Thursday, October 26, 2023

The Morning Call--The bond market has a supply/demand problem

 

The Morning Call

 

10/26/23

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/nukes-pukes-bullion-black-gold-bitcoin-jump-bonds-banks-big-tech-dump

 

            More charts.

            https://www.zerohedge.com/the-market-ear/technical-trouble

 

Note: the S&P reversed course again, closing yesterday below both (1) its 200 DMA which restarts the clock on a new challenge of that support level and (2) the 23.6% Fibonacci retracement level.  If it remains there through the close on Monday, it will have successfully challenged both support levels; and as I mentioned before, the next visible significant support is ~3800.  The sidelines remain the place to be until Mr. Market tells us what he is going to do.

 

What if rates matter to tech?

https://www.zerohedge.com/the-market-ear/what-if-rates-matter-tech

 

            Short term risks are piling up.

            https://www.zerohedge.com/markets/short-term-risks-are-piling-market

 

            When the time comes to buy.

            https://allstarcharts.com/when-the-time-comes-to-buy/

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Weekly initial jobless claims totaled 210,000 versus consensus of 208,000.

 

  Preliminary Q3 GDP growth was 4.9% versus predictions of 4.3%; preliminary consumer spending was up 4.0% versus +0.7%; the preliminary PCE price index was +2.4% versus +2.5%.

 

                          September new home sales rose 12.3% versus estimates of -11.0%.

                          https://www.advisorperspectives.com/dshort/updates/2023/10/25/new-home-sales-jump-september-2023

 

                        International

 

                        Other

 

                          How useful is the ADP private payroll report?

                          https://politicalcalculations.blogspot.com/2023/10/less-than-useful-data-adp-employment.html

 

            The Fed

 

              Jim Grant: the Fed needs some grounding in common sense.

              https://www.zerohedge.com/markets/jim-grant-fed-needs-some-grounding-financial-history-common-sense

 

              The ECB pauses rate hikes but sticks with ‘higher for longer’.

              https://www.zerohedge.com/markets/after-10-straight-hikes-ecb-pauses-expected-warns-inflation-still-expected-stay-too-high

 

            Fiscal Policy

 

              If the economy is growing why are tax receipts falling?

              https://issuesinsights.com/2023/10/24/how-did-biden-manage-to-lose-300-billion-in-tax-revenues/

                     

              How much faster is the national debt going to grow?

              https://www.zerohedge.com/markets/us-just-added-600-billion-debt-one-month-and-what-comes-next-will-shock-everyone

 

            Recession

 

As of October, the Conference Board’s confidence index does not reflect a recession.

              https://econbrowser.com/archives/2023/10/does-the-confidence-index-say-were-in-a-recession

 

                  Spending is up, savings are down.

              https://econbrowser.com/archives/2023/10/consumer-spending-is-up-saving-is-down-what-does-this-mean-for-the-economy

 

  The flash PMI’s suggest increasing odds of a ‘soft’ landing.

  https://www.pmi.spglobal.com/Public/Home/PressRelease/800861276eb949fc9646061f8eb2ffb4

 

 

                China

 

              China unveils fresh economic stimulus.

              https://seekingalpha.com/news/4023863-china-stimulus-bond-issue-budget-deficit-weak-economy

          

               The Bond Market

            

              The bond market has a supply/demand problem.

               https://www.ft.com/content/b0f842ad-7ec5-45b8-9752-a6ae0252b36f

 

     Bottom line

 

         Investment regime change.

         https://ritholtz.com/2023/10/understanding-investing-regime-change/

 

    News on Stocks in Our Portfolios

 

Mastercard press release (NYSE:MA): Q3 Non-GAAP EPS of $3.39 beats by $0.18.

Revenue of $6.5B (+14% Y/Y) misses by $30M.

 

Altria press release (NYSE:MO): Q3 Non-GAAP EPS of $1.28 misses by $0.02.

Revenue of $5.28B (-2.4% Y/Y) misses by $150M.

 

UPS press release (NYSE:UPS): Q3 Non-GAAP EPS of $1.57 beats by $0.01.

Revenue of $21.06B (-13.0% Y/Y) misses by $410M.

 

What I am reading today

           

Thursday morning humor.

            https://babylonbee.com/news/republicans-place-house-speaker-job-on-ziprecruiter

           

Why would we use less cheaper energy?

https://www.adamsmith.org/blog/but-why-would-we-use-less-cheaper-energy

 

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