The Morning Call---Are Markets front running the first rate cut?

The Morning Call

 

12/12/23

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/bitcoin-big-tech-bullion-dumped-ahead-cpi

 

Note: the S&P closed above the upper boundary of its short term trading range (4607); if it remains there through the close on Wednesday, it will reset to an uptrend.

 

            Stock buybacks enter blackout period.

            https://www.zerohedge.com/markets/stock-buybacks-enter-blackout-period-retail-only-buyers-left

 

            Will the everything rally last?

            https://www.wsj.com/finance/rise-in-stocks-bonds-crypto-gold-683f0e91?st=d3olk5g2xm5k2w7&reflink=desktopwebshare_permalink

 

            Classic bull market behavior in credit.

            https://allstarcharts.com/classic-bull-credit/

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

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

 

November CPI was +0.1% versus expectations of 0.0%; core CPI was +0.3%, in line.

                          https://www.zerohedge.com/personal-finance/core-cpi-hotter-expected-used-car-price-rise-offsets-energy-drop

 

The November small business optimism index came in at 90.6 versus projections of 90.7.

 

                        International

 

The October UK unemployment rate was 4.2% versus consensus of 4.3%; 3 month average earnings increased 7.2% versus +7.7%.

 

November Japanese PPI was +0.2%, in line; November German PPI was -0.2%, also in line.

 

The December EU economic sentiment index was reported at 23.0 versus forecasts of 11.2; the December German economic sentiment index was 12.8 versus 8.8; the December German current conditions index was -77.1 versus -76.       

 

                        Other

 

            The Fed

                     

              Markets will be watching Fed messaging this week.

              https://www.investopedia.com/why-markets-care-about-a-federal-reserve-meeting-where-no-rate-change-is-expected-8413732

 

              Peak uncertainty.

              https://www.nytimes.com/2023/12/11/business/economy/federal-reserve-rates-options.html

 

              Rate cut pivot can’t come soon enough for some debt strapped companies.

  https://www.bloomberg.com/news/articles/2023-12-11/2024-interest-rate-cut-races-debt-to-avoid-hard-landing?srnd=premium&embedded-checkout=true&sref=loFkkPMQ

 

            Fiscal Policy

 

Paying a ‘fair share’ still wouldn’t solve the problem of irresponsible government spending.

https://www.advisorperspectives.com/commentaries/2023/12/10/fair-shares-debt-funds-john-mauldin

 

            Inflation

 

              How accurate are the inflation forecasts?

              https://econbrowser.com/archives/2023/12/the-inflation-surge-forecasted-or-not

 

  Here is where prices are coming down.

  https://www.wsj.com/business/retail/heres-where-prices-are-actually-coming-down-980041bc?mod=hp_lead_pos3&utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=285932298&_hsenc=p2ANqtz-8f-hs5vgSeHHi1wNWbu9PwCHA0YiOgdU4BnOWh7ew16JtLLQ2-ddQqQkICdnS4AS0M2UtHZ5ojjs-tVUhXS1HmVP5lIQ&utm_content=285932298&utm_source=hs_email

 

            Recession

 

              Rest easy. Things aren’t that bad.

              https://www.carsongroup.com/insights/blog/if-youre-worried-about-a-rising-unemployment-rate-rest-easy-for-now/

 

              There is no assurance of a ‘soft landing.’

  https://www.cnbc.com/2023/12/08/the-runway-is-getting-clearer-but-the-us-economy-still-isnt-assured-of-a-soft-landing.html?utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=285932298&_hsenc=p2ANqtz-9pMS-FbXxFCShf8WnK2pgh2b7L5vXhPUICmaEfrPIAxkn-cT2aj1dDGfLFt9q4lstOFFWcC8JsMK9wSqOb0AUOBTiuxw&utm_content=285932298&utm_source=hs_email

 

              Here is a more optimistic take.

  https://www.wsj.com/economy/jobs/jobs-report-november-2023-us-economy-59125cde?mod=economy_lead_story&utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=285932298&_hsenc=p2ANqtz--NXhtHE9DMzX7KkmAPwfGWEW6IFBR6I_Xq2Y_wDnsXYxN0zSCzKwvgWaZbRj3zJIrTMWUq8GMe0OmS_PQw5Orifvrz7w&utm_content=285932298&utm_source=hs_email

 

            Civil Strife

 

              Wait. What did she just say?

              https://www.zerohedge.com/geopolitical/what-just-happened

 

            Geopolitics

 

              What happens next in Ukraine?

              https://www.zerohedge.com/geopolitical/end-zelenskyy

 

     Bottom line

 

            Are Markets front running the first Fed rate cut?

            https://www.zerohedge.com/markets/markets-are-front-running-first-rate-cut

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

Want to be depressed?

https://brownstone.org/articles/its-not-too-early-to-name-the-decade/

 

            But is it really that bad?

            https://www.infinitescroll.us/p/the-age-of-doom

 

            Quote of the day.

            https://cafehayek.com/2023/12/quotation-of-the-day-4477.html

 

            The paradox of inequality.

            https://www.adamsmith.org/blog/that-paradox-of-inequality

 

            Global warming. What can’t it do?

            https://www.powerlineblog.com/archives/2023/12/global-warming-what-cant-it-do.php

 

 

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