Wednesday, March 5, 2025

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

 

           

 

 

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