Wednesday, August 16, 2023

The Morning Call---Beware of Chinese recession

 

The Morning Call

 

8/16/23

 

The Market

         

    Technical

 

Tuesday in the charts.

https://www.zerohedge.com/markets/banks-big-tech-bitcoin-black-gold-breakdown-beijing-barfs-builders-belief-busts

 

Note: the S&P finished below both its 50 DMA and the lower boundary of its very short term uptrend.  If it remains there through the close today that uptrend will be voided, and the 50 DMA will revert from support to resistance.  Support now exists at (1) ~4284---its 100 DMA, (2) ~4157---the lower boundary of its short-term uptrend, and (3) ~4121---its 200 DMA.  Follow through.

 

Wall Street the least bearish since February 2022.

https://www.zerohedge.com/markets/bearish-positioning-no-longer-tailwind-fms-finds-wall-street-least-bearish-feb-2022

 

            Corrections are a choice.

            https://allstarcharts.com/corrections-are-a-choice/

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

 Weekly mortgage applications declined 0.8% while purchase applications were off 0.3%.

 

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

 

  July housing starts were up 3.9% versus consensus of +1.7%; July building permits were up 0.1% versus +1.1%.

                          https://www.zerohedge.com/personal-finance/us-building-permits-stagnant-july-mortgage-rates-topped-7

 

                          The August housing index came in at 50 versus forecasts of 56.

                           https://www.advisorperspectives.com/dshort/updates/2023/08/15/nahb-housing-market-index-builder-confidence-falls-on-rising-mortgage-rates

 

                        International

 

June EU industrial production was up 0.5% versus estimates of -0.1%; Q2 GDP grew 0.3%, in line.

 

July UK CPI was up 0.3% versus predictions of +0.2%.

 

                        Other

 

            The Fed

 

              This analyst believes that the Fed’s job is done.

              https://www.aier.org/article/disinflation-dreams-and-keynesian-confusion/

 

              The end of zero interest rates?

              https://econbrowser.com/archives/2023/08/guest-contribution-the-end-of-zero-interest-rates

 

This is a decent summation of the problems current central bank monetary policy has caused.  But it is short of concrete solutions.

    https://www.nakedcapitalism.com/2023/08/how-to-fix-monetary-policy-in-advanced-countries.html

 

Recession

 

              The latest Q3 nowcasts.

              https://www.capitalspectator.com/early-us-q3-gdp-nowcasts-point-to-ongoing-economic-growth/

 

              Rising real rates are a good thing.

              https://alhambrapartners.com/2023/08/14/weekly-market-pulse-a-positive-feedback-loop/

 

  Beware of Chinese recession:

 

      China’s downside surprises.

      https://econbrowser.com/archives/2023/08/china-downside-surprises

 

      Chinese central banker calls of ‘helicopter money’.

      https://www.zerohedge.com/markets/chinas-economy-verge-collapse-pboc-central-banker-calls-helicopter-money

 

  But Japan is doing great.

  https://www.nytimes.com/2023/08/14/business/japan-economy-gdp.html

 

  Credit is the next shoe to drop.

  https://www.advisorperspectives.com/commentaries/2023/08/15/credit-inflation-next-shoe-drop-anne-walsh

 

  What is the yield curve saying now?

  https://www.wsj.com/articles/what-wall-streets-top-recession-gauge-is-saying-now-67232353

 

     Bottom line

 

            Stocks or government bonds?

            Government Bonds Or Stocks? Which Is A Better Choice Now? - RIA (realinvestmentadvice.com)

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            The irrational behavior of western elites.

            https://www.nakedcapitalism.com/2023/08/analyzing-apparently-irrational-behavior-in-western-elites.html

 

            Your flaw is your strength.

            https://traderfeed.blogspot.com/2023/08/your-flaw-is-your-strength.html

 

 

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