The Morning Call--Economists may be confused but the Markets aren't.

 

The Morning Call

 

12/21/23

 

I am off for the Holidays, returning 1/2/24.  Best wishes for a great Christmas and New Years.

 

 

The Market

         

 

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/stocks-bond-yields-puke-rate-cut-expectations-surge

 

            The Market has risen too far too fast.

            https://www.zerohedge.com/the-market-ear/acrophobia-alert-market-has-risen-too-far-too-fast

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

 Final Q3 GDP growth was 4.9% versus estimates of 5.2%; real consumer spending was up 3.1% versus +3.8%; the price index was 3.3% versus 3.5%.

                                 

                          November existing home sales rose 0.8% versus expectations of -0.5%.

                          https://www.calculatedriskblog.com/2023/12/nar-existing-home-sales-increased-to_20.html

 

December consumer confidence came in at 110.7 versus predictions of 104.0.

                            

  The December Philadelphia Fed manufacturing index was -10.5 versus consensus of -3.0.

 

                        International

 

                        Other

 

            The Fed

 

              Confusion over the ‘Fed pivot’.

              https://www.wsj.com/economy/central-banking/powells-pivot-sows-confusion-over-when-and-how-fast-fed-will-cut-66495602?mod=economy_lead_story

 

              Economists may be confused (what’s new), but the Markets aren’t.

              https://www.capitalspectator.com/confidence-rising-in-markets-for-rate-cuts-in-2024/

 

            Fiscal Policy

 

A less alarmist view of the deficit.  This analysis is a bit partisan, but I agree with the conclusion: no one has a clue at what level the national debt will trigger significant economic consequences.

https://www.vox.com/money/2023/12/18/24001984/us-budget-deficit-2023-debt-tax-revenue-interest-rates

 

It’s the spending, stupid.

https://www.realclearmarkets.com/articles/2023/12/20/congress_wont_address_the_debt_markets_yawn_listen_to_markets_999968.html

 

Inflation

 

  How much will the chaos in the Red Sea impact inflation?

  https://www.bloomberg.com/news/articles/2023-12-20/red-sea-chaos-risks-driving-up-price-of-goods-for-global-economy?srnd=economics-v2&sref=loFkkPMQ

 

Recession

 

  44% of US office loans underwater.

  https://www.bisnow.com/national/news/capital-markets/economists-44-percent-us-office-loans-underwater-threatening-more-bank-failures-122166

 

 

                Geopolitics

 

              Failed leadership.

              https://www.zerohedge.com/geopolitical/ukraine-situation-failure-strategy-and-leadership

 

            China

 

              China’s debt is not the problem.

              https://www.ft.com/content/630f828c-ce4b-4f41-a867-9593bfaf0528

 

    News on Stocks in Our Portfolios

 

What I am reading today

 

            Another cost of bureaucracy.

            https://www.adamsmith.org/blog/its-the-15-months-not-the-banning-of-the-deal-that-matters

 

                Thursday morning humor.

            https://babylonbee.com/news/8-superior-alternatives-to-public-school-for-your-kids

 

 

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