The Morning Call--An important shift in the Fed officials rate stance is underway

 

The Morning Call

 

9/12/23

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/big-tech-best-bitcoin-battered-event-risk-ridden-week-looms

                  

 Note: the S&P closed back above its 50 DMA.  If it finishes there today, the DMA will reset to support; plus the S&P will have marked a new higher low.  Both would be indicative of further upside.

 

            It’s about to get rocky.

            https://www.riskhedge.com/outplacement/its-about-to-get-rocky/rcm

 

            VIX seasonality starts now.

            https://www.zerohedge.com/the-market-ear/3-charts-we-are-watching-remember-vix-seasonality-starts-now

 

            The strength in commodities.

            https://allstarcharts.com/commodities-provide-more-than-just-information/

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

The August small business optimism index was reported at 91.3 versus predictions of 91.6.

 

                        International

                            

July UK average earnings (3mo/YoY) were up 8.5% versus consensus of +8.2%; the July unemployment rate was 4.3%, in line.

 

August German PPI rose 0.2% versus expectations of +0.4%; the September economic sentiment index came in at -11.4 versus -15.0; the current conditions index was -79.4 versus -75.0.

 

The September EU economic sentiment index was -8.9 versus estimates of -6.2.

 

 

                        Other

                           

                            Update on real total net worth per capita.

                            https://www.advisorperspectives.com/dshort/updates/2023/09/08/household-net-worth-q2-2023

 

                           Leading index of commercial real estate down in August.

                            https://www.calculatedriskblog.com/2023/09/leading-index-for-commercial-real.html

 

The Fed

 

An important shift in the Fed officials rate stance is underway---this from the Fed whisperer (must read).

  https://www.wsj.com/economy/central-banking/an-important-shift-in-fed-officials-rate-stance-is-under-way-70a91f8a?mod=economy_lead_pos2

 

Fiscal Policy

 

  The surprising trend in Medicare expenditures.

  https://www.nytimes.com/interactive/2023/09/05/upshot/medicare-budget-threat-receded.html?utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=273603921&_hsenc=p2ANqtz-8KdMQOpFTjDteFBQ_I_Hq0dKYjyAyyo3IOp-EkZ8WHVPgkrG7qpATD1tf4mgA-FESLK-aX7_3er8mHUL8aMNgezGJ58Q&utm_content=273603921&utm_source=hs_email

 

            Inflation

 

              Oil prices, inflation and interest rates.

              Oil Price Inflation & Interest Rates. What Is The Link? - RIA (realinvestmentadvice.com)

 

            Recession

 

              Three competitiveness takeaways from Jackson Hole.

              https://www.realclearmarkets.com/articles/2023/09/11/three_competitiveness_takeaways_from_jackson_hole_978516.html

 

                           Another upbeat analysis from my favorite optimist.

              https://scottgrannis.blogspot.com/2023/09/is-this-great-country-or-what.html

 

  This analyst believes that sufficient evidence of recession is lacking.

  https://econbrowser.com/archives/2023/09/kopitsian-and-other-recession-indicators

 

Bloomberg Pulse survey shows investors believe that consumer spending is about to hit a wall.

https://www.bloomberg.com/news/articles/2023-09-11/us-consumer-is-likely-to-start-cutting-back-hurting-economy-and-stocks?srnd=premium&sref=loFkkPMQ

 

 

NY Fed survey equally disappointing.

https://www.zerohedge.com/economics/ny-fed-survey-finds-sharp-deterioration-household-finanancial-sentiment-long-term

 

 

 

The Financial System

 

  What free money does to bank balance sheets.

  https://www.nakedcapitalism.com/2023/09/unrealized-losses-on-securities-held-by-banks-oh-dearie-the-whole-schmear-8-to-558-billion.html

 

Civil Strife

 

  The decline of liberalism.

  https://arnoldkling.substack.com/p/the-decline-of-liberalism

 

            China

 

              Xi’s tight control hampers economic growth.

              https://www.wsj.com/world/china/xis-tight-control-hampers-stronger-response-to-chinas-slowdown-868ab454?mod=economy_lead_pos3

 

              It is no longer a given that China will become the world's biggest economy.

              https://www.ft.com/content/20a14331-d282-4039-97d2-71d777359733

 

              Can the US and China avoid an armed conflict?

              https://global-macro-monitor.com/2023/09/09/can-the-u-s-and-china-avoid-the-thucydidess-trap/

 

     Bottom line

 

            Why mega caps continue to dominate and the risks therein.

            https://www.advisorperspectives.com/commentaries/2023/09/11/mega-cap-stocks-dominate-lance-roberts

 

            Low NASDAQ equity risk premium is warning to investors.

            https://www.zerohedge.com/markets/nosediving-nasdaq-equity-risk-premium-has-warning-traders

 

    News on Stocks in Our Portfolios

 

Oracle press release (NYSE:ORCL): Q1 Non-GAAP EPS of $1.19 beats by $0.04.

Revenue of $12.45B (+8.7% Y/Y) misses by $20M, up 8% in constant currency.

 

Oracle (NYSE:ORCL) declares $0.40/share quarterly dividend, in line with previous

 

What I am reading today

 

            The climate emergency is a hoax (must read)

            https://www.zerohedge.com/markets/climate-emergency-hoax

 

            Tuesday morning humor.

            https://babylonbee.com/news/best-questions-to-ask-your-husband-during-football-game

 

            Quote of the day.

            https://cafehayek.com/2023/09/quotation-of-the-day-4381.html

 

 

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