Thursday, September 18, 2025

The Morning Call--The smart money is flashing a warning signal

 

The Morning Call

 

9/18/25

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/market-recaps/powells-risk-management-cut-wreaks-havoc-across-markets

 

                Wednesday in the technical stats.

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

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

            https://www.barchart.com/stocks/signals/new-recommendations

 

            The Russell hits resistance.

            https://www.zerohedge.com/the-market-ear/roaring-russell-hits-resistance

 

            The number of NASDAQ stocks above their 50 DMA is declining.

            https://x.com/AndrewThrasher/status/1968309940248043881

 

            S&P support strengthens; Gold uptrends holds.

            https://talkmarkets.com/content/etfs/spx-support-strengthens-gold-uptrend-holds?post=523229

 

            How the stock market acts during a government shutdown.

            https://www.carsongroup.com/insights/blog/lets-talk-about-a-government-shutdown/

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

                       

                          Weekly initial jobless claims totaled 231,000 versus forecasts of 240,000.

                          https://www.zerohedge.com/personal-finance/initial-jobless-claims-tumble-back-their-four-year-range-texas-anomaly-normalizes

 

The September Philadelphia Fed manufacturing index came in at 23.2 versus predictions of 8.0.

 

                        International

 

                          July Japanese machinery orders fell 4.6% versus estimates of -1.3%.

 

                          July EU construction output was up 3.2% versus projections of +2.1%.

 

                        Other

 

                          September business cycle indicators.

                          https://econbrowser.com/archives/2025/09/business-cycle-indicators-at-mid-september

 

                          The housing bubble in major US cities.

  https://wolfstreet.com/2025/09/16/the-most-splendid-housing-bubbles-in-america-aug-2025-price-drops-gains-in-33-large-expensive-metros-us-home-prices-fell-yoy/

 

                          A short history of median household income.

                          https://www.advisorperspectives.com/dshort/updates/2025/09/17/u-s-household-incomes-over-50-years-the-great-divide

 

An in depth analysis of housing construction and what it means for the economy.

https://bonddad.blogspot.com/2025/09/august-housing-construction-even-more.html

 

            Overnight News

 

US government shutdown risks are rising, with Democrats demanding health care policy changes that House Speaker Mike Johnson has said have “zero” chance of becoming law. The US House cleared the procedural hurdle for a floor vote this week on the stopgap funding measure to avert a government shutdown.

 

The Trump administration is drawing up plans to use tariff revenue to fund a program to support US farmers as they head into harvest facing falling export sales and rising input costs.

 

China is dropping an antitrust probe into Google, as Beijing and Washington step up negotiations over TikTok, Nvidia and trade at a time of heightened tensions between the superpowers.

 

China rare earth exports jumped to a record level in Aug as Beijing permits expanded shipments following an easing of tensions with Washington. BBG

 

            Monetary Policy

 

As everyone knows, the FOMC wrapped up its September meeting yesterday and that was followed by the Powell presser. It cut the Fed Funds rate by 25 basis points, as expected. The tone of the Fed statement and Powell’s comments along with the accompanying dot plot suggested to me an above normal level of uncertainty about the strength of the economy as well as inflation. While I would have voted for no rate cut, I am comforted by the level of concern about inflation.

https://www.zerohedge.com/markets/fomc-29

 

A more negative take.

https://www.zerohedge.com/markets/jerome-powells-fed-enters-nightmare-territory

           

              More Wall Street reactions.

              https://www.zerohedge.com/economics/wall-street-reacts-powells-risk-management-rate-cut

 

              The yield curve doesn’t mean what it used to mean.

              https://www.marketwatch.com/story/why-the-feds-rate-cut-might-not-boost-the-economy-b764c0e6?st=jEXU3Q

 

            Fiscal Policy

 

              Political cowardice.

              https://www.nationalreview.com/corner/political-cowardice-covid-obamacare-credit-edition/

 

GOP again cedes tariff power to Trump (again, in my opinion, this is a constitutional issue).

https://www.nytimes.com/2025/09/16/us/politics/republicans-house-tariffs-emergency-trump.html

 

     Investing

 

            The outlook for Q3 dividends.

            https://politicalcalculations.blogspot.com/2025/09/the-outlook-for-s-500-dividends-in.html

 

            US IPO activity on course for best quarter since 2022.

            https://www.advisorperspectives.com/commentaries/2025/09/17/us-ipo-activity-track-best-quarter-since-q1-2022

 

            The ‘smart money’ is flashing a warning signal.

                        https://www.bloomberg.com/opinion/articles/2025-09-17/institutional-investors-are-flashing-a-warning-for-stocks?srnd=homepage-americas&sref=loFkkPMQ

 

            AI trade getting crowded.

            https://www.zerohedge.com/markets/ai-momentum-trade-getting-very-crowded-top-goldman-traders-warn

 

            The debt landscape has flipped.

            https://www.ft.com/content/b2d44ad5-62bc-4dc4-9bbc-90633fa596c6

 

            Gold: overbought, overvalued, overcrowded.

            https://www.zerohedge.com/the-market-ear/gold-overbought-overvalued-overcrowded

 

    News on Stocks in Our Portfolios

 

FactSet Research Systems press release (NYSE:FDS): Q4 Non-GAAP EPS of $4.05 misses by $0.08.

Revenue of $596.9M (+6.2% Y/Y) beats by $3.46M.

 

What I am reading today

 

            The tyranny of the playbook.

            https://investmentecosystem.com/2025/09/17/the-tyranny-of-the-playbook/

 

 

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