The Morning Call---Stocks all-in for a soft landing

 

The Morning Call

 

8/30/24

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/nvidia-dumps-gold-pumps-dollar-general-craters-most-record

 

            Stocks are all-in for a soft landing.

            https://www.zerohedge.com/markets/stocks-are-all-soft-landing-what-if-theyre-wrong

 

            The Market reeks of complacency.

            https://www.zerohedge.com/markets/unanimity-bullish-views-market-reeks-complacency

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          July pending home sales fell 5.5% versus forecasts of +0.4%.

                          https://www.advisorperspectives.com/dshort/updates/2024/08/29/pending-home-sales-unexpectedly-fall-5-5-in-july-to-all-time-low

 

 

July personal income was up 0.3% versus expectations of up 0.2%; July personal sending was up 0.5%, in line.

 

                         July CPI was +0.2%, in line; July core CPI was +0.2%, also in line.

 

                        International

 

The July Japanese unemployment rate was 2.7% versus predictions of 2.5%; July industrial production was up 2.8% versus up 3.3%; July retail sales were up 0.2% versus +0.3%; July YoY housing starts fell 0.2% versus -1.0%; August YoY CPI rose 2.4% versus +2.2%; ex food and energy, it was up 1.6%, in line.

 

The August German unemployment rate was 6.0%, in line.

 

The August EU CPI was up 0.2%, in line: the August unemployment rate was 6.4% versus 6.5%.

 

                        Other

 

                          The impact of AI on cap ex spending.

                          https://www.apolloacademy.com/capex-spending-on-ai-continues-to-be-a-significant-tailwind-to-the-economic-outlook/

 

                          The US mortgage rate whiplash.

                          https://www.ft.com/content/57301a11-063f-42e1-adfb-b7b74ea177d6

 

                          A weaker dollar is good for almost everyone.

  https://www.bloomberg.com/opinion/articles/2024-08-29/global-currencies-king-dollar-s-softening-is-good-news-for-nearly-everyone?srnd=homepage-americas&sref=loFkkPMQ

 

                          Analysis of yesterday’s GDP report.

                          https://www.zerohedge.com/markets/q2-gdp-unexpectedly-revised-higher-bizarre-surge-personal-consumption

 

            Fiscal Policy

 

              The latest Treasury financing strategy.

              https://wolfstreet.com/2024/08/28/treasury-department-aggressively-pushes-down-long-term-interest-rates-via-shift-to-t-bill-issuance-and-bond-buybacks/

 

            Geopolitics

 

              The US geopolitical hubris.

              https://www.zerohedge.com/markets/us-geopolitical-hubris-presents-terrifying-fat-tail-risks

 

     Bottom line

 

            Debt load and corporate profitability.

            https://www.advisorperspectives.com/commentaries/2024/08/29/debt-burdens-elevated-rates-test-equity-investors

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            Quote of the day.

            https://cafehayek.com/2024/08/quotation-of-the-day-4749.html

 

            Do what brings you joy.

            https://wggtb.substack.com/p/joy

 

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

 

 

 

The Morning Call---M2 continues to slow

 

The Morning Call

 

8/29/24

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/big-tech-bullion-bitcoin-battered-nvdas-big-night

 

            Stubbornly stressed stocks.

            https://www.zerohedge.com/the-market-ear/stubbornly-stressed-stocks

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly initial jobless claims totaled 231,000 versus consensus of 232,000.

 

Q2 (2^nd est.) GDP growth was 3.0% versus projections of 2.8%; Q2 (2^nd est.) real consumer spending was +2.9% versus +2.3%; Q2 (2^nd est.) core PCE was +2.8% versus +2.9%; Q2 (preliminary) corporate profits were up 1.7% versus -1.5%.

 

                        International

 

                          August German CPI was -0.1% versus estimates of +0.1%.

 

The August EU economic sentiment index was 96.6 versus expectations of 95.8.; the August consumer confidence index was -13.5 versus -13.4; the August industrial sentiment index was +9.7 versus -10.6; the August services sentiment index was 6.3 versus 5.2.

 

                        Other

 

                          August economic sentiment and confidence.

                          https://econbrowser.com/archives/2024/08/sentiment-and-confidence

 

                          Protests in China on the rise.

  https://www.bloomberg.com/news/articles/2024-08-28/china-s-economic-malaise-stirs-rising-protests-on-labor-housing?srnd=homepage-americas&sref=loFkkPMQ

 

                                                  African debt crisis has catastrophic implications.

                          https://www.nytimes.com/2024/08/28/business/african-debt-crisis.html

 

                          Germany falling into crisis.

  https://www.bloomberg.com/news/newsletters/2024-08-28/germany-falling-into-crisis-as-berlin-suffers-vision-deficit?srnd=homepage-americas&sref=loFkkPMQ

 

 

            Monetary Policy

 

              The irrelevancy of the Fed.

              https://alhambrapartners.com/weekly-market-pulse-the-fed-declares-victory/

 

M2 (and risk of inflation) continues to decline. That means that I am going to have to revise my inflation forecast, at least for the near term. But the bigger problem remains, i.e., if our political class continues its profligate ways (more spending without a commensurate increase in taxes), the Fed will almost surely be forced to monetize that spending and that means inflation.

https://scottgrannis.blogspot.com/2024/08/excess-m2-continues-to-fade-away.html

 

              The alternative is recession.

              https://www.bostonherald.com/2024/08/21/antoni-coming-recession-may-already-have-arrived/

 

            Fiscal Policy

 

              God forbid either candidate has their way.

              https://www.nytimes.com/2024/08/27/opinion/harris-trump-economic-populism.html

 

              The foolishness (and unworkability) of taxing unrealized gains.

              https://www.cato.org/blog/harriss-taxes-unrealized-gains-only-tip-5-trillion-tax-iceberg

 

     Bottom line

 

            Past performance is a public enemy (must read).

            https://www.ft.com/content/a9b53d71-3bd5-43dd-80ac-399957614374

 

            How dividends impact stock performance (must read).

            https://politicalcalculations.blogspot.com/2024/08/dividends-and-market-performance-of.html

 

            Ten facts about the Treasury market.

            https://www.apolloacademy.com/10-facts-about-the-us-treasury-market/

 

            When will Nivida’s run end?

            https://sherwood.news/markets/nvidia-craziest-charts-in-market-history/

 

Investor Alert

 

            While GLD has remains above its all-time high, it is struggling to do so. In addition, the latest M2 and inflation numbers (see above) are not fitting my higher inflation scenario.  Finally, this was a trade not an investment. I am selling my GDX position.

 

            In my quarterly review of Starbucks, it failed to meet the minimum financial criteria for inclusion in our Universe. Accordingly, I am selling the Aggressive Growth Portfolio’s position in SBUX and removing it from the Aggressive Growth Universe.

 

    News on Stocks in Our Portfolios

 

What I am reading today

 

 

 

 

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

 

 

 

The Morning Call--Recession risk low based on latest nowcasts

 

The Morning Call

 

8/28/24

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/gold-hits-new-record-high-bonds-bid-nvda-earnings-loom

 

            Overbought conditions set up short term correction.

            Overbought Conditions Set Up Short-Term Correction - RIA (realinvestmentadvice.com)

 

            Stocks are usually weak heading into a national election.

https://www.riskhedge.com/outplacement/ai-makes-us-more-human/rcm?utm_campaign=RH-144&utm_content=RH144OP615&utm_medium=ED&utm_source=rcm

 

            But don’t get too bearish.

            https://allstarcharts.com/how-bearish-is-this/

 

            A potential blowup in the TLT trade.

            https://www.zerohedge.com/markets/will-1-trillion-treasury-carry-trades-blow-clearinshouses

 

            Is gold losing its shine?

            https://www.zerohedge.com/the-market-ear/gold-bull-run-losing-its-shine

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications were up 0.5% while purchase allocations were up 1.0%.

 

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

 

The June Case Shiller home price index was up 0.6% versus forecasts of +1.0%.

https://www.advisorperspectives.com/dshort/updates/2024/08/27/sp-case-shiller-home-price-index-june-2024

 

The August consumer confidence index came in at 103.3 versus projections of 100.7.

https://www.advisorperspectives.com/dshort/updates/2024/08/27/consumer-confidence-hits-6-month-high-in-august

 

The August Richmond Fed manufacturing index was -19 versus consensus of -14.

 

                        International

 

The June Japanese final leading economic indicator index reading was 109.0 versus predictions of 108.6.

 

                        Other

 

            Fiscal Policy

 

              When Keynes killed laissez faire.

              https://lawliberty.org/when-keynes-killed-laissez-faire/?mc_cid=701e504967&mc_eid=345c45bfca

             

  Why massive deregulation is difficult.

              https://marginalrevolution.com/marginalrevolution/2024/08/why-massive-deregulation-is-very-difficult.html

 

                Inflation

 

              EU inflation expectations fall.

              https://www.ft.com/content/284d893b-d4fb-4628-a526-5feb2768c14e

 

                Recession

 

              Recession risk low based on latest nowcasts.

              https://www.capitalspectator.com/us-recession-risk-is-still-low-via-q3-gdp-nowcasts/

 

              Hints of a recession.

              https://www.zerohedge.com/economics/i-feel-recession-going-hit-us-dallas-richmond-philly-fed-surveys-slump

 

              Highflyer’s stock price crash sends warning on Chinese economy.

  https://www.bloomberg.com/news/articles/2024-08-27/china-s-crashing-consumer-star-sounds-alarm-on-economic-growth?srnd=homepage-americas&sref=loFkkPMQ

 

 

                Geopolitics

 

As you know, one of my pet peeves is the neocons love of spending our money and killing our kids to no avail (e.g., Afghanistan, Iraq, Vietnam). Historically, neocons have been associated with republicans---and I hold them at fault for the aforementioned missteps (at least the first two). Now it appears that the democrats are embracing a new and improved thesis for wasting money and killing our youth.

https://www.nakedcapitalism.com/2024/08/the-rising-democratic-threat-of-hopeful-militarism.html

 

    Bottom line

 

            IPO market gets cold feet.

            https://www.wsj.com/finance/stocks/the-ipo-market-gets-cold-feet-80222c4c?mod=finance_lead_pos1

 

    News on Stocks in Our Portfolios

 

What I am reading today

 

            Wednesday morning humor.

            https://youtu.be/Nyvxt1svxso

 

 

 

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

 

 

 

The Morning Call---Rate cuts versus fiscal policy

 

The Morning Call

 

8/27/24

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/dow-hits-record-high-nasdaq-dumps-oil-gold-jumps

 

            Bullish sentiment rising.

            https://www.bespokepremium.com/interactive/posts/think-big-blog/bulls-take-off

 

            And broadening.

            https://allstarcharts.com/3trillion-nvda/

 

            Gold hits new high.

            https://www.cnbc.com/2024/08/26/gold-holds-ground-on-september-us-rate-cut-expectations.html

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

The August Dallas Fed manufacturing index came in at -9.5 versus estimates of -14.0.

                          https://www.advisorperspectives.com/dshort/updates/2024/08/26/dallas-fed-manufacturing-business-activity-reaches-19-month-high-in-august

 

                        International

 

Q2 final German GDP growth was -0.1%, in line; the September consumer confidence index was -22 versus predictions of -18.

 

                        Other

 

            Monetary Policy

 

              The Powell pivot.

              https://disciplinefunds.com/2024/08/25/three-things-post-weekend-edition/

 

              Fed rate cuts versus inflationary fiscal policies.

  https://wolfstreet.com/2024/08/24/the-rate-cuts-powell-dangled-in-front-of-markets-for-next-year-may-slam-into-inflationary-fiscal-economic-policies-of-whoever-is-in-the-white-house/

 

 

            Inflation

 

              What the claims of price gouging ignore.

              https://www.msn.com/en-us/money/markets/what-kamala-harris-doesn-t-get-about-food-costs/ar-AA1pk6zu

 

            Civil Strife

 

              Feedback from the democratic convention from a liberal democrat.

              https://www.nakedcapitalism.com/2024/08/former-ambassador-chas-freeman-possible-disintegration-of-civilian-government-at-year-end.html

 

            Geopolitics

 

              This is a bit too partisan for me; but it makes a point.

              https://townhall.com/columnists/kurtschlichter/2024/08/26/what-is-happening-in-the-ukraine-war-should-scare-the-hell-out-of-us-n2643880

 

     Bottom line

 

            The latest from John Mauldin.

            https://www.advisorperspectives.com/commentaries/2024/08/26/unemployment-inflation-feds-choice-john-mauldin

 

    News on Stocks in Our Portfolios

 

Bank of Nova Scotia press release (NYSE:BNS): Q3 Non-GAAP EPS of C$1.63.

Revenue of C$8.36B (+3.6% Y/Y).

Bank of Nova Scotia (NYSE:BNS) declares CAD 1.06/share quarterly dividend, in line with previous.

What I am reading today

 

            How to avoid online scams.

            https://www.nytimes.com/2024/08/10/business/online-scams-advice.html

 

 

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