https://www.zerohedge.com/political/trump-must-avoid-these-3-civilization-killers-when-tackling-national-debt
An Analysis of Daily Events that Impact Your Money
Tuesday, May 27, 2025
Saturday, May 24, 2025
Monday Morning Chartology--early
5/26/25
I
am off on a two and half week vacation in Europe. Be back on 6/16. Enjoy your
Memorial Day weekend.
The Market
Technical
Not a great week for the S&P. Between the
latest Trump tariff tantrum and the disappointedly, fiscally irresponsible Big,
Beautiful Bill, neither stock nor bond investors were very happy. The index
ended the week having broken the uptrend off its April 7th low and
hanging precariously above its 100 and 200 DMAs. The only thing to do now is
see whether the S&P will regain that uptrend or reset those two DMAs. If
the latter, then the next visible support level is the 50 DMA (~5584). Follow
through.
As I noted above, the long bond didn’t fare any
better than the S&P. It pushed through (1) the lower boundary of its very short
term trading range---resetting it to a downtrend and (2) the lower boundary of
its intermediate term downtrend. That leaves TLT in downtrends across all time frames
and below all DMAs. If the bond vigilantes are getting serious about refusing to
go along with these spendthrift morons in the ruling class, expect more
downside.
https://www.zerohedge.com/the-market-ear/end-era-8-incredible-charts-bond-markets
Watch the Japanese long bond.
https://www.zerohedge.com/the-market-ear/want-know-where-markets-go-next-watch-japans-long-bond
GLD performed pretty much as expected given the
tariff and budget news---bouncing off its 50 DMA and rallying nicely on the week.
Near term, I would expect it to continue to react inversely with bond and stock
markets (i.e., rally off a further deterioration in fiscal policy). 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.
Unsurprisingly, the dollar followed the same
playbook as the rest of the indices---which is to say it got hammered. So for the
moment, the assumption remains that it is heading lower.
Friday in the charts.
Friday in the technical stats.
https://www.barchart.com/stocks/momentum
https://www.barchart.com/stocks/sectors/sectors-heat-map
Fundamental
Headlines
The Economy
The US stats last week were mixed as were the
primary indicators (one plus, one minus). Ditto, the international numbers. So,
no real reason here to contemplate altering my forecast---a ‘muddle through’ economy.
I noted last week that the caveat to this outlook was
that we can’t dismiss entirely the risk of another nuclear
blast coming out of the White House that would again raise the odds of
recession.
And, of course, we got one on Friday when Trump made
a new set of threats against Apple and the EU for not bending to his will. If
this follows what has become the standard script, the parties will have a conversation,
kiss and make up and this will be another of those ‘much to do about nothing’
incidents.
That said, the almost continuous state of
uncertainty fostered by Trump’s trade policy is likely having an impact on businesses
willingness to make long term investment decisions which almost certainly has a
dampening effect on economic growth---hence, recession remains a risk.
To make matters worse/more uncertain, the bond vigilantes
apparently woke up to the fact that fiscal profligacy reigns supreme both here
and abroad---apparently triggered by the house’s passage of the Big, Beautiful
Bill. The Japanese and US bond market were especially hard hit.
What is most concerning is prospect that the
markets have finally reached the end of their patience with the budgetary malpractice
of the ruling class and are about to impose the kind of discipline (refusal to
buy) that will make for a very rough ride in the securities markets.
And.
https://www.capitalspectator.com/inflation-anxiety-and-the-big-beautiful-bill/
I am not making that my forecast---yet. But I am pushing
the yellow warning light. Unfortunately, if this is a false alarm and it doesn’t
lead to a change in fiscal policy, the impact will be all that more painful
when it finally does occur.
Bottom line. Short term, the odds of recession, in
my opinion, remain low. Longer term, the inflation outlook is more visible and getting
worse.
US
International
Other
The death of the penny (speaking of
inflation---which I wish I weren’t).
https://politicalcalculations.blogspot.com/2025/05/the-day-penny-died.html
A deep dive into the housing market.
https://bonddad.blogspot.com/2025/05/new-home-sales-make-3-year-high-as.html
Fiscal Policy
Regime
uncertainty versus market uncertainty.
https://thedailyeconomy.org/article/regime-uncertainty-and-market-uncertainty/
Tariffs
The
negative impact of tariffs on earnings.
https://www.apolloacademy.com/the-negative-impact-of-tariffs-on-earnings/
And now for some good news. Trump endorses
Nippon Steel/US Steel deal.
https://www.zerohedge.com/markets/trump-endorses-us-steel-nippon-deal
Investing
Big oil just went big AI.
The anchoring problem and how to solve it.
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.
Friday, May 23, 2025
The Morning Call---Hedge funds piling into risk off bets
The Morning Call
5/23/25
The
Market
Technical
Thursday in the
charts.
Thursday in the technical
stats.
https://www.barchart.com/stocks/momentum
https://www.barchart.com/stocks/sectors/sectors-heat-map
The latest from Goldman.
Fundamental
Headlines
The
Economy
US
April building permits declined 4.0% versus expectations
of -4.7%.
April existing home sales fell 0.5% versus forecasts
of +0.7%.
https://mishtalk.com/economics/existing-homes-sales-drop-0-5-percent-in-may-but-supply-soars/
The May Kansas
City Fed manufacturing index came in at -10 versus projections of -1.
The May flash
manufacturing PMI was 52.3 versus estimates of 50.1; the May flash services PMI
was 52.3 versus 50.8; the May flash composite PMI was 52.1 versus 50.4.
International
Final Q1 German GDP growth was +0.4% versus
predictions of +0.2%.
April UK retail sales
rose 1.2% versus consensus of +0.2%; the May consumer confidence index was -20
versus -22.
April Japanese CPI
was +0.1% versus expectations of +0.2%.
Other
Overnight
News
Futures plunge on Trump tariff threats.
Fiscal
Policy
Trump tariff/tax
policies losing war with the bond market. Bear in mind that the author of this
piece is a liberal. So the tone is clearly anti-Trump. Unfortunately, much of her
analysis is correct.
The bond market warns Trump/congress of the dangers
of the rising deficit.
A more positive take on the outlook for interest
rates/bond prices.
https://www.zerohedge.com/markets/time-add-duration
Recession
A significant headwind to consumer spending.
https://www.apolloacademy.com/significant-headwinds-to-consumer-spending/
Unsustainable interest rates.
https://dollarcollapse.com/john-rubino-recession-watch-unsustainable-interest-rates/
Investing
Upending asset
allocations.
https://www.wellington.com/en-us/institutional/insights/the-dollar-smile-theory
Are we at a sovereign trust checkpoint?
Why the Japanese bond market is imploding.
https://www.zerohedge.com/markets/why-japanese-bond-market-imploding-goldman-explains
Political CEOs
hurt stock prices.
https://politicalcalculations.blogspot.com/2025/05/political-ceos-hurt-stock-prices.html
Chinese gold
imports surge.
Hedge funds piling into risk off bets.
https://www.zerohedge.com/markets/macro-hedge-funds-have-piled-big-risk-bets
News on Stocks in Our Portfolios
Home Depot (NYSE:HD) declared $2.30/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.
Thursday, May 22, 2025
The Morning Call--The Japanese government bond liquidity crisis is a global warning.
The Morning Call
5/22/25
The
Market
Technical
Wednesday in the
charts.
Wednesday in the
technical stats.
https://www.barchart.com/stocks/momentum
https://www.barchart.com/stocks/sectors/sectors-heat-map
The real move is
hiding in plan sight.
Update on
sentiment.
https://econbrowser.com/archives/2025/05/sentiment-confidence-news
Shorting is hot
again.
https://www.ft.com/content/deecb2a2-04a3-40cf-b835-577b2879d719
Q1 hedge fund
monitor.
https://www.zerohedge.com/markets/hedge-fund-trend-monitor-q1-short-interest-soars-6-year-high
Macro storm clouds
gather.
https://www.zerohedge.com/the-market-ear/markets-pause-macro-storm-clouds-gather
Fundamental
Headlines
The
Economy
US
Weekly initial jobless claims totaled 227,000
versus consensus of 230,000.
The April Chicago
Fed national activity index came in at -.25 versus expectations of -.20.
International
The May German
flash manufacturing PMI was 48.8 versus estimates of 48.9; the May flash services
PMI was 47.2 versus 49.5; the May flash composite PMI was 48.6 versus 50.4; the
May EU flash manufacturing PMI was 49.4 versus 49.3; the May flash services PMI
was 48.9 versus 50.3; the May flash composite PMI was 49.5 versus 50.7; the May
UK flash manufacturing PMI was 45.1 versus 46.0; the May flash services PMI was
50.2 versus 50.0; the May flash composite PMI was 49.4 versus 49.3.
The May German business
climate index was 87.5 versus projections of 87.4; the May current conditions
index was 86.1 versus 86.8.
The May UK industrial
trades orders index was -30 versus forecasts of -25.
Other
Ten risks to the US economy.
https://www.apolloacademy.com/10-downside-risks-to-the-us-economic-outlook/
Update on consumer credit.
Fiscal
Policy
House passes Big, Beautiful Bill.
https://www.zerohedge.com/political/trumps-big-beautiful-bill-narrowly-passes-house-215-214-vote
The reason we should be worried about the
deficit.
A
reason not to worry (Note, the author ignores the impact on inflation).
Lance Roberts isn’t worried.
https://www.advisorperspectives.com/commentaries/2025/05/21/moodys-debt-downgrade-matter-does
However, don’t ignore what is happening in
Japan.
But the ten year Treasury will decide who is
right and who is wrong.
https://www.capitalspectator.com/markets-still-expect-fed-to-keep-rates-steady-for-near-term/
And right now, it is not amused. (See
Wednesday in the charts---above)
https://bonddad.blogspot.com/2025/05/the-bond-market-is-not-amused-on.html
So maybe we should be worried.
Tariffs
An economic lesson from Daivd Ricardo.
https://www.ft.com/content/9e5b5b77-df41-4215-a512-51e04d0aad65
Investing
Japanese government bond liquidity crisis is
a global warning.
https://www.zerohedge.com/markets/price-rice-jgb-liquidity-crisis-global-warning
Innovation and
stock market bubbles.
https://mailchi.mp/verdadcap/innovation-and-stock-market-bubbles?e=513c9c4eac
Outlook for May
dividends.
https://politicalcalculations.blogspot.com/2025/05/the-outlook-for-s-500-dividends-in-may.html
At what interest rate do stocks care?
https://www.zerohedge.com/markets/10y-yields-surge-what-rate-do-stocks-break
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.
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