The Morning Call--Prepare for major accidents in the commercial real estate market

The Morning Call

 

5/2/23

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/bonds-bitcoin-bullion-battered-after-bank-bailout-stagflation-scare

 

                Fourth largest call buying on record.

            https://www.zerohedge.com/markets/fourth-biggest-call-buying-record-did-reluctant-bulls-finally-overextend-themselves

 

            The air has come out of the dollar.

            https://www.wsj.com/articles/the-air-has-come-out-of-the-dollar-36c4c03f?mod=economy_lead_pos2

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          March construction spending was up 0.3% versus estimates of +0.1%.

                          https://www.calculatedriskblog.com/2023/05/construction-spending-increased-03-in.html

 

                          The April manufacturing PMI was 50.2 versus projections of 50.4.

 

                          The April ISM manufacturing index was 47.1 versus expectations of 46.8.

                          https://www.calculatedriskblog.com/2023/05/ism-manufacturing-index-increased-to.html

 

                        International

                          

March German retail sales fell 2.4% versus forecasts of +0.4%; the April manufacturing PMI was 44.5 versus 44.0.

 

April Japanese consumer confidence came in at 35.4 versus consensus of 32.0.

 

The April EU manufacturing PMI was 45.8 versus predictions of 45.5; April CPI was +0.7% versus +0.3%.

 

The April UK manufacturing PMI was 47.8 versus estimates of 46.6.

                           

                           

 

                        Other

 

              Year over year rent growth continues to decelerate.

              https://www.calculatedriskblog.com/2023/05/year-over-year-rent-growth-continues-to.html

 

The Fed

 

  Two books provide an inside look at the Fed.

  https://foreignpolicy.com/2023/04/30/federal-reserve-limitless-trillion-dollar-triage-review-powell-us-economy-banking-crisis/

 

The Debt Ceiling

 

Dwindling tax revenues among the many problems surrounding raising the debt ceiling.

https://www.nytimes.com/2023/05/01/us/politics/debt-limit-tax-money.html

 

              What the Treasury/Fed might do in a debt ceiling crisis.

              https://www.wsj.com/articles/heres-what-treasury-fed-might-do-in-a-debt-ceiling-crisis-88ed096c?mod=economy_lead_pos5

 

            The Banking System

 

              At Treasury, Yellen repeating her disastrous leadership of the Fed.

              https://nypost.com/2023/04/28/clueless-yellen-fails-to-stave-off-bank-crisis-as-first-republic-sinks/

 

                  Prepare for major accidents in the commercial real estate market.

              https://www.zerohedge.com/markets/prepare-major-accidents-market-morose-milken-ites-warn-were-going-see-losses

 

     Bottom line

 

            Update on valuations.

            https://www.advisorperspectives.com/dshort/updates/2023/05/01/the-q-ratio-and-market-valuation-april-update

            https://www.advisorperspectives.com/dshort/updates/2023/05/01/regression-to-trend-s-p-composite-117-above-trend-in-april

 

 

                        Thinking the unthinkable.

            https://www.advisorperspectives.com/commentaries/2023/04/30/pivot-to-the-fourth-turning?firm=mauldin-economics

                       

            The latest from Morgan Stanley.

https://www.bloomberg.com/news/articles/2023-05-01/morgan-stanley-s-wilson-says-hawkish-fed-surprise-to-roil-stocks?srnd=premium&leadSource=uverify%20wall&sref=loFkkPMQ

 

                        Why future returns could approach zero.

            https://www.zerohedge.com/markets/why-future-market-returns-could-approach-zero

 

    News on Stocks in Our Portfolios

 

Illinois Tool Works Inc.  press release (NYSE:ITW): Q1 GAAP EPS of $2.33 beats by $0.11.

Revenue of $4B (+2.6% Y/Y) beats by $20M, with organic growth of 5%.

 

Cummins press release (NYSE:CMI): Q1 GAAP EPS of $5.55 beats by $0.77.

Revenue of $8.45B (+32.0% Y/Y) beats by $320M.

 

T. Rowe Price press release (NASDAQ:TROW): Q1 Non-GAAP EPS of $1.69 beats by $0.06.

Revenue of $1.54B (-17.2% Y/Y) in-line.

 

What I am reading today

 

            Quote of the day.

            https://cafehayek.com/2023/05/bonus-quotation-of-the-day-922.html

 

            Some interesting history about investing.

            https://ritholtz.com/2023/05/timeline-markets/

 

            How did chess pieces get their name.

            https://bigthink.com/strange-maps/names-of-chess-pieces/

 

            The art of asking the right questions.

            https://traderfeed.blogspot.com/2023/04/the-art-of-asking-right-questions.html

 

            The collapse of operational capabilities in the West.

            https://www.nakedcapitalism.com/2023/05/the-collapse-in-operational-capabilities-in-the-west-and-some-knock-on-effects.html

 

 

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