The Morning Call---Earnings mean reversion

 

The Morning Call

 

9/23/26

 

The Market

         

    Technical

 

            Tuesday in the charts.

https://www.zerohedge.com/markets/big-tech-bid-banks-battered-agentic-anxiety-spreads-everything-else-hits-snooze?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1OTMzIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDExMTgzNiwiZXhwIjoxNzkyNzAzODM2LCJhdWQiOiJ6aC1naWZ0In0.zaK8qhTxSJSvsi1iVFL-0BUi9n2TT_vBWcUB9vdqP2w

 

            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

 

            The latest from Goldman.

https://www.zerohedge.com/markets/yesterday-felt-proper-fomo-goldman-one-delta-desk-took-some-chips-table-sees-inference?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1ODkzIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDEwMzUzMSwiZXhwIjoxNzkyNjk1NTMxLCJhdWQiOiJ6aC1naWZ0In0.M_g2fGntAscO833XS-AAK64VvsPe2L7DMsNxEXqjUAI

                       

            Gamma squeeze the world.

            https://quoththeraven.substack.com/p/gamma-squeeze-the-world?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

                       

            The crypto bear market is over.

            https://www.riskhedge.com/the-jolt/the-crypto-bear-market-is-over

 

Wednesday morning setup: US equity futures are down modestly, but at session lows, as oil reverses earlier losses (crude was on pace for a sixth straight day of declines, its longest losing run in a year) sending Brent back over $100 and pushing 10Y yields back to 4.99%. As of 8:30am, S&P 500 futures were 0.1% lower with Nasdaq 100 futures sliding 0.3%, and also at session lows after hitting a record on Tuesday. In premarket trading, memory and semis are lower as Mag7/software are higher. Within SPX sectors, all of the majors have pockets of strength ex-Materials which are set to lag given the selloff in metals. Rising oil prices have also weighed on European equities, which have pared opening gains and left the Stoxx 600 down 0.5%, also at session lows. In Asia, Chinese and Hong Kong shares declined, trailing regional peers including South Korean and Taiwanese benchmarks. Oil remains the wildcard for stocks and bonds, while Meta’s Muse AI agent is reshaping sector rotation. Yields are notably higher, with 2Y yields rising to a 2 year high of 4.79% as the curve flattens aggressively, as the tactical market narrative seeks more color from UN meetings (US/China; US/Iran; NATO+UKR/Russia) before deciding direction. The USD rally continues with the DXY 75bp away from YTD highs set June 24. Commodities are lower ex-Energy which is seeing a bid within fuels / natgas and Brent is outperforming WTI. Base over Precious and Ags uniformly sold. The US economic calendar includes September S&P Global US manufacturing and services PMIs at 9:45 a.m. Fed speaker slate includes Governor Barr (10:05 a.m.) and Chicago’s Goolsbee (12 p.m.)

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications fell 1.5% while purchase applications were down 0.8%.

 

Month to date retail chain store sales were up 7.6% versus up 8.5% in the prior week.

 

The September Richmond Fed manufacturing index came in at -2 versus estimates of +5.

 

                        International

 

 

The September EU flash consumer confidence index was -16.5 versus expectations of -16.0.

 

The September German flash manufacturing PMI was 53.5 versus consensus of 54.0; the flash services PMI was 52.9 versus 50.0; the flash composite PMI was 53.1 versus 51.7; the September EU flash manufacturing PMI was 52.7 versus 52.6; the flash services PMI was 53.0 versus 51.5; the flash composite PMI was 53.1 versus 51.7; the September UK flash manufacturing PMI was 52.0 versus 51.5; the flash services PMI was 51.7 versus 52.0; the flash composite PMI was 51.7 versus 52.0.

 

                        Other

 

The problem with the level of interest rates versus that of economic growth.

https://alhambrapartners.com/weekly-market-pulse-what-now-2/?src=news

                       

                          August real median household income.

                          https://econbrowser.com/archives/2026/09/real-median-household-income-down-relative-to-may

 

            Iran

 

              Overnight news.

              https://www.zerohedge.com/geopolitical/cargo-vessel-struck-unknown-projectile-hormuz-casualties-reported

 

            Inflation

 

              Beware oil’s second strike on inflation.

                          https://www.wsj.com/economy/central-banking/beware-oils-second-strike-on-inflation-a07161d3?st=xvMWoB&reflink=desktopwebshare_permalink

 

              As an example:

              https://mishtalk.com/economics/the-average-supertanker-cost-is-1-2-million-per-day-up-from-29900/

 

            AI

 

              Funding trouble in AI land.

  https://www.zerohedge.com/technology/sb-energy-delays-ipo-funding-worlds-largest-data-center-amid-investor-revolt-public?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1OTc0Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDE2Mzk0MiwiZXhwIjoxNzkyNzU1OTQyLCJhdWQiOiJ6aC1naWZ0In0.PxaHtWOB5EDCl7kVBvaeNZbm3htcnGH2ZQDKOT4x2pE

 

 

              Where intelligence and consciousness have to be separated.

              https://www.realclearmarkets.com/articles/2026/09/22/where_intelligence_and_consciousness_have_to_be_separated_1207087.html

 

              Do Covid and AI rhyme?

              https://www.americanthinker.com/articles/2026/09/do-covid-and-ai-rhyme/

 

              AI angst.

              https://www.carsongroup.com/insights/blog/ai-angst/

 

     Investing

 

            Earnings mean reversion.

            https://www.advisorperspectives.com/commentaries/2026/09/22/earnings-mean-reversion-estimates-snap-back

 

            The historic divide between the bulls and the bears signals an earnings slowdown.

https://www.bloomberg.com/opinion/articles/2026-09-22/this-historic-divide-between-bulls-and-bears-signals-a-slowdown?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc5MDA5OTA1MCwiZXhwIjoxNzkwNzAzODUwLCJhcnRpY2xlSWQiOiJUTFJEMDNLR1pBSjMwMCIsImJjb25uZWN0SWQiOiJCMzFCNTRDQTI3MTE0NjAxOUQxMURCN0IxRUM4NTE2MyJ9.u4eKDr5Fzf1poybp1NbsZXZFyBUXnVIR-nfG-ePejWM

 

            The bond market returns to normal.

            https://mrzepczynski.blogspot.com/2026/09/what-is-fixed-income-market-telling-us.html

 

            The resiliency of the high yield market.

            https://bondvigilantes.com/blog/2026/09/the-honey-badger-market/

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            Another blight on our education system.

            https://www.zerohedge.com/geopolitical/china-ranked-1-world-math-usa-27th

 

 

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