Thursday, August 7, 2025

The Morning Call---The odds of recession

 

The Morning Call

 

8/7/25

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/market-recaps/bitcoin-big-tech-bond-yields-jump-trump-tariff-tantrum-whipsaws-wti

 

                More charts.

            https://www.zerohedge.com/the-market-ear/bounce-done-fear-gone-greed-missing-action

 

                Wednesday in the technical stats.

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

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

 

            Goldman trader: stocks are ignoring recession risks, so the trend is still up.

https://www.bloomberg.com/news/articles/2025-08-06/goldman-trader-says-buoyant-stocks-are-ignoring-recession-risks?srnd=homepage-americas&sref=loFkkPMQ

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

           

                          Weekly initial jobless claims totaled 226,000 versus estimates of 221,000.

 

Q2 preliminary nonfarm productivity rose 2.4% versus expectations of up 2.0%; unit labor costs were up 1.6% versus +1.5%.

 

                        International

 

The June Japanese leading economic indicators came in at 106.1 versus consensus of 105.2.

 

The June German trade balance was +E14.9 billion versus projections of +E17.3 billion; the July Chinese trade balance was +$98.2 billion versus +$105 billion.

 

                        Other

 

                          An alternative view of the labor market.

                          https://econbrowser.com/archives/2025/08/even-more-depressing-pictures-from-the-labor-market

 

            Overnight News

 

Japan cut its growth forecast for the current fiscal year as US tariffs and persistent   inflation weigh on the economy. 

 

This morning, the BoE delivered a hawkish 25bps cut, with the vote split 5:4 for 25bps vs hold, and the statement noting that timing/extent of further cuts will be based on continued improvements in underlying inflation. The vote was the first ever revote in 28 years after the 4:4:1 vote in the first round failed to reach a majority.

              https://www.zerohedge.com/markets/bank-england-cuts-rates-4-after-historic-re-vote

 

The Kremlin said Thursday that a meeting between presidents Donald Trump and Vladimir Putin has been agreed in principle and will happen in the “coming days,” teeing up their first in-person encounter of Trump's second term. 

 

            Monetary Policy

 

              Will upcoming inflation data derail odds of a rate cut?

              https://www.capitalspectator.com/will-incoming-inflation-data-derail-outlook-for-interest-rate-cut/

 

              Counterpoint.

              https://talkmarkets.com/content/the-fed-set-to-move-faster-to-stave-off-recession-risk?post=513785

 

            Recession

 

              This analysts weighs in on the recession metrics.

              https://www.calculatedriskblog.com/2025/08/recession-watch-metrics.html

 

              And another.

              https://mishtalk.com/economics/burns-home-value-index-shows-price-declines-in-35-percent-of-the-us/

 

              And another.

              https://www.zerohedge.com/markets/dr-copper-talking-no-one-listening

 

Confirming Moynihan’s comments on CNBC, Yardini points to continued strength in the banking sector as a sign that the economy/Market will continue to perform.

              Still Banking On A Resilient US Economy

 

              On the other hand, the credit card bubble is near bursting.

              https://www.zerohedge.com/personal-finance/bubble-bursting-delinquency-rates-have-doubled-and-credit-card-defaults-are

 

            Fiscal Policy

 

              Holding the BLS responsible for its work product.

              https://issuesinsights.com/2025/08/05/is-the-bls-corrupt-or-just-hopelessly-incompetent/

 

              More.

              https://www.zerohedge.com/political/lies-damn-lies-and-statistics

           

Encouraging a weaker dollar is bad policy. (Reagan said that a currency represents a country’s stock. The higher the price of the stock, the more valuable/economically successful a country.)

https://www.cato.org/blog/encouraging-weaker-us-dollar-bad-economic-policy

 

              Quote of the day.

              https://cafehayek.com/2025/08/quotation-of-the-day-5092.html

 

     Investing

 

            Cracks starting to show.

            https://www.advisorperspectives.com/commentaries/2025/08/06/august-2025-letter-cracks-show

 

            Bubble warnings flashing for tech.

            https://www.zerohedge.com/markets/bubble-warnings-flashing-tech-risk-highest-bursting-dot-com-bubble

 

            On the other hand: why risk assets are so complacent.

            https://www.zerohedge.com/markets/macro-signals-30-recession-probability-goldman-asks-why-are-risk-assets-so-complacent-now

 

            The downside to crypto.

            https://www.ft.com/content/c8379d47-7f80-4ee6-8e9d-69b379cea027

 

            July dividends by the numbers.

            https://politicalcalculations.blogspot.com/2025/08/dividends-by-numbers-in-july-2025.html

 

            Why NOT to invest in meme stocks.

            https://marknewfield.substack.com/p/the-grand-illusion

 

    News on Stocks in Our Portfolios

 

     General Dynamics declares $1.50 dividend

 

What I am reading today

 

            What is a catastrophe bond?

https://theweek.com/business/catastrophe-bond-market-growing?refid=75FFC898AD6883CBB120FC6A86C62323&utm_medium=email&utm_campaign=afternoon_newsletter_20250804&utm_source=afternoon_newsletter

 

 

 

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