Wednesday, November 6, 2024

The Morning Call---It's not all wine and roses

 

The Morning Call

 

11/7/24

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/market-recaps/trump-quake-sparks-market-euphoria-gold-dips-dollar-rips

 

Note: as positive as yesterday’s pin action was, the moonshot was done on a huge gap up open which it almost surely be closed. The only question is timing. While I have my eye on a couple of stocks that will benefit from a Trump presidency, I am electing to be patient and await a pullback.

 

            Yearend rally starts today.

            https://www.zerohedge.com/markets/year-end-rally-starts-today-goldman-flows-guru-sees-institutional-fomo-feedback-loop

 

            The great gold puke?

            https://www.zerohedge.com/the-market-ear/great-gold-puke

 

            Long dollar the shakiest of Trump trades.

            https://www.zerohedge.com/markets/long-dollar-looks-shakiest-trump-trades

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications fell 10.8% while purchase applications were down 5.0%.

 

                        International

 

                          September EU PPI was down 0.6%, in line.

 

The October German services PMI came in at 51.6 versus forecasts of 51.4; the October composite PMI was 48.6 versus 48.4; the October EU services PMI was 51.6 versus 51.2; the October composite PMI was 50.0 versus 49.7.

 

                        Other

 

            Monetary Policy

 

              Four questions the Fed faces.

              https://www.wsj.com/economy/central-banking/fed-readies-a-rate-cut-and-faces-these-four-questions-d32c9e20?mod=economy_lead_story

 

            Inflation

 

              A look a multiple inflation indices.

              https://econbrowser.com/archives/2024/11/everyday-price-inflation-at-0-3-y-y

 

            Recession

 

              Update on the probability of recession

              https://politicalcalculations.blogspot.com/2024/11/us-recession-odds-fall-with-fed-rate.html

 

            The Election

 

              The aftermath.

              https://www.zerohedge.com/political/watch-live-election-night-results-roll

 

              Inflation risks are now even more underpriced.

              https://www.zerohedge.com/markets/inflation-risks-are-now-even-more-woefully-underpriced

 

       Bottom line

 

So far so good. At least at this point, my concerns regarding potential civil disruption are not being realized. Clearly a plus. That doesn't mean that there won’t be; but the hope now has to be that (1) all that rhetoric about the existential threat to democracy was just that---rhetoric---‘full of sound and fury, signifying nothing’ and (2) that the dems recognize their agenda is at least partially flawed.

 

That said, it is not all wine and roses. The US still faces a spending/deficit/debt problem that won’t be solved by Trump’s stated campaign promises. Indeed, it will only be exacerbated. That said, I am clinging to the hope that the recent Musk/Paulson comments are a sign that Trump may be prepared to do some serious budget cutting---‘clinging to the hope’ being the operative phrase. If that hope is misplaced then we are likely looking at a period of rising inflation, higher interest rates and slowing economic growth.

https://www.wsj.com/economy/what-a-trump-win-means-for-the-economy-50de4670?mod=economy_lead_pos1

 

More.

https://www.capitalspectator.com/how-will-trumps-election-win-change-the-macro-outlook/

 

Still more.

https://www.zerohedge.com/markets/trump-wins-here-are-economic-market-tax-tariff-immigration-and-regulation-implications

 

            And more.

            https://www.zerohedge.com/markets/next-stage-western-cilivization-dawns

 

    News on Stocks in Our Portfolios

 

Automatic Data Processing (NASDAQ:ADP) declares $1.54/share quarterly dividend, 10% increase from prior dividend of $1.40.

 

 

What I am reading today

 

            Quote of the day.

            https://cafehayek.com/2024/11/quotation-of-the-day-4820.html

 

 

 

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