The Morning Call---Ray Dalio warns that US government debt at dangerous level

 

The Morning Call

 

5/17/24

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/Dow-40000

 

            Nothing is going to stop us now.

            https://www.zerohedge.com/markets/there-isnt-much-can-stop-market-now

 

            Corrections happen during bull markets.

            https://allstarcharts.com/corrections-happen-during-bull-markets/

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

April industrial production was flat versus estimates of +0.1%; capacity utilization was 78.4%, in line.

                          https://www.advisorperspectives.com/dshort/updates/2024/05/16/recession-indicators-industrial-production-april-2024

 

                         

                        International

 

April Chinese YoY industrial production rose 6.7% versus consensus of +5.5%; April YoY retail sales were up 2.3% versus +3.8%; April YoY fixed investment was up 4.2% versus +4.6%; the April unemployment rate was 5.0% versus 5.2%.

 

The April EU CPI was up 0.6%, in line.

 

                        Other

 

                          Mid-May business cycle indicators.

                          https://econbrowser.com/archives/2024/05/business-cycle-indicators-mid-may-3

 

            Fiscal Policy

 

              Ray Dalio warns that US government debt at dangerous level.

              https://www.ft.com/content/d54e5886-7f9a-49c4-a915-61ca506e4514

 

            Inflation

 

              How to measure inflation?

              https://www.ft.com/content/b95701eb-c434-4187-a329-9ca4e0c8f2e9

 

              Out of control inflation.

              https://www.zerohedge.com/personal-finance/out-control-inflation-it-now-takes-least-177798-family-4-live-comfortably-us

 

            Recession

 

              US still headed for a soft landing.

              https://www.wsj.com/finance/stocks/america-is-still-headed-for-a-soft-landing-97db0be8?mod=economy_lead_pos1

 

              Mortgage delinquencies increased slightly in Q1.

              https://www.calculatedriskblog.com/2024/05/mba-mortgage-delinquencies-increased.html

 

            The Financial System

 

              The ECB warns EU central banks.

              https://www.ft.com/content/9c2dad74-e3bb-4c8c-b190-41cf2e838dde

 

            The coronavirus

 

              The Operation Warp Speed story worsens by the day.

              https://www.realclearmarkets.com/articles/2024/05/16/the_operation_warp_speed_story_worsens_by_the_day_1030948.html

 

    Bottom line.

 

Another argument for higher stock prices based on lower inflation due to declining owner’s equivalent rent (OER). Don’t forget the study I cited last week that showed that the forward data on OER is already starting to rise again.

            https://investorplace.com/hypergrowthinvesting/2024/05/stocks-poised-to-soar-on-softer-inflation-report/

               

How effective has an inverted yield curve been in forecasting a recession and/or a decline in stock prices?

https://caia.org/blog/2024/05/14/far-perfect-inverted-yield-curves-dont-reliably-predict-recessions-or-direction

 

                Ten year Treasury yield likely too high.

            https://www.capitalspectator.com/10-year-us-treasury-yield-fair-value-estimate-11-april-2024-2/

 

    News on Stocks in Our Portfolios

 

Home Depot (NYSE:HD) declared $2.25/share quarterly dividend, in line with previous.

Altria (NYSE:MO) declares $0.98/share quarterly dividend, in line with previous.

 

 

What I am reading today

 

           

 

 

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