The Morning Call---S&P confirms breakdown

The Morning Call

 

8/17/23

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/stocks-bonds-commodities-crumble-dollar-rips-hawkish-fed-minutes

 

Note: The S&P remained below both the lower boundary its very short term uptrend and its 50 DMA.  Therefore, the uptrend is voided and the DMA reverts from support to resistance.  The next visible support level is its 100 DMA (~4284).

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Weekly initial jobless claims totaled 239,000 versus forecasts of 240,000.

 

July industrial production rose 0.5% versus expectations of 0.0%; July capacity utilization was 79.3% versus 79.1%.

                      

  The August Philadelphia Fed manufacturing index was reported at +12 versus consensus of -10.

 

                        International

 

June Japanese machine orders were up 2.7% versus estimates of +3.8%; the June trade balance was Y-78.7 billion versus Y+24.6 billion.   

 

The June EU trade balance was E23 billion versus projections of E18.3 billion.

 

                        Other

 

                          Update on big four economic indicators.

                          https://www.advisorperspectives.com/dshort/updates/2023/08/16/the-big-four-economic-indicators-industrial-production-rebounds-in-july

 

The Fed

 

  High rates could be here for a while.

  https://www.investopedia.com/high-interest-rates-could-be-here-for-a-while-fed-official-says-7643842

 

  Has the Treasury market misjudged the timing for peak rates?

              https://www.capitalspectator.com/has-treasury-market-misjudged-timing-for-peak-rates-again/

 

  The latest FOMC minutes show staff worried about inflation, not recession.

  https://www.calculatedriskblog.com/2023/08/fomc-minutes-staff-no-longer-predicts.html

 

            Recession

 

              Though recession is not off the table.

              https://www.zerohedge.com/markets/looser-financial-conditions-take-edge-recession-risk

 

              Rapidly depleting consumer savings: another recession indicator.

              https://www.zerohedge.com/markets/fed-warns-consumers-will-deplete-excess-savings-third-quarter-end

 

              Tax receipts: another recession indicator.

              https://www.advisorperspectives.com/commentaries/2023/08/16/tax-receipts-inflation-insurance-recession-lance-roberts

 

            Fiscal Policy

 

              Government bonds are junk bonds.

              https://arnoldkling.substack.com/p/us-government-bonds-are-junk-bonds

 

             

    Bottom line.

 

            Are bonds a buy?

            https://disciplinefunds.com/2023/08/15/have-bonds-finally-reached-escape-velocity/

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

            Having sex in a robotaxi.

            https://sfstandard.com/2023/08/11/san-francisco-robotaxi-cruise-debauchery/

 

 

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