Wednesday, September 2, 2026

The Morning Call---Liquidity is shrinking

 

The Morning Call

 

9/2/26

 

The Market

         

    Technical

 

            Tuesday in the charts.

https://www.zerohedge.com/markets/rate-spike-hedgers-go-bonkers-iran-attacks-spike-oil-stocks-gold-crypto-all-tank?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTIzNTk1Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4ODI5Mzk2MSwiZXhwIjoxNzkwODg1OTYxLCJhdWQiOiJ6aC1naWZ0In0.sZarB-I4AkPsKCRLtRKWAdrPA8us6Vz9hWlXBLj44V0

 

            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 case for why this September could be different.

            https://www.carsongroup.com/insights/blog/why-the-worst-month-of-the-year-likely-wont-bring-rain/

 

            Increasing Market dispersion.

            https://www.acadian-asset.com/investment-insights/owenomics/crazy-days-in-the-stock-market

 

Wednesday morning setup: US equity futures are lower with Tech underperforming as oil prices / bond yields move higher (although off session highs), both in response to an acceleration in "kinetic hostilities" in the Middle East. As of 8:00am ET, S&P futures are down 0.1%, off session lows, while Nasdaq futures rise 0.4% after Dell shares jumped after the company boosted its annual sales forecast by $25 billion. In premarket trading, Semis / Memory are weaker and AVGO is -53bp with earnings after the Close today. Mag7 are mostly lower as are Software names with Hardware buoyed by earnings. Defensives and Energy gain while Cyclicals drop. According to JPM's Market Intel team, which on Monday turned Neutral on stocks (from Bullish), equities will continue to struggle until crude / rates stabilize. Europe’s Stoxx 600 retreated 0.7%, while Asian stocks fell the most in two weeks. WTI trades around $90/bbl as the yield curve steepens, having erased gains from Bessent’s "Treasury Twist". The Dollar is also higher as the Debasement trade continues to struggle. Commodities are mostly lower with Energy the lone bright spot and Ags underperforming Metals; keep an eye on gold to see if $4,300 acts as support. Today’s macro data focus is on the August ADP employment change (8:15am) and July factory orders (10am). Fed calendar is blank apart from Beige Book release at 2pm

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications rose 0.8% while purchase applications were up 2.2%.

 

Month to date retail chain store sales grew 9.6% versus 9.1% in the prior week.

 

July job openings (JOLTS) totaled 7.27 million versus estimates of 7.3 million.

https://talkmarkets.com/article/us-job-openings-rise-modestly-in-july-but-employers-pull-back-on-hiring-1788280541

 

July construction spending fell 0.5% versus predictions of 0.0%.

 

The August manufacturing PMI came in at 53.9 versus consensus of 53.2.

 

The August ISM manufacturing index was 54.6 versus expectations of 55.2.

https://bonddad.blogspot.com/2026/09/august-manufacturing-less-good-july.html

 

The August ADP private payrolls report showed an increase in jobs of 38,000 versus forecasts of 47,000.

https://www.zerohedge.com/personal-finance/adp-reports-august-saw-weakest-job-growth-january-wage-growth-dips

 

The September small business optimism index was 45.6 versus projections of 46.2.

 

                        International

 

                        Other

 

                          July median household income.

                          https://politicalcalculations.blogspot.com/2026/09/median-household-income-in-july-2026.html

 

                          Seven graphs on the financial system.

                          https://econbrowser.com/archives/2026/08/seven-graphs-for-the-financial-system

 

                          China declines to sign G20 joint communique.

                          https://www.zerohedge.com/markets/bessent-blame-china-derailing-g20-joint-communique

 

            Iran

 

              Overnight news.

              https://www.zerohedge.com/energy/projectiles-hit-two-supertankers-exiting-hormuz-brent-tops-92-diesel-crack-breaches-100

 

            Fiscal Policy

 

              If congress reforms social security, it will simply spend the savings elsewhere.

              https://www.realclearmarkets.com/articles/2026/09/01/no_social_security_is_not_the_cause_of_the_national_debt_1202988.html

 

            AI

 

              Ten predictions on the future of AI.

              https://www.honest-broker.com/p/10-brutally-honest-predictions-on

 

            The Financial System

 

The Financial Stability Board warns of multiple threats to the global financial system.

https://wolfstreet.com/2026/08/31/ai-leverage-out-the-wazoo-sky-high-asset-prices-private-credit-government-debt-pose-risks-to-global-financial-system/

 

Trillion dollar dislocation hiding in the credit markets.

https://www.bloomberg.com/news/articles/2026-09-01/trillion-dollar-dislocation-hides-in-calm-credit-markets?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc4ODI4MDUxNiwiZXhwIjoxNzg4ODg1MzE2LCJhcnRpY2xlSWQiOiJUS0Q4V0FLR0NURk0wMCIsImJjb25uZWN0SWQiOiJCMzFCNTRDQTI3MTE0NjAxOUQxMURCN0IxRUM4NTE2MyJ9.4UvdStrF6hgFtSAPlssFs35QqnnU6wdOZ_jlJDZNNrg

 

              The risk of financial repression is rising.

              https://giftarticle.ft.com/giftarticle/actions/redeem/edbe13cb-7e44-45ed-9ddb-8b0057a03506

 

            Tariffs

 

              Trump’s trade war with Canada is stupid.

              https://reason.com/2026/08/31/trumps-trade-war-with-canada-is-costly-absurd-and-unfunny/

 

     Investing

 

            Liquidity is shrinking.

https://www.zerohedge.com/markets/its-squeezed-liquidity-thats-holding-stocks-back?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTIzNTkyIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4ODI5Mjg1MiwiZXhwIjoxNzkwODg0ODUyLCJhdWQiOiJ6aC1naWZ0In0.c49Y6Jx-dK9WAFD-h4FxdShKquFStMHEP7M7E6MluWc

 

            Why crashes, timing and valuations matter.

            https://www.advisorperspectives.com/commentaries/2026/09/01/crashes-timing-valuations-matter

 

            Bonds aren’t doing their job.

            https://trendlabs.com/bonds-arent-doing-their-job/

 

            In six months, rates will be lower.

            https://www.apollo.com/wealth/insights-news/insights/daily-spark/think-six-months-ahead

 

            Counterpoint.

            https://talkmarkets.com/article/global-bond-market-rout-continues-feds-barr-ponders-decisive-action-1788275421

 

            Why bond yields continue to rise.

https://www.zerohedge.com/markets/conflict-crowding-out-global-bond-yields-soar-2008-highs?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTIzNTUyIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4ODI5MjI0MywiZXhwIjoxNzkwODg0MjQzLCJhdWQiOiJ6aC1naWZ0In0.BxSkeMWLXOMHTiFyRAjOQ4Dn1Pf5PPnAeckefAGY5Kk

 

            Consumer stocks cracking.

                        https://www.zerohedge.com/markets/worse-under-hood-goldman-warns-consumer-stocks-cracking-hedge-fund-exposure-tanks

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

 

 

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