The Morning Call--Two percent inflation is toast

 

The Morning Call

 

3/24/23

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/bonds-bitcoin-bullion-soar-bank-bloodbath-builds

 

Note: the S&P ended above its 200 DMA, resetting it to support.  Strictly speaking that should be a plus.  However, today’s headline on Deutsche Bank (see below) could reverse this positive indicator---which wouldn’t be surprising give the index’s back and forth between the 200 DMA and the 38.2% Fibonacci retracement level.

 

            Does the Market know something that we don’t.

            https://theirrelevantinvestor.com/2023/03/23/stocks-arent-going-down-why/

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          February new home sales were up 1.1% versus expectations of -4.5%.

                          https://www.advisorperspectives.com/dshort/updates/2023/03/23/new-home-sales-up-for-third-straight-month

 

February durable goods orders fell 1.0% versus an anticipated rise of 0.6%; ex transportation, they were flat versus +0.2%.

 

The March Kansas City Fed manufacturing index came in at +3 versus estimate of -18.

                          https://www.advisorperspectives.com/dshort/updates/2023/03/23/kansas-city-fed-manufacturing-survey-activity-stayed-flat

 

                        International

 

February Japanese CPI fell 0.6% versus predictions of -0.3%; the March flash manufacturing PMI was 48.6 versus 48.8; the March flash services PMI was 54.2 versus 52.0; the March flash composite PMI was 51.9 versus 52.3.

 

February UK retail sales were up 1.2% versus consensus of +0.2%; ex fuel, they were up 1.5% versus +0.1%; March consumer confidence was -36, in line; the March flash manufacturing PMI was 48.0 versus 49.8; the March flash services PMI was 52.8 versus 53.0; the March composite PMI was 52.3 versus 52.9.

 

The March German flash manufacturing PMI was 44.4 versus projections of 47.0; the March flash services PMI was 53.9 versus 51.0; the March flash composite PMI was 52.6 versus 51.0.

 

March EU consumer confidence was -19.2 versus forecasts of -18.3; the March flash manufacturing PMI was 47.1 versus 47.0; the March flash services PMI was 55.6 versus 53.5; the March flash composite was 54.1 versus 51.9.

 

                        Other

 

            The Fed

 

              The Fed walks a tightrope.

              https://www.wsj.com/articles/fed-walks-tightrope-between-inflation-and-financial-instabilitybut-for-how-long-789283d0?mod=economy_lead_story

 

              Powell’s guide to recession.

  https://www.bloomberg.com/news/articles/2023-03-23/powell-s-own-guide-to-recessions-shows-rate-cuts-are-coming?srnd=premium&sref=loFkkPMQ#xj4y7vzkg

 

 

            Inflation

 

              Two percent inflation is toast. (must read)

              https://arnoldkling.substack.com/p/the-2-percent-inflation-target-is

 

            Recession

 

              Consumer spending started to crater following the banking crisis.

              https://www.zerohedge.com/markets/fed-gets-its-wish-real-time-card-data-shows-consumer-spending-craters-after-start-bank

 

            The Banking System

 

              Is Deutsche Bank the next domino to fall?

              https://www.zerohedge.com/markets/deutsche-bank-bloodbath-reignites-global-bank-crisis-fears

 

              In another Fed dipsy doodle, Yellen backtracks.

              https://www.zerohedge.com/markets/after-sparking-selloff-yellen-changes-key-part-prepared-testimony-says-prepared-additional

 

 

              Small banks, big reach.

              https://www.ft.com/content/945f754b-6323-4ad1-8b8c-76ef8d2e0a6a

 

              Anxiety strikes $8 trillion mortgage debt market.

  https://www.wsj.com/articles/anxiety-strikes-8-trillion-mortgage-debt-market-after-svb-collapse-15ef0207?utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=251217498&_hsenc=p2ANqtz-8FqrhaTgnOAQs9JNbHXphJ-m19V9nJJ-MMu5h08zwD_T5VlpquouKn2GjMj-mCnSxR-JBoJ-guKnxqUY8gESGKFzlP2Q&utm_content=251217498&utm_source=hs_email

 

 

     Bottom line

 

            A history of unfavorable dividend actions.

            https://politicalcalculations.blogspot.com/2023/03/a-visual-history-of-unfavorable.html#.ZBx8jHbMKUk

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            Quote of the day.

            https://cafehayek.com/2023/03/quotation-of-the-day-4216.html

 

 

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