The Morning Call
8/25/26
The
Market
Technical
Monday in the charts.
Monday 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
Some good news for
the stock market.
And some bad news.
Gold screaming ‘overbought’.
Tuesday morning
setup: Global stocks rose as chipmakers rebounded, with falling
bond yields adding support to rise sentiment after Brent crude slid
below $90 a barrel, down more than 3% after a New York
times reports that "evacuated foreign service officers could
begin heading back to their posts as early as this week... suggesting
Washington does not anticipate a renewal of full-scale conflict with
Iran." Oil is also lower on positive signals from
Pakistan’s army chief, and Al-Arabiya reporting that he carried an
offer to lift sanctions under the MOU. As of 8:00am ET, S&P 500
futures climbed 0.4%, while those for the Nasdaq 100 advanced 0.9% and leading
the charge in a reversal of yesterday’s cash performance. In premarket trading,
semis lead with Memory, Mag7, Software, and Low/Unprofitable Tech all higher
too. This is occurring with bond yields down 1-2bp. Nvidia was poised to
break its longest losing streak since 2022. Semis are up 2% and Memory +3.5%,
reversing all of yesterday's drop. NVDA is also leading Mag7 higher with 5 / 7
higher ex-AAPL, MSFT. The AI theme is boosting other sectors as Cyclicals
ex-Energy lead Defensives. Monday saw the second-lowest tape volume
of the year despite the update from Bessent and renewed noise around debasement
trades. Gold snapped a four-day run of gains, while the dollar held steady. The
yield on 10-year Treasuries declined four basis points. In a WSJ Op-ed,
Stan Druckenmiller gives his view on the likelihood that Bessent - his former
junior trader at Soros - is making with intervention. In commodities all 3
complexes are lower with Base Metals the bright spot; gold is outperforming
broader Precious on the move lower. Today’s macro data focus is on Housing
Data, regional Fed activity indicators, weekly ADP, and Consumer Confidence.
Fundamental
Headlines
The
Economy
US
International
Q2 final German
GDP grew 0.3% versus forecasts of +0.2%; the August business climate index was
88.8 versus 87.2; the August current conditions index was 88.5 versus 87.0.
The June Japanese
leading economic indicators were reported at 116.5 versus projections of 116.4.
Other
The latest Q3 nowcast.
https://www.capitalspectator.com/q3-growth-still-firm-but-fresh-headwinds-cloud-the-outlook/
Iran
Trackers can’t
verify the amount of oil the US says is moving through the Strait of Hormuz.
US sanctions dozens of Chinese firms.
Iran’s economy is on the ropes.
Monetary
Policy
The
bond market will break Warsh.
Time for Fed accountability.
Fiscal
Policy
Bessent plans, markets laugh.
https://www.realclearmarkets.com/blog/2026/08/22/man_plans_markets_laugh_1201898.html
Bessent’s real plan?
There is no easy fix for Bessent.
Summary:
Treasury Secretary Scott Bessent announced a plan to buy back long-term US
debt, which he called a "Treasury twist", in an effort to influence
Treasury yields. The plan had a brief impact on yields, but they quickly
returned to near their highest levels since Bessent took office, suggesting
that his efforts to get borrowing costs down are running into forces beyond his
control. Bessent’s vision of yield-curve control extends beyond Treasuries and
includes influencing rates for companies investing in artificial intelligence,
but some market participants doubt his ability to shape yields and believe that
a more effective approach would be through Fed quantitative easing.
The
perils of an interventionalist Treasury and passive Fed.
Summary:
US Treasury Secretary Scott Bessent has been intervening in financial markets
to reduce upward pressure on long-dated US Treasury bond yields. Bessent's
efforts include directing US intervention in the foreign-exchange market to
support the yen and committing to increase the size of its buybacks of
long-dated government securities. The interventions are seen as having limited
impact and potentially creating more problems, such as making policy less
predictable and increasing risk premia, and the underlying issue of the
nation's fiscal problems needs to be addressed.
Some
perspective on the federal debt.
https://scottgrannis.blogspot.com/2026/08/key-facts-about-federal-debt-you-might.html
Counterpoint.
A debt crisis?
https://talkmarkets.com/article/weekly-market-pulse-a-debt-crisis-1787561212
A brief history of interest payments and the
national debt (politically annotated).
https://bonddad.blogspot.com/2026/08/a-deeper-look-at-history-and-sources-of.html
AI
Spooked
by AI.
Tariffs
Unprecedented self-harm.
China
China shock 2.0.
https://www.apollo.com/wealth/insights-news/insights/daily-spark/china-shock-2-point-0-is-here
The
Financial System
A ‘democratized’ financial crisis is still a
crisis.
https://giftarticle.ft.com/giftarticle/actions/redeem/347989ef-5ae6-4f2a-9c9e-f73a8ab69169
Investing
Is
the stock market rigged?
https://www.carsongroup.com/insights/blog/is-the-stock-market-rigged/
News (but not a Buy recommendation) on Stocks
in Our Portfolios
What
I am reading today
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