The Morning Call
Including
four must read articles.
12/1/25
The
Market
Technical
The S&P bounced off its 100 DMA and
pushed back through its 50 DMA. It is now challenging the lower boundary of the
former uptrend off its May low (~6849). That represents some minor resistance;
but the bigger challenge will be its former high (~6920). Given the momentum it
has generated over the last two weeks, it seems almost certain to test that all
time high. Given (1) seasonal factors, (2) that the index is above all three
DMAs and in uptrends across all time frames and (3) investors have gotten jiggy
about a December rate cut, odds favor a push higher.
Still, I
remain of the opinion that this is a market to trade not invest in long term.
If you do, be sure to have close in stops. I did reestablish my GDX position on
Friday.
Santa’s rally.
The latest from
Goldman’s desk.
https://www.zerohedge.com/markets/little-something-goldman-sachs-weekend-sir
The pain trade is likely
higher.
https://www.zerohedge.com/markets/bull-vs-bear-pain-trade-likely-be-higher
After another bad
week (11/17), TLT made a comeback on the renewed hope of a December rate cut. It
is now above all three DMAs but remains in downtrends across all timeframes. Despite
the renewed optimism, the only circumstance I can see as pushing rates meaningfully
lower would be a recession. And I hardly think anyone would be happy about that
scenario. I wouldn’t bet heavily on a change of direction until TLT breaches
the upper boundary of its short term downtrend.
Bond
quake in Tokyo.
After being so
overbought, I am little surprised that the correction in gold didn’t push to
lower levels than it has to date. Of course, it could still do so. But absent
the prospect for higher rates or a stronger dollar, that probability seems to
be fading. It remains above all three DMAs and in uptrends across all
timeframes. Given all that, as I noted above, I re-established my trading
position in GDX.
The dollar stumbled again last week and, in the process, re-broke
the very short term uptrend off the September low. While not a positive sign, it
clearly has managed to remain within its short term trading range and, optimistically,
will continue to do so. Although I don’t think more rate cuts are the answer
for its dismal performance.
Friday in the
charts.
Friday 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
Fundamental
Headlines
The
Economy
Week of 11/17
The US stats were
very positive, as were the primary indicators (three plus, one neutral) with no
inflation data.
Overseas, the
releases were negative and the inflation numbers balanced (one plus, two
neutral, one minus)
Week
of 11/24
The US stats were
meager but balanced as were the primary indicators (one positive, one negative).
No inflation numbers
Overseas was a
similar story---gross data balanced. But the inflation stats were upbeat (one
plus, one neutral).
Given the paltry supply
of data, it is tough to make any kind of confident judgement regarding any
potential change in the economic winds.
So, my forecasts
on economic growth (muddle through) and inflation (good as it is going to get)
remain in place.
The major
developments over the past two weeks were:
(1) the reopening
of government. Evern though there was no economic data forthcoming in the week
of 11/17, investors/economists as well as the Fed narrative held to their view
that growth was slowing and prices were rising,
(2) then in the
week of 11/24, data started being reported. And even though [a] it was stale
and outdated, it was quite dovish {i.e. weak growth}, it brought increasing
hope of a Fed rate cut, [b] which was reinforced by more dovish comments from
the Fed {remember the Fed Kenneth Hassett {a dove, so hardly a surprise} was
the leading candidate to replace Powell.
So we witnessed a massive
swing in the odds of a Fed rate cut. In my opinion, a couple of old economic
datapoints is hardly a reason for a major swing in economic sentiment; but
there it is. I await more information before making a judgment about the
economy or the Markets. More patience.
My yellow light is
flashing but my Market focus has shifted from potential support levels to potential
resistance levels (see above).
US
International
The November
German manufacturing PMI was 49.2 versus consensus of 48.4; the November EU manufacturing
PMI was 49.6 versus 49.7; the November UK manufacturing PMI was 50.2, in line.
Other
The week ahead.
ECONOMIC
WEEK AHEAD: December 1-5
Five economic reasons to be thankful.
https://www.calculatedriskblog.com/2025/11/five-economic-reasons-to-be-thankful.html
Overnight
News
Trump said on
Friday he is cancelling all executive orders signed by former President Biden
using autopen and stated that any document signed by Biden with autopen, which
was approximately 92% of them, is hereby terminated and of no further force or
effect. Furthermore, Trump stated that Biden was not involved in the autopen
process and if he says he was, he will be brought up on charges of perjury.
US and Ukrainian
negotiators said they held productive talks on a potential peace framework but
have yet to reach a breakthrough. Steve Witkoff is due to meet Vladimir Putin
in Russia tomorrow.
Black Friday sales
climbed 4.1%, Mastercard said, surpassing last year’s growth, a sign US
consumers are continuing to spend despite persistent economic concerns. But
Adobe Analytics expects growth in Cyber Monday sales to ease from last year.
Monetary
Policy
How
central bank monetary policy has reversed.
Inflation
The cost of Thanksgiving dinner in down in
2025.
https://politicalcalculations.blogspot.com/2025/11/cost-of-thanksgiving-dinner-shrinks-in.html
Recession
We may already be in a recession.
Counterpoint.
Investing
This bodes well for the upside.
https://www.zerohedge.com/the-market-ear/may-bode-well-both-upside-and-market-breadth
Ten things not to be thankful for.
https://www.zerohedge.com/the-market-ear/10-things-not-be-thankful-monday-morning
News on Stocks in Our Portfolios
What
I am reading today
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