The Morning Call--Crisis not calibration drives rate cuts

 

The Morning Call

 

6/28/24

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/bonds-bullion-bitcoin-big-tech-ex-nvda-bid-despite-macro-meltdown

 

            For the past twenty years, July has been the best month for the Market.

            https://www.carsongroup.com/insights/blog/here-comes-the-best-month-according-to-the-past-20-years/

 

            The stock market’s concentration.

            https://www.axios.com/2024/06/27/the-stock-markets-concentration-in-one-chart

 

            Mathematically, volatility can’t go much lower.

            https://www.zerohedge.com/markets/last-time-happened-volmageddon-struck

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

May personal income rose 0.5% versus predictions of +0.4%; May personal spending was up 0.2% versus +0.3%; the May PCE price index was flat, in line.

                          https://www.zerohedge.com/markets/suprecore-prices-rise-49th-straight-month-spending-disappoints

 

                          May pending home sales fell 2.1% versus forecasts of +2.5%.

                          https://www.advisorperspectives.com/dshort/updates/2024/06/27/pending-home-sales-fall-may-2024

 

The June Kansas City Fed manufacturing index was -11 versus projections of +2.

                          https://www.advisorperspectives.com/dshort/updates/2024/06/27/kansas-city-fed-manufacturing-activity-june-2024

 

                        International

 

The May Japanese unemployment rate was 2.6%, in line; May preliminary industrial production was up 2.8% versus +2.0%; May YoY housing starts fell 5.3% versus -6.1%; May YoY construction orders were up 2.1% versus +23.0%; June YoY CPI was up 2.3%, in line; June YoY core CPI was up 2.1% versus 2.0%.

 

Q1 UK GDP growth a +0.7% versus estimates of +0.6%; Q1 business investment was up 0.5% versus +0.9%.

 

The June German unemployment rate was 6.0% versus expectations of 5.9%.

 

                        Other

 

            Monetary Policy

 

History shows that crisis not calibration drive deep rate cuts (like the five projected   in 2025).

  https://www.bloomberg.com/news/newsletters/2024-06-27/world-economy-latest-fed-history-shows-crises-not-calibration-drive-deep-cuts?srnd=homepage-americas&sref=loFkkPMQ

 

            Recession

 

              Americans’ pandemic savings are gone and the economy is bracing for impact.

              https://www.bloomberg.com/news/articles/2024-06-27/us-economy-feels-impact-of-dried-up-pandemic-savings?srnd=homepage-americas&sref=loFkkPMQ

 

              Eleven signs that the US consumer is in worse shape than most people think.

              https://www.zerohedge.com/personal-finance/11-signs-us-economy-far-worse-shape-most-people-think

 

            Geopolitics

 

              Russia tepid response (at least so far).

              https://www.zerohedge.com/geopolitical/russias-response-ukraines-us-backed-bombing-beachgoers-wasnt-what-many-expected

           

    Bottom line

 

            The case for broadening of participation in the rising market.

            https://investorplace.com/hypergrowthinvesting/2024/06/how-to-prepare-for-the-great-stock-market-broadening-of-2024/

 

            Goldman’s initial stab at positioning for potential election outcomes.

            https://www.zerohedge.com/markets/goldman-election-risk-starting-creep-markets-here-are-main-scenarios

 

    News on Stocks in Our Portfolios

 

Nike press release (NYSE:NKE): Q4 Non-GAAP EPS of $1.01 beats by $0.17.

Revenue of $12.61B (-1.7% Y/Y) misses by $250M.

           

Kroger (NYSE:KR) declared $0.32/share quarterly dividend, 10.3% increase from prior dividend of $0.29.

 

What I am reading today

 

           

                        The medicine for wayward youth (must read).

            https://lawliberty.org/molieres-medicine-for-wayward-youth/

 

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