The Morning Call
6/27/25
The
Market
Technical
Thursday in the
charts.
Thursday in the technical stats.
https://www.barchart.com/stocks/momentum
https://www.barchart.com/stocks/sectors/rankings
The latest from Goldman’s trading desk.
Fundamental
Headlines
The
Economy
US
May pending home sales were up 1.8% versus forecasts
of -0.3%.
May PCE price index was +0.2% versus predictions
of +0.1%.
May personal
income declined 0.4% versus consensus of +0.3%; May personal spending was -0.1%
versus +0.1%.
The June Kansas
City Fed manufacturing index came in at 5 versus expectations of -5.
International
May Chinese YoY industrial profits fell 1.1%
versus estimates of +1.5%.
The May Japanese
unemployment rate was 2.5%, in line; May retail sales were down 0.2% versus up 0.4%;
June CPI was +3.1% versus +3.5%; June YoY core CPI was +3.1% versus +3.3%; June
YoY core CPI, ex food and energy was +3.1% versus +1.9%.
The June EU
economic sentiment index was 94.0 versus projections of 95.1; the June industrial
sentiment index was -12.0 versus -9.9; the June services index was up 2.9 versus
1.6; the June consumer confidence index was -15.3, in line.
Other
More on the housing market.
How worried should
we be about yesterday’s continuing jobs claims number?
https://bonddad.blogspot.com/2025/06/jobless-claims-indicate-employment.html
This analyst thinks that we should.
https://www.zerohedge.com/markets/stocks-are-being-given-warning-they-shouldnt-ignore
How much will yesterday’s GDP numbers impact
the Q2 now cast?
Overnight
News
On whether the US Reconciliation
Bill can be sent to President Trump by the July 4th deadline, Punchbowl says
that it is possible but is becoming increasingly difficult; Senators say voting
will not being until Saturday at the absolute earliest. "...one key
holdout said they’re far from the point when Trump will be needed to help close
a deal." Senators say voting will not being until Saturday at the absolute
earliest, with that viewed as optimistic. Senate parliamentarian ruling focused
on "the provider tax freeze in the bill rather than the Senate’s more
drastic constraints for Medicaid expansion states, according to two sources
with knowledge of the decision". Republicans believe they can come up with
a fix. President Trump has reportedly told multiple GOP senators privately that
he prefers the House’s provider tax framework, which is much less drastic than
the Senate’s version.
A
flurry of Federal Reserve officials this week made clear they’ll need a few
more months to gain confidence that tariff-driven price hikes won’t raise
inflation in a persistent way. After Waller and Bowman’s dovish commentary on
lowering rates as soon as July, nearly a dozen policymakers have dumped cold
water on that idea since then.
Europe considers a
range of concessions to the White House in an effort to strike a trade deal in
the near-term, including lowering tariffs on a range of imports, removing
certain non-tariff barriers, buying more American products, and taking steps to
address concerns about China.
US President Trump
said he just signed a deal with China on Wednesday, and says he has one maybe
coming up with India. Trump added that China is starting to open up. It
was later clarified that the US and China have agreed to an additional
understanding to implement the Geneva agreement, according to a White House
official cited by Fox’s Lawrence. A second Administration official confirmed
that the framework finalizes what was agreed in London and also addresses
Chinese export controls, according to a source familiar with the agreement.
China issues a
statement on trade framework with US; two sides confirmed details on framework
China will approve export applications for controlled items in accordance with
the law. Both sides maintained close communications after meetings in London.
The US side will accordingly lift a series of restrictive measures taken
against China.
Monetary
Policy
Does the data support a rate cut?
https://talkmarkets.com/content/us-markets/rate-cut-rumors-does-the-data-back-one?post=506089
Fiscal
Policy
How the dems view the big, beautiful bill.
https://www.nytimes.com/2025/06/25/opinion/trump-republicans-megabill.html
How effective is the debt limit?
https://www.cato.org/blog/warren-trump-debt-limit
We need to pay for the spending, not for the
tax cuts.
https://www.theunseenandtheunsaid.com/p/stop-saying-we-need-to-pay-for-the
Incompatible
goals: lowering the trade deficit while raising the budget deficit. The math
here is pretty simple: lowering trade deficit means fewer dollars to buy US Treasuries.
A larger deficit means more Treasuries. So more supply with less demand equals
higher rates.
Tariffs
Free trade is flourishing, just not in
America.
https://www.theunpopulist.net/p/free-trade-is-flourishing-just-not
Geopolitics
Continued uncertainty over Iran’s nuclear
program.
https://www.ft.com/content/0808eeb8-341c-4a4e-8ccf-0db07febef91
Part 2.
Victor Davis Hanson’s opinion.
https://www.zerohedge.com/geopolitical/vdh-end-everyone-hated-iranian-theocracy
Investing
The dollar’s death
is greatly exaggerated.
https://www.advisorperspectives.com/commentaries/2025/06/25/dollars-death-greatly-exaggerated
A sentiment shift
favors dollar bulls.
https://www.advisorperspectives.com/commentaries/2025/06/26/shift-favors-dollar-bulls
Foreign bonds
having a good year.
https://www.capitalspectator.com/foreign-bonds-are-having-a-very-good-year-in-us-dollar-terms/
A
great explanation of how the math of the Vix works and how it can be used in a
predictive manner.
https://www.zerohedge.com/markets/get-fearful-when-stock-market-gets-greedy
And some charts to
go along with the above.
https://www.zerohedge.com/the-market-ear/risk-20-sell
The latest from
Goldman’s head of strategy.
News on Stocks in Our Portfolios
Nike GAAP EPS of $0.14 beats by
$0.02, revenue of $11.1B beats by $380M
What
I am reading today
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