The Morning Call---Fed and Bank of England pause

 

The Morning Call

 

9/21/23

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/stocks-bonds-slammed-powell-pies-next-years-punchbowl

 

            The most important trend on earth.

            https://allstarcharts.com/most-important-trend-on-earth/

 

            The strong dollar is confounding investors.

            https://www.bloomberg.com/news/articles/2023-09-19/dollar-rally-is-crushing-one-of-the-most-popular-trades-of-2023?srnd=premium&sref=loFkkPMQ

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Weekly initial jobless claims totaled 201,000 versus estimates of 225,000.

 

The September Philadelphia Fed manufacturing index came in at -13.5 versus consensus of -0.7.

                          https://www.zerohedge.com/markets/philly-fed-business-survey-crashes-back-contraction-september

 

                        International

 

                        Other

 

            The Fed

                            

   FOMC leaves rates unchanged but ‘dot plot’ grew more hawkish (higher for    longer).

              https://www.zerohedge.com/markets/fomc-9

                  

              The ‘experts’ reaction.

              https://www.zerohedge.com/markets/wall-street-reacts-feds-confused-2024-hawkish-shock

                  

              The Bank of England unexpectedly leaves rates unchanged.

              https://www.zerohedge.com/markets/boe-surprises-markets-keeping-rates-unchanged-first-time-two-years

 

              Turns out that there is a least one good thing that results from easy money.

              https://www.ft.com/content/77b98af7-4089-4d1e-9eb1-e42053813aa2

 

              Dealing with $100 oil.

  https://www.wsj.com/finance/commodities-futures/the-feds-next-challenge-100-oil-4388e3fc?mod=hp_lead_pos3&utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=274918035&_hsenc=p2ANqtz-9K1PBfhKbv_KeQJ15svu-ScmEzML0CNwKBqOQk14CPOXZmDKf-phjeDFTjZYJxs5S_oNOqGggs6Mjuei6H4vmzIB_cSg&utm_content=274918035&utm_source=hs_email

 

              Central banks appear to be at peak rates---but the inflation battle is not over.

  https://www.cnbc.com/2023/09/18/central-banks-head-for-peak-rates-but-inflation-battle-is-not-over.html?utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=274918035&_hsenc=p2ANqtz--eF-EEKku5C6FFRlDVoIm07a1VROVby6VOlunoEWwAp-QlYuTQUvWNK3M0-vBjh0fW9wSsn6hxKKvgWGG1NayOHI-Lkw&utm_content=274918035&utm_source=hs_email

 

 

            Fiscal Policy

 

              Changing the rules to allow more spending (larger deficits).

              https://www.clubforgrowth.org/key-vote-alert-senate-no-on-suspension-of-rule-xvi-to-proceed-to-the-appropriations-minibus/

 

            Inflation

 

              Lessons from a century of inflationary shocks (must read).

              https://www.ft.com/content/a8b0e874-9454-45db-a0d4-ee94fab320fa

 

            Recession

 

              More on the coming data revisions due out on 9/28 (must read).

              https://www.zerohedge.com/markets/ignore-hawkish-fed-not-only-gdp-about-tumble-next-week-it-will-be-revised-sharply-lower

 

              Why some economists still think a recession is coming.

              https://www.axios.com/2023/09/19/soft-landing-recession-federal-reserve-economy

                  

              Sentiment is turning very negative on the consumer.

              https://www.zerohedge.com/markets/jpm-markets-desk-sentiment-turning-very-negative-us-consumer

 

            Government Shutdown

 

              The risks in a government shutdown.

              https://www.capitalspectator.com/government-shutdown-risk-the-sequel/

 

              Shutdowns don’t have to be bearish.

              https://twitter.com/RyanDetrick/status/1704477576649924861

 

            Geopolitics

 

You have to wonder what the Russians, Chinese, Nort Koreans and Iranians are thinking when our military makes these kinds of headlines.

https://johnalucas6.substack.com/p/general-milley-sinks-his-credibility?r=2mmq41&utm_campaign=post&utm_medium=web

 

            China

 

              China’s economic predicament could be worse than Japan’s.

  https://www.wsj.com/world/asia/is-chinas-economic-predicament-as-bad-as-japans-it-could-be-worse-aa962d0d?mod=economy_lead_pos2&utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=274918035&_hsenc=p2ANqtz-9Lto_8wk9_JTCLI7MBtpiBcN1H9mDAkt3PuEyUmai029dWsQ9kRi3FreeYgL3yV-qP3bXXYon4Ff5MM3GttIgkojGkSA&utm_content=274918035&utm_source=hs_email

 

 

    News on Stocks in Our Portfolios

 

FactSet Research Systems press release (NYSE:FDS): Q4 Non-GAAP EPS of $2.93 misses by $0.56.

Revenue of $535.8M (+7.3% Y/Y) in-line.

 

FedEx press release (NYSE:FDX): Q1 Non-GAAP EPS of $4.55 beats by $0.80.

Revenue of $21.7B (-6.5% Y/Y) misses by $130M.

 

What I am reading today

 

            Hypersonic weapons are game changers and the US doesn’t have any.

            https://www.wsj.com/politics/national-security/hypersonic-missiles-america-military-behind-936a3128

           

                        Quote of the day.

            https://cafehayek.com/2023/09/bonus-quotation-of-the-day-986.html

 

            The efficiency of roads versus trains.

            https://www.adamsmith.org/blog/greenpeace-proves-roads-are-better-than-trains

 

 

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