The Morning Call---The tariff house of horrors

 

The Morning Call

 

6/27/24

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/yen-sanity-blows-jensenity-slows-bonds-bullion-dumped-big-tech-ex-nvda-jumps

 

            Hedge funds dump record amounts of tech stocks to retail.

            https://www.zerohedge.com/markets/party-almost-over-hedge-funds-dumping-record-amounts-tech-stocks-retail-investors

 

            High dispersion and low correlation.

            https://sherwood.news/markets/us-stocks-sp500-setting-new-records-even-as-they-do-nothing/

 

            Liquidity deteriorating in Treasury market.

            https://www.apolloacademy.com/liquidity-deteriorating-in-treasury-markets/

 

    Fundamental

 

 

              The Economy

 

                        US

 

Weekly intimal jobless claims totaled 233,000 versus projections of 236,000.

 

Q1 real consumer spending was up 1.5% versus consensus of +2.0%; the Q1 PCE price index was +3.1%, in line; the Q1 core PCE price index was +3.7% versus +3.6%; Q1 corporate profits were down 2.7% versus -1.7%.

 

                          May new home sales fell 11.3% versus expectations of +2.9%.

                          https://www.advisorperspectives.com/dshort/updates/2024/06/26/new-home-sales-plummet-may-2024

 

May durable goods orders rose 0.1% versus estimates of -0.1%; ex transportation, they were down 0.1% versus +0.2%.

 

                        International

 

Th June EU economic sentiment index came in at 96.4 versus predictions of 96.2; the June consumer confidence index was -14.0, in line; the June industrial sentiment index was -10.1 versus -9.6; the June services sentiment index was +6.5 versus +6.4.

 

                        Other

 

                          Architecture billings declined in May.

                          https://www.calculatedriskblog.com/2024/06/aia-architecture-billings-declined-in.html

 

            Fiscal Policy

 

              Economic history sounds alarm on US debt.

              Economic History—but Not Yet Financial Markets—Sounds an Alarm on American Debt Levels | American Enterprise Institute - AEI

 

            Inflation

 

              The difference between the price level and its rate of change.

              https://www.project-syndicate.org/commentary/elevated-price-levels-defining-economic-problem-us-presidential-election-by-stephen-s-roach-2024-06

 

            Tariffs

 

              The tariff house of horrors.

              https://econbrowser.com/archives/2024/06/truly-tariffying-a-economic-policy-house-of-horrors

 

            The Election

 

              The bond market is about to collide with the election.

  https://www.bloomberg.com/news/articles/2024-06-26/bond-market-in-step-with-fed-is-about-to-slam-into-us-election?srnd=homepage-americas&sref=loFkkPMQ

 

 

            The Financial System

 

              As expected, US banks passed latest stress test.

              https://www.zerohedge.com/markets/usual-all-us-banks-pass-feds-stress-test-goldman-unexpectedly-has-2nd-ugliest-credit-card

 

     Bottom line

 

            In defense of the standard deviation measure of risk.

            https://www.morningstar.com/columns/rekenthaler-report/standard-deviation-is-an-imperfect-measure-not-useless

 

            Why Q2 and Q3 earnings reports are less truthful than yearend results.

            https://klementoninvesting.substack.com/p/beware-of-companies-moving-targets

 

    News on Stocks in Our Portfolios

 

Paychex press release (NASDAQ:PAYX): Q4 Non-GAAP EPS of $1.12 beats by $0.02.

Revenue of $1.3B (+5.7% Y/Y) beats by $10M.

 

 

What I am reading today

 

            Quote of the day.

            https://www.adamsmith.org/blog/a-significant-mistake-by-willy-hague

 

 

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