The Morning Call---The K shaped economy: the narrative versus the reality

 

The Morning Call

 

3/5/25

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/stocks-software-soar-oil-snores-traders-forget-about-war

 

Note: another perplexing performance (at least for me) from the stock market. The S&P is back above its 100 DMA, keeping that narrow (ing) trading range intact. My bottom line hasn’t changed---do nothing until the Market gives us some direction.

           

            Wednesday in the technical stats.

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

            https://www.barchart.com/stocks/market-performance

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

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

 

            Bond volatility just woke up.

            https://www.zerohedge.com/the-market-ear/bond-volatility-just-woke-stocks-usually-dont-it

 

            The Street is massively long semis and massively short software.

            https://www.zerohedge.com/the-market-ear/wall-street-massively-long-semis-and-massively-short-software

 

            Citadel desk turns positive.

            https://www.zerohedge.com/markets/bear-camp-has-become-too-popular-citadels-rubner-turns-bullish-gives-10-reasons-why

           

            Gold down on proposed sale by Poland.

            https://www.zerohedge.com/precious-metals/precious-metals-plunge-poland-weigjs-gold-sales-fund-defense

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly initial jobless claims totaled 213,000 versus projections of 215,000.

https://www.zerohedge.com/personal-finance/no-hire-no-fire-economy-rolls-job-cuts-plunge-jobless-claims-hover-near-multi-year

 

Q4 nonfarm productivity rose 2.8% versus estimates of 1.9%; unit labor costs were up 2.8% versus +2.0%

 

The February services PMI was 51.7 versus expectations of 52.3; the February composite PMI was 51.9 versus 52.3.

 

The February ISM services index was 56.1 versus consensus of 53.5.

                               https://bonddad.blogspot.com/2026/03/strongly-positive-ism-services-report.html

 

                        International

 

                          January EU retail sales were down 0.1% versus predictions of +0.3%.

 

The February EU construction PMI came in at 46.0 versus forecasts of 45.9; the February German construction PMI was 43.7 versus 45.4; the February UK construction PMI was 44.5 versus 47.0.

 

                        Other

 

            Iran

 

              The Iran war’s most precious commodity is not oil.

              https://www.bloomberg.com/opinion/articles/2026-03-04/iran-war-the-most-precious-commodity-is-water-not-oil?sref=loFkkPMQ

 

              How long will soaring energy prices last?

              https://www.capitalspectator.com/energy-prices-are-soaring-how-long-will-it-last/#more-25352

 

              Why isn’t oil $100 a barrel?

              https://www.ft.com/content/1ca535f4-d4a6-480b-b2da-f5b05ad8dd5d

 

              Qatar declares force majeure.

              https://www.zerohedge.com/energy/qatarenergy-declares-force-majeure-one-fifth-global-lng-supply-goes-dark

           

              Rumor that Iran was willing to give up nuclear stockpile.

              https://www.zerohedge.com/markets/futs-jump-old-news-recirculated-about-irans-willingness-give-uranium-stockpile

 

            Inflation

 

              The Strait of Hormuz, energy and inflation.

              https://www.apolloacademy.com/strait-of-hormuz-energy-demand-and-supply/

 

            Recession

 

              The K shaped economy: the narrative versus the reality.

              https://www.axios.com/2026/02/26/us-economy-stock-market

 

            Tariffs

 

              Bessent says Trump likely to raise tariffs to the 15% level this week.

  https://www.bloomberg.com/news/articles/2026-03-04/bessent-says-trump-s-tariff-hike-to-15-likely-coming-this-week?srnd=homepage-americas&sref=loFkkPMQ

 

 

                        AI

 

              More thoughts on the future of AI.

              Some Guesses about AI in 2026 - by Arnold Kling

                       

 

            The Financial System

 

              Big lenders risky loans are rattling Wall Street.

              https://www.nytimes.com/2026/03/03/business/private-credit-crisis-blue-owl-capital.html

           

 

     Investing

 

            Rotation into hard assets.

            https://www.gspublishing.com/content/research/en/reports/2026/02/08/531d73dd-fd3f-4647-9841-46e2261e4f4c.pdf

 

            Update on valuation.

            https://www.advisorperspectives.com/dshort/updates/2026/03/04/market-valuation-is-the-market-still-overvalued

 

            Incorporating dividend yield into your investment strategy.

            https://www.advisorperspectives.com/commentaries/2026/03/04/lpl-research-thinks-dividends

           

            Ten rules for dealing with uncertainty.

            https://awealthofcommonsense.com/2026/03/10-rules-for-dealing-with-uncertainty/

 

            The tokenization of gold.

            https://www.zerohedge.com/markets/gold-digital-asset-space-are-increasingly-interlinked-goldman

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

 

 

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