The Morning Call---Thanks for nothing

The Morning Call

 

2/2/24

 

The Market

         

    Technical

 

Thursday in the charts.

https://www.zerohedge.com/markets/stocks-soar-amid-hopes-regional-bank-crisis-will-lead-early-rate-cut-more-fed-easing

 

Time to be short stocks---this guy has been bullish for the last six months.

https://allstarcharts.com/why-its-time-to-short-stocks/

 

            The pain trade is lower.

            https://www.zerohedge.com/markets/goldmans-flows-guru-warns-pain-trade-now-lower-here

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          December construction spending was up 0.9% versus consensus of +0.5%.

                          https://www.calculatedriskblog.com/2024/02/construction-spending-increased-09-in.html

 

The January ISM manufacturing index came in at 49.1 versus projections of 47.0.

https://www.advisorperspectives.com/dshort/updates/2024/02/01/ism-manufacturing-index-contracts-for-15th-consecutive-month

 

The January manufacturing PMI was 50.7 versus estimates of 47.2.

https://www.advisorperspectives.com/dshort/updates/2024/02/01/s-p-global-us-manufacturing-pmitm-strongest-improvement-since-september-2022

 

January nonfarm payrolls grew by 353,000 versus predictions of 180,000; the January unemployment rate was 3.7% versus 3.8%.

 

                        International

 

                        Other

 

                          December median household income.

                          https://politicalcalculations.blogspot.com/2024/02/median-household-income-in-december-2023.html

 

The Fed

 

Stop the news conferences. I tend to agree. They are not just confusing but counterproductive, i.e., remember in December Powell gave an unexpectedly dovish narrative; Market roars.  Wednesday it was more hawkish than anticipated; Market tanks. Thanks for nothing. This is all somewhat reminiscent of the Bernanke/Yellen ‘on the one hand, on the other hand’ routine. Except all they did was confuse you. In Powell’s case, he is doing ‘on the one hand’ one month and Market reacts; then does ‘on the other hand’ at a later time and the Market gets whiplashed.

  https://gregmankiw.blogspot.com/2024/02/memo-to-fed-stop-news-conferences.html

 

  ECB sees profits and wages to determine inflation path.

  https://www.bloomberg.com/news/articles/2024-02-01/ecb-s-lane-sees-profits-and-wages-important-for-inflation-path?srnd=premium&sref=loFkkPMQ

 

 

  Bank of England opens door for rate cuts in 2024.

  https://www.bloomberg.com/news/articles/2024-02-01/bank-of-england-signals-rate-cuts-possible-once-inflation-eases?srnd=premium&sref=loFkkPMQ

 

            Fiscal Policy

 

Did Trump’s tariffs help the economy? The author says no; and I agree. However, Trump was attempting to counter (1) Chinese theft of US intellectual property and (2) NATO’s lack of self [military] support. There may have been a better way to do either. I won’t speculate on that; however, there is nothing like hitting someone in their bread basket to get their attention.

https://marginalrevolution.com/marginalrevolution/2024/01/did-the-trump-tariffs-help-the-heartland.html

 

House passes child credit tax cut---just what the economy needs as the deficit/debt soars.

https://finance.yahoo.com/news/the-us-house-passes-the-bipartisan-tax-deal-to-expand-the-child-tax-credit-up-next-the-senate-013737690.html

 

  And there is more wrong with it than just jacking up the deficit.

  https://www.wsj.com/articles/what-the-house-needs-to-know-before-voting-on-the-child-tax-credit-a03bd092?mod=opinion_lead_pos8

 

Inflation

 

  Two measures of inflation.

  https://www.advisorperspectives.com/dshort/updates/2024/01/31/two-measures-of-inflation-december-2023

 

                Recession

 

              Update on one measure of the probability of recession.

              https://econbrowser.com/archives/2024/02/probability-of-recession-term-spread-vs-term-spread-dsr-foreign-term-spread

 

     Bottomline

 

            Update on valuations.

            https://www.advisorperspectives.com/dshort/updates/2024/02/01/q-ratio-and-market-valuation-january-2024

                https://www.advisorperspectives.com/dshort/updates/2024/02/01/regression-to-trend-s-p-composite-142-above-trend-in-january

 

    News on Stocks in Our Portfolios

 

Apple (NASDAQ:AAPL) declares $0.24/share quarterly dividend, in line with previous.

 

Apple press release (NASDAQ:AAPL): Q1 GAAP EPS of $2.18 beats by $0.07.

Revenue of $119.6B (+2.1% Y/Y) beats by $1.34B.

 

FactSet Research Systems (NYSE:FDS) declares $0.98/share quarterly dividend, in line with previous

              

Exxon Mobil press release (NYSE:XOM): Q4 Non-GAAP EPS of $2.48 beats by $0.27.

Revenue of $84.34B (-11.6% Y/Y) misses by $4.48B

 

Exxon Mobil (NYSE:XOM) declares $0.95/share quarterly dividend, in line with previous.

 

 

What I am reading today

 

           

 

 

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