The Morning Call
.
12/8/25
The
Market
Technical
The S&P continued to tip toe higher. Though
it is still below the lower boundary of the former uptrend off its May low (~6891)
and its former high (~6920). It seems almost certain to me that it will 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) a December rate cut
appears to be lock.
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.
Breakouts
everywhere.
The latest
from Citadel’s desk.
TLT suffered
another dismal week. It reset its 50 DMA to resistance. If it remains (1) below
its 100 DMA through the close today, it will reset that DMA to resistance and
(2) below it 200 DMA through the close on Wednesday, it will rest the DMA to
resistance. In addition, remember it is in downtrends across all timeframes. Despite
the optimism on rate cut this week, 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.
Gold was down
slightly on the week. Although it did manage to make a higher high in the
process. So the trend remains to the upside. It is above all three DMAs and in
uptrends across all timeframes. I continue to hold my trading position in GDX.
The dollar confirmed its break of the very short term
uptrend off the September low. However, the good news is that it did test its
50 DMA and bounced---a slight positive. It remains 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.
https://www.zerohedge.com/markets/most-shorted-mag7-momo-gains-bitcoin-bonds-bullion-pains
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
US stats last week
were balanced as were the primary indicators (one plus, three neutral, one
minus). Overseas, the numbers were very positive with the inflation data
balanced (one plus, three neutral, one minus).
After all the
fretting about the lack of economic data, with the resumption of statistical
releases, nothing has really changed. The US economy is still muddling through
assisted by better data from overseas. Ditto my inflation forecast (as good as
it is going to get).
On the monetary front,
a Fed rate cut this week seems assured. While I think it a negative, it
reinforces both my growth and inflation outlook. Still I want to see a couple
more confirming weeks of data before turning off my yellow flashing light.
US
International
Other
Consumer sentiment improves slightly.
Update on personal
income.
Update on real disposable income per capita.
Real
income is rising but real spending may be rolling over.
https://bonddad.blogspot.com/2025/12/real-income-rises-but-real-spending-on.html
A tailwind for the economy in 2026.
https://www.apolloacademy.com/significant-fiscal-boost-coming-in-2026/
October consumer credit below expectations.
Monetary
Policy
The
Fed’s November 30th balance sheet.
A Fed Funds rate cut is not likely to have
much effect on the economy.
Fiscal
Policy
Living on borrowed credibility.
https://www.theunseenandtheunsaid.com/p/living-on-borrowed-credibility
Inflation
The PCE measure for housing declined in
September.
https://www.calculatedriskblog.com/2025/12/pce-measure-of-shelter-declined-to-37.html
Tariffs
National security tariffs on toilet paper?
https://econbrowser.com/archives/2025/12/national-security-tariffs-sec-232-on-toilet-paper
The
Financial System
In an earlier post
I noted that banks aren’t nearly at risk from the private credit market as they
were the mortgage market in 2008. While that is correct, this article provides
an estimate of the banking system’s current exposure to private credit---which
is not insignificant.
Geopolitics
Trump’s latest National Security Strategy.
The Outlook for 2026
Goldman trader
first reviews 2025, then opines on 2026.
The latest from BofA.
https://www.zerohedge.com/markets/hartnett-soon-all-commodity-charts-will-look-gold
Investing
The moment for gold has arrived.
Revisiting the ‘safe’ portfolio withdrawal
rate in retirement.
https://www.capitalspectator.com/revisiting-safe-portfolio-withdrawal-rates-for-retirement/
Time to rebalance.
MARKET
CALL: Rebalancing Domestic & Global Stock Portfolios In 2026
News on Stocks in Our Portfolios
What
I am reading today
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