The Morning Call---What if inflation is a secular problem?

 

The Morning Call

 

11/8/23

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/earthquakes-golden-paths-everythings-booming-fedspeak-sparks-bond-bitcoin-big-tech-gains

 

Note: the S&P reset its 50 DMA from resistance to support.  Immediately overhead is its 100 DMA and the upper boundary of its very short term downtrend both at roughly 4405.  A successful challenge of that level would open the way for a test of the upper boundary of its short term trading range ~4607.

 

            New lows peaked a while ago.

            https://allstarcharts.com/new-lows-peaked-a-while-ago/

 

Short term, the pain trade is still higher.

https://www.zerohedge.com/markets/goldman-explains-savage-sudden-and-material-pain-trade-higher-stocks

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

  Weekly mortgage applications rose 2.5% while purchase applications were up 3.0%.

                                   

Month to date retail chain store sales growth declined significantly from the prior week.

 

                        International

 

The preliminary September Japanese leading economic indicators came in at 108.7 versus forecasts of 108.8.

 

                          September EU retail sales fell 0.3% versus expectations of -0.2%.

 

                          October German CPI was 0.0%, in line.

 

                        Other

 

                         Q3 household debt rises to $17 trillion.

                          https://www.calculatedriskblog.com/2023/11/ny-fed-q3-report-household-debt.html

 

            The Fed

 

              Central banks look to have hit peak rates.

  https://www.cnbc.com/2023/11/07/central-banks-look-to-have-hit-peak-rates-heres-how-markets-think-theyll-come-down.html?utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=281535318&_hsenc=p2ANqtz-9x5tv5CDXvvxIBhYXkg6zPqPjSj2AfEM-uWTXyaYoE7vNePbbVt2UlpvgRbaFC81rXT5vnfRG1yyzmM7lpF6-MlsCi6g&utm_content=281535318&utm_source=hs_email

 

 

            Inflation

 

              What if inflation is a secular problem?

              https://alhambrapartners.com/2023/11/05/weekly-market-pulse-monetary-policy-is-hard/

                

              New study confirms that the Fed cannot control inflation.

              https://www.cato.org/blog/new-cato-cmfa-study-confirms-fed-ineffective-controlling-inflation

 

                 Home prices falling but still unaffordable.

  https://politicalcalculations.blogspot.com/2023/11/new-home-prices-falling-slowly-still.html

                

              Wholesale used car prices went down in October.

               https://www.calculatedriskblog.com/2023/11/wholesale-used-car-prices-decreased-23.html

 

            Recession

 

              Economic optimism index rebounds.

              https://www.realclearmarkets.com/articles/2023/11/07/rcmtipp_economic_optimism_index_rebounds_991266.html

 

              Current EU Q3 GDP growth nowcast.

              https://econbrowser.com/archives/2023/11/euro-area-treading-water

 

            Geopolitics

 

              The impossibility of negotiated settlements in Gaza and Ukraine.

              https://www.nakedcapitalism.com/2023/11/the-impossibility-of-negotiated-settlements-in-the-gaza-and-ukraine-conflicts.html

              

             War in the Middle East

 

               David Stockman opposes aid to Israel.

               https://www.zerohedge.com/geopolitical/stockman-uncle-sam-doesnt-have-one-thin-dime-bidens-106-billion-war-package

 

 

    Bottom line.

 

            The latest from Ed Yardini.

            https://www.marketwatch.com/story/stock-market-correction-is-over-after-broad-surge-amid-epic-market-rallies-6a85426c

 

The worst sales beat since 2019.

https://www.zerohedge.com/markets/worst-sales-beats-2019-expose-weak-us-consumer

 

    News on Stocks in Our Portfolios

 

Expeditors press release (NASDAQ:EXPD): Q3 GAAP EPS of $1.16 misses by $0.12.

Revenue of $2.19B (-49.8% Y/Y) misses $130M.

 

Expeditors (NASDAQ:EXPD) declares $0.69/share semi-annual dividend, in line with previous.

 

3M (NYSE:MMM) declares $1.50/share quarterly dividend, in line with previous.

 

Automatic Data Processing (NASDAQ:ADP) declares $1.40/share quarterly dividend, 12% increase from prior dividend of $1.25.

 

What I am reading today

 

           

 

 

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