The Morning Call
6/2/23
The
Market
Technical
Thursday in the
charts.
Note: the S&P traded
higher, pushing back through the 4200 level (the upper boundary of a year-long
trading range). That restarts the clock
on our time and distance discipline. If
it remains there through the close on Monday, it will confirm an upside break.
Where are we in
the bubble?
https://www.zerohedge.com/the-market-ear/where-are-we-bubble
Don’t let them
scare you.
https://wealthfoundme.com/theyre-just-trying-to-scare-you/
Beginning to look
a lot like FOMO.
https://www.zerohedge.com/the-market-ear/it-beginning-look-lot-fomo
Fundamental
Headlines
The
Economy
US
Weekly initial
jobless claims totaled 232,000 versus projections of 235,000.
Q1 nonfarm
productivity fell 2.1% versus estimates of -2.5%; unit labor costs rose 4.2%
versus 6.0%.
April construction
spending was up 1.2% versus consensus of +0.2%.
The May ADP
private payroll report revealed an increase of 278,000 jobs versus predictions
of 170,000.
https://www.advisorperspectives.com/dshort/updates/2023/06/01/adp-employment-private-jobs-278k-added
The May manufacturing
PMI was 48.4 versus expectations of 48.5.
The May ISM
manufacturing index came in at 46.9 versus forecasts of 47.0.
May nonfarm
payrolls grew 339,000 versus projections of 190,000; the May unemployment rate
was 3.7% versus 3.5% (the participation rate went up slightly).
International
April German retail sales grew 0.8% versus
projections of +1.0%.
The April EU
unemployment rate was 6.5%, in line; May CPI was 6.6% versus 6.3%.
The Japanese
manufacturing PMI came in at 50.6 versus estimates of 50.8; the May Chinese
Caixin manufacturing PMI was 50.9 versus 49.5; the May German manufacturing PMI
was 43.2 versus 42.9; the May EU manufacturing PMI was 44.8 versus 44.6; the May
UK manufacturing PMI was 47.1 versus 46.9.
Other
Rumors are the
Chinese are working on a set of measures supporting their property markets.
https://www.zerohedge.com/markets/china-property-bailout-rumors-send-global-markets-higher
The
Fed
Mohammed El Erian blasts the Fed.
Inflation
Some good inflation news.
https://www.bespokepremium.com/think-big-blog/some-good-inflation-news/
Recession
Some bad news on corporate balance sheets.
https://www.ft.com/content/07149a13-2e82-42a7-8cd6-f018bdd0003d
More
bad news.
The
Debt Ceiling
This episode of the DC clown show is almost
over.
The
Banking System
Bank bailout facility hits record high.
Bottom line
Investors’
dilemma: no recession versus higher interest rates. This is the tug of war. The economy is showing few signs of weakness;
the labor market is strong; corporate earnings are better than anticipated. And
many non-AI stocks are at attractive valuations. But the Fed may stay tighter for longer---‘may’
being the operative word. Is it really
serious about taking inflation back to 2%?
If it is, then it will be the first time since Volcker. If it is not, then all those non-AI stocks
could rally hard.
Update on
valuations.
https://www.advisorperspectives.com/dshort/updates/2023/06/01/q-ratio-unchanged-in-may
News on Stocks in Our Portfolios
What
I am reading today
What El Nino
means to coming weather patterns (interesting if you can get through the global
warming narrative).
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for Survival’s website (http://investingforsurvival.com/home)
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