Wednesday, September 9, 2026

The Morning Call--The coming problem in AI debt financing

 

The Morning Call

 

9/9/26

 

The Market

         

    Technical

 

            Tuesday in the charts.

https://www.zerohedge.com/markets/houthis-hammer-black-gold-bears-agi-hopes-lift-ai-stocks-bitcoin-bruised?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI0MjcwIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4ODg5OTMxOSwiZXhwIjoxNzkxNDkxMzE5LCJhdWQiOiJ6aC1naWZ0In0.ps-8QVN9vmCmtkjLn5AT3xtZ65y71Cesz1qEtuhsU7U

 

            Tuesday 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

 

            S&P starting its historic September pattern.

            https://talkmarkets.com/article/back-to-work-and-back-in-the-red-1788894354

           

            Support for gold.

            https://talkmarkets.com/article/look-beyond-rates-to-golds-long-term-support-1788889212

 

Wednesday morning setup: US equity futures are lower as oil continues its ascent, pushing Brent above $100 for the first time since July 24 and pushing 10Y yields to 4.81%. As of 8:15am, S&P futures are trading at session lows, down 0.5% and after erasing early gains, echoing a rally in Asian technology shares that lost momentum as the session progressed. Nasdaq futures are down 0.6% as Mag 7s trade mixed premarket: META +5% after saying early Muse AI usage has “blown way past our projections” with users engaging 10x more than its test cohorts, while AMZN -0.4%. The Treasury Department is expected to announce on Wednesday the size of the next day’s operation to repurchase outstanding 10-year to 20-year securities. Treasury 10-year yields trade above 4.81%, rising by 3bps. USD extended losses, trading near a 7 month low. The yen extends gains to trade near 153.30 per dollar, outperforming its G-10 peers. Treasury Secretary Scott Bessent challenged traders to test his resolve on boosting the Japanese currency. Hedge funds are betting the yen will strengthen beyond 150 by year-end. Commodities were mostly higher with WTI surging above $95 and Brent topping $100 (with Shanghai oil trading almost $10 higher) for the first time since July 24 after the US struck Iranian tankers near the Kharg Island export hub and in the Gulf of Oman. Tehran responded by firing missiles at Jordan and warning ships in the Persian Gulf. Precious metals and ags are all higher. US economic data slate includes weekly ADP employment change at 8:15am. Fed speaker slate is blank during Sept. 5-17 external communications blackout period around the Sept. 15-16 FOMC meeting.

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications fell 2.7% while purchase applications were flat.

 

                        International

 

Q2 Japanese QoQ capital expenditures fell 0.9% versus consensus of -0.8%; Q2 QoQ private consumption was flat, in line; July YoY average earnings were up 4.7% versus consensus of +3.9%; August YoY machine tool orders rose 64.7% versus +43.0%.

 

August Chinese CPI was up 0.4% versus predictions of +0.3%; August YoY PPI was up 3.8% versus +3.7%.

 

                        Other

 

                          A closer look at the manufacturing ‘boom’.

                          https://www.realclearmarkets.com/articles/2026/09/08/a_loyal_dissent_on_the_us_manufacturing_boom_1204418.html

 

                          White House nowcasts versus everybody else.

                          https://econbrowser.com/archives/2026/09/the-blackest-black-box-mid-session-review-ever

 

                          A deep dive into Friday’s nonfarm payroll report.

                          https://www.advisorperspectives.com/dshort/updates/2026/09/04/recession-indicators-employment-august-2026

           

                        The economy is heating up; so are the headwinds.

                        https://www.capitalspectator.com/the-economy-appears-to-be-heating-up-so-are-the-headwinds/

 

                        Consumer credit balances hit new all-time high.

                        https://www.zerohedge.com/markets/consumer-credit-smashes-estimates-credit-card-debt-hits-new-all-time-high

 

            Iran

 

              Overnight news.

              https://www.zerohedge.com/commodities/brent-tops-100-gulf-conflict-escalates-ubs-warns-us-iran-ramp-remains-elusive

 

            Monetary Policy

           

              The case for no rate hike.

              https://scottgrannis.blogspot.com/2026/09/jobs-growth-update-modest-improvement.html

 

              Counterpoint.

              https://www.carsongroup.com/insights/blog/data-shows-the-economy-is-clearly-running-hot/

 

              The Fed’s credibility rests on resisting politics.

  https://www.bloomberg.com/opinion/articles/2026-09-08/fed-credibility-depends-on-resisting-politics-not-playing-it?utm_source=website&utm_medium=share&utm_campaign=copy

 

           

            Tariffs

 

              The liberation of the rest of the world from trade with the US.

              https://www.cato.org/sites/cato.org/files/2026-08/briefing-paper-205-update-2.pdf

 

            AI

 

              The extraordinary assumption behind AI.

  https://www.zerohedge.com/markets/extraordinary-assumption-behind-ai-trade?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI0MjM0Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4ODkwMDI1MywiZXhwIjoxNzkxNDkyMjUzLCJhdWQiOiJ6aC1naWZ0In0.4N69Iz-qSdKj3BucNhL0ZIqlvsPVl-p4-vJ1Km7xxAQ

 

 

              The coming problem in AI debt financing.

  https://www.zerohedge.com/markets/goldman-credit-desk-sees-eye-hurricane-ai-debt-issuance-then-all-hell-breaks-loose?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI0MzMwIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4ODk1ODUyMywiZXhwIjoxNzkxNTUwNTIzLCJhdWQiOiJ6aC1naWZ0In0.djAMdJu71fopO0pFFuXpxCkn8DXOBcHOUPIhrckKHNk

 

 

     Investing

 

            The changing stock/bond relationship.

            https://www.axios.com/2026/09/04/stocks-bonds-yields-correlation

 

            The latest from John Hussman.

            https://www.advisorperspectives.com/commentaries/2026/09/08/road-up-road-down-same-road

 

            What could bring stocks down?

                        https://www.nytimes.com/2026/09/08/business/stock-market-interest-rates.html?unlocked_article_code=1._lA.RqfY.bIVL8WDYwSPx&smid=url-share

 

            Looking ahead to third quarter earnings.

            https://talkmarkets.com/article/looking-ahead-to-the-q3-earnings-season-what-to-expect-1788583751

 

            Global bond yields reflect inflationary concerns.

            https://talkmarkets.com/article/global-bond-yields-fret-inflation-deficits-1788426577

 

            More investing myths dismantled.

            https://www.zerohedge.com/markets/more-investing-myths-dismantled

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            In praise of Rick Santelli.

            (3) Thank You Rick Santelli, You Fucking Legend

 

 

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