The Morning Call---Powell disapoints; China deal not exactly 'amazing'.

 

The Morning Call

 

10/30/25

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/stocks-bonds-and-bitcoin-battered-after-powell-trapdoors-markets-says-december-cut-not-set

 

                        Wednesday in the technical stats (again note the weak breadth).

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

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

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

 

            In Goldilocks melt up, Goldman addresses the three bears.

            https://www.zerohedge.com/markets/goldilocks-melt-equities-will-continue-goldman-traders-address-three-bears

 

            The fast money is mostly out of gold and silver.

            https://www.zerohedge.com/precious-metals/fast-money-mostly-out-gold-and-silver

 

            The gold puke pause.

            https://www.zerohedge.com/the-market-ear/gold-puke-pause

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

September pending home sales were flat with August versus an anticipated rise of 1.3%.

                          https://www.advisorperspectives.com/dshort/updates/2025/10/29/pending-home-sales-flat-september-2025

 

                        International

 

Q3 German flash GDP growth was 0.0% versus forecasts of +0.1%; October preliminary CPI was 0.3%, inline.

                          

Q3 EU flash GDP growth was +0.2% versus expectations of +0.1%; the September unemployment rate was 6.3%, in line; the October economic sentiment indicator was 96.8 versus 95.5; the October industrial sentiment indicator was -8.2 versus -10.0; the October services sentiment indicator was 4.0 versus 3.4; the October consumer confidence indicator was -14.2, in line.

 

                        Other

 

                          September multi-family delinquency rate increased.

                          https://www.calculatedriskblog.com/2025/10/fannie-and-freddie-single-family.html

 

                          October regional Fed bank summaries of goods production.

                          https://bonddad.blogspot.com/2025/10/october-regional-feds-summary-of-goods.htm

 

                Overnight News

 

 The Senate votes 50-46 to block Trump’s tariffs on Canada (this action, the second in as many days after the Senate voted to remove Trump’s Brazil tariffs, is most likely symbolic since it likely will not pass in the house).

 

Senate Majority Leader John Thune said Wednesday he expects to engage “pretty soon” with a group of rank-and-file Senate Democrats about ending the 29-day-and-counting government shutdown. If a meeting happens, it would be a rare bipartisan gathering involving a top party leader.

 

The Bank of Japan kept interest rates steady on Thursday, with its governor sending the strongest signal yet that a rate hike was possible as soon as December depending on the outlook for wages next year. 

 

Trump ordered nuclear weapons trials in response to Russia’s recent tests of nuclear-powered underwater drones and cruise missiles. The US’s last nuclear explosive test was in 1992. 

 

                Monetary Policy

 

The FOMC wrapped up its October meeting, followed by a Powell press conference. Below summarizes most of the salient points (rate cut, end of QT) from this event. However, it fails to convey the more hawkish tone of Powell comments. He raised serious doubts about a December rate cut (odds have dropped substantially) and voiced more concern than in the recent past about inflation. Markets didn’t like it though not to the point of a major decline. Nonetheless, it raises just one more concern about stock prices at current levels.

                  https://www.zerohedge.com/markets/fomc-31

 

              Ed Yardini’s take.

              Don't Feed The Animal Spirits

 

            Tariffs

 

              US/China strike ‘tactical’ trade deal.

              https://www.zerohedge.com/markets/trump-hails-amazing-xi-meeting-trade-concessions-us-soybean-farmers-win-china-eases-rare

 

     Investing

 

            Memory is the next AI bottleneck.

https://www.riskhedge.com/outplacement/memory-is-the-next-ai-bottleneckand-the-next-profit-opportunity/rcm?utm_campaign=RH-144&utm_content=RH144OP828&utm_medium=ED&utm_source=rcm

 

            Another analyst argues that the Santa Claus rally may not happen (but BTFD).

            https://www.advisorperspectives.com/commentaries/2025/10/29/what-spook-markets

 

            Is it really a bubble?

            https://www.ft.com/content/e65579d3-f513-44f4-91e0-246fefe66e4c

           

Markets face a defining week.

            https://www.zerohedge.com/markets/markets-face-defining-week-risk-packed-days-loom-goldilocks-toughest-test

 

    News on Stocks in Our Portfolios

 

Altria press release (MO): Q3 Non-GAAP EPS of $1.45 in-line.

Revenue of $5.26B (-1.5% Y/Y) misses by $50M.

 

Microsoft press release (MSFT): Q1 Non-GAAP EPS of $4.13 beats by $0.47.

Revenue of $77.67B (+18.4% Y/Y) beats by $2.28B.

 

What I am reading today

 

            Prediction markets are very accurate.

            https://marginalrevolution.com/marginalrevolution/2025/10/prediction-markets-are-very-accurate.html

 

                        Quote of the day.

            https://cafehayek.com/2025/10/quotation-of-the-day-5177.html

 

                        Why aren’t smart people happier?

            https://www.theseedsofscience.pub/p/why-arent-smart-people-happier

 

 

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