Tuesday, May 27, 2025

three civilization killers

 https://www.zerohedge.com/political/trump-must-avoid-these-3-civilization-killers-when-tackling-national-debt



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.

            https://www.zerohedge.com/market-recaps/dollar-crashes-18-month-lows-after-trump-tantrum-bitcoin-gold-near-record-highs

 

            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.

https://www.bloomberg.com/news/articles/2025-05-23/trump-threatens-a-50-tariff-on-eu-goods-starting-in-june?sref=loFkkPMQ

 

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.

https://www.wsj.com/economy/central-banking/bond-market-yields-government-borrowing-4a78af80?mod=economy_lead_pos1

 

 

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.

            https://investorplace.com/hypergrowthinvesting/2025/05/big-oil-just-went-big-ai-the-trillion-dollar-shift-reshaping-the-future/

 

                The anchoring problem and how to solve it.

            https://talkmarkets.com/content/stocks--equities/the-anchoring-problem-and-how-to-solve-it?post=499239

 

 

    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.

            https://www.zerohedge.com/market-recaps/stocks-flat-mystery-buyer-emerges-bonds-after-budget-busting-bill-passes-bitcoin-tags

 

            Thursday in the technical stats.

            https://www.barchart.com/stocks/momentum

            https://www.barchart.com/stocks/sectors/sectors-heat-map

 

            The latest from Goldman.

            https://www.zerohedge.com/markets/goldmans-shocking-admission-only-offramp-break-treasury-stock-reflexive-selling-loop-means

 

    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.

              https://www.zerohedge.com/markets/futures-plunge-after-trump-threatens-25-tariff-apple-50-europe-bonds-bullion-bid

 

            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.

              https://www.nakedcapitalism.com/2025/05/ideology-driven-inflationary-trump-tax-and-tariff-policies-losing-war-with-bond-and-currency-markets.html

 

              The bond market warns Trump/congress of the dangers of the rising deficit.

  https://www.bloomberg.com/news/articles/2025-05-21/treasury-yields-climb-auguring-5-rate-for-20-year-bond-auction?srnd=homepage-americas&sref=loFkkPMQ

 

              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?

            https://www.americanthinker.com/articles/2025/05/bond_market_shock_is_a_new_financial_crisis_looming.html

 

            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.

            https://talkmarkets.com/content/global-markets/chinese-gold-imports-surge-as-demand-continues-to-grow?post=499028

 

            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.

            https://www.zerohedge.com/market-recaps/ugly-auction-triggers-bond-bloodbath-big-tech-black-gold-dumped-bitcoin-bullion-jump

 

            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.

            https://talkmarkets.com/content/ghost-prints-and-volatility-say-the-real-move-is-still-ahead?post=498798

           

            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.

  https://wolfstreet.com/2025/05/20/credit-card-delinquencies-balances-debt-to-income-ratio-and-credit-limits-in-q1-2025-our-drunken-sailors-and-their-credit-cards/

 

 

            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.

                https://www.foxnews.com/opinion/trumps-big-beautiful-bill-needs-fat-shot-end-our-dangerous-debt-addiction

 

              A reason not to worry (Note, the author ignores the impact on inflation).

              https://www.realclearmarkets.com/articles/2025/05/21/what_market_signals_can_teach_the_national_debt_alarmists_1111495.html

 

              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.

              https://talkmarkets.com/content/economics--politics/japan-is-going-bust-and-the-us-is-not-far-behind?post=498788

 

              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.

              https://www.zerohedge.com/markets/single-most-important-market-indicator-accelerating-us-fiscal-risks-deutsche-bank

 

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.