The Morning Call--No more rate hikes?

 

The Morning Call

 

4/13/23

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/hawkish-fedspeak-recession-fears-spoil-cool-cpi-party

 

            Goldman trade guru gives reasons why the melt up could continue.

            https://www.zerohedge.com/markets/goldman-trader-dear-fundamental-trader-heres-14-things-consider

 

Gold continues to rally.

https://www.zerohedge.com/the-market-ear/gold-havent-closed-here-while

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US 

 

                          Weekly initial jobless claims were 239,000 versus estimates of 232,000.

 

            March PPI was -0.5% versus forecasts of 0.0%; core PPI was -0.1% versus

            +0.3%.

 

The March budget deficit was $378 billion versus projections of $302.0 billion.

 

                        International

 

The February UK GDP was flat versus consensus of up 0.1%; February industrial production was down 0.2% versus up 0.2%; the February trade balance was L-4.8 billion versus L-4.9 billion; February YoY construction output rose 5.7% versus +1.6%.

 

February EU industrial production was up 1.5% versus expectations of up 1.0%.

 

The March Chinese trade balance was +$88.2 billion versus estimates of +$39.2 billion.

 

March German CPI was up 0.8%, in line.

 

                        Other

 

                          De-dollarization---Part 2.

                          https://www.aier.org/article/de-dollarization-has-begun-redux/

 

                          IMF lowers growth forecasts.

  https://www.wsj.com/articles/bank-volatility-to-cut-u-s-gdp-imf-expects-6c043526?mod=economy_lead_pos3&utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=254012331&_hsenc=p2ANqtz--ZxssnWdvZ1cRU9NAjx0rnnKN3wH-pkX0njSvdPqwIWGwqX_J0yw2-jH08PDc4efXhbhPNy5d4uXDyd4fgi4pTvzEy4g&utm_content=254012331&utm_source=hs_email

 

 

            The Fed

 

This analyst thinks that Fed rate hikes will end next month.  I would note that historically, when the yield curve un-inverts that anticipates recession and a Market sell off.

              https://www.cnbc.com/2023/04/11/fed-rate-hikes-will-end-next-month-former-pimco-economist-mcculley.html

 

              Goldman agrees.

              https://www.zerohedge.com/markets/after-softer-cpi-print-goldman-changes-fed-call-no-longer-expects-june-rate-hike

 

              Time to stop raising rates.

              https://ritholtz.com/2023/04/cpi-5-0/

 

              Fed, we have a problem:  wage growth is crashing.

              https://www.zerohedge.com/markets/fed-we-have-problem-wage-growth-actually-crashing

 

On the other hand, the latest FOMC minutes suggest that another rate hike is coming.  However, since that meeting, new information is available that could temper that judgment.  But bottom line, the Market is still expecting one.  But the key will be the accompanying narrative.

https://www.zerohedge.com/markets/fomc-minutes-4

 

Still another opinion from Mohamed El Erian who warns that inflation has not gone away.

https://www.ft.com/content/9722fd18-129e-488e-b422-077f26c0ba2e

 

 

            Fiscal Policy

 

              Pentagon fails fifth consecutive audit.

              https://pjmedia.com/news-and-politics/benbartee/2023/04/11/watch-pentagon-official-confronted-over-militarys-5-consecutive-failed-audits-n1686307

 

              Fiscal insanity.

              https://www.zerohedge.com/personal-finance/fiscal-insanity-government-borrows-6-billion-day-and-were-stuck-bill

 

            The Banking System

 

              What the Fed isn’t telling you about its new Bank Term Funding Program.

              https://econbrowser.com/archives/2023/04/guest-contribution-in-god-we-trust-all-the-others-must-bring-good-collateral

 

    News on Stocks in Our Portfolios

 

Fastenal press release (NASDAQ:FAST): Q1 GAAP EPS of $0.52 beats by $0.01.

Revenue of $1.86B (+9.4% Y/Y) misses by $10M.

 

Fastenal (NASDAQ:FAST) declares $0.35/share quarterly dividend, in line with previous.

 

Qualcomm (NASDAQ:QCOM) declares $0.80/share quarterly dividend, in line with previous.

 

Automatic Data Processing (NASDAQ:ADP) declared $1.25/share quarterly dividend, in line with previous.

 

What I am reading today

 

            Thursday morning humor.

https://www.tiktok.com/@okiepatriot1776/video/7220234782133931310?embed_source=71112494%2C121331973%2C120811592%2C120810756%3Bnull%3Bembed_song_name&refer=embed&referer_url=instapundit.com%2F

 

 

            Quote of the day.

            https://cafehayek.com/2023/04/quotation-of-the-day-4235.html

 

 

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