Friday, December 5, 2025

The Morning Call--Why Americans are so unhappy with the economy

 

The Morning Call

 

12/5/25

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/super-squeeze-sends-small-caps-soaring-bonds-bitcoin-dip-good-data

 

                Thursday 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 setup for all-time highs in gold.

                https://www.zerohedge.com/the-market-ear/golds-ath-setup-here-explosive-seasonality-meets-surging-jgb-yields

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

September factory orders rose 0.2% versus forecasts of -0.7%; ex transportation, they were up 0.2% versus +0.1%.

 

                        International

 

Q3 EU GDP grew 0.3% versus predictions of +0.2%; Q3 employment increased 0.2% versus +0.1%.

 

October Japanese household spending fell 3.5% versus estimates of +0.5%; the October leading economic indicators came in at 110.0 versus 108.8.

 

October German factory orders were up 1.5% versus expectations of +0.4%.

 

                        Other

 

                          Update on business cycle indicators.

                          https://econbrowser.com/archives/2025/12/business-cycle-indicators-industrial-production-implied-employment-alternatives

 

                          Update on mortgage delinquencies and foreclosures.

                          https://www.calculatedriskblog.com/2025/12/q3-update-delinquencies-foreclosures.html

                         

   Update on consumer sentiment.

                          https://www.zerohedge.com/personal-finance/economic-confidence-slips-17-month-low-holiday-spending-plans-weaken

 

                          Home price growth slowed in October.

                          https://www.calculatedriskblog.com/2025/12/cotality-house-price-growth-slowed-to.html

 

The role seasonal factors played in yesterday's weekly jobless claims number.

https://bonddad.blogspot.com/2025/12/jobless-claims-holiday-seasonality.html

 

            Overnight News

 

BOJ officials are ready to raise the policy rate at this month’s meeting — taking it to its highest level since 1995 — provided there’s no major shocks in the meantime, people familiar said. The yen strengthened.

 

US Trade Representative Greer said trade with China needs to be balanced and probably needs to be smaller, while he added they want to have stability in the relationship with China, and that the US trade deficit in goods with China is down about 25%, which is the right direction.

 

Greer also noted there are problems with the US-Mexico-Canada Trade Agreement and that they already have adjustments to some of these challenges, as well as stated that the US wants to make sure that Canada and Mexico aren't used as an export hub for China, Vietnam or Indonesia, among others.

 

            Monetary Policy

 

               Labor market data supports likelihood of a December rate cut.

              https://www.capitalspectator.com/weak-labor-market-supports-outlook-for-another-rate-cut/

 

Bond investors warn Trump about appointing Hassett. (I include this article because it had investors all in a tizzy yesterday. Personally, I think it much ado about nothing: (1) there is always disagreement about Fed policy---just look at the dialogue right now about whether or not it is wise to lower rates, (2) the Fed chair has always been a political appointee that it is assumed will follow the party in power’s agenda, and (3) he is one vote.

              https://www.ft.com/content/ad4bfd8b-a0f8-4f9e-a234-eed589e3d0ab

             

            Fiscal Policy

 

              Why income inequality is not as big a problem as some make it out to be.

              https://thedailyeconomy.org/article/economics-of-envy-cant-answer/

 

Washington’s unstoppable spending train. (the only problem with this article is that republicans are just as guilty as democrats)

https://pjmedia.com/vodkapundit/2025/12/03/the-congressional-spending-train-is-unstoppable-n4946665

 

            Inflation

 

Why Americans are so unhappy with the economy. (And Trump wants lower interest rates.)

 

            Outlook for 2026

 

              Some unhealthy precedents.

            https://talkmarkets.com/content/us-markets/looking-ahead-to-december-and-beyond?post=542639

 

              Volatility likely to increase in 2026.

              https://www.zerohedge.com/markets/rate-vol-too-sleepy-given-macro-catalysts-ahead

 

     Investing

 

            The bitcoin canary in the coal mine.

            https://www.aei.org/economics/the-bitcoin-canary-in-the-coalmine/

 

            The investment case for gold.

            https://www.man.com/insights/gold-bugs-bears-myths

 

            More on the run up in silver.

            https://www.zerohedge.com/markets/clear-something-behind-scenes-breaking-holter-warns-were-headed-derivative-meltdown

 

            Policy news and stock market volatility.

            https://alphaarchitect.com/policy-news/

 

            More on valuation.

            https://politicalcalculations.blogspot.com/2025/12/the-mystery-of-m.html

 

            Secular bull and bear market trends.

            https://www.advisorperspectives.com/dshort/updates/2025/12/04/secular-bull-and-bear-market-trends-november-2025

 

Hedge funds double down using near record level of leverage.  (The complacency expressed in the article aside, leverage has always worked against investors when the Market rolls over. I am not saying that will happen tomorrow; but record high valuations [see above article] coupled with lots of leverage suggests caution.)

            https://www.reuters.com/business/finance/hedge-funds-double-down-using-near-record-leverage-quest-boost-returns-2025-12-03/

 

                        The risks in private equity investing.

            https://ritholtz.com/2025/12/sturgeons-corollary/

 

    News on Stocks in Our Portfolios

 

Kroger press release (KR): Q3 Non-GAAP EPS of $1.05 beats by $0.02.

Revenue of $33.86B (+0.7% Y/Y) misses by $320M.

 

What I am reading today

 

            How ignorance has become a survival strategy.

            https://www.bloomberg.com/news/articles/2025-11-28/we-all-ignore-bad-news-behavioral-science-calls-it-the-ostrich-effect?sref=loFkkPMQ

           

            A threat that could turn everything off.

            https://www.zerohedge.com/technology/ai-booms-us-ignores-one-threat-could-turn-everything

 

 

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