Friday, October 25, 2024

The Morning Call---Is the era of big price hikes over?

 

The Morning Call

 

 10/25/24

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/market-recaps/traders-buy-everything-they-sold-yesterday-rate-cut-expectations-rebound

 

            Buying could get much bigger.

            https://www.zerohedge.com/the-market-ear/big-buying-could-get-much-bigger

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

September durable goods orders fell 0.8% versus projections of -1.0%; ex transportation, they were up 0.4% versus -0.1%.

 

                          September new home sales rose 4.1% versus consensus of -2.2%.

                          https://www.calculatedriskblog.com/2024/10/new-home-sales-increase-to-738000_24.html

 

The October Kansas City Fed manufacturing index was 0 versus predictions of -16.

 

The October flash manufacturing PMI was 47.8 versus forecasts of 47.7; the October flash services PMI was 55.3 versus 55.0; the October flash composite PMI was 54.3 versus 54.0.

 

                        International

 

The August Japanese leading economic indicators were reported at 106.9 versus expectations of 106.7; the October YoY CPI was 1.8% versus 1.7%; ex food and energy, it was 1.8% versus 1.0%.

 

The October UK consumer confidence index was -21, in line.

 

The October German business climate index was 86.5 versus estimates of 85.6; the October current conditions index was 85.7 versus 84.4.

 

                        Other

 

                          Mortgage delinquency rate increased in September.

                          https://www.calculatedriskblog.com/2024/10/ice-mortgage-delinquency-rate-increased.html

 

            Monetary Policy

 

              Why the negative effects of high interest rates on corporations have been small.

              https://www.apolloacademy.com/corporate-net-interest-payments-at-record-low-levels-despite-fed-hikes/

 

              The future of QT.

              https://wolfstreet.com/2024/10/22/feds-qt-balance-sheet-composition-and-ample-liquidity-dallas-feds-lorie-logan-outlines-the-future-of-the-balance-sheet/

 

            Inflation

 

I like this discussion on inflation and agree with much that the author says. But what he fails to say, in my opinion, is that it is the disconnect between government spending and government income (taxes) that is the precipitating factor aggravating inflation. Because the Fed had to fund that disparity---which increases the money supply which means more money chasing fewer goods which spawns inflation which incites the ‘bond vigilantes.’

https://disciplinefunds.com/2024/10/22/we-need-to-have-a-talk-about-bond-vigilantes/

 

              Is the era of big price hikes over?

              https://www.bloomberg.com/news/articles/2024-10-24/era-of-big-price-hikes-is-over-giving-comfort-to-the-fed?srnd=homepage-americas

 

            Recession

 

              Eurozone economic activity stagnates.

              https://www.wsj.com/economy/global/eurozone-activity-contracts-again-pmi-surveys-suggest-55991ed3?mod=economy_lead_pos1

 

            Tariffs

 

              The economic risks of tariffs.

              https://www.wsj.com/opinion/donald-trump-tariffs-economy-2024-election-kamala-harris-robert-lighthizer-29c07e94?mod=opinion_feat1_editorials_pos3

 

     Bottom line

 

            Where the risks are.

            https://www.zerohedge.com/markets/stock-markets-bogeyman-once-again-move

 

            Here is another argument for lower equity returns over the next ten years,

            Lower Forward Returns Are A High Probability Event - RIA

 

            Bonds face double whammy.

            https://www.zerohedge.com/markets/bond-bulls-face-risk-double-whammy-election-looms

 

            BRICS summit puts focus on dethroning the dollar.

            https://www.zerohedge.com/economics/brics-summit-puts-focus-dethroning-us-dollar-putin-unveils-brics-banknote

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

            Friday morning humor.

            9 Ways Trump Is Exactly Like Hitler | Babylon Bee

 

 

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