The Morning Call---The return to quantitative easing

 

The Morning Call

 

6/29/23

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/bonds-dollar-pop-banks-tech-drop-powell-flexes-hawkishly

 

    Fundamental

 

       Headlines

                    

                        US

 

Weekly initial jobless claims totaled 239,000 versus projections of 265,000.

 

Final Q2 GDP growth was +2.0% versus consensus of +1.4%; final Q2 corporate profits were down 5.9% versus -6.8%; final Q2 real consumer spending was +4.2% versus +3.8%; the final Q2 PCE price index was +4.9% versus +5.0%.

                          https://www.zerohedge.com/markets/q1-gdp-unexpectedly-revised-sharply-higher-bizarre-surge-net-exports

 

The May trade balance was -$91.1 billion versus forecasts of -$91.0 billion.

 

                        International

                           

May Japanese retail sales were up 1.3% versus predictions of +0.7%; the June consumer confidence index was 36.2, in line.

 

                            June German CPI was up 0.3% versus estimates of +0.2%.

 

The June EU economic sentiment index was 95.3 versus expectations of 96.0; the June industrial sentiment index was -7.2 versus -5.5; the June services sentiment index was 5.7 versus 5.5; the June consumer confidence index was -16.1, in line.

 

                        Other

 

The Fed

 

  The return to quantitative easing (must read).

  https://www.ft.com/content/6d14cad1-00f2-4d39-969f-c01ae1860d34

 

  The impact of Fed policy on services inflation.

  https://www.cato.org/blog/americans-should-not-expect-fed-lower-services-inflation

 

  Are interest rates the true reflection of monetary policy?

  https://www.themoneyillusion.com/but-the-lags/

 

  LaGarde: ECB likely to raise rates in July.

  https://www.wsj.com/articles/ecb-likely-to-hike-rates-in-july-says-lagarde-c5d6ba47?mod=economy_lead_pos2&utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=264171285&_hsenc=p2ANqtz-9uP6xdaaQrhtn39dyYWqrN7-Dgi6j1JvYWqxc5XUIsJC4LG1Yh3V5g3PP8N_timKEH_UzfYfMIX31YUE28q-Wh19Jtyw&utm_content=264171285&utm_source=hs_email

 

  M1 shrinking in EU.

  https://www.zerohedge.com/markets/money-trends-europe-leave-ecbs-renewed-hawkishness-doubt

 

Fiscal Policy

 

  The $4 trillion problem.

  https://www.axios.com/2023/06/26/president-2025-trump-biden-tax-health-care-debt

 

Inflation

 

  The accounting behind ‘greedflation’.

  https://politicalcalculations.blogspot.com/2023/06/skiffy-greedflation.html

 

            Recession

 

              Redefining recession.

              https://www.heritage.org/markets-and-finance/commentary/the-treasury-secretarys-own-definition-were-back-recession

 

              Nouriel Roubini: A mild global contraction is coming.

  https://www.project-syndicate.org/commentary/global-economic-outlook-implications-for-equities-bonds-by-nouriel-roubini-2023-06?utm_source=project-syndicate.org&utm_medium=email&utm_campaign=authnote&

 

  Credit spreads and bankruptcies are increasingly at odds.

  https://www.zerohedge.com/markets/credit-spreads-and-real-economy-are-increasingly-odds

 

The Banking System

 

  All big banks pass the latest Fed ‘stress test’.

  https://www.zerohedge.com/markets/surprise-fed-says-all-big-banks-passed-stress-tests

 

     Bottom line

 

            The only thing we have to fear is fear itself.

            https://allstarcharts.com/fear/

 

    News on Stocks in Our Portfolios

 

What I am reading today

 

            The courage to stand out.

            https://neckar.substack.com/p/the-courage-to-stand-out-sam-zells

 

            The alarming decline of K-12 education.

            https://www.washingtonpost.com/opinions/2023/06/28/education-decline-campaign-issue/

 

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