The Morning Call
8/14/23
Unfortunately, my computer
crashed and I am told that it will take 3-4 days for the repair. In the interim I am using my wife’s computer
though (1) I can’t access my charting service from her computer and (2) she has
a business to run for which she needs her computer. So, until my repairs are complete, this
narrative will be shorter than usual.
The
Market
Technical
Friday in the
charts.
https://www.zerohedge.com/markets/bonds-big-tech-battered-inflation-fears-trump-payrolls-hope
Fundamental
Headlines
The
Economy
Last Week Review
Last
week’s US stats were downbeat with the primary indicators one neutral, one
negative---both price related. Overseas, the data was very positive.
The
results continue their less than enthusiastic support of both the Markets’
takeaway and the growing consensus among leading economists that (1) inflation
is in the rear-view mirror and (2) we will get a ‘soft’ landing. Given the new
numbers, it certainly remains unclear whether inflation is in a secular decline
and there is no new evidence that a recession will be avoided.
So,
I am sticking with my recession forecast though (1) my conviction remains weak
and (2) if there is one, I have no idea of its magnitude.
I
am also maintaining my position that the Fed loosens at the first sign of
trouble. Though if these new stats are indication of a revival of inflationary
pressures, that will surely make that thesis problematic.
Jeffrey
Snider has a different take.
As an aside, I will note that the one scenario that would screw almost
all investors/forecasters/current elected officials would be for either the Fed
(would
be forced?) to stick to its guns, pushing the economy
into a rough recession or the economy falls into a severe recession of its own
accord weighted down by years of monetary/fiscal mismanagement. To be clear, I don’t think that will happen,
but I would pose it as the major Market/economic risk.
Longer
term, irrespective of how low inflation goes in the short term, irrespective of
whether or not we have a recession and if so, how deep it will be, we are still
faced with an economy growing at well below its historic secular rate and a
base rate of inflation above 2%.
Correcting those self-inflicted wounds won’t be easy. It will take years
of fiscal and monetary restraint to do so. And that would mean less fiscal
stimulus and interest rates staying higher for longer than many now expect---which
unfortunately is not apt to happen.
The
Economy
US
International
Other
Fiscal Policy
We have to put the Pentagon on a diet.
News on Stocks in Our Portfolios
What
I am reading today
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