The Morning Call---Markets are telling us inflation isn't gone.

 

The Morning Call

 

1/22/26

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/trump-sparks-pump-greenland-triggers-dump-markets-see-saw-geopol-gerrymandering

 

 

Note: the S&P regained its 50 DMA, invalidating Tuesday’s break. Plus it has yet to close Tuesday’s gap down opening. Both are clearly good news. However, it still has to regain its former all time high (~6927) by Friday or last week’s breakout will be voided. Bottom line, yesterday’s pin action was positive, but the Market is not out of the woods yet. Stay patient.

 

 

                        Wednesday in the technical stats.

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

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

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

 

            The Russell 2000 still has more legs.

            https://www.zerohedge.com/markets/record-breaking-rtyspx-trade-has-some-more-legs-it-top-goldman-trader

 

            The latest from Goldman’s desk.

            https://www.zerohedge.com/markets/goldman-warns-stretched-positioning-and-exceedingly-bullish-sentiment-paves-way-headline

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Weekly initial jobless claims totaled 200,000 versus forecasts of 195,000.

 

Month to date retail chain store sales were up 5.5% versus +5.7% in the prior week.

 

Q3 final GDP growth was +4.4% versus expectations of +4.3%; the final PCE index was +3.7%, in line; final corporate profits were up 4.7% versus +4.4%; final real consumer spending was +3.5%, in line.

 

October construction spending rose 0.5% versus projections of +0.1%.

https://bonddad.blogspot.com/2026/01/stale-data-watch-construction-spending.html

 

December pending home sales fell 9.3% versus estimates of up 1.4%.

                          https://www.advisorperspectives.com/dshort/updates/2026/01/21/pending-home-sales-sink-december-2025

 

                        International

 

The December Japanese trade balance was +Y103.7 billion versus predictions of -Y400.0 billion.                      

 

                        Other

 

                          Zero sum economics keep failing.

                          https://www.noahpinion.blog/p/zero-sum-economics-keeps-failing

 

            Overnight News

 

US House GOP leaders are struggling to strike a deal with Republican hard-liners tonight that would allow the final government funding package to advance. "The Rules Committee recessed Wednesday evening without a solution. Senior Rs hope to reconvene the panel by 9 pm"

 

Volodymyr Zelenskiy is traveling to Davos to meet with Trump, a person familiar said. US envoys Steve Witkoff and Jared Kushner will go to Russia for talks with Vladimir Putin.

 

For the first time since the start of the private-credit boom, large numbers of individual investors are trying to get their money out. Several of the biggest funds eligible to wealthy individuals received requests from about 5% of shareholders to cash out at the end of last year, well above the normal volume, according to SEC filings.

 

            Fiscal Policy

 

Trump followed his ‘art of the deal’ strategy on Greenland---making enormous demands, then settling for less but nonetheless, (for the moment at least, apparently) getting what he wants. In this case, greater access to Greenland’s natural resources and territory as part of his defense strategy. The MSM derisively calls it TACO (Trump always chickens out), but it is just part of the ‘art of the deal’. There are so many headlines from yesterday’s Davos speech and CNBC interview, it would take pages to review them all or link to other’s reviews. Below is just a list.

https://www.zerohedge.com/political/trump-arrives-davos-after-air-force-one-electrical-issue-sparked-brief-delay

 

              The latest on Greenland.

              https://www.zerohedge.com/political/trump-arrives-davos-after-air-force-one-electrical-issue-sparked-brief-delay

 

 

              Central planning gone awry.

              https://alhambrapartners.com/weekly-market-pulse-central-planning-gone-awry/?src=news

 

            Inflation

 

Markets are telling us inflation isn’t gone. (I agree with this analysis except that it gives too much credit to Powell)

              https://trendlabs.com/the-market-is-telling-the-fed-chair-inflation-isnt-gone/

 

              Growth is back; so is the potential inflation problem.

              https://www.zerohedge.com/the-market-ear/growth-back-so-potentially-inflation-problem

 

              Expect big differences this year between CPI and PCE inflation.

              https://mishtalk.com/economics/expect-a-big-divergence-this-year-between-cpi-and-pce-inflation/

 

            The Dollar

 

The dollar slips amidst Trump Greenland threat. (Pay close attention to the last paragraph).

https://www.ft.com/content/4e5440f3-e0e8-44c1-83b4-a7a131647278

 

     Investing

 

            The stock market performance since Liberation Day.

            https://www.apolloacademy.com/stock-market-performance-since-liberation-day-2/

 

            The 2026 outlook for S&P 500 dividends.

            https://politicalcalculations.blogspot.com/2026/01/the-outlook-for-s-500-dividends-in.html

 

            Bitcoin’s myths are breaking.

            https://www.zerohedge.com/the-market-ear/bitcoins-myths-are-breaking-hedge-store-value-now-quantum-risk

 

            The short term pros and cons for gold.

            https://www.zerohedge.com/the-market-ear/golden-reversal-meets-golden-upgrade

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

 

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

 

 

 

Monday Morning Chartology

 

 

The Morning Call

.

 

1/12/26

 

The Market

 

         Technical

 

The S&P closed back above its all time high. If it remains there through the close this Wednesday, the break will be confirmed. In the meantime, it remains above all three DMAs and in uptrends across all time frames. As you can see, resistance in the form of the upper boundary of its very short term uptrend exists at ~7173.

 

I remain of the opinion that this a Market to be traded not invested in---and I am sticking to it until there is some follow through (in either direction).

https://www.zerohedge.com/the-market-ear/breakout-or-bull-trap-valuation-hubris-means-no-room-mistakes

 

Market breadth is expanding.

https://trendlabs.com/jan-brady-just-made-a-new-all-time-high/

 

Part 2.

https://www.zerohedge.com/markets/process-broadening-leadership-remains-intact-top-goldman-trader

 

 

 

Despite all the happy talk about lower rates/inflation, bond investors don’t seem to be buying it. The long bond is below all three DMAs and in downtrends across all timeframes. I continue to believe that the only circumstance I can see pushing rates meaningfully lower would be a recession.

 

 

 

 

 

 

 

 

This is a twenty year picture of gold. As you can see, it is quite extended on a short and intermediate trem basis but has a ways to go to test the high of its long term uptrend. I continue to hold my trading position in GDX. Emphasis on ‘trading’ given its short term geometric rise.

 

 

 

 

The dollar has bounced off the lower boundary of its short term trading range for the third time---hopefully, that is a charm. Nonetheless, it remains below all three DMAs; so, it still has a lot of work to do in order to be anything but an ugly chart.

 

 

 

 

 

 

            Friday in the charts.

            https://www.zerohedge.com/markets/stocks-oil-gold-soar-catalyst-heavy-week-sparks-rate-cut-odds-rout

 

 

           

Friday in the technical stats.

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

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

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

 

           

 

    Fundamental

 

       Headlines

 

              The Economy

 

  The US stats last week were mixed, though the primary indicators were upbeat (two plus, no neutral, no minus) and no inflation measures. Overseas, the data was slightly downbeat with two positive and two negative price indicators.

 

               

Nothing in this data set to warrant a change in my economic growth forecast (muddle through) though certainly Friday’s nonfarm payroll number as well as the Atlanta Fed’s upward revision of Q4 GDP point to continued growth in the economy.

 

However, contrary to Street (and my above comment), this analysts sees the payrolls number as a recession warning.

https://bonddad.blogspot.com/2026/01/december-jobs-report-ringing-alarm.html

 

My ‘inflation is as good as it is going to get’ prediction is not quite as solid---with many Street pundits suggesting otherwise. While I have yet to see any solid data substantially confirming that outlook, I nonetheless have to respect the degree of disagreement and keep the yellow light flashing on this part of my forecast.

 

                        US

 

                        International

 

                        Other

 

                          Household net worth increased $6 trillion in Q3.

                          https://www.calculatedriskblog.com/2026/01/feds-flow-of-funds-household-net-worth.html

 

                          The economy is Gen-shaped not K-shaped.

                          DEEP DIVE: US Economy Is Gen-Shaped, Not K-Shaped

 

            Overnight News

 

DOJ launched criminal probe of Powell. News accounts reckon that Trump’s poor ratings are due to ‘affordability’. I would argue that it is due to his persistent erratic behavior (not that I disagree with some of his policies) and childish name calling. This one seems over the top and unless there is real substance to these charges, I think that he just nailed the mid-terms for the dems. And unfortunately, he has provided a precedent for future progressive presidents.

 

U.S. Treasury Secretary Scott Bessent on Friday said the goal of the Trump administration's launch of mortgage-backed securities purchases is to roughly match the rate at which those bonds are rolling off the Federal Reserve's balance sheet.

 

Credit card and bank shares fell premarket after Trump doubled down on a demand that issuers lower rates to 10% by Jan. 20 and keep them there for a year. Capital One was down nearly 9%.

 

A group of countries led by the UK and Germany is discussing plans for a military presence on Greenland to appease Trump and show that Europe is committed to Arctic security, people familiar said.

 

President Trump is scheduled to be briefed Tuesday on options to respond to the protests in Iran, according to U.S. officials, a sign the president is considering reprimanding the regime for its crackdown on demonstrators as he has repeatedly threatened.

 

Iran warns it will hit American bases in the Middle East if the Pentagon launches strikes, along with Israel and regional shipping lanes.

 

Israel and Hamas are preparing for renewed fighting as the Palestinian militant group is refusing to disarm, a requirement that is holding up progress on President Trump’s peace plan for Gaza. Israel’s military has drawn up plans for a new ground operation inside Hamas-controlled territory in Gaza.

 

Exxon CEO Darren Woods offered the starkest assessment, telling Trump in the live-streamed meeting in the East Room that Venezuela is “uninvestable” under current conditions. He said major changes were needed before his company would return to the country, and that big questions remain about what return Exxon could expect from any investments.

 

            Fiscal Policy

 

              G3 fiscal policy will be expansive in 2026.

              https://www.apolloacademy.com/g3-fiscal-policy-very-expansionary-in-2026/

 

              Goldman on Trump’s bond buying bonanza.

              https://www.zerohedge.com/markets/signal-matters-more-flow-what-goldman-thinks-about-trumps-big-bond-buying-bonanza

 

What is confusing to me about Trump wanting to increase Venesuelan oil production, it is direct opposition to his rationale for imposing tariffs, i.e., to help/protect American producers.

https://www.zerohedge.com/markets/betrayal-shale-producers-furious-over-trumps-venezuela-plan-lower-crude-prices

 

            Inflation

 

              Here is how tariffs are being passed on the US consumer.

              https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5985094

 

            Greenland

 

              Why Trump wants Greenland.

              https://unherd.com/2026/01/the-space-war-will-be-won-in-greenland/

 

     Investing   

           

            The latest from Citadel.

            https://www.zerohedge.com/markets/life-fast-lane-citadel-macro-guru-says-markets-are-underpricing-us-growth

 

            The latest from B of A.

            https://www.zerohedge.com/markets/hartnett-normally-would-be-time-sell-not-time

 

            The outlook for this earnings season.

            MARKET CALL: Earnings Powering The Bull Market

 

    News on Stocks in Our Portfolios

 

What I am reading today

 

What happened to the Ark of the Covenent?

What happened to the Ark of the Covenant? Here’s what we know. | National Geographic

 

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

 

 

 

Monday Morning Chartology

 

The Morning Call

 

1/13/25

 

 

The Market

         

    Technical

 

The (so far) mini correction continued last week. The S&P (1) reset its 50 DMA to resistance, (2) made a new lower low and (3) is poised to challenge both its 100 DMA [~5820] and the lower boundary of its very short term uptrend [~5800]---which together should offer decent support. But I wouldn’t be making bets on that trade. If they do hold then the next issue will be the ensuing high, i.e., whether it is higher (thereby breaking the downtrend) or lower (not). On the other hand, if those levels fail, the next visible support is the 200 DMA (~5572).

 

Rising rates and rising fear.

https://www.zerohedge.com/the-market-ear/rising-rates-and-rising-fear

 

            Getting close to buying the dip.

            https://www.zerohedge.com/the-market-ear/getting-close-btd-opportunity

 

            Technical breakdown levels to watch.

            https://www.zerohedge.com/markets/consolidation-continues-technical-breakdown-levels-watch

 

                Hedge funds dump stocks.

            https://www.zerohedge.com/markets/hedge-funds-dump-stocks-2nd-straight-week-funding-spreads-collapse

 

 

 

 

Like stocks, the destruction continued. TLT remains below all DMAs and in very short term, short term, and intermediate term downtrends. Plus, there is no visible support between current levels and the 10/23 low with the possible exception of the lower boundary of that very short term downtrend. And I wouldn’t hang my hat on that. This suggests my ‘inflation has seen its lows’ scenario is on track; and it certainly explains the stomachache in the equities market. This is a market in search of a bottom and a warning to do nothing until that bottom is found.

 

Something odd is happening in the bond market.

https://www.zerohedge.com/the-market-ear/something-odd-happening-bond-markets-should-we-worry-0

 

 

 

 

 

Despite higher interest rates (lower bond price) and a stronger dollar (see below), gold not only rallied but (1) bounced off its 100 DMA to the upside, (2) reset its 50 DMA to support and (3) pushed through the downtrend off its 10/30 high. If it holds above that trendline then its next challenge is the upper boundary of its very short term trading range; and if that doesn’t hold, it is on to new all-time highs. But that is getting a bit ahead of ourselves. Still, it is good for a trade to its former high.

 

The everything hedge.

https://www.zerohedge.com/the-market-ear/gold-everything-hedge-waking

 

 

 

The dollar made a partial recovery from last week’s plunge---likely on the hopes that the bond guys will force the Fed to raise rates or at least stop lowering them. While plenty technical damage has been done, it is still (1) above its 100 and 200 DMAs, (2) in an intermediate term uptrend and (3) has that massive gap down open that needs to be filled.

 

 

 

            Friday in the charts.

            https://www.zerohedge.com/market-recaps/bullion-black-gold-jump-stocks-bonds-slump-macro-wrecks-rate-cut-hopes

 

            Fragile markets.

            https://www.zerohedge.com/the-market-ear/fragile-markets-breaking-trends-rising-panic-and-oversold-conditions

 

    Fundamental

 

       Headlines

 

              The Economy

 

The stats last week in total were quite negative though the primary indicators were balanced. Ditto overseas except that they were even more disappointing than our own. Clearly, in and of themselves, not supportive of a ‘muddle through’ scenario. However, (1) it was one week’s data which hardly makes a trend and (2) indeed, one would expect some unevenness in the numbers flow in a ‘muddle through’ forecast.

 

Certainly, investors were not concerned with last week’s biased leaning of the stats as interest rates continued to rise on fears that the economy was strengthening to the point that the Fed would halt its rate cutting policy. And that notion got a dramatic boost on Friday with the blow out nonfarm payrolls report---which supports my ‘inflation is as good as its going to get’ call.

 

A deep dive into those numbers.

https://bonddad.blogspot.com/2025/01/december-jobs-report-ho-ho-ho-santa.html

 

On the other hand.

https://www.capitalspectator.com/introducing-the-us-5-year-yield-opportunity-index/

 

Add in the inflationary implications of the Donald’s stated intention to raise tariffs and cut taxes and you have a formula for stagflation---not great for the economy nor the Market. To be sure, his cost cutting proposals could be an offset but (1) Trump has the power to impose tariffs unilaterally, and (2) it is a lot easier to get congress to cut taxes than it is to cut spending.

 

 

Bottom line: my outlook remains: (1) the economy ‘muddles through’ and (2) inflation has likely seen its lows.

 

Inflation reaccelerating.

                        https://www.apolloacademy.com/inflation-reaccelerating/

 

                        US

                       

 

                        International

 

December Chinese vehicle sales were up 10.5% versus consensus of +6.4%.

 

                        Other

 

                          Update on big four recession indicators.

                          https://www.advisorperspectives.com/dshort/updates/2025/01/10/the-big-four-recession-indicators

 

                          More Q4 nowcasts.

                          https://www.calculatedriskblog.com/2025/01/q4-gdp-tracking-18-to-27-range.html

 

            Fiscal Policy

 

              The era of free government is over.

              https://www.wsj.com/opinion/bond-yields-rising-u-k-united-states-central-banks-economy-keir-starmer-rachel-reeves-18ecb485?mod=opinion_lead_pos2

 

            China

 

              China’s central bank worried about deflation.

              https://www.nytimes.com/2025/01/10/business/china-central-bank-bonds.html

 

     Investing

 

Goldman joins the argument that valuations deserve to be higher today than in the past.

https://www.zerohedge.com/markets/top-goldman-trader-highlights-8-showstopping-big-picture-charts-2025

 

            Rates are only at the low end of normal.

https://wolfstreet.com/2025/01/09/bond-market-rout-in-the-uk-like-in-the-us-only-pushes-the-10-year-yield-into-low-end-of-old-normal-after-14-years-of-interest-rate-repression/

 

            Repeating our mistakes.

            Investor Resolutions For 2025 - RIA

 

            A bitcoin critic.

            https://www.acadian-asset.com/investment-insights/owenomics/there-are-idiots-seven-pillars-of-market-bubbles

 

    News on Stocks in Our Portfolios

 

Paychex (NASDAQ:PAYX) declares $0.98/share quarterly dividend, in line with previous.

 

 

What I am reading today

 

            Why Greenland is important.

            https://www.zerohedge.com/markets/hartnett-explains-why-greenland-so-important-race-arctic-great-game-next-10-years

           

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.