The Morning Call---A close look at what is going on in the bond market

 

The Morning Call

 

10/5/23

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/bond-yields-black-gold-buck-tumble-amid-macro-miasma

 

            Is the Treasury market in a bubble?

            https://www.zerohedge.com/markets/maslow-safe-assets-and-bubbles

 

            The latest from the trading desks at Goldman and Morgan.

            https://www.zerohedge.com/markets/what-goldman-jpm-trading-desks-are-seeing-hedge-funds-still-shorting-mutual-funds-frozen-no

 

                        Max market pain.

            https://www.zerohedge.com/the-market-ear/max-pain-market-0

 

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

                          

Weekly initial jobless claims totaled 207,000 versus expectations of 210,000.

                           https://www.zerohedge.com/personal-finance/jobless-claims-hovers-near-2023-lows-despite-adp-weakness

                                   

The August trade balance was -$58.3 billion versus estimates of -$62.3 billion.

 

August factory orders were up 1.2% versus forecasts of +0.2%; ex transportation, they were up 1.4% versus +0.6%.

                           https://www.zerohedge.com/economics/us-factory-orders-jumped-more-expected-august-thanks-war

                                   

                           The September ISM services index came in at 53.6, in line.

 

                        International

                        

 The August German trade balance was E16.6 billion versus predictions of E15.0 billion; the September construction PMI was 39.3 versus 42.6.

 

  The September EU construction PMI was 43.6 versus consensus of 44.0.

 

  The September UK construction PMI was 45.0 versus 49.9; September YoY auto sales were up 21% versus +18.7%.

 

                        Other

                       

                          The latest Q3 nowcast.

                          https://www.capitalspectator.com/us-median-q3-gdp-nowcast-holds-above-3/#more-20934

           

                          Light vehicle sales up in September.

                          https://www.calculatedriskblog.com/2023/10/vehicles-sales-increase-to-1567-million.html

 

            The Fed

 

             ECB rate hikes may be over.

             https://www.bloomberg.com/news/articles/2023-10-04/ecb-s-centeno-says-rate-hiking-cycle-may-have-been-concluded?srnd=premium&sref=loFkkPMQ

 

            Recession

 

             The bond selloff calls into question the ‘soft landing’ scenario.

             https://www.wsj.com/economy/central-banking/bond-selloff-threatens-hopes-for-economys-soft-landing-80bb152a?mod=hp_lead_pos1

 

             Credit card spending craters in September.

            https://www.zerohedge.com/economics/consumer-just-crashed-credit-card-spending-unexpectedly-cratered-september

 

           Government Shutdown

 

McCarthy’s ouster means more turmoil in the upcoming government funding debate.

https://www.bloomberg.com/news/articles/2023-10-04/mccarthy-ouster-means-more-turmoil-as-next-shutdown-fight-looms?srnd=premium&sref=loFkkPMQ

     

      The Bond Market

     

            The bond vigilantes have taken control.

https://www.cnbc.com/2023/10/03/us-treasury-yields-investors-weigh-economic-outlook.html?utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=276816545&_hsenc=p2ANqtz--YKty0_2HXnGPAcaDJzFNJQrjCLrZ237fkqUFg0RMNKdXncPn7SfHcAgHg-1lJPgx9Fjmzys_WTyRpPtTuzOl0gGGZtA&utm_content=276816545&utm_source=hs_email

 

            The increasingly odd bond market.

            https://www.ft.com/content/627b9e56-e989-4734-ade6-da7cff827de1

 

            Bank unrealized balance sheet losses near record high.

            https://www.zerohedge.com/markets/yield-surge-will-send-banks-unealized-losses-140-billion-higher-record-700-billion

 

            Goldman recommending buying the five year Treasury.

            https://www.zerohedge.com/markets/move-par-2015-bund-and-var-shock-jpmorgan-says-10y-yield-now-40bps-too-high

 

     Bottom line.

 

            More on valuations.

            https://www.advisorperspectives.com/dshort/updates/2023/10/03/buffett-valuation-indicator-september-2023-update

 

               

 

            Corporate profits are expected to rebound in Q4.

            https://www.bloomberg.com/news/articles/2023-10-04/investors-eye-profit-rebound-after-yearlong-earnings-recession?srnd=premium&sref=loFkkPMQ

 

September dividends by the numbers.

https://politicalcalculations.blogspot.com/2023/10/dividends-by-numbers-for-september-2023.html

 

    News on Stocks in Our Portfolios

 

McDonald's (NYSE:MCD) declares $1.67/share quarterly dividend, 9.9% increase from prior dividend of $1.52.

 

What I am reading today

 

           

 

 

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