Thursday, January 30, 2025

The Morning Call--The Fed is doing nothing until it can figure Trump out

 

The Morning Call

 

1/30/25

 

 

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/market-recaps/powell-saves-markets-hawkish-fed-statement-mega-cap-meltdown-resumes

 

            The gold miners (GDX) rally is over. (I am Selling my position this morning)

            https://talkmarkets.com/content/commodities/the-miners-rally-is-likely-over--its-about-time?post=479753

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Weekly initial jobless claims totaled 207,000 versus estimates of 220,000.

                          https://www.zerohedge.com/markets/initial-jobless-claims-tumble-back-near-multi-decade-lows

 

Q4 GDP growth was 2.3% versus projections of 2.6%; Q4 core PCE prices were up 2.2% versus +2.5% Q4 real consumer spending was up 4.2% versus +2.9%.

 

                        International

 

                          Q4 German flash GDP growth was -0.2% versus consensus of -0.1%.

 

Q4 EU flash GDP growth was 0.0% versus expectations of +0.1%: the December unemployment rate was 6.3%, in line; the January consumer confidence index was -14.2, in line; the January economic sentiment index was 95.2 versus 94.1; the January industrial sentiment index was -12.9 versus -13.8; the January services sentiment index was 6.9 versus 6.0.

 

                        Other

 

                          New home glut in south and west.

  https://wolfstreet.com/2025/01/28/glut-of-new-houses-for-sale-in-the-south-at-all-time-highs-bigger-even-than-during-the-housing-bust-the-west-is-getting-close/

 

                          Measuring consumer attitudes.

                          https://www.advisorperspectives.com/dshort/updates/2025/01/28/two-measures-of-consumer-attitudes-january-2025

           

                          Record new trade deficit.

                          https://mishtalk.com/economics/imports-surge-3-9-percent-exports-plunge-4-5-percent-new-trade-deficit-record/

 

            Monetary Policy

 

The FOMC wrapped up its January meeting, leaving rates unchanged---totally expected. The most notable item in its presser was the failure to mention progress on inflation; and that was followed in Chair Powell’s comments stating that basically the Fed was going to do nothing until it figured out the implications of Trump policies.

https://www.calculatedriskblog.com/2025/01/fomc-statement-no-change-to-fed-funds.html

 

The 10 year Treasury yield rose slightly.

https://tradingeconomics.com/united-states/government-bond-yield

 

The stock market declined slightly.

https://tradingeconomics.com/united-states/stock-market

 

              Wall Street’s reaction.

              https://www.zerohedge.com/markets/wall-street-responds-feds-hawkish-pause

 

              Trump’s reaction.

              Trump Slams Hawkish Fed For 'Failing To Stop The Problem They Created' | ZeroHedge

 

              ECB cuts rates as expected.

              https://www.zerohedge.com/markets/disinflation-process-well-track-ecb-cuts-rates-expected

 

            Fiscal Policy

 

A study showing that the longer the maturity structure of a country’s debt, the greater the odds it will reach unsustainable levels.

https://klementoninvesting.substack.com/p/politicians-care-about-some-debt

 

The legality of Trump ‘impounding’ federal expenditures will be decided by the Court.

https://www.bloomberg.com/news/articles/2025-01-28/impoundment-can-trump-really-refuse-to-spend-money-congress-appropriated?srnd=homepage-americas

 

              Trump freezes foreign aid fraud.

              https://www.zerohedge.com/political/jim-bovard-trump-freezes-foreign-aid-frauds

 

            Inflation

 

The perfect storm in insurance. The end result may be as described but the California wildfires (the effect) are not caused by climate change. They were the result of poor conservation practices (not clearing underbrush) and poor municipal management (water supplies). Maybe the insurance companies should be suing the State for negligence.

https://econofact.org/the-perfect-storm-in-home-insurance

 

    News on Stocks in Our Portfolios

 

BlackRock (NYSE:BLK) declares $5.21/share quarterly dividend, 2.2% increase from prior dividend of $5.10.

 

C.H. Robinson Worldwide press release (NASDAQ:CHRW): Q4 Non-GAAP EPS of $1.21 beats by $0.10.

Revenue of $4.18B (-0.9% Y/Y) misses by $260M.

 

Microsoft press release (NASDAQ:MSFT): Q2 GAAP EPS of $3.23 beats by $0.13.

Revenue of $69.6B (+12.2% Y/Y) beats by $790M.

 

Mastercard Press Release (NYSE:MA): Q4 Non-GAAP EPS of $3.82 beats by $0.13.

Revenue of $7.5B (+15.4% Y/Y) beats by $120M, or 16% on a currency-neutral basis.

 

Sherwin Williams press release (NYSE:SHW): Q4 Non-GAAP EPS of $2.09 beats by $0.03.

Revenue of $5.3B (+1.0% Y/Y) misses by $20M.

 

Altria press release (NYSE:MO): Q4 Non-GAAP EPS of $1.29 beats by $0.01.

Revenue of $5.1B (+1.6% Y/Y) beats by $50M.

 

UPS press release (NYSE:UPS): Q4 Non-GAAP EPS of $2.75 beats by $0.22.

Revenue of $25.3B (+1.6% Y/Y) misses by $120M.

 

 

What I am reading today

 

           

 

 

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