The Morning Call--Credit markets see 84% chance of recession

The Morning Call

 

4/14/23

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/ppi-plunge-prompts-panic-bid-big-tech-bullion-bitcoin

 

            Large hedge funds are getting very short.

            https://allstarcharts.com/sentiment-check-large-speculators-get-aggressively-short/

 

            Short squeeze 3.0.

            https://www.zerohedge.com/the-market-ear/too-damn-short-squeeze-30

 

            Counterpoint.

            https://www.institutionalinvestor.com/article/b8y8bxb25pspvj/Hedge-Funds-Signal-Tough-Times-Ahead

 

            Rare buy signal hints worst is over,

            https://www.zerohedge.com/markets/rare-buy-signal-hints-worst-over-stocks

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

  March retail sales fell 1.0% estimates of -0.4%; ex autos, they were down 0.8% versus -0.3%.

                          https://www.zerohedge.com/markets/retail-sales-tumble-more-expected-grow-weakest-annual-pace-june-2020

 

                        International

 

                          March German PPI came in at +0.2% versus expectations of +2.5%.

 

                        Other

 

                          Hotel occupancy rate down year over year.

                          https://www.calculatedriskblog.com/2023/04/hotels-occupancy-rate-down-74-year-over.html

 

            The Fed

 

              San Francisco Fed head says more rate hikes are needed.

              https://finance.yahoo.com/news/feds-daly-still-need-to-raise-rates-but-how-much-hinges-on-bank-stresses-162358494.html

 

                          The Fed’s balance sheet shrank last week.

              https://www.zerohedge.com/markets/fed-balance-sheet-shrinks-3rd-straight-week-bank-bailout-facility-usage-eases

 

            Inflation

 

              Inflation is yesterday’s story.

              http://scottgrannis.blogspot.com/2023/04/inflation-is-yesterdays-news.html

 

              Inflation cooling.

              https://econbrowser.com/archives/2023/04/cpi-inflation-in-march

 

            Recession

 

              Credit investors see defaults rising, 84% chance of recession.

              https://www.bloomberg.com/news/articles/2023-04-13/credit-investors-see-defaults-rising-84-chance-of-us-recession?srnd=premium&sref=loFkkPMQ

 

            The Banking System

 

              Yellen’s solution to the banking crisis is like all her other decisions.

              https://fee.org/articles/yellen-s-comments-create-the-worst-of-all-possible-worlds-for-banking-incentives/

 

            Geopolitics

 

              Corruption still rampant in Ukraine.

              https://www.zerohedge.com/geopolitical/hersh-cia-knows-zelensky-top-generals-are-skimming-us-aid

 

    Bottom line.

 

            Dour earnings reports loom over Wall Street.

            https://www.nytimes.com/2023/04/13/business/earnings-reports-stock-market.html

 

            BofA expects big cuts in 2023 earnings estimates.

            https://www.zerohedge.com/markets/corporate-misery-building-bofa-warns-expect-big-cuts-2023-sp-earnings

 

            Is great unwinding (cheap debt to buy assets) in the cards?

            https://www.ft.com/content/0fb2e067-6c71-4914-beb8-aed44c037fb4

 

    News on Stocks in Our Portfolios

 

BlackRock press release (NYSE:BLK): Q1 Non-GAAP EPS of $7.93 beats by $0.20.

Revenue of $4.24B (-9.8% Y/Y) in-line.

 

What I am reading today

 

           

The story of the coconut war.

https://neddonovan.substack.com/p/the-coconut-war-choose-your-own-law

 

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