The Morning Call---How hard should the Fed squeeze to get to its 2% target?

The Morning Call

 

8/23/23

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/bjs-blows-it-dicks-shrink-consumer-concerns-spook-stocks-flattens-yield-curve

 

Tuesday’s technical take.

            Stock Market Rally Coming? And Investing In 2024. - RIA (realinvestmentadvice.com)

 

            NASDAQ, the bearish cross.

            https://www.zerohedge.com/the-market-ear/nasdaq-bearish-cross

 

            Is the correction over?

            https://alhambrapartners.com/2023/08/21/weekly-market-pulse-is-the-correction-over/

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

                           

Weekly mortgage applications fell 4.2% while purchase applications were down 5.0%.

 

                            July existing home sales fell 2.2% versus expectations of -0.5%.

                            https://www.advisorperspectives.com/dshort/updates/2023/08/22/existing-home-sales-fall-prices-remain-elevated

 

 

                                                         July building permits were up 0.1%, in line.

 

                            The August Richmond Fed manufacturing index came in at -7, in line.

                            https://www.advisorperspectives.com/dshort/updates/2023/08/22/richmond-fed-manufacturing-activity-remained-sluggish-august

                                                        

                        International

                           

The August Japanese flash manufacturing PMI was 49.7 versus forecasts of 49.5; the flash services PMI was 54.3 versus 53.6; the flash composite PMI was 52.6 versus 52.0; the August German flash manufacturing PMI was 39.1 versus 38.7; the flash services PMI was 47.3 versus 51.5; the flash composite PMI was 44.7 versus 48.3; the August EU flash manufacturing PMI was 43.7 versus 42.6; the flash services PMI was 48.3 versus 50.0; the flash composite PMI was 47.0 versus 48.5; the August UK flash manufacturing PMI was 42.5 versus 45.0; the flash services PMI was 48.7 versus 51.0; the flash composite PMI was 47.9 versus 50.8.

                            https://www.zerohedge.com/economics/yields-tumble-after-european-pmis-signal-stagflation-accelerating

 

                        Other

 

The Fed

 

  How hard should the Fed squeeze to get to its 2% inflation target?

  https://www.wsj.com/economy/central-banking/how-hard-should-the-fed-squeeze-to-reach-2-inflation-77dbf56f?mod=economy_lead_pos1

 

Recession

 

  S&P joins Moody’s in downgrading US banks.

  https://www.zerohedge.com/markets/sp-joins-downgrade-party-us-banks-due-tough-cliamte

 

China

 

  Why it is so hard for China to fix its real estate crisis.

  https://www.nytimes.com/2023/08/22/business/china-economy-property.html

 

     Bottom line

 

            Update on expected S&P earnings.

            https://politicalcalculations.blogspot.com/2023/08/summer-2023-snapshot-of-expected-future.html              

 

            Rates matter.

            http://mrzepczynski.blogspot.com/2023/08/in-case-you-forget-real-rates-matter.html

 

            But is it time to start nibbling at bonds?

            https://allstarcharts.com/the-biggest-question-i-have-right-now/

 

The macro-economic implications of rising real yields.

https://www.capitalspectator.com/analysts-assess-investing-macro-implications-of-rising-real-yields/

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

            Wednesday morning humor.

            https://babylonbee.com/news/hypocrite-christian-man-says-yoga-pants-are-sinful-but-now-his-wife-is-wearing-them-and-awoooga-all-aboard-matey

 

            Deepfake imposter scams are fueling a new wave of financial fraud.

https://www.bloomberg.com/news/articles/2023-08-21/money-scams-deepfakes-ai-will-drive-10-trillion-in-financial-fraud-and-crime?srnd=premium&sref=loFkkPMQ

                       

            The world’s happiest man.

            https://www.nytimes.com/interactive/2023/08/13/magazine/matthieu-ricard-interview.html

 

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