Friday, January 24, 2025

The Morning Call---Trump's pompous economic illiteracy is scary

 

The Morning Call

 

1/24/25

 

 

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/market-recaps/trump-tanks-crude-bitcoin-blasts-stargate-surge-stalls

 

            Tech melt up in four charts.

            https://www.zerohedge.com/markets/goldmans-hedge-fund-honcho-highlights-tech-melt-4-discrete-charts

 

            Getting late to chase the squeeze.

            https://www.zerohedge.com/the-market-ear/getting-late-chase-squeeze

 

            Gold’s overbought frenzy.

            https://www.zerohedge.com/the-market-ear/golds-overbought-frenzy-smart-traders-are-turning-options

 

            Silver, not so much.

            https://www.zerohedge.com/the-market-ear/3-silver-charts-we-are-watching

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

The January Kansas City Fed manufacturing index came in at -5 versus estimates of -7.

                         https://www.advisorperspectives.com/dshort/updates/2025/01/23/kansas-city-fed-manufacturing-activity-january-2025

 

                        International

 

                          December Japanese CPI was up 0.6% versus predictions of +0.4%.

 

The January EU consumer confidence index was -14.2, in line; the January UK consumer confidence index was -22 versus -18.

 

The January Japanese flash manufacturing PMI was 48.8 versus forecasts of 49.7; the flash services PMI was 52.7 versus 51.1; the flash composite PMI was 51.1 versus 51.0; the January German flash manufacturing PMI was 44.1 versus 42.9; the flash services PMI was 52.5 versus 51.0; the flash composite PMI was 50.1 versus 48.2; the January EU flash manufacturing PMI was 46.1 versus 45.2; the flash services PMI was 52.5 versus 51.0; the flash composite PMI was 50.1 versus 48.2; the January UK flash manufacturing PMI was 48.2 versus forecasts of 47.0; the flash services PMI was 51.2 versus 50.9; the flash composite PMI was 50.9 versus 50.0.

 

                        Other

 

                          Productivity and employment.

                          https://econbrowser.com/archives/2025/01/productivity-demand-and-manufacturing-employment

 

                          Auto loan delinquencies rates.

  https://wolfstreet.com/2025/01/22/subprime-prime-and-overall-auto-loan-delinquency-rates-why-this-surge-in-subprime-delinquencies-when-prime-is-pristine/

 

                          Survey of economists on 2025 outlook.

                          https://www.wsj.com/economy/economists-predictions-survey-charts-2025-a919c800?mod=economy_lead_pos3

 

                          What the latest jobless claims number means for the unemployment rate.

                          https://bonddad.blogspot.com/2025/01/jobless-claims-seasonality-and.html

 

            Overnight News

 

  • The US House Republican committee chairs pitched in a private meeting what could add up to between USD 2.5-3 trillion of spending cuts and budget savings to fund Republicans’ reconciliation package, according to Punchbowl News. The Energy and Commerce Committee is eyeing up to USD 2tln of cuts, including per capita caps for Medicaid. Energy-related cuts, such as rolling back tailpipe rules and fuel efficiency benchmarks for cars and light trucks, known as CAFE standards, were also part of the committee’s pitch. The Education and Workforce panel believes it has up to USD 500bln in cuts, largely through targeting student loans. The House Agriculture Committee is targeting between USD 100bln and USD 250bln in cuts. Some would impact SNAP, aka food stamps. The Transportation and Infrastructure panel’s up to USD 26bln in savings would include raising tonnage duties for ships, and electric vehicles fees that would go into the Highway Trust Fund. Ultimately, each and every cut will have to get approved by every Republican member in the House - any GOP member could kill the bill, at least until early April.
  • Trump reiterated that he will impose “massive” tariffs on Russia and “big” sanctions if it doesn’t settle the war in Ukraine. Trump also said he’s had “good, friendly” talks with Xi Jinping. BBG

 

            Monetary Policy

 

              Pimco on Fed policy.

              https://www.ft.com/content/740b34da-a02c-4b63-9b3a-1b4069bf6ab2

 

            Fiscal Policy

 

              The growth of the national debt.

              https://politicalcalculations.blogspot.com/2025/01/the-growth-of-us-national-debt-in-biden.html

 

              Trump’s pompous economic illiteracy is scary.

              https://mishtalk.com/economics/economically-clueless-trump-will-demand-interest-rates-drop-immediately/

 

     Investing

 

            Bursting the complacency bubble.

            https://www.advisorperspectives.com/commentaries/2025/01/23/complacency-bubble-bursting

 

            The bond market awaits news on inflation, tariffs and the deficit.

            https://www.capitalspectator.com/bond-market-awaits-news-on-inflation-tariffs-and-the-deficit/

 

           

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

As you know, I try to avoid political issues in this letter unless they have a direct impact on the economy/Market. For some reason, yesterday’s news flow from the sites I normally use included two subjects that while mostly political in nature have an impact on how our economic system works---presidential executive orders being the most obvious. Tariffs, immigration, DOGE will clearly affect the economy/Markets. Censorship is less apparent though managing the reporting of economic statistics (which I have cynically suggested in the past) would surely qualify---though as you will see, is not the point of the article. In addition, both articles outline the guilt of both political parties; so to the extent that these articles can be judged as political, they at least point out the shared guilt of our entire ruling class.

 

            The increasing use of the presidential executive order.

https://www.wsj.com/opinion/trumps-imperial-presidency-we-may-be-headed-to-outer-limits-american-system-checks-and-balances-ef6e6c99?mod=opinion_lead_pos9

 

 

                        And.

            https://reason.com/2025/01/22/with-executive-order-avalanche-trump-continues-trend-toward-a-monarchical-presidency/

 

                Counterpoint.

            https://www.zerohedge.com/political/these-restorative-executive-orders-should-not-be-necessary

 

                Censorship and the press.

            https://www.nakedcapitalism.com/2025/01/rob-urie-on-being-censored-for-the-last-four-years.html

 

 

            Trump signs executive order releasing additional JFK assassination files.

            https://www.zerohedge.com/political/trump-signs-executive-order-releasing-additional-jfk-assassination-files

 

 

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