 million versus consensus of 10.0 million.   

 

  The November trade balance was -$61.5 billion versus forecasts of -$73 billion.

 

  The December ISM manufacturing index was 48.9 versus predictions of 48.5.

 

  The December ADP private payrolls report reflected an increase of 235,000 in employment versus expectations of 150,000. 

  https://www.zerohedge.com/personal-finance/adp-reports-big-jump-jobs-december-wage-growth-plunges

 

  December initial jobless claims totaled 204,000 versus projections of 225,000.           

                          https://www.zerohedge.com/markets/jobless-claims-print-better-expected

 

                        International

                              

   The December Chinese Caixin services PMI was 48.0 versus 46.7 in       November; the December composite PMI was 48.3 versus 47.0 in November.

 

  December Japanese consumer confidence was 30.3 versus 28.6 in November.

 

  The November German trade balance was E10.8 billion versus E7.5 billion in November; the December construction PMI was 41.7 versus 41.5 in November.

 

  November EU PPI was -0.9%, in line; the December EU construction PMI was 42.6 versus 43.6 in November.

 

  December YoY UK new car sales grew 18.3% versus 23.5% in November; the December services PMI was 49.9 versus estimates of 50.0; the December composite PMI was 49.0, in line.

                        .

                        Other

           

                          November median household income.

                          https://politicalcalculations.blogspot.com/2023/01/median-household-income-in-november-2022.html#.Y7XQb3bMKUk

                       

                          The worst of the EU’s energy crisis maybe yet to come.

                          https://www.nakedcapitalism.com/2023/01/worst-of-europes-energy-crisis-may-be-yet-to-come.html

 

                          Global manufacturing continued to decline in December.

                          https://www.pmi.spglobal.com/Public/Home/PressRelease/61782d8eac584849b191087c4a41ddee

 

            The Fed

 

The FOMC released the minutes from its December meeting---and as usual they were cryptic enough to give both bulls and bears something to hold on to: (1) the narrative expressed frustration that the Markets weren’t discounting a hawkish Fed but (2) several members expressed the view that there were multiple risks, i.e., both inflation and recession, facing the economy.  In short, the Fed members are pissed that the Markets doubt that they have the balls to stick with policies that will return inflation to the 2% target, but they are scared shitless that those policies won’t lead to a soft landing---which, if I read the history books correctly, there is a near zero probability of occurring.  You decide.

https://www.zerohedge.com/markets/fomc-minutes-2

 

 

            Inflation

 

              Inflation in the services sector is also rolling over.

              https://www.cato.org/blog/fed-chair-powells-story-about-service-price-inflation-untrue-3

 

            China

 

              A must read interview with a China expert.

              https://themarket.ch/english/i-think-there-has-been-some-kind-of-quiet-internal-revolt-against-xi-jinpings-personal-rule-ld.8148

                      

              In support of the above analysis.

              https://www.zerohedge.com/geopolitical/new-chinese-foreign-minister-seen-xis-attempt-soften-us-china-relations

 

            The coronavirus

 

              Here is a new study on the efficacy of the current Covid vaccine protocol.

  https://www.nakedcapitalism.com/2023/01/the-ethics-of-covid-19-vaccine-mandates-where-do-we-stand-and-where-should-we-go-regarding-social-and-biomedical-responses-to-pandemic.html

 

 

    News on Stocks in Our Portfolios

 

MSC Industrial Direct press release (NYSE:MSM): Q1 Non-GAAP EPS of $1.48 beats by $0.02.

Revenue of $957.7M (+12.9% Y/Y) beats by $10.06M.

What I am reading today

 

           

 

 

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