The Morning Call (early)--The Trump Put

 

The Morning Call

 

4/10/25

 

I am having surgery bright and early tomorrow morning. Hence the early delivery. Friday’s Morning Call will depend on how it goes and recovery time.

 

 

The Market

         

    Technical

 

The Trump Put. It doesn’t take a genius to tell you that this represents a major change in strategy. Despite what Trump has said, he either couldn’t take the heat, has decided to alter his trade strategy or this was his strategy all along. I got $100 that says the story line will be the latter irrespective of what has really occurred. In any case, while this provides interim relief for the Markets, we still don’t know how the tariff strategy all plays out (i.e., how punitive the tariffs will be and to whom). Although it is probably safe to say that the downside risk has been truncated. I nibbled yesterday on the news in Zoetis (ZTS), Applied Materials (AMAT) and Ball (BALL).

            https://www.zerohedge.com/markets/china-holds-back-retaliation-opts-strategic-messaging-through-white-paper-trade

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/stocks-surge-most-5-years-trump-policy-pivot-everything-else-soars

 

            How the big boys fared.

            https://www.zerohedge.com/markets/largest-our-history-nomuras-mcelligott-calculates-historic-end-day-levered-etf-buy

 

            The mother of all short squeezes.

            https://www.zerohedge.com/the-market-ear/upside-panic-shorts-torched-mother-all-squeezes

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                        International

 

                        Other

 

Monetary Policy

 

The FOMC released the minutes from its last meeting. Of course how you interpret them today will be entirely different from how you would have interpreted them on Tuesday.

              https://www.zerohedge.com/markets/fomc-minutes-confirm-fed-members-fear-trade-policy-uncertainty-support-qt-taper

 

            Fiscal Policy

 

              It is Main Street’s turn.

              https://www.zerohedge.com/personal-finance/its-main-streets-turn-restore-american-dream-us-treasury-secretary-warns-wall

 

              Trump’s economic revolution.

              https://www.zerohedge.com/markets/trumps-economic-revolution-unraveling-blessing-and-curse

 

              What will happen to the dollar?

              https://investor.fm/the-reputational-bankruptcy-of-the-american-dollar/

 

            Recession

 

              Sprinkling cold water on the idea of recession.

              https://wolfstreet.com/2025/04/08/but-this-kind-of-dynamic-sprinkles-additional-cold-water-on-the-idea-of-a-looming-recession/

 

            Tariffs

             

              erased

 

     Investing

 

            How effective in rebalancing?

            https://roberthuebscher.substack.com/p/take-this-test-how-well-do-you-understand

 

    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--Credit markets starting to blow up

 

The Morning Call

 

4/9/25

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/stocks-pumpndump-beijings-nope-trumps-bessents-hope

 

            A breadth based ‘bottom’ signal has been triggered.

            https://www.zerohedge.com/markets/breadth-based-bottom-signal-stocks-has-triggered

 

            Credit markets are starting to crack.

            https://www.zerohedge.com/markets/avalanche-has-really-just-started-credit-market-cracks-raise-fears-bankruptcy-wave

 

            Credit markets starting to blow up.

            https://www.zerohedge.com/markets/absolutely-spectacular-meltdown-basis-trade-blowing-sparking-multi-trillion-liquidation

 

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications rose 20.0% while purchase applications were up 9.0%.

 

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

 

                        International

 

The March Japanese consumer confidence index came in at 34.1 versus consensus of 34.7; March machine tool orders were up 11.4% versus +0.5%.

 

                        Other

 

                          Tuesday in the economic charts.

                          https://dailyshotbrief.com/the-daily-shot-brief-april-8th-2025/

 

            Recession

 

              Still no evidence of a weakened consumer.

              https://bonddad.blogspot.com/2025/04/daily-t-p-tariff-recession-watch-no.html

 

            Tariffs

 

Since their implementation, I have been focused on tariffs ill effects on the US and global economies. I believe that almost everyone has now agreed that if nothing changes, the world, including the US, is in for a rough ride. So, enough pissing and moaning about the fallout if nothing changes. I am switching my focus to what people smarter than me think (1) Trump is trying to accomplish and (2) how his current strategy could or could not achieve those objectives.

 

              Trump’s high stakes tariff gambit.

              https://www.foxnews.com/opinion/heres-what-trump-really-up-high-stakes-tariff-gambit

 

              Here is another theory.

              https://www.nytimes.com/2025/04/07/opinion/tariffs-trump-dollar.html

 

This article is a bit long; but I think it is a good attempt at discerning what Trump is trying to accomplish.

https://talkmarkets.com/content/us-markets/my-take-on-the-new-tariff-regimen-and-the-gift-of-lower-asset?post=491089

 

The problem with telling everyone your plan is that they then know your plan. That is not how you negotiate.

https://www.capitalspectator.com/uncertainty-clouds-outlook-for-trumps-tariff-goals/#more-23838

 

On the other hand, markets are telling you that shaking faith in US safe haven is a dangerous gamble.

https://www.bloomberg.com/opinion/articles/2025-04-08/shaking-faith-in-dollar-treasuries-is-a-dangerous-gamble?srnd=homepage-americas&sref=loFkkPMQ

 

              And that tariffs are a bad idea.

              https://www.realclearmarkets.com/articles/2025/04/08/thanks_to_markets_we_dont_need_wait-and-see_with_trump_tariffs_1102513.html

 

              These irrationalities are what makes it tough for Trump to sell his tariff program,

              https://www.cato.org/blog/five-most-absurd-things-about-trumps-reciprocal-tariffs

 

We don’t need to run a trade deficit in order to finance our budget deficit anymore.

              https://econbrowser.com/archives/2025/04/guest-contribution-miran-were-not-in-triffin-land-anymore

 

              How Mexico emerged from the tariff broadside.

              https://www.wsj.com/economy/trade/how-mexico-emerged-from-tariff-broadside-with-an-edge-over-asia-120a5f73?mod=economy_lead_pos1

 

              Canada’s economy is starting to crack.

              https://www.wsj.com/world/americas/inflation-worries-escalate-among-companies-households-bank-of-canada-survey-says-5a90c0bf?mod=economy_lead_pos3

 

              China strikes back.

              https://www.zerohedge.com/markets/china-holds-back-retaliation-opts-strategic-messaging-through-white-paper-trade

 

     Investing

 

            The answers are yet to come.

            https://www.zerohedge.com/markets/medias-piss-stain-starts-dry

 

            Navigating the tariff turmoil.

            https://behaviouralinvestment.com/2025/04/04/a-guide-to-navigating-tariff-turmoil/

 

            Current valuations.

            https://www.ft.com/content/e21f97b1-cd31-4eb3-b016-2c4c8336946e

 

            Bear markets and bad decisions.

            https://behaviouralinvestment.com/2025/04/08/bear-markets-and-bad-decisions/

 

    News on Stocks in Our Portfolios

 

Automatic Data Processing (NASDAQ:ADP) declares $1.54/share quarterly dividend, in line with previous.

 

 

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---Is recession inevitable?

 

The Morning Call

 

4/8/25

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/market-recaps/stocks-bonds-gold-dumped-us-dollar-liquidity-fears-grow

 

            Hedge funds hit with steep margin calls.

            https://www.ft.com/content/2e88e9ef-5026-44e3-89f9-c7a09ae7eefe

 

            Relief this morning, but…….

            https://www.zerohedge.com/markets/there-relief-markets

 

            Goldman traders turn bullish.

                https://www.zerohedge.com/markets/risk-reward-skewed-upside-goldman-traders-turn-bullish

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

The March small business optimism index came in at 97.4 versus estimates of 101.3.

 

                        International

 

                        Other

 

                          Home prices continue to cool.

                          https://www.calculatedriskblog.com/2025/04/ice-mortgage-monitor-home-prices.html

 

                          Consumer credit numbers show consumer is finally down and out.

                          https://www.zerohedge.com/markets/6-sigma-miss-consumer-credit-confirms-us-consumer-finally-down-and-out

 

            Overnight News

 

Scott Bessent told Fox that “everything is on the table” in tariff talks but deals probably won’t be reached before the April 9 start date. He said Japan would get priority after swiftly reaching out to the US, but he noted that has not seen a trade offer from Japan; he added that maybe 70 countries have approached the US by now on trade and that Japan's non-tariff trade barriers are quite high, according to an FBN interview. Furthermore, Bessent said tariffs depend on negotiations which will be tough and the US will not likely have any trade deals in place by April 9th to avoid the retaliatory tariffs going into place, as well as commented that China has chosen to isolate itself by retaliating and doubling down on previous negative behavior.

 

Bessent having some success steering the White House tariff messaging away from permanence and toward negotiations after warning Trump of further market losses.

 

White House considers withdrawing 10K US troops from Eastern Europe, a move sparking alarms in the region given Russia’s aggression.

 

US President Trump posted on Truth "The Budget Plan just passed by the United States Senate has my Complete and Total Endorsement and Support. All of the elements we need to secure the Border, enact Historic Spending Cuts, and make Tax Cuts PERMANENT, and much more, are strongly covered and represented in the Bill."

 

Republicans increasingly embrace the idea of raising upper-income individual tax rates as they scramble to find revenue for their reconciliation bill.

 

            Fiscal Policy

 

              It is spending increases not tax cuts that is driving he deficit.

              https://thehill.com/opinion/finance/5230454-cbo-budget-projections-debt/

 

            Recession

 

              Near horizon recession probability.

              https://econbrowser.com/archives/2025/04/near-horizon-recession-probability-2

 

              Is recession inevitable?

              https://www.capitalspectator.com/is-a-us-recession-inevitable/

 

              Or are we already there?

              https://www.zerohedge.com/political/canary-sick-blackrocks-fink-says-most-ceos-telling-him-were-already-recession

 

              The labor market is just fine.

              https://wolfstreet.com/2025/04/04/the-stock-market-may-be-in-trouble-and-consumers-may-be-in-a-sour-mood-but-the-labor-market-is-just-fine/

 

              RecessionAlert weekly leading economic index.

              https://www.advisorperspectives.com/dshort/updates/2025/04/07/recession-weekly-leading-economic-index

 

              Summary of weekly economic indices.

              https://seekingalpha.com/article/4773123-weekly-indicators-stocks-commodities-crash-bonds-soar-consumer-spending-crack

 

            Tariffs

 

              Trump’s tariff aren’t reciprocal.

              https://www.cato.org/blog/trumps-tariffs-arent-reciprocal-are-massive-tax-increase-americans

 

              What Liberation Day means to the US economy and stock market.

                         www.apolloacademy.com/wp-content/uploads/2025/04/What-Might-Trumps-Liberation-Day-Mean-to-the-U.S.-Economy-Financial-Markets_040525.pdf

 

              China: the war has just begun.

              https://www.zerohedge.com/geopolitical/tariff-war-just-begun-beijings-new-tariff-target-list-leaked-bloggers

 

              The latest from John Mauldin.

              https://www.advisorperspectives.com/commentaries/2025/04/07/recession-tariff

 

     Investing

 

            Chaos.

            https://www.nytimes.com/2025/04/06/business/stock-market-plunge-investment-bank-impact.html

 

            And its consequences.

            https://ritholtz.com/2025/04/the-consequences-of-chaos/

 

            It is not like this was unexpected.

            https://talkmarkets.com/content/stocks--equities/asset-bubble-bug-finds-another-windshield?post=490854

 

            What to watch for.

            https://talkmarkets.com/content/stocks--equities/the-bears-dont-lie?post=490852

 

            Part 2.

            https://talkmarkets.com/content/stocks--equities/what-to-watch-amid-the-tariffs-driven-selloff?post=490794

 

            What is the Market pricing in?

            https://klementoninvesting.substack.com/p/invert-always-invert-the-tariff-edition

 

            Apparel brands and retailers most at risk.

            https://www.zerohedge.com/markets/tariff-shockwave-these-apparel-brands-retailers-most-risk-price-hikes

           

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            The purpose of a vacation.

            https://traderfeed.blogspot.com/2025/04/the-purpose-of-vacation.html

 

 

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

 

 

 

Monday Morning Chartology----and more

 

The Morning Call

 

4/7/25

 

 

The Market

         

    Technical

 

Well, wasn’t that fun.  The S&P did a cliff dive on Thursday and Friday, taking out the March 13 low, the 23.6% Fibonacci retracement level, the lower boundary of its short term uptrend and the lower boundary of the very short term trading range. Next stop is the lower boundary of the intermediate term uptrend (~4896). I am not saying that we will get there; but at the moment, it seems reasonable. At some point, I expect some sort of reflexive bounce especially given those two massive gap down opens.   

 

The latest from Goldman’s trading desk.

https://www.zerohedge.com/markets/feels-record-scratch-moment-goldman-flow-funds-gurus-warn-there-are-no-bulls-sight

 

The latest form Goldman’s flows guru.

https://www.zerohedge.com/markets/cta-selling-back-vengeance-and-its-about-get-very-ugly

 

How low can it go?

https://www.zerohedge.com/markets/crashes

 

Beyond panic.

https://www.zerohedge.com/the-market-ear/beyond-panic-fortune-favors-brave

 

And now for some perspective.

https://www.zerohedge.com/markets/inevitable-just-sooner

 

Part 2.

https://www.zerohedge.com/the-market-ear/why-trump-tariffs-are-smart

 

 

 

As one might expect in the midst of a stock market collapse, investors headed towards bonds. On Friday, TLT made a third higher high and began a challenge of its 200 DMA. Since it negated a very short term downtrend in late February, the question on my mind has been---did the mid-January low confirm the bottom of the secular downtrend that began in March of 2020? It appears that has occurred though I would like to see the long bond make one more higher low and higher high before making that call.

 

 

 

 

While GLD suffered with everything else last week, there no real technical damage to the chart. It remains well within a very short term uptrend and in uptrends across all other time frames as well as above all DMAs. Stay with what works.

 

 

 

 

 

 

 

While the dollar continued its slide, it did make a strong reversal of Friday, closing much of Thursday’s huge gap down open.  I am assuming that investors running to bonds (safe haven) explains that pin action. Nonetheless, it remains in a confirmed downtrend---below all DMAs and in a very short term downtrend---and that likely won’t change as long as the Donald is hell bent on his weak dollar program.

 

 

 

            Friday in the charts.

            https://www.zerohedge.com/markets/surveying-carnage-after-week-when-decades-happened

 

    Fundamental

 

       Headlines

 

              The Economy

 

Last week’s stats were upbeat as were the primary indicators (one plus, one neutral, no negative). So, we are now at five weeks in a row of relatively positive data. Unfortunately, I am not sure that means much since the numbers are all backward looking and we now have a tariff regime that (1) is unexpectedly harsh which increases the likelihood of recession but (2) we have no idea how permanent it is.

 

The latter point is perhaps the most important because it raises the level of uncertainty to an unnerving level---to such an extent that it is nearly impossible to forecast the impact on economic growth, employment, and inflation.

https://www.calculatedriskblog.com/2025/04/fed-chair-powell-tariff-increases-will.html

 

That is not good for the economy (businesses decision making process freezes up) or the Market (which hates uncertainty).

https://thehill.com/opinion/5229397-wealth-inequality-consumption/

 

Stocks understand that tariffs are a tax on corporate profit margins.

https://wolfstreet.com/2025/04/03/103178/

 

Tariffs will also likely negatively impact capital flows.

https://www.ft.com/content/c5648017-2357-4dc1-a33b-809bd8561275

 

The only sensible solution is to admit that I am clueless, turn on the red warning light, do nothing BUT monitor future Buy candidates and await the opportunity to put my cash to work.

 

I should add that, in my opinion, this mess could turn out better than what seems to be general consensus at the moment. The fact is we simply don’t know. But before I get permanently beared up, I want to see how this unnecessary trauma gets resolved.

https://issuesinsights.com/2025/04/03/if-trumps-tariffs-work-it-will-be-epic/

 

And.

https://www.foxnews.com/opinion/trumps-liberation-day-no-cause-panic-here-5-reasons-why

 

Bottom line, I am suspending any forecast on economic growth and inflation until we get some clarity.

 

                        US

 

 

                        International

 

The February Japanese preliminary leading economic indicators were reported at 107.9 versus forecasts of 107.8.

 

The February German trade balance was E17.7 billion versus projections of E17.8 billion.

 

February EU retail sales were up 0.3% versus estimates of up 0.5%.

 

                        Other

 

                          The last good employment report?

                          https://bonddad.blogspot.com/2025/04/march-jobs-report-possibly-last-good.html

 

                          Friday in the economic charts.

                          https://dailyshotbrief.com/the-daily-shot-brief-april-3rd-2025/

 

            Monetary Policy

           

              Update on the Fed’s balance sheet.

              https://wolfstreet.com/2025/04/03/fed-balance-sheet-qt-33-billion-in-march-2-24-trillion-from-peak-to-6-72-trillion-lowest-since-may-2020/

 

                Recession

 

              Update on big four recession indicators.

              https://www.advisorperspectives.com/dshort/updates/2025/04/04/the-big-four-recession-indicators

 

                  One of Fed’s favorite recession indicators is flashing red.

              https://www.reuters.com/markets/us/one-feds-top-recession-alarms-sends-2008-style-signal-2025-04-04/

 

                  US services sector at risk in trade war.

              https://www.capitalspectator.com/us-services-sector-an-exporting-powerhouse-at-risk-in-trade-war/

 

                Tariffs

 

              The faulty math in the ‘Liberations Day’ tariffs.

              The "Liberation Day" Tariffs Crash The Market - RIA

 

                  The case for Trump’s strategy.

              https://www.zerohedge.com/geopolitical/other-countries-seem-tariffs-so-why-are-people-opposed-trumps-tariffs

 

                  Vietnam, Taiwan capitulate.

              https://www.zerohedge.com/markets/vietnam-capitulates-offers-remove-all-us-tariffs

 

      Investing

 

            S&P 5000 or 3100?

            https://www.zerohedge.com/the-market-ear/sp500-5000-or-3100-call-it

 

            The latest from BofA.

            https://www.zerohedge.com/markets/harnett-stay-short-until-hard-policy-pivot-here-are-5-things-would-be-buillish

 

    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.