The Morning Call---The one-handed economist

 

The Morning Call

 

8/27/25

 

I am taking the rest of the week off to enjoy an extended Labor Day weekend. Unless something unusual happens, I will be back 9/2. Have a great holiday.

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/market-recaps/bonds-bullion-bid-amid-cook-chaos-stocks-steady-nvda-looms

 

                Tuesday in the technical stats.

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

            https://www.barchart.com/stocks/sectors/rankings

 

            The latest from Goldman’s trading desk.

            https://www.zerohedge.com/markets/seasonality-gets-ugly-here-top-goldman-trader-fears-liquidity-headwinds-amid-late-summer

 

            Gold---tic, tic, boom.

            https://www.zerohedge.com/the-market-ear/gold-tic-tic-boom

 

            VIX shorts at extremes; crash risk rising.

            https://www.zerohedge.com/the-market-ear/vix-shorts-extremes-crash-risk-rising

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications fell 0.5% while purchase applications were up 2.2%.

                       

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

 

The June Case Shiller home price index was up 2.1% versus consensus of +2.7%.

https://www.advisorperspectives.com/dshort/updates/2025/08/26/s-p-cotality-case-shiller-index-home-prices-fall-for-fourth-straight-month

 

The August consumer confidence index came in at 97.4 versus predictions of 96.0.

https://www.advisorperspectives.com/dshort/updates/2025/08/26/consumer-confidence-dips-slightly-in-august

 

The August Richmond Fed manufacturing index was -7 versus estimates of -19.

https://www.advisorperspectives.com/dshort/updates/2025/08/26/richmond-fed-manufacturing-activity-remained-soft-august-2025

 

                        International

 

July Chinese (YTD) YoY industrial profits were down 1.7% versus forecasts of -1.8%.

 

The September German consumer confidence index was reported at -23.6 versus expectations of -21.3.

 

                        Other

 

                          Results of the latest TIPP poll.

                          https://issuesinsights.com/2025/08/25/despite-recent-good-news-the-public-remains-sour-on-the-economy-ii-tipp-poll-finds/

 

                          Discretionary spending and the business cycle.

                              https://econbrowser.com/archives/2025/08/non-essentials-and-the-business-cycle

 

                         The economy is growing; the employment numbers look solid.

                          Economy Is Growing, While Job Indicators Remain Solid

 

            Monetary Policy

 

              The one handed economist.

              https://alhambrapartners.com/weekly-market-pulse-a-one-handed-economist/?src=news

 

              The Fed still evading key issues.

              https://www.advisorperspectives.com/commentaries/2025/08/26/fed-evading-key-issues

 

The notion of influencing Fed policy by the executive branch is a tricky subject. First, let me posit that the Fed policy has a long and undistinguished history of being consistently wrong. So, the idea of altering the Fed policy making machinery has a lot of merit (in my opinion). That said, it seems to me that altering it by allowing the executive branch (politics) to influence (have a say) on said policy would only make matters worse---which says nothing about the constitutional issues such a development would raise.    

 

 Uncharted waters.

              https://www.wsj.com/economy/central-banking/uncharted-waters-trumps-attempt-to-take-charge-of-the-fed-a2548461?mod=economy_lead_pos1

 

              Long bonds fall over Cook firing.

              https://www.bloomberg.com/news/articles/2025-08-26/dollar-falls-with-treasuries-as-trump-seeks-to-oust-fed-s-cook?srnd=homepage-americas&sref=loFkkPMQ

 

            Fiscal Policy

 

              The left is applauding the government’s stake in Intel.

              https://www.forbes.com/sites/waynecrews/2025/08/25/when-washington-buys-intel-it-owns-you-too/

           

              What are the limits of Trumpian state capitalism?

              https://fasterplease.substack.com/p/what-are-the-limits-to-trumpian-state

 

              Counterpoint.

              https://wolfstreet.com/2025/08/25/big-fuss-in-the-media-about-the-governments-10-stake-in-intel-but-just-giving-this-cash-to-intel-under-the-chips-act-was-fine/

 

              Trump policies are testing the limits of the economy’s resilience.

              https://www.capitalspectator.com/trump-policies-will-test-limits-of-us-economic-resilience/

 

            Inflation

 

              Housing market in deflation.

              https://talkmarkets.com/content/us-markets/repeat-home-sales-indexes-provide-final-confirmation-that-the-housing-market-is-in-deflation?post=518143

 

            Recession

 

              US consumers with prime credit ratings are starting to slip payments.

              https://www.reuters.com/business/finance/us-consumers-with-prime-credit-are-starting-slip-payments-2025-08-25/

 

            Tariffs

 

              Quote of the day.

              https://cafehayek.com/2025/08/quotation-of-the-day-5114.html

 

     Investing

 

              Bearish on stocks.

              https://ofdollarsanddata.com/why-im-bearish-on-us-stocks-for-the-second-time-since-2017/

 

              Investing in the long bond is risky.

              https://www.zerohedge.com/markets/black-mirror-economics-turn-bonds-risky-play

 

              Gold benefits from risk aversion, Fed expectations and technical compression.

              https://talkmarkets.com/content/commodities/gold-benefits-from-risk-aversion-fed-expectations-and-technical-compression?post=518124

 

              ETH and ETH treasury stocks are cheap.

              https://www.zerohedge.com/crypto/eth-ethereum-treasury-companies-are-cheap-stanchart

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            Wild theories about a giant space rock careening through our universe.

            https://www.zerohedge.com/technology/wild-theories-abound-over-gigantic-comet-careening-through-our-solar-system-fall

 

            Brain food.

            https://www.forkingpaths.co/p/brain-food-18a

 

            Managing your income to avoid higher taxes.

            https://politicalcalculations.blogspot.com/2025/08/managing-your-income-to-avoid-higher.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--Excessive money growth creates secular stagnation.

 

The Morning Call

 

8/26/25

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/market-recaps/stocks-mixed-amid-last-week-summer-lull-bitcoin-battered-black-gold-bid

 

                Monday in the technical stats.

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

            https://www.barchart.com/stocks/sectors/rankings

 

            The 90/90 breadth thrust.

            https://ritholtz.com/2025/08/crosscurrents/

 

            Goldman trader on AI stocks.

            https://www.zerohedge.com/markets/goldman-top-tech-trader-says-ais-tactical-breather-not-start-broader-correction

 

            Dollar death cross.

            https://www.zerohedge.com/the-market-ear/dollar-death-cross-and-then-we-ripped

 

            The buyback window closes on 9/14.

            https://www.zerohedge.com/the-market-ear/managements-voting-their-shareholders-money

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

July durable goods orders declined 2.8% versus predictions of -2.5%; ex transportation, they were up 1.1% versus -0.4%.

                          https://www.zerohedge.com/economics/core-durable-goods-orders-rise-fastest-annual-rate-3-years

 

                          July new home sales fell 0.6% versus forecasts of down 1.1%.

                          https://www.advisorperspectives.com/dshort/updates/2025/08/25/new-home-sales-inch-down-0-6-in-july

 

The August Dallas Fed manufacturing index was -1.8 versus projections of +0.2.

                          https://www.advisorperspectives.com/dshort/updates/2025/08/25/dallas-fed-manufacturing-business-conditions-unchanged-august-2025

 

                        International

 

                        Other

 

                          Mortgage delinquencies ease in July.

                          https://www.calculatedriskblog.com/2025/08/ice-first-look-at-july-mortgage.html

 

            Overnight News

 

Donald Trump escalated his battle to exert more control over the Fed by moving to fire Lisa Cook over allegations she falsified mortgage documents. Cook said the president has no authority to oust her, and she won’t quit, setting the scene for a legal battle. Trump’s move may become a test of the Supreme Court’s intentions when it signaled earlier this year it would shield the Fed from at-will removal of board members.

 

The U.S. will increase tariffs and impose export restrictions on countries that tax or regulate U.S. tech firms, President Trump said on Monday evening, in his most direct threat to retaliate against nations that he views as discriminating against companies such as Google and Meta Platforms.

 

Trump said on US stakes in companies, that he wants to get as much as he can and hopes to have many more cases like Intel, while he added there will be other cases.

 

A senior Chinese trade negotiator is heading to Washington this week for what is expected to be the first dialogue in the U.S. capital, according to people familiar with the matter, as both sides seek to establish regular communication during an extended tariff truce.

 

An announcement regarding the US-Japan trade deal involving a $550 billion investment vehicle is due this week, Commerce Secretary Howard Lutnick told Fox.

 

The US outlined plans to implement a 50% tariff on products from India. A draft notice said the levies would apply from 12:01 a.m. ET tomorrow. BBG

 

            Monetary Policy

 

              Excessive money growth creates secular stagnation.

              https://www.zerohedge.com/markets/excessive-money-supply-growth-creates-secular-stagnation

 

              Trump doesn’t need the Fed.

              https://www.forbes.com/sites/johntamny/2025/08/24/if-the-trump-economy-is-booming-then-it-doesnt-need-the-fed/

 

              Trump doesn’t understand interest rates.

              https://mishtalk.com/economics/chart-of-u-s-treasury-yields-show-trump-does-not-understand-interest-rates/

 

An important change of policy not mentioned in all the discussions about Powell’s Jackson Hole speech.

https://wolfstreet.com/2025/08/22/powell-makes-room-for-rate-cut-fed-kills-average-inflation-targeting-that-caused-so-much-damage-when-inflation-raged/

 

            Fiscal Policy

 

              Trump’s Intel deal.

              https://www.nakedcapitalism.com/2025/08/trumps-intel-deal-the-price-of-everything-the-value-of-nothing.html

 

     Investing

 

            Recent data show risk to earnings.

            https://www.advisorperspectives.com/commentaries/2025/08/25/us-economy-data-suggests-risk-earnings

 

            Numbers behaving badly.

            https://www.advisorperspectives.com/commentaries/2025/08/25/behaving-badly-numbers

 

            The appeal of small cap stocks.

            https://scottgrannis.blogspot.com/2025/08/the-appeal-of-small-cap-stocks.html

 

            Is the bull market finally broadening?

            Is the Bull Market In Stocks Finally Broadening?

           

            Why the long Fed pause may extend stocks’ rally.

https://www.marketwatch.com/story/after-9-months-on-hold-the-fed-could-cut-rates-in-september-why-the-long-pause-may-extend-stocks-rally-e90f3012?st=Aovbvr

 

            Where have all the contrarians gone?

            https://awealthofcommonsense.com/2025/08/where-have-all-the-contrarians-gone/

 

    News on Stocks in Our Portfolios

 

Bank of Nova Scotia (TSX:BNS:CA) declares CAD 1.10/share quarterly dividend, in line with previous.

 

 

What I am reading today

 

           

 

 

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Monday Morning Chartology

 

The Morning Call

 

8/25/25

 

The Market

         

    Technical

 

The S&P once again traded below the newly re-established uptrend off its April lows. Then, in a mighty effort on Friday attempted to recover the trend but failed. That is not to say that it won’t. Clearly, investors got jiggy with Powell’s Jackson Hole speech; and barring a negative news event, it seems likely that there will be follow through to the upside. Supporting that notion is that the index is (1) above all three DMAs and (2) in uptrends across all timeframes. That said, I continue to be worried about valuation levels. This is a market to trade not invest in long term. If you do, be sure to have close in stops. I still hold GDX and ETH as trades.

 

Chart of the week.

https://entrylevel.topdowncharts.com/p/chart-of-the-week-the-best-vs-worst

 

Where are the bulls?

https://www.zerohedge.com/the-market-ear/where-are-bulls

 

If you see a bubble, ride it.

https://www.zerohedge.com/the-market-ear/if-you-see-bubble-ride-it-1

 

 

 

TLT rallied on the week and not just because of Powell’s Friday gift, in the process recovering above its 50 DMA (now resistance; if remains there through the close today, it will reset to support) and closing right on its 100 DMA (now resistance). Nevertheless, (1) it remains below its 200 DMA and in downtrends across all timeframes and (2) its bounce on Friday was considerably less enthusiastic than that of equities. That suggests that inflation remains a bigger concern to the bond guys than your friendly stock jockey.

 

 

 

 

 

 

After being flat from Monday through Thursday, GLD rallied on Friday to close up on the week, ending back above its 50 DMA (now resistance; if it remains there through the close today, it will revert to support). While it remains above its 100 and 200 DMAs and is in uptrends across all time frames, it still needs to make a higher high before I feel comfortable that the uptrend is intact.

 

The dollar clearly didn’t like Powell’s dovish move, plunging back below its 100 DMA and breaking the very short term uptrend off its 7/1 low. While it is not an encouraging chart, it does have three near in support levels (the 50 DMA, the lower boundary of a very, very short term uptrend and the lower boundary of its short term trading range) that could help it construct a double bottom. That notwithstanding, like GLD, it doesn’t seem to be buying the stock boys’ enthusiasm over the prospects of a rate cut. I remain hard pressed to think that the worst is over.

 

 

 

 

            Friday in the charts.

                https://www.zerohedge.com/market-recaps/dovish-powell-drives-dollar-dump-panic-buying-across-risk-assets

 

            Friday in the technical stats.

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

            https://www.barchart.com/stocks/sectors/rankings

 

    Fundamental

 

       Headlines

             

              The Economy

                       

The stats last week were mixed (for the second week in a row) though the primary indicators were positive (one plus, one neutral) with no price measures. Overseas, the data was very upbeat including three positive inflation readings.

 

So, the numbers were supportive of my ‘muddle through’ scenario. My ‘inflation is as good as it is going to get’ forecast---not so much.

 

Of course, the week was dedicated to guessing what Powell would say Friday morning at the Jackson Hole conference. And he didn’t disappoint.  The narrative was dovish resulting in spike in both the odds of September rate cut and the Market.

 

It also increases the likelihood that both legs of my outlook will come to fruition. Short term, I remain in the ‘muddle through’ camp. Longer term, inflation is as good as it is going to get’ and, indeed, with the onset of tariffs and the deficits from the BBB, it could become an even larger problem than I previously thought.

 

US

                       

                          July building permits fell 2.2% versus estimates of -2.8%.

 

The July Chicago national activity index came in at -0.19 versus expectations of -0.2.

 

                        International

 

The June Japanese leading economic indicators were reported at 105.6 versus projections of 106.1.

 

The August German business climate index was 89.0 versus consensus of 87.0; the July current conditions index was 86.4 versus 86.6.

 

                        Other

                       

                          Update on Q3 nowcast.

                          https://www.capitalspectator.com/us-gdp-nowcasts-continue-to-indicate-slower-q3-growth/

                                                 

                          More.

                          https://www.calculatedriskblog.com/2025/08/q3-gdp-tracking_22.html

 

                          Not so fast.

                          ECONOMIC WEEK AHEAD: August 25-29

 

                        Overnight News

 

Despite Powell’s speech, clear divisions remain among Fed officials. The St. Louis Fed’s Alberto Musalem said he’ll need more data, Reuters reported, while Chicago’s Austan Goolsbee pointed out he’s still more concerned about the inflation side of their mandate than employment.

 

 South Korea's President Lee said they will ultimately arrive at a reasonable trade deal with the US and he expects to discuss with US President Trump security and defense costs, as well as tariff negotiations.

 

India’s Foreign Minister said trade negotiations are still going on and they have lines to maintain and defend, while he added the lines India cannot cross are the interests of farmers and small producers. Furthermore, he said India buying Russian oil was never brought up before the public announcement of tariffs and issues about buying Russian oil are not being used to target other major users such as China and the EU.

 

                        Fiscal Policy

 

                          If the new BLS head is as bad as his critics say, that is a win.

                          https://www.realclearmarkets.com/articles/2025/08/22/if_ej_antoni_is_as_bad_as_his_critics_say_we_all_win_1130350.html

 

                                                  Three economists discuss current economic issues.

                          https://www.nytimes.com/2025/08/21/opinion/trump-economy-tariffs-data.html

 

This is the good news side of the BBB. But the author fails to mention its impact on the deficit/national debt.

https://thehill.com/opinion/finance/5462354-expanding-economic-opportunity-law/

 

                          And speaking of the deficit/debt (which I wish I wasn’t).

https://investorsobserver.com/news/treasury-secretary-bessent-is-gaslighting-the-american-people-on-tariff-revenue-as-government-debt-runs-wild-analyst-says/

 

                          What if Treasuries are no longer a safe haven?

                          https://mrzepczynski.blogspot.com/2025/08/what-if-treasury-bonds-are-not-safe.html

 

                          Mimicking China is not the way to win the race against China.

  https://www.aei.org/articles/mimicking-china-isnt-how-the-us-should-race-against-china/?mkt_tok=NDc1LVBCUS05NzEAAAGccDIPwaNDHxjnZQX0gVkpDACMPVZKpjkqYH36JirelKaxOqUVTiwQWmYrjv56rL9B-TPZeIxrn5JG-y0P65ZE3uofLEr-bewU2HzXPNlNUvHsu3M

 

 

      Investing

 

            Is value investing making a comeback?

            https://www.advisorperspectives.com/commentaries/2025/08/22/value-investings-comeback

 

            How long can this lopsided market continue to prosper?

            https://www.nytimes.com/2025/08/22/business/stock-market-nvidia-trump.html

 

            Update on Q2 S&P earnings.

            https://talkmarkets.com/content/us-markets/sp-500-earnings-dashboard-25q2-friday-aug-22?post=517404

 

            The downside to private equity.

            https://www.wsj.com/finance/investing/the-ivy-league-keeps-failing-this-basic-investing-test-747c8b8c?st=VXH8tH&reflink=desktopwebshare_permalink

 

            Bubble risks grow in Chinese market.

            https://www.zerohedge.com/markets/bubble-risks-grow-chinas-bull-run-defies-angst

 

            In Europe, not so much.

            https://www.zerohedge.com/the-market-ear/things-can-only-get-less-worse-long-trade-europe

 

   News on Stocks in Our Portfolios

 

What I am reading today

 

            Monday morning humor.

            10 Ways Babies Are Smarter Than Liberals | Babylon Bee

 

            What is Alpha School?

            Cash Transfers Fail? - by Arnold Kling - In My Tribe          

 

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