The Morning Call---Lots of room to the upside in yields

 

The Morning Call

 

10/4/23

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/juicy-jobs-data-sparks-bond-bloodbath-stock-slaughter-vixnado

           

Note: the long Treasury took another beating yesterday, ending below the lower boundary of its long term trading range for the second day; if it remains there through the close tomorrow it will reset to a downtrend.  Meanwhile, over in stock land, the S&P blew though the lower boundary of its short term uptrend; if it finishes there today, it will reset to a trading range.  The good news is that support exists just below current levels at the 200 DMA (~4201).  The bad news is that if that support level can’t hold the next visible stop is the 38.2% Fibonacci retracement level (~3817).  This is no time to be a hero.

 

More charts.

https://www.zerohedge.com/the-market-ear/risk-ripples

 

            Goldman funds flow guru says the selling isn’t over.

            https://www.zerohedge.com/markets/goldmans-flows-guru-answers-anxious-equity-btfders-are-we-there-yet

 

            Growing odds of a negative feedback loop.

            https://www.zerohedge.com/markets/goldman-jpmorgan-pull-alarm-risks-are-growing-sharp-impulsive-negative-feedback-loop-there

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications fell 6.0% while purchase applications were down 5.7%.

 

August job openings (JOLTS) totaled 9.61million versus estimates of 8.8 million.

                          https://www.calculatedriskblog.com/2023/10/bls-job-openings-increased-to-96.html

                                                

   The September ADP private payroll report showed job increases of 89,000    versus expectations of 153,000.

                                 https://www.zerohedge.com/markets/adp-employment-report-signals-weakest-labor-market-jan-2021

 

                        International

 

August EU retail sales declined 1.2% versus projections of -0.3%; August PPI was up 0.6%, in line; the September services PMI was 48.7 versus 48.4; the composite PMI was 47.2 versus 47.1.

 

The September Japanese services PMI was 53.8 versus consensus of 53.3; the composite PMI was 52.1 versus 51.8; the September German services PMI was 50.3 versus 49.8; the composite PMI was 46.4 versus 46.2; the September UK services PMI was 49.3 versus 47.2; the composite PMI was 48.5 versus 46.8.

 

                        Other

 

                          August median household income.

                          https://politicalcalculations.blogspot.com/2023/10/median-household-income-in-august-2023.html

                            

                          Update on business cycle indicators.

                          https://econbrowser.com/archives/2023/10/business-cycle-indicators-at-octobers-start-2

 

            The Fed

 

              The Fed’s losses have passed $100 billion.

              https://thehill.com/opinion/finance/4232867-the-feds-losses-have-passed-100-billion-whats-next/

 

            Inflation

 

              OPEC+ shows no sign of easing the oil squeeze.

              https://www.bloomberg.com/news/articles/2023-10-03/opec-shows-no-sign-of-easing-oil-squeeze-as-ministers-meet?srnd=premium&sref=loFkkPMQ

 

  Annual home price growth rate increased in August.

  https://www.calculatedriskblog.com/2023/10/corelogic-us-annual-home-price-growth.html

 

  Please stop telling us everything is fine.

  https://www.zerohedge.com/personal-finance/please-stop-telling-us-everything-fine-economy-it-not

 

Recession

 

  Office market headed for a steep plunge.

  https://finance.yahoo.com/news/us-office-market-headed-steep-023928083.html

 

            Civil Strife

 

              We are in the middle of a revolution.

              https://www.zerohedge.com/political/were-middle-revolution-victor-davis-hanson-warns-tucker-next-12-months-will-be-most

 

            Geopolitics

 

              Ukraine’s unraveling.

              https://www.nakedcapitalism.com/2023/10/ukraines-unraveling-the-funding-row-and-coalition-wobbles.html

 

     Bottom line

 

            Patience is a virtue.

            https://alhambrapartners.com/2023/10/01/weekly-market-pulse-patience-is-a-virtue/

 

            More on valuations.

            https://www.advisorperspectives.com/dshort/updates/2023/10/03/market-valuation-is-the-market-still-overvalued

 

            The end of the era of QE.

https://www.reuters.com/markets/rates-bonds/market-us-bond-market-signals-end-an-era-2023-10-02/?utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=276627252&_hsenc=p2ANqtz-_SqAakDYo-3nMnFmM8JLUHOkX7gc3hSpzs8miT7Bcr1jXOLMaRaLFxmUl35zhR1cFc0ZwK-iVRna2Bt3vQ8j28QQZLvw&utm_content=276627252&utm_source=hs_email

 

            Why rates are rising.

            https://www.advisorperspectives.com/articles/2023/10/02/rates-bonds-rising-larry-swedroe

 

            Lots of room to the upside in yields.

            https://www.zerohedge.com/markets/30-year-yields-hit-highest-2007-one-day-after-cnbcs-santelli-suggests-10-year-could-go-13

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

 

 

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