The Morning Call---A second round of inflation?

 

The Morning Call

 

3/7/25

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/market-recaps/stocks-puke-despite-easing-tariffs-trifecta-trouble-hits-markets

 

            Grinding panic.

            https://www.zerohedge.com/the-market-ear/grinding-panic-0

 

            The Market should bounce here, but……….

            https://www.zerohedge.com/the-market-ear/it-should-really-bounce-here

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

February nonfarm payrolls were up 151,000 versus consensus of up 160,000.

 

                        International

 

                          Q4 EU (3^rd estimate) GDP grew 0.2% versus predictions of +0.1%.

 

The January/February Chinese trade balance was +$170.5 billion versus forecasts of +$142.2 billion.

 

January German factory orders fell 7.0% versus expectations of -2.8%.

 

                        Other

 

                          Near term gloom; long term boom.

                              https://scottgrannis.blogspot.com/2025/03/near-term-gloom-long-term-boom.html

 

                          New home unaffordability surges.

                          https://politicalcalculations.blogspot.com/2025/03/unaffordability-of-new-homes-surges-in.html

 

                          Thursday in the economic charts.

                          https://dailyshotbrief.com/the-daily-shot-brief-march-5th-2025/

 

            Monetary Policy

 

              ECB cuts rates for sixth time and says monetary policy becoming less restrictive.

              https://www.bloomberg.com/news/live-blog/2025-03-06/ecb-interest-rate-decision-euro-lagarde-press-conference-live-updates?sref=loFkkPMQ

 

            Fiscal Policy

 

              Another win for the US economy.

              https://www.foxnews.com/opinion/us-treasury-trump-score-huge-win-main-street

 

              Trump tones down DOGE’s deep state assault.

              https://www.zerohedge.com/political/trump-tones-down-doges-deep-state-assault-using-scalpel

 

              But look at its latest find (scam).

              https://www.zerohedge.com/markets/doge-hones-shady-climate-popup-ngo-shell-received-billions-biden

 

            Inflation

 

              Is this the beginning of a second round of inflation?

              https://wolfstreet.com/2025/03/05/is-this-the-beginning-of-the-second-wave-of-inflation/

 

 

            Recession

 

              Update on odds of a recession.

              https://econbrowser.com/archives/2025/03/is-a-recession-still-coming

 

            Tariffs

 

              Trump crawfishes again.

              https://www.zerohedge.com/political/stocks-bounce-lutnick-hints-usmca-compliant-tariff-exemptions

 

              Short term pain, long term gain?

              https://www.apolloacademy.com/short-term-pain-long-term-gain/

 

              The case against tariffs is getting stronger.

              https://www.bloomberg.com/opinion/articles/2025-03-06/the-case-against-tariffs-is-getting-stronger?srnd=homepage-americas&sref=loFkkPMQ

 

            Geopolitics

 

              US and Ukraine set to meet next Wednesday.

              https://www.zerohedge.com/geopolitical/high-level-us-ukraine-meeting-set-riyadh-after-zelensky-apologizes

 

            Germany

 

              The German shock.

              https://www.bloomberg.com/opinion/articles/2025-03-06/germany-s-vance-shock-turns-to-anger-and-animal-spirits?srnd=homepage-americas&sref=loFkkPMQ

 

                          German bonds in rout.

                        https://www.bloomberg.com/news/articles/2025-03-06/japan-s-10-year-bond-yield-reaches-highest-since-june-2009?srnd=homepage-americas&sref=loFkkPMQ

 

     Investing

 

            Guidelines for downturns.

            https://www.fortunesandfrictions.com/post/perspectives-on-market-downturns

 

            The index inclusion effect is dead.

            https://klementoninvesting.substack.com/p/the-index-inclusion-effect-is-dead

 

            Update on valuations.

            https://www.advisorperspectives.com/dshort/updates/2025/03/05/market-valuation-is-the-market-still-overvalued

 

            Howard Marks reviews the credit market.

            https://www.advisorperspectives.com/commentaries/2025/03/06/credit-gimme

 

            Gold prices getting frothy.

            https://talkmarkets.com/content/commodities/gold-prices-are-getting-frothy?post=485573

 

            Counterpoint.

            https://talkmarkets.com/content/commodities/gold--healthy-pullback-already-over?post=485572

 

            Short term holders of bitcoin dominate.

            https://talkmarkets.com/content/short-term-holders-dominate-as-bitcoin-reboundswhats-next?post=485568

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

            Winners of the 2025 nature photography awards.

            https://www.theatlantic.com/photo/2025/02/winners-2025-world-nature-photography-awards/681773/

 

            Biden and his autofill signature.

            https://www.zerohedge.com/political/could-bombshell-discovery-render-all-bidens-presidential-actions-null-and-void

 

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--Bearish sentiment surges

 

The Morning Call

 

3/6/25

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/market-recaps/stocks-bond-yields-jump-trump-eases-tariff-tensions-germany-goes-nuts

 

            Bearish sentiment surges.

            Bearish Sentiment Surges As If The Market Just Crashed - RIA

           

            Stocks dumped.

            https://www.zerohedge.com/the-market-ear/stocks-dumped-whos-left-sell

 

            The latest from Goldman’s trading desk.

            https://www.zerohedge.com/markets/isnt-over-top-goldman-trader-warns-were-bottom-first-inning-if-markets-re-rating-growth

 

            However, this is somewhat different take from another Goldman trader.

https://www.zerohedge.com/markets/goldman-sees-largest-hedge-fund-net-selling-decade-amid-growth-downgrade

 

Market Ear agrees with the latter.

            https://www.zerohedge.com/the-market-ear/stocks-dumped-whos-left-sell

 

Yet more from Goldman: five macro scenarios and how to trade them.

https://www.zerohedge.com/markets/5-macro-scenarios-how-trade-them-goldman-trader-eyes-changing-landscape

 

            Ten charts from Ed Yardini.

            IN 10 CHARTS: Moving Markets

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Weekly initial jobless claims totaled 221,000 versus forecasts of 235,000.

 

Q4 nonfarm productivity rose 1.5% versus expectations of +1.2%; unit labor costs were up 2.2% versus +3.0%.

 

                          January factory orders were up 1.7% versus consensus of +1.6%.

 

The January trade balance was -$131.4 billion versus projections of -$127.4 billion.               

 

The February ADP private payrolls report showed an increase of 77,000 jobs versus estimates of 140,000.

 

The February services PMI was 51.0 versus predictions of 49.7; the composite PMI was 51.6 versus 50.4.

                           https://www.zerohedge.com/personal-finance/us-services-sector-surveys-beat-expectations-february-jobs-new-orders-jump

 

The February ISM nonmanufacturing index was 53.5 versus forecasts of 52.6.

                           https://bonddad.blogspot.com/2025/03/economically-weighted-ism-indexes-for.html

 

                        International

 

                          January EU retail sales fell 0.3% versus expectations of +0.1%.

 

The February EU construction PMI came in at 42.7 versus consensus of 45.4; the February German construction PMI was 41.2 versus 44.0; the February UK construction PMI was 44.6 versus 49.5.

 

                        Other

 

                          Wednesday in the economic charts.

                          https://dailyshotbrief.com/the-daily-shot-brief-march-4th-2025/

 

                          Property insurance costs up substantially in 2024.

                          https://www.calculatedriskblog.com/2025/03/ice-mortgage-monitor-property-insurance.html

 

The latest Fed Beige Book showed prices, employment and economic growth up slightly.

https://www.zerohedge.com/markets/beige-book-economic-activity-employment-and-prices-rose-january-economic-expectations-are

 

            Overnight News

 

The Trump administration is weighing more exemptions from the new tariffs on Canada and Mexico — this time for the agriculture industry. Officials are discussing waiving the 25 percent duty on some agriculture products, including Canadian potash, a key ingredient in fertilizer.

 

Trump executive order could be released as soon as Tues calling for the Dept. of Education to be abolished (although doing so would require an act of Congress).

 

            Monetary Policy

 

I ordinarily don’t have a lot of sympathy/patience with the Fed’s labored attempts at setting monetary policy. But I do think Trump is making life much more difficult for it.

https://www.wsj.com/economy/trade/what-is-stagflation-trump-tariffs-b8be754c?mod=economy_lead_pos3

 

            Fiscal Policy

 

              Trump cares too much about the wrong deficit.

              https://unseenandunsaid.substack.com/p/this-administration-cares-a-lot-about

           

Effects of a trade war is now starting to show up in the latest nowcasts.  It is helpful to know what the potential impact could be; but probably too soon to be making bets on it.

https://www.capitalspectator.com/nowcast-for-us-q1-gdp-falls-sharply/

 

              Supreme Court rejects Trump’s pause in USAID payouts.

              https://mishtalk.com/economics/supreme-court-rejects-trumps-pause-on-usaid-payouts/

 

            Geopolitics

 

              Zelensky’s letter to Trump.

              https://www.powerlineblog.com/archives/2025/03/zelensky-climbs-down.php

 

     Investing

 

            The latest from JP Morgan.

            https://www.zerohedge.com/markets/jpmorgan-pours-cold-water-tariff-optimism-does-ease-tariff-risks-we-dont-think-so

 

            Warren Buffett’s test.

            https://behaviouralinvestment.com/2025/03/04/the-crystal-ball-test/

 

            February dividends by the numbers.

            https://politicalcalculations.blogspot.com/2025/03/dividends-by-numbers-in-february-2025.html

 

            The seasonal price trend in bitcoin.

            https://talkmarkets.com/content/bitcoin-crash-seasonality-says-so?post=485368

 

            Goldman blows up the euro trade.

            https://www.zerohedge.com/markets/goldman-blows-euro-trade-european-fiscal-expansion-trade-finished-over-pushed-too-much-week

 

     Investor Alert

 

In our regular quarterly review, Exxon failed to meet the minimum quality criteria for inclusion in the Dividend Growth Universe. Accordingly, it is being Removed and the Dividend Growth Portfolio will Sell its position at the open.

 

    News on Stocks in Our Portfolios

 

General Dynamics (NYSE:GD) declared $1.50/share quarterly dividend, 5.6% increase from prior dividend of $1.42.

 

Kroger press release (NYSE:KR): Q4 Non-GAAP EPS of $1.14 beats by $0.03.

Revenue of $34.3B (-7.5% Y/Y) misses by $460M.

 

What I am reading today

 

           

                        Zelensky and Foghorn Leghorn.

                        https://www.realclearmarkets.com/articles/2025/03/05/you_know_as_much_about_zelensky_as_you_do_foghorn_leghorn_1095507.html

 

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--Earnings estimates have gone parabolic

 

The Morning Call

 

3/5/25

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/market-recaps/bitcoin-big-tech-bullion-bounce-ukraine-deal-trumps-tariff-tantrum

 

            Bounce or big trouble.

            https://talkmarkets.com/content/stocks--equities/its-bounce-or-big-trouble--time-for-stocks?post=485188

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Weekly mortgage applications were up 20.4% versus forecasts of +9.0%.

 

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

 

                          The February ADP private payroll report showed expectations.

 

The March economic optimism index was reported at 49.8 versus projections of 53.1.

                          https://www.zerohedge.com/markets/high-frequency-data-signals-further-decline-small-business-optimism

 

                        International

 

                          January EU PPI came in at +0.8% versus estimates of +0.5%.

 

                          February UK YoY auto sales fell 1.0% versus predictions of -6.5%.

 

The February Japanese services PMI was 53.7 versus estimates of 53.1; the composite PMI was 52.0 versus 51.6; the February Chinese Caixin services PMI was 51.4 versus 50.8; the composite PMI was 51.5 versus 51.4; the February German services PMI was 51.1 versus 52.2; the composite PMI was 50.4 versus 51.0; the February EU services PMI was 50.6 versus 50.7; the composite PMI was 50.2, in line; the February UK services PMI was 51.0 versus 51.1; the composite PMI was 50.5, in line.

 

                        Other

 

                        January median household income.

                        https://politicalcalculations.blogspot.com/2025/03/median-household-income-in-january-2025.html

 

                                YoY heavy truck sales fall in February.

                        https://www.calculatedriskblog.com/2025/03/heavy-truck-sales-decreased-9-yoy-in.html

 

                                The volatility of the Atlanta Fed nowcast.

                        https://bonddad.blogspot.com/2025/03/important-changes-in-trend-in-bond-and.html

 

                Overnight News

 

President Donald Trump's administration is considering granting relief from his 25% tariffs on Canadian and Mexican imports to products that comply with the trade pact he negotiated with the two U.S. neighbors during his first term, Commerce Secretary Howard Lutnick said on Tuesday.

 

                Fiscal Policy

 

              Global government borrowing to hit record high in 2025.

              https://www.ft.com/content/951828dd-9d5e-434e-9a47-4f0272941a60

 

                Inflation

 

              The NY Fed’s measure of persistent inflation accelerated in January.

  https://www.nakedcapitalism.com/2025/03/new-york-feds-measure-of-inflation-persistence-nixes-fridays-idea-that-yoy-pce-inflation-cooled-using-same-data.html

 

 

                Recession

 

              Recession odds rising.

              https://econbrowser.com/archives/2025/03/recession-betting-odds-rising

 

              Interest rates are down for all the wrong reasons.

              https://www.nytimes.com/2025/03/03/business/treasury-bond-yields-trump-economy.html#

 

            Tariffs

 

              How Canada cut its trade deficit.

              https://alhambrapartners.com/weekly-market-pulse-no-tariffs-required/?src=news

 

 

This whole tariff business is too fluid to have any confidence in predictions of the future. So I would read this as what could happen in a worse case scenario.    

              A global trade war has started; a global recession will follow.

              https://talkmarkets.com/content/economics--politics/a-global-trade-war-has-started--global-recession-will-follow?post=485191

 

     Investing

 

            Update on valuations.

            https://www.advisorperspectives.com/dshort/updates/2025/03/04/qratio-market-valuation-february-2025

                https://www.advisorperspectives.com/dshort/updates/2025/03/04/market-valuation-regression-trend-sp500-february-2025

           

Earnings estimates have gone parabolic.

            https://www.advisorperspectives.com/commentaries/2025/03/04/estimates-analysts-gone-parabolic

 

    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.