Thursday, June 20, 2024

The Morning Call---The Market's concentrated bet

 

The Morning Call

 

6/20/24

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/magnificent-7-stocks-fade-nvda-becomes-worlds-largest-company-ever

 

            Time to hedge.

            https://www.zerohedge.com/the-market-ear/markets-overheat-time-hedge

 

            The bull in no sell offs.

            https://www.zerohedge.com/the-market-ear/bull-no-sell-offs

 

            376 days and counting.

            https://www.zerohedge.com/markets/376-days-and-counting

 

            The continuing saga of low breadth.

            https://sherwood.news/markets/us-stocks-low-breadth-explained/

 

            Central banks expect to buy more gold this year.

            https://www.wsj.com/economy/central-banking/central-banks-expect-to-snap-up-more-gold-this-year-amid-dollar-pessimism-096ce58f?mod=economy_lead_story

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications were up 0.9% while purchase applications were up 2.0%.

 

Weekly initial jobless claims totaled 238,000 versus expectations of 235,000.

 

                          Month to date retail chain store sales grew faster than in the prior week.

                       

  May industrial production was up 0.9% versus consensus of +0.3%;       capacity utilization was 78.7% versus 78.6%.

                          https://www.calculatedriskblog.com/2024/06/industrial-production-increased-09-in.html

 

May housing starts declined 5.5% versus predictions of +2.2%; May building permits were down 3.8% versus +2.0%.

 

The June Philadelphia Fed manufacturing index came in at 1.3 versus forecasts of 5.0.

 

                          The June housing index was reported at 43 versus projections of 45.

                          https://www.calculatedriskblog.com/2024/06/nahb-builder-confidence-declined-in-june.html

 

                        International

 

                          April EU YoY construction output fell 1.1% versus estimates of +1.1%.

 

  The May Japanese trade balance was -Y1221.3 billion versus expectations of -Y1300.0 billion.

 

  May EU CPI was +0.3% versus consensus of +0.4%; core CPI was +0.5%   versus +0.2%.

 

                          May German PPI was flat versus predictions of +0.3%.

 

                        Other

 

                          Update on business cycle indicators.

                          https://econbrowser.com/archives/2024/06/business-cycle-indicators-mid-june-2

 

            The Fed

 

              Bank of England keeps rates unchanged.

              https://www.zerohedge.com/markets/bank-england-keeps-rates-unchanged-dovish-hold-august-rate-cut-deck

 

              Goldman sees two rate cuts this year.

  https://www.bloomberg.com/news/articles/2024-06-18/goldman-sees-us-jobs-at-inflection-point-sticks-to-two-cut-call?srnd=homepage-americas&sref=loFkkPMQ

 

              This analyst says the Fed needs to cut rates sooner.

              https://www.ft.com/content/40301e87-ca39-4b60-a9f2-88633e5f8ea7

 

              So does this one.

              https://www.cnbc.com/2024/06/18/economist-sahm-who-devised-recession-rule-says-the-fed-is-playing-with-fire-.html

 

            Fiscal Policy

 

              CBO raises FY2024 estimate of budget deficit.

              https://www.zerohedge.com/markets/cbo-figures-out-how-math-raises-2024-us-budget-deficit-400bn-19-trillion

 

              The economic world that we have lost.

              https://www.aei.org/op-eds/the-economic-world-weve-lost/

 

              Another expensive government project that doesn’t work.

              https://www.zerohedge.com/geopolitical/expensive-incompetence-us-giving-230-million-gaza-air-pier

 

            Recession

 

              Big four recession indicators.

              https://www.advisorperspectives.com/dshort/updates/2024/06/18/recession-indicators-industrial-production-may-2024

 

              Recession risk rising?

              https://www.capitalspectator.com/is-us-recession-risk-rising-warning-signs-are-starting-to-emerge/

 

            The Financial System

 

              Giant Japanese bank reveals massive losses.

              https://www.zerohedge.com/markets/music-just-stopped-banking-giant-norinchukin-liquidate-63-billion-treasuries-and-european

 

     Bottom line.

 

            A concentrated bet (must read).

            https://alhambrapartners.com/2024/06/16/weekly-market-pulse-a-concentrated-bet/?src=news

 

            BofA survey shows that investors will continue to pump money into stocks.

https://www.bloomberg.com/news/articles/2024-06-18/stocks-bofa-poll-shows-investors-primed-to-fuel-rally-with-cash?srnd=homepage-americas&sref=loFkkPMQ

 

            AI enthusiasm prompts three Wall Street banks to up year stock market forecasts.

            https://finance.yahoo.com/news/ai-enthusiasm-prompts-3-wall-street-banks-to-raise-stock-market-forecasts-100027154.html

 

    News on Stocks in Our Portfolios

 

Mastercard (NYSE:MA) declares $0.66/share quarterly dividend, in line with previous.

 

What I am reading today

 

            The queen who survived Henry VIII.

            Meet Catherine Parr—the queen who survived Henry VIII (nationalgeographic.com)

 

            AI and the Supreme Court.

            https://marginalrevolution.com/marginalrevolution/2024/06/claude-3-for-scotus.html

 

            Video of the day.

           

 

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