Wednesday, September 4, 2024

The Morning Call--Market risks increase in September

 

The Morning Call

 

9/4/24

 

The Market

         

    Technical

 

Tuesday in the charts.

https://www.zerohedge.com/markets/semis-slaughtered-september-starts-carnage-everywhere

 

Note: stocks took on the chin yesterday. As a result, (1) the S&P failed to make a new high and (2) it is close to a challenge of its 50 DMA [~5497]. Of course, one day does not a trend make; so as always, follow through is important. But a dip below the 50 DMA, opens the way to the 100 DMA (~5368) and the 23.6% Fibonacci retracement level (~5157)---which also marked the low of the ‘Yen carry trade selloff’.

 

            More charts to consider.

            https://www.zerohedge.com/the-market-ear/maybe-earnings-numbers-are-just-wrong

 

            Overbought conditions set up short term correction.

            https://www.advisorperspectives.com/commentaries/2024/09/03/overbought-conditions-short-term-correction

 

            Market risks increase in September.

            https://www.zerohedge.com/markets/risks-facing-bullish-investors-september-begins

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications were up 1.6% while purchase applications were up 3.0%.

 

The July trade balance was -$78.8 billion versus expectations of -$79.0 billion.

 

                          July construction spending fell 0.3% versus consensus of 0.0%.

 

                          The August manufacturing PMI came in at 47.9 versus predictions of 48.0.

                          https://www.advisorperspectives.com/dshort/updates/2024/09/03/sp-global-manufacturing-pmi-august-2024

 

                          The August ISM manufacturing index was 47.2 versus estimates of 47.5.

                          https://www.advisorperspectives.com/dshort/updates/2024/09/03/ism-manufacturing-index-contracts-august-2024

 

                        International

 

                          The July EU PPI was +0.8% versus projections of +0.3%.

 

The August Japanese services PMI was 53.7 versus forecasts of 54.0; the August composite PMI was 52.9 versus 53.0; The August Chinese Caixin service PMI was 51.6 versus 52.2; the August composite PMI was 51.2 versus 51.0; the August German services PMI was 51.2 versus 51.4; the August composite PMI was 48.4 versus 48.5; the August EU services PMI was 52.9 versus 53.3; the August composite PMI was 51.0 versus 51.2; the August UK services PMI was 53.7 versus 53.3; the august composite PMI was 53.8 versus 53.4.

 

                        Other

 

                          Creative destruction rips through the commercial property market.

                          https://www.ft.com/content/531f2cda-f378-441c-8158-207a1305d7de

 

            Monetary Policy

 

              What rate cuts mean for GDP growth and inflation.

              https://www.apolloacademy.com/quantifying-what-fed-cuts-mean-for-gdp-and-inflation/

 

            Fiscal Policy

 

              Taxing unrealized capital gains is a terrible idea.

              https://marginalrevolution.com/marginalrevolution/2024/09/taxing-unrealized-capital-gains-is-a-terrible-idea.html

 

              Stupid price gouging discourse (from my favorite liberal blogger).

              https://www.nakedcapitalism.com/2024/09/the-stupid-price-gouging-discourse.html

 

The lack of accountability in spending. This article addresses spending on defense. While it implies the lack of accountability, it fails to focus on the most elementary aspect of budgeting. The Pentagon has never passed an audit and, hence, is basically immune from repercussions for irresponsible spending. That has to stop. The examples of waste in the military are too innumerable to list. The aggregiousness of this is matched only by the waste of lives pursuing unwinnable wars.

              https://responsiblestatecraft.org/f-35-most-expensive/

 

            Civil Strife

 

              The West’s real enemy.

              https://www.zerohedge.com/political/david-sacks-wests-real-enemy-itself

 

     Bottom line

 

            Wall Street strategists face their own short squeeze.

            https://www.bloomberg.com/opinion/articles/2024-09-03/wall-street-strategists-face-their-own-short-squeeze?srnd=homepage-americas&sref=loFkkPMQ

 

            The demand for ‘fall back’ money.

            https://www.bloomberg.com/news/newsletters/2024-09-02/gold-is-rising-because-of-demand-for-fallback-money?srnd=homepage-americas&sref=loFkkPMQ

 

            Update on valuations.

            https://www.advisorperspectives.com/dshort/updates/2024/09/03/p-e10-and-market-valuation-august-2024

                https://www.advisorperspectives.com/dshort/updates/2024/09/03/q-ratio-and-market-valuation-august-2024

                https://www.advisorperspectives.com/dshort/updates/2024/09/03/regression-to-trend-s-p-composite-164-above-trend-in-august

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            Being careful how you read/interpret the news.

            https://www.tker.co/p/facts-in-the-news-that-can-lead-you-astray

 

            Exercising our character.

            https://traderfeed.blogspot.com/2024/09/exercising-our-character-improving.html

 

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

 

 

 

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