Tuesday, December 16, 2025

The Morning Call--The bond market's warning

 

The Morning Call

 

12/16/25

 

The Market

         

    Technical

 

            Friday in the charts.

            https://www.zerohedge.com/markets/crypto-carnage-continues-bonds-stocks-mixed-ahead-catalyst-heavy-week

 

                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

 

            Margin debt tops $1.2 trillion.

            https://www.advisorperspectives.com/dshort/updates/2025/12/15/margin-debt-finra-new-record-high-november-2025

           

            Bitcoin is at the edge.

            https://www.zerohedge.com/the-market-ear/bitcoins-edge-whos-gonna-buy

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                         Today we got the data from the shutdown:

 

October nonfarm payrolls down 105,000 versus estimates of up   55,000; October retail sales flat versus +0.2%, ex autos, up 0.5% versus +0.2%; November nonfarm payrolls up 64,000 versus up 25,000; the November unemployment rate was 4.6%, in line.

 

                          The December NAHB housing index was 39 versus predictions of 37.

                          https://www.advisorperspectives.com/dshort/updates/2025/12/15/nahb-housing-market-index-builder-confidence-december-2025

 

                        International

 

The October UK unemployment rate was 5.1%, in line; the October (3 mo./YoY) average earnings were up 4.7% versus 4.5%.

 

The October EU trade balance was +E18.4 billion versus consensus of +E14.1 billion; the December economic sentiment index was 33.7 versus 25.5; the December German economic sentiment index was 45.8 versus 39.0; the December German current conditions index was -81.0 versus -76.8.

 

The December Japanese flash manufacturing PMI was 49.7 versus expectations of 49.5; the flash services PMI was 52.5 versus 51.2; the flash composite PMI was 51.5 versus 51.9; the December German flash manufacturing PMI as 47.1 versus 48.9; the flash services PMI was 52.6 versus 52.5; the flash composite PMI was 51.9 versus 53.6; the December EU flash manufacturing PMI as 49.2 versus 50.1; the flash services PMI was 52.6 versus 53.8; the flash composite PMI was 51.9 versus 53.6; the December UK flash manufacturing PMI as 51.2, in line; the flash services PMI was 52.1 versus 52.0; the flash composite PMI was 52.1 versus 51.9.

 

                        Other

 

                          What do vehicle miles traveled and gas usage tell us about the economy?

                          https://bonddad.blogspot.com/2025/12/what-do-vehicle-miles-traveled-and-gas.html

 

                          Yields are rising.

                          https://www.zerohedge.com/the-market-ear/interest-costs-are-exploding-and-yields-are-still-rising

 

            Overnight News

 

Two days of intense negotiations between Ukraine, the U.S. and European officials resulted in clear progress on security guarantees for Ukraine but left significant gaps on the issue of territory.

 

The U.S. is offering Ukraine security guarantees similar to those it would receive as part of NATO, American officials said Monday. The offer is the strongest and most explicit security pledge the Trump administration has put forward for Ukraine, but it comes with an implicit ultimatum: Take it now or the next iteration won’t be as generous.

 

            Monetary Policy

 

              Can the Fed really do what economists think it can?

              https://www.realclearmarkets.com/articles/2025/12/15/can_the_fed_do_what_economists_think_it_can_1153186.html

 

              Yield curve steepens sharply as Fed continues to cut rates (inflation anyone?)

              https://wolfstreet.com/2025/12/15/treasury-yield-curve-steepens-sharply-yields-from-2-years-to-30-years-have-risen-as-the-fed-cut-three-times-this-year/

 

              The bond market won’t be fooled.

              https://www.bloomberg.com/opinion/articles/2025-12-15/fed-interest-rate-cuts-the-bond-market-will-not-be-fooled?srnd=homepage-americas&sref=loFkkPMQ

 

            Fiscal Policy

 

              Global debt addiction.

              https://www.advisorperspectives.com/commentaries/2025/12/15/debt-addiction-global

 

            AI

 

              Will AI capex spending lead to positive returns?

              https://www.advisorperspectives.com/commentaries/2025/12/15/ai-capex-spending-lead-positive-outcomes

 

            Tariffs

 

            The Supreme Court’s dilemma.

            https://www.americanthinker.com/articles/2025/12/the_rings_of_power_and_the_trump_tariffs.html

 

     Investing

 

Valuations say nothing about stocks one year forward return (although they are predictive about the ten year forward return).

https://www.tker.co/p/schwab-forward-pe-valuation-says-nothing

           

            The parallels between the dot com bubble and AI mania.

            https://www.wsj.com/finance/stocks/the-eerie-parallels-between-ai-mania-and-the-dot-com-bubble-f99be6fe?st=SG8z3v

 

            The coming rotation from AI to the physical assets.

            https://www.latticework.com/p/the-great-rotation-the-case-for-intelligent

 

            A bull market genius is a dangerous thing.

            https://www.zerohedge.com/markets/bull-market-genius-dangerous-thing

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

           

 

 

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