The Morning Call---Is everyone getting bailed out?

 

The Morning Call

 

3/17/23

a little late.  i had internet issues. 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/big-banks-depo-reacharound-rescues-small-banks-bonds-dumped

 

Note: the S&P powered back above both DMAs on the banking news (see below).  At the same time, the 100 DMA crossed above the 200 DMA (so-called golden cross) which is quite positive for technicians.  That said, our discipline dictates a wait till next Tuesday before resetting the 200 DMA back to support. 

 

            The problem with trend following.

            https://www.rcmalternatives.com/2023/03/ouch-a-massive-bond-reversal-hits-trend/

 

            It is what the Market doesn’t see coming that matters.

            https://theirrelevantinvestor.com/2023/03/16/what-does-the-market-think/

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                        International

 

                        Other

           

The Fed

 

              The ECB raised its key rates 50 bp.

  https://www.reuters.com/markets/europe/ecb-rate-hike-plans-clouded-by-financial-turmoil-2023-03-15/?utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=250500381&_hsenc=p2ANqtz-8518L74LLM13VCV7DAR8oEpGmwxJEiaBY7QN2GFteXrTe5XVtXrqoI3KaY6HsSjW6SEn1GPU2gHxXxZ6-YoVFAo7TIwA&utm_content=250500381&utm_source=hs_email

 

 

              To raise or not to raise?

  https://www.cnbc.com/2023/03/15/a-recession-could-come-sooner-on-cooling-bank-lending-.html?utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=250500381&_hsenc=p2ANqtz-_1PNBJYU5Cuuji02XR7uC8d3DOBSC8TPVKmjXCfLIXaNDx8OXKFJChfO3unQ02D2whke99vGODH97BwULWzeOVaAewlQ&utm_content=250500381&utm_source=hs_email

 

 

              Fed Funds futures are suggesting that the Fed is close to a pause.

              https://econbrowser.com/archives/2023/03/implied-fed-funds-peak-from-september-to-march

 

            Recession

 

              The lending standards for autos are the tightest since 2011.

              https://www.zerohedge.com/markets/bank-lending-standards-autos-tightest-levels-2011

           

              Atlanta Fed lifts Q1 nowcast.

              https://www.atlantafed.org/cqer/research/gdpnow

 

            Inflation

 

              But it also raised its business inflation expectations index.

              https://www.atlantafed.org/research/inflationproject/bie

 

            The Banking System

 

              When accounting impacts economics.

              https://arnoldkling.substack.com/p/when-accounting-departs-from-economics

 

              Bank failures and the Fed.

              https://www.advisorperspectives.com/commentaries/2023/03/15/bank-failures-and-the-fed

 

               Corporations are not the only ones taking money out of banks.

  https://www.cnbc.com/2023/03/16/where-wealthy-investors-are-putting-their-cash-after-svb-collapse.html?utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=250500381&_hsenc=p2ANqtz-9lPu0MOhP4R3Hm0t4QL7YrD56QjXTTwF09cYvMazW7DMp8TD_v7MIkgjINyZK5RG6KBxaNxcpvupHhk8Tz6rlgiycumQ&utm_content=250500381&utm_source=hs_email

 

 

              But big banks are bailing out First Republic Bank.

              https://www.zerohedge.com/markets/first-republic-bank-shares-crash-exploring-strategic-options

 

              While the Fed is bailing out everyone else (a return to QEInfinity?)

              https://www.zerohedge.com/markets/jpm-finds-feds-new-btfp-facility-stealth-qe-injecting-2-trillion-liquidity

 

Both of the above solve the liquidity problem but the banks are still stuck with a solvency problem (office real estate loans).

https://www.zerohedge.com/markets/liquidity-phase-bank-crisis-over-solvency-phase-getting-worse

 

              2023 is not 2008.

              https://ritholtz.com/2023/03/deja-vu-2008/

 

    Bottom line

 

            Fatal behavioral flaws that can occur during a crisis.

            https://behaviouralinvestment.com/2023/03/16/what-does-the-demise-of-svb-tell-us-about-our-behaviour-during-market-shocks/

 

            The dangerous assumption embedded in current P/E’s (must read).

            https://www.zerohedge.com/markets/dangerous-assumption-embedded-todays-pe-ratios-0

 

    News on Stocks in Our Portfolios

 

Williams-Sonoma press release (NYSE:WSM): Q4 Non-GAAP EPS of $5.50 beats by $0.04.

Revenue of $2.45B (-2.0% Y/Y) misses by $150M.

 

Williams-Sonoma (NYSE:WSM) declares $0.90/share quarterly dividend, 15% increase from prior dividend of $0.78.

 

FedEx press release (NYSE:FDX): Q3 Non-GAAP EPS of $3.41 beats by $0.67.

Revenue of $22.2B (-5.9% Y/Y) misses by $540M.

 

 

What I am reading today

 

           

 

 

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