The Morning Call---Debt catharsis

 

The Morning Call

 

10/31/23

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/stocks-jump-everything-else-dumps

 

Note: despite the moonshot yesterday, the S&P 200 DMA reverted to resistance.  Let’s see if stocks can rally back to that level.  Of course, even if they were to push back through the 200 DMA, the trend in lower highs and lower lows would still be in place.  So it will take a lot to change the downward momentum.  On the other hand, with no support until the ~3800 area, the path of least resistance is down.

 

            When does the correction end?

            https://allstarcharts.com/when-does-correction-end/

 

            A change in Market regime?

            https://politicalcalculations.blogspot.com/2023/10/a-change-in-market-regime-for-s-500.html

               

            Middle East markets pricing in low probability of wider war.                                 

            https://www.bloomberg.com/news/articles/2023-10-29/mideast-market-reaction-subdued-as-israel-begins-gaza-ground-war?sref=loFkkPMQ

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

The October Dallas Fed manufacturing index came in at -19.2 versus forecasts of -15.0.

                          https://www.advisorperspectives.com/dshort/updates/2023/10/30/dallas-fed-manufacturing-business-conditions-continue-to-worsen-in-october

 

                        International

 

Q3 EU flash GDP growth fell 0.1% versus estimates of 0.0%; Q3 flash CPI was +0.1% versus +0.5%

                          https://www.zerohedge.com/markets/eurozone-economy-shrinks-first-time-covid-inflation-tumbles-eur-rallies

 

September German retail sales declined 0.8% versus predictions of -0.5%; October CPI was 0.0% versus +0.2%.

 

The September Japanese unemployment rate was 2.6%, in line;  preliminary September industrial production was up 0.2% versus +2.5%; preliminary September retail sales was down 0.1%, in line; September YoY housing starts were down 6.8% versus -4.7%; September YoY construction orders were down 3.0% versus -12.0%; October consumer confidence was 35.7 versus 35.1.

 

The October Chinese manufacturing PMI was 49.5 versus consensus of 50.2; the nonmanufacturing PMI was 50.6 versus 51.8; the composite PMI was 50.7 versus 52.2.

 

                        Other

 

            The Fed

 

From the Fed whisperer: High bond yields could reduce the need for further Fed rate hikes.

              https://www.wsj.com/economy/central-banking/higher-bond-yields-could-end-the-feds-historic-rate-rises-f54b65d3?mod=economy_lead_story

 

            Fiscal Policy

 

              Debt catharsis.

              https://www.advisorperspectives.com/commentaries/2023/10/28/debt-catharsis-john-mauldin

 

            Inflation

 

              Two measures of inflation and Fed policy.

              https://www.advisorperspectives.com/dshort/updates/2023/10/30/two-measures-of-inflation-and-fed-policy

                

              Growth and inflation update.

              https://scottgrannis.blogspot.com/2023/10/growth-and-inflation-update-not-much-to.html

 

Recession

 

  Initial Q4 GDP nowcast.

  https://www.atlantafed.org/cqer/research/gdpnow

 

  Why Americans are still spending.

  https://www.wsj.com/economy/consumers/5-things-us-economy-8a588781?mod=economy_trendingnow_article_pos3&utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=280407791&_hsenc=p2ANqtz-9v19Wx1S8ECk6SHwWcoWTzNbE0XhxtVcyEgH2RnDSIxc7HAva8KX3XB57OoeP-MOElCjL6_KuPiImyoNf8kmZFvuS63A&utm_content=280407791&utm_source=hs_email

 

              The Bond Market

 

              The big bond event this week is not at the Fed; it is at the Treasury.

  https://www.bloomberg.com/news/articles/2023-10-29/the-big-bond-market-event-wednesday-is-at-treasury-not-the-fed?utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=280407791&_hsenc=p2ANqtz-98JmVQDRe6AL0V897pL0M4d7O_5kdTdwmNKLhqWLPQp5wNiQsf9S333WQEaLIk2O_jiwIv7fqmZyuTksuOB2RVoJUAsQ&utm_content=280407791&utm_source=hs_email&sref=loFkkPMQ

                                   

              But first, exactly how much will it borrow?

              https://www.zerohedge.com/markets/us-borrow-15-trillion-debt-next-quarter-after-borrowing-massive-1-trillion-last-quarter

 

    Bottom line

 

            Corrections and crashes.

            https://www.zerohedge.com/the-market-ear/correction-crashes

 

    News on Stocks in Our Portfolios

 

What I am reading today

 

            Byran Wein’s 20 rules for investing and life.

            https://ritholtz.com/2013/07/byron-wiens-20-rules-of-investing-life/

 

            Why you shouldn’t trust your gut.

            https://contessacapitaladvisors.com/blog/f/your-brain-is-playing-tricks-on-you

 

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