The Morning Call--Stocks are discounting too much easing

 

The Morning Call

 

6/13/23

 

The Market

         

    Technical

 

Monday in the charts.

https://www.zerohedge.com/markets/bonds-banks-bullion-black-gold-dip-mega-cap-tech-continues-rip

 

Note: the S&P finished above the upper boundary of its short-term trading range (~4325).  If it remains there through the close on Wednesday, it will reset to an uptrend.

 

Pre FOMC FOMO.

https://www.zerohedge.com/the-market-ear/pre-fomc-fomo

 

More charts.

https://bilello.blog/2023/the-week-in-charts-6-11-23

 

            More data on the bifurcation of the Market.

            https://www.morningstar.com/markets/5-charts-about-super-concentrated-stock-market

 

            Three reasons to be cautious.

            https://www.zerohedge.com/the-market-ear/are-we-there-yet-holy-crap

 

            Counterpoint: Why stocks are headed higher.

https://www.barrons.com/articles/stock-market-bull-up-down-outlook-a7abb320?mod=past_editions&utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=262012852&_hsenc=p2ANqtz-8FZxuy51591kZidd8Rjjh8id7zMTTm8ToKAhDe5iV6WJRJ0ROGotkfS6Aje8GwXPVgN_iFNdfYt_bt1bCIMof309PgCw&utm_content=262012852&utm_source=hs_email

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Month to date retail chain store sales grew less rapidly than in the prior week.

                              

The May budget deficit was $240 billion versus expectations of $236 billion.

 

The May small business optimism index was reported at 89.4 versus consensus of 88.5.

 

May CPI was up 0.1% versus forecasts of up 0.2%; May core CPI was up 0.4%, in line.          

                              

                        International

 

                          The April UK unemployment rate was 3.8% versus predictions of 4.0%.

 

The June EU economic sentiment index came in at -10.0 versus estimates of -11.9; the June German economic sentiment index was -8.5 versus -13.1; the June German current conditions index was -56.5 versus -40.0.

                            

                        Other

 

              Q1 household net worth.

              https://www.advisorperspectives.com/dshort/updates/2023/06/09/household-net-worth-q1-2023

 

The Fed

 

  The Fed still has a lot of work to do.

  https://www.cnbc.com/2023/06/11/why-the-new-bull-market-is-headed-for-more-fed-stress-after-a-pause.html?utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=262012852&_hsenc=p2ANqtz-_xB9Mzeb_qXulUnGEBU8eCtQpNMPG4yE3VhJLAsjnJOS-rh8rMVsX1A56M_S5KkP32YT7iWcd23v6E2MSR3wKmS8m4QQ&utm_content=262012852&utm_source=hs_email

                       

    And that is a problem.

   https://www.wsj.com/articles/fed-jerome-powell-big-problem-more-complicated-ba27ece4?mod=economy_lead_story

 

Recession

 

  Odds of a recession.

  https://marginalrevolution.com/marginalrevolution/2023/06/mark-zandi-on-changing-odds-of-recession.html

 

              Imports as a recession indicator.

              https://econbrowser.com/archives/2023/06/are-imports-a-leading-or-contemporaneous-indicator-of-recession

 

              Manufacturing is sputtering in the world’s largest economies.

              https://www.cnn.com/2023/06/11/economy/global-manufacturing-sputtering-economies/index.html

 

     Bottom line

 

            Stocks are discounting too much easing.

            https://www.zerohedge.com/markets/stocks-discount-too-much-easing-and-optimism

 

    News on Stocks in Our Portfolios

 

Oracle press release (NYSE:ORCL): Q4 Non-GAAP EPS of $1.67 beats by $0.09.

Revenue of $13.84B (+16.9% Y/Y) beats by $110M; up 18% in constant currency.

 

Oracle (NYSE:ORCL) declares $0.40/share quarterly dividend, in line with previous.

 

What I am reading today

 

           

                        John Mauldin on the current macrocycles at work.

            https://www.advisorperspectives.com/commentaries/2023/06/12/storm-cycles-bond-debt-gdp-economy-mauldin

 

 

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