The Morning Call---Why central bankers are unsure if they have raised rates enough

The Morning Call

 

8/29/23

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/bonds-buck-quiet-stocks-squeeze-higher-event-risk-heavy-week-looms

 

Note: the S&P closed right on the upper boundary of a very short-term downtrend.  A break above it would suggest further upside; a reversal, the opposite.  Follow through.

 

More charts.

https://www.zerohedge.com/the-market-ear/fearless-vix-back

 

            The two-year Treasury flashes a sell signal.

            https://allstarcharts.com/2-year-t-note-flashes-sell/

 

            Three bond charts worth watching.

            https://www.zerohedge.com/the-market-ear/3-charts-we-are-watching-contrarian-bonds

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

                       

 The August Dallas Fed manufacturing index was -17.2 versus predictions   of -21.0.

                          https://www.advisorperspectives.com/dshort/updates/2023/08/28/dallas-fed-manufacturing-business-conditions-weaken-in-august

 

                        International

                         

                          The July Japanese unemployment rate was 2.7% versus estimates of 2.5%.

 

September German consumer confidence was reported at -25.5 versus consensus of -24.3.

 

 

                        Other

                       

              Regional Fed manufacturing overview.

              https://www.advisorperspectives.com/dshort/updates/2023/08/28/regional-fed-manufacturing-overview-august-2023

 

The Fed

 

  Why central bankers are unsure if they have raised rates enough.

  https://www.wsj.com/economy/central-banking/why-central-bankers-are-unsure-whether-theyve-raised-rates-enough-aa57c648?mod=economy_lead_pos5&utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=271988172&_hsenc=p2ANqtz-97_uDtnnJoKquwb7dgKKVbK7hZQdBPX3J9zLbeUrQVOyVZsgg0e-3_LesD7OPRkmw_LBPPUrlLtVocpnhtKpyYGSTl4A&utm_content=271988172&utm_source=hs_email

 

 

Fiscal Policy

 

  With higher interest rates comes a day of reckoning for the federal government

  https://www.barrons.com/articles/high-interest-rates-federal-debt-deficit-budget-fed-448dafdc?mod=past_editions&utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=271988172&_hsenc=p2ANqtz-_vSXgxVtG_XTYujSvu9r-6-9HTqx4UUts7MTJ3QImW3IxZvzcySx-kbxqbXyBYyDjFd9yqXzyTZ7Ni7LTsMk8jDp2sfg&utm_content=271988172&utm_source=hs_email

 

GOP tensions between the house and senate raise the odds of a government shutdown.

https://thehill.com/homenews/senate/4170143-gop-tensions-between-senate-house-raise-shutdown-odds/

 

                Recession

 

              Stocks are underpricing recession.

              https://www.zerohedge.com/markets/us-stocks-are-underpricing-recession-risks

 

              Fannie Mae single family mortgage delinquency rate lowest since 2002.

              https://www.calculatedriskblog.com/2023/08/fannie-mae-single-family-mortgage.html

 

China

 

  China’s slow moving economic disaster.

  https://www.axios.com/2023/08/26/chinas-slow-moving-economic-disaster

 

  The problem with China’s economy.

  https://econbrowser.com/archives/2023/08/the-problems-with-chinas-economy

 

              China’s problems start at the top.

  https://www.nytimes.com/2023/08/26/opinion/china-economy-xi-jinping.html?utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=271988172&_hsenc=p2ANqtz-99eYcMDYuJ2_8rw7WmSb5o64tvLVtsuEkNhnTs2nc60DeDJc5f4xtzqDMk_PyfID4e9IrGj0Wi_fiA4Y4qIw2SOx4uBw&utm_content=271988172&utm_source=hs_email

 

     Bottom line

 

            Timing is hard.

            https://www.ft.com/content/47b49fd1-48fb-4855-9c34-d32348c6df37

 

    News on Stocks in Our Portfolios

 

Bank of Nova Scotia press release (NYSE:BNS): Q3 Non-GAAP EPS of C$1.73.

Revenue of C$8.09B (+2.0% Y/Y).

 

Bank of Nova Scotia (NYSE:BNS) declares CAD 1.06/share quarterly dividend, in line with previous.

 

What I am reading today

              

            Tuesday morning humor.

            https://www.powerlineblog.com/archives/2023/08/rich-men-strike-back.php

 

            Life is a promise; fulfill it.

            https://traderfeed.blogspot.com/2023/08/the-wellness-grid-framework-for.html

 

The curious way your skin impacts your health.

https://www.bbc.com/future/article/20230823-the-curious-ways-your-skin-shapes-your-health

 

The science of cycles.

https://www.advisorperspectives.com/commentaries/2023/08/28/global-job-science-cycles-john-mauldin

 

            We have already spent all the money.

            https://www.adamsmith.org/blog/sorry-but-weve-already-spent-all-the-money

 

 

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