The Morning Call--Is there any way out of the current debt crisis?

 

The Morning Call

 

6/6/24

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/buy-everything-sp-hits-all-time-high-nvidia-passes-3-trillion

 

            Goldman trader on market volatility and stock fragility.

            https://www.zerohedge.com/markets/goldman-trader-explains-why-there-oversupply-volatility-despite-greatest-stock-fragility-30

 

            Bond traders pile into bets favoring lower rates (faster Fed cuts).

            https://www.bloomberg.com/news/articles/2024-06-04/bond-traders-pile-into-fresh-bets-on-faster-pace-of-fed-cuts?srnd=homepage-americas&sref=loFkkPMQ

 

            Part two.

            https://www.capitalspectator.com/is-the-bond-market-rethinking-the-outlook-for-rate-cuts/

 

            A potential dollar breakdown.

            https://allstarcharts.com/weighing-a-potential-dollar-breakdown/

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

The May services PMI was 54.8, in line; the May composite PMI was 54.5 versus 54.4.

                          https://www.advisorperspectives.com/dshort/updates/2024/06/05/sp-global-services-pmi-may-2024

 

                          The May ISM nonmanufacturing index was 53.8 versus estimates of 50.8.

                          https://www.advisorperspectives.com/dshort/updates/2024/06/05/ism-services-pmi-grew-may-2024

 

                                  May auto sales totaled 15.9 million versus expectations of 15.8 million.

 

                        International

 

April German factory orders fell 0.2% versus consensus of +0.3%; the May construction PMI was 38.5 versus 39.0.

 

The May EU construction PMI as 42.9 versus projections of 43.0; the May UK construction PMI was 54.7 versus 52.8.

 

                        Other

 

                          The latest economic review from my favorite optimist.

                          https://scottgrannis.blogspot.com/2024/06/tight-money-hasnt-hurt-corporate-profits.html

 

                          Lumber prices down slightly YoY.

                          https://www.calculatedriskblog.com/2024/06/update-lumber-prices-down-slightly-yoy.html

 

            The Fed

 

              As expected, the ECB cuts rates, ditches 2% inflation goal.

              https://www.zerohedge.com/markets/ecb-cuts-rates-first-time-2019-does-not-pre-commit-particular-rate-path

             

 But it wasn’t the first central bank to do so.

              https://www.ft.com/content/284dec22-0f84-4d45-9b32-dc4a9ed1d168

 

Note: a reminder that historically recessions begin not when the yield curve inverts but when it uninverts, i.e., when short rates are cut.

 

            Fiscal Policy

 

              Is there any way out of the current debt crisis?

              https://www.washingtontimes.com/news/2024/jun/3/is-there-any-way-out-of-global-debt-crisis/

 

              The Treasury’s dastardly debt disaster.

              https://dailycaller.com/2024/06/04/opinion-dissecting-the-us-treasurys-dastardly-debt-disaster-james-carter/

 

              Can electricity demand cure our debt problem?

              https://www.advisorperspectives.com/commentaries/2024/06/05/electricity-demand-cure-debt-concerns-lance-roberts

 

            Recession

 

              Pay attention to the employment data.

              https://www.ft.com/content/247c45ab-773d-492c-8d00-82c378e52a49

 

Job growth and illegal aliens. Be sure to understand the math in the author’s thesis. The situation may not be as dire as portrayed.

              https://www.zerohedge.com/economics/wall-street-admits-biggest-economic-shocker-all-jobs-past-year-have-gone-illegal-aliens

 

            The Financial System

 

              FDIC reports that the number of problem banks is growing.

              https://www.zerohedge.com/markets/number-problem-banks-climbs-1st-quarter-new-fdic-report-finds

 

     Bottom line

 

            The Minsky market.

            https://awealthofcommonsense.com/2024/06/the-minsky-incineration/

 

            May dividends by the numbers.

              https://politicalcalculations.blogspot.com/2024/06/dividends-by-numbers-in-may-2024.html

 

    News on Stocks in Our Portfolios

 

General Dynamics (NYSE:GD) declares $1.42/share quarterly dividend, in line with previous.

What I am reading today

 

            Quote of the day.

            https://cafehayek.com/2024/06/quotation-of-the-day-4598.html

 

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.