The Morning Call---Recession is still the most likely scenario

The Morning Call

 

10/3/23

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/bonds-bullion-black-gold-battered-hawkish-fedspeak-inflation-fears-lift-dollar

 

Note: the long bond took another shellacking yesterday, closing below the lower boundary of its long term trading range.  If it remains there through the close on Thursday, it will reset to a downtrend.  I doubt that will be a plus for stocks; though somewhat surprisingly, the S&P held above the lower boundary of this short term uptrend.

 

            Three more charts.

            https://www.zerohedge.com/the-market-ear/3-charts-we-are-watching-could-cause-severe-pl-pain

 

            Volume in VIX trade grows amid worries about the economy.

            https://www.ft.com/content/ba10f6b1-3f99-4471-b8aa-8abfcd573ece

 

            Is the QT trade back on?

            https://www.zerohedge.com/the-market-ear/qt-trade-back

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Month to date retail chain store sales grew slower than in the prior week.

 

                          August construction spending was up 0.5%, in line.

                          https://www.calculatedriskblog.com/2023/10/construction-spending-increased-05-in.html

 

The September manufacturing PMI came in at 49.8 versus forecasts of 48.9.

                          https://www.advisorperspectives.com/dshort/updates/2023/10/02/manufacturing-pmi-slower-contraction-september-2023

 

The September ISM manufacturing index was 49.0 versus projections of 47.8.

                          https://www.advisorperspectives.com/dshort/updates/2023/10/02/ism-manufacturing-index-contracts-eleventh-consecutive-month

 

                        International

 

                        Other

 

            The Fed

 

              Update on M2, GDP and interest rates.

              https://scottgrannis.blogspot.com/2023/09/m2-gdp-and-interest-rate-update.html

 

            Inflation

 

              More evidence of softer inflation.

  https://www.wsj.com/economy/consumers/consumer-spending-personal-income-inflation-august-2023-ee262c56?mod=economy_lead_pos3&utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=276627252&_hsenc=p2ANqtz-_FeTjlmpolXzChb1JDzM1NVRmveu8RFKUY6rbBpEWjElQLRe8xZszBOBoC1ZSv6DOpZsaslo7URnu5dU3S0RdMZWa60A&utm_content=276627252&utm_source=hs_email

 

                   

            Recession

 

              Soft landing not happening.

              "Soft Landing" Hope by The Fed Is Likely Optimistic - RIA (realinvestmentadvice.com)

 

              Happy talk about a US slowdown.

              https://www.nakedcapitalism.com/2023/10/possible-knock-on-effect-from-recession-worries-in-us-and-china-growth-weakening.html

               

              Recession is still the most likely scenario.

              https://www.bloomberg.com/news/articles/2023-10-01/6-reasons-why-a-us-recession-is-likely-and-coming-soon?srnd=premium&sref=loFkkPMQ

 

              Americans are spending like there is no tomorrow.

  https://www.wsj.com/economy/consumers/americans-are-still-spending-like-theres-no-tomorrow-6a1d307?mod=hp_lead_pos3&utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=276627252&_hsenc=p2ANqtz--0btXQaRHjAV8RJi6qU2XKnmLAOsZHBXRRyPcRuwVgzCcWYADQDz_xqippxibdyxB1cub_JdQMUzZCOGsVZ5YAxqasVw&utm_content=276627252&utm_source=hs_email

 

             Can economists predict recession? 

             https://www.stlouisfed.org/on-the-economy/2023/sep/can-economists-predict-recessions

 

              Small business bankruptcies surge.

              https://www.zerohedge.com/personal-finance/small-business-bankruptcies-surge-2023-five-reasons-why

 

Port of New York and New Jersey volume dropped 21% in August.            https://www.zerohedge.com/markets/port-new-york-and-new-jersey-cargo-volumes-drop-21-august

 

            China

 

              China’s economy still needs help.

              https://www.bloomberg.com/news/articles/2023-10-02/china-s-precarious-economic-recovery-signals-more-support-needed?srnd=premium&sref=loFkkPMQ

 

            The coronavirus

 

              Pandemic lockdown denialism.

              https://brownstone.org/articles/a-pandemic-of-lockdown-denialism/

 

     Bottom line

 

Update on valuations.

https://www.advisorperspectives.com/dshort/updates/2023/10/02/q-ratio-falls-again-in-september

            https://www.advisorperspectives.com/dshort/updates/2023/10/02/regression-to-trend-s-p-composite-126-above-trend-in-september

 

            It is too soon to say the value premium is dead.

            https://www.morningstar.com/portfolios/its-too-soon-say-value-premium-is-dead

 

            In search of a hedging strategy that works.

            https://www.priceactionlab.com/Blog/2023/09/hedge-equity-portfolios/

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            Catherine Parr’s legacy.

            Meet Catherine Parr—the queen who survived Henry VIII (nationalgeographic.com)

 

            Your brain is looking for winning streaks.

            https://www.scientificamerican.com/article/your-brain-looks-for-winning-streaks-everywhere-heres-why/

 

Tuesday morning humor.

https://babylonbee.com/news/congress-passes-trillion-dollar-stopgap-bill-that-will-fund-government-until-about-2-pm-tomorrow

 

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