The MOrning Call--The Fed's monetary policy has screwed the average American

 

The Morning Call

 

12/7/21

 

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/stocks-erase-payrolls-puke-bonds-battered-crypto-bounces-back

 

            Not a bear market yet.

            https://allstarcharts.com/not-a-bear-21/

 

            But more bearish sentiment.

            https://www.linkedin.com/in/edward-yardeni/detail/recent-activity/

 

            And more depreciating breadth.

            https://www.zerohedge.com/the-market-ear/chf8n33-zu

 

            On the other hand……

            https://www.zerohedge.com/the-market-ear/bubbles

 

            Oil market hit by hedge fund liquidations.

            https://www.zerohedge.com/commodities/oil-market-hit-tsunami-hedge-fund-liquidations

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Q3 nonfarm productivity was down 5.2% versus estimates of -4.9%; unit labor costs were +9.6% versus +8.3%.

 

The October trade balance was -$67.1 billion versus expectations of -$66.8 billion.

 

                        International

 

Q3 EU GDP growth was reported at +2.2%, in line; Q3 unemployment change was +0.9%, also in line; December economic sentiment was 26.8 versus 23.2.

 

October Japanese household spending was up 3.4% versus consensus of +3.6%; October YoY cash earnings were up 0.2% versus +0.7%; October preliminary leading economic indicators were 102.1 versus 100.2.

                       

The November Chinese trade balance was $71.7 billion versus projections  of $82.7 billion.

 

December German economic sentiment came in at 29.9 versus forecasts of 29.1.

 

                        Other

                        

                           Real wages through November.

                           https://econbrowser.com/archives/2021/12/real-wages-through-november

 

                           Goldman cuts 2022 GDP growth forecast.

                          https://www.cnn.com/2021/12/04/economy/goldman-sachs-us-gdp-omicron/index.html

 

                           Update on seven high frequency economic indicators.

                           https://www.calculatedriskblog.com/2021/12/seven-high-frequency-indicators-for.html

 

                           Housing inventory down last week.

                           https://www.calculatedriskblog.com/2021/12/housing-inventory-december-6th-update.html

                                

             The Fed

 

                 The Fed’s monetary policy has screwed the average American.  

                 https://www.zerohedge.com/markets/feds-monetary-policy-has-screwed-americans

 

            The coronavirus

 

              A return to normalcy.

              https://brownstone.org/articles/bidens-throat-frog-hints-at-the-coming-normalcy/

 

              The precautionary principle is poison.

              https://cafehayek.com/2021/12/the-precautionary-principle-is-poison.html

 

     Bottom line

 

            The latest from John Mauldin.

            https://www.advisorperspectives.com/commentaries/2021/12/03/capital-excess

               

            The latest from Morgan Stanley.

            https://www.zerohedge.com/markets/omicron-didnt-start-fire-morgan-stanley-sees-powell-raining-fire-and-brimstone-market

 

            Investors are setting themselves up for a fall.

            https://www.ft.com/content/32e000cf-c95a-4940-8985-f67ca6170ae8

 

            Focus on your portfolio and stop worrying about everyone else’s.

            https://allstarcharts.com/take-care-of-your-business/

 

            Is this how the story ends?

            https://www.zerohedge.com/markets/perhaps-how-our-story-ends-run-dollar-takes-hold-worlds-reserve-currency-collapses

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

           

 

 

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Monday Morning Chartology

 

The Morning Call

 

12/6/21

 

 

The Market

         

    Technical

 

           

            Another rough week in stock land. The S&P reset its short term trend from up to a trading range. It also appears ready to challenge its 100 DMA. However, as I noted last week, the S&P broke its short term uptrend several times earlier this year only to rebound and reset to a new uptrend. So, I don’t see the pin action itself as a reason to get worried. However, coupled with significantly deteriorating breadth, my concern-o-meter is racheting up.

 

            New lows spike.

            https://sentimentrader.com/blog/a-split-market-as-oil-tumbles-into-a-bear-market/

 

            The hottest stocks are getting quietly killed.

            https://www.bloomberg.com/news/articles/2021-12-03/in-the-tarantino-market-the-hottest-stocks-are-getting-quietly-killed?sref=loFkkPMQ

 

 

 

 

 

TLT reestablished its uptrend last week. Given the hawkish pronouncements from Powell, that might seem a bit unusual. Check out the links under Inflation below and they will spell out what the bond guys are thinking, i.e., Powell waited too late to get hawkish and now the Fed will be tightening into a weaker economy---thereby making it even weaker.

 

 

 

            As you can see, GLD followed through to the downside last week, in the process, successfully resetting its 200 DMA to resistance. That is not exactly what you would expect if inflation were in the forefront of investors’ minds---supporting the bond boys’ notion that we should be worried about a weakening economy versus rising inflation.

          

 

 

The dollar continues to trend higher. Again, that performance is more indicative of a deflationary/noninflationary environment versus an inflationary one.

 

 

At least for last week, it appears that most investors are now discounting slower economic growth and/or less inflation. Let’s see if there is follow through among all the indicators.

 

            Friday in the charts.

            https://www.zerohedge.com/markets/bubble-market-bloodbath-powell-put-strike-plunges

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        Review of Last Week 

 

The US stats were positive again last week, but the primary indicators were negative (two negative, one positive). So, a mixed week and, hence, no third plus week in a row. As I said last week, ‘two (weeks of upbeat numbers in a row) is not enough for a trend to be set, but it is a beginning.’---which is now a bit questionable.

 

Overseas, the data were slightly positive. That does keep a two week (now three) streak alive. Although with the European governments again overreacting this time to the omicron variant, I can’t imagine that continuing.

 

My take on the economy remains unchanged---it is struggling to grow, hampered by increasingly irresponsible monetary and fiscal policies, getting no support from the global economy and threatened by seemingly mounting inflationary forces---though Markets were questioning the latter point this week.

 

Of course, the big economic headline of the week was that transitory (inflation) is no longer. I am not going to waste time with another diatribe about Fed incompetence. But investors and consumers probably need to prepare themselves for some rougher times.

 

                        US

                       

 

                        International

 

                          October German factory orders fell 6.9% versus estimates of -0.5%.

 

The November EU construction PMI came in at 53.3 versus expectations of 51.5; the November German construction PMI was 47.9 versus 48.5; the November UK construction PMI was 55.5 versus 54.2.

November UK YoY car sales rose 1.7% versus consensus of down 12.0%.

 

                        Other

           

            The Fed

 

              Can the Fed overcome its transitory policy mistake?

              https://www.project-syndicate.org/commentary/us-federal-reserve-transitory-inflation-trap-by-mohamed-a-el-erian-2021-12

 

            Inflation

 

              An inversion that likely means the end of the inflation narrative.

              https://www.realclearmarkets.com/articles/2021/12/03/an_inversion_that_will_likely_end_the_inflation_narrative_806286.html

 

                          Here is a less professorial narrative on the above subject.

              https://allstarcharts.com/treasury-spreads-tank/

 

                          Just in case you have lingering doubts.

              https://www.ft.com/content/056c2bb6-1ba7-46ad-ab43-e5b21e1c379d

 

            The coronavirus

 

World Health Organization says no evidence that booster shot offers greater protection.

              https://www.zerohedge.com/covid-19/world-health-organization-says-no-evidence-booster-jabs-would-offer-greater-protection

 

 

    Bottom line

 

            Crazier than the dot com bust.

            https://www.bloomberg.com/news/articles/2021-12-03/berkshire-s-munger-says-now-is-even-crazier-than-dotcom-bust?srnd=premium&sref=loFkkPMQ

             

    News on Stocks in Our Portfolios

 

What I am reading today

 

           

 

 

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The Morning Call--Food prices continue to soar

 

The Morning Call

 

12/3/21

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/markets-turmoil-easing-omicron-anxiety-battles-surge-technical-default-fear

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Weekly jobless claims were up 222,000 versus estimates of up 240,000.

                          https://www.calculatedriskblog.com/2021/12/weekly-initial-unemployment-claims.html

 

November nonfarm payrolls rose 210,000 versus expectations of up 550,000.

                                  https://www.zerohedge.com/economics/november-payrolls-huge-miss-just-210k-jobs-added-fewest-december-2020

 

                        International

 

                          October EU retail sales were up 0.2%, in line.

 

The November Japanese final services PMI was reported at 53.0 versus consensus of 52.1; the composite PMI was 53.3 versus 52.5; the November Chinese final services PMI was 52.1 versus 53.0; the composite PMI was 51.2 versus 51.0; the November German final services PMI was 52.7 versus 53.4; the composite PMI was 52.2 versus 52.9; the November EU final services PMI was 55.9 versus 56.6; the composite PMI was 55.4 versus 55.8; the November UK final services PMI was 58.5, in line; the composite PMI was 57.6 versus 57.7.

 

                        Other

 

                          The JP Morgan global manufacturing PMI was off slightly in November.

                          https://www.markiteconomics.com/Public/Home/PressRelease/938c51c888bd41c0b5c0d81725abc6a9

 

                          Business cycle indicators as of 12/1.

                          https://econbrowser.com/archives/2021/12/business-cycle-indicators-as-of-december-1st-2

 

            The Fed

 

              Thoughts on ‘transitory.’

              https://www.pragcap.com/three-things-i-think-i-think-transitory-is-transitory/

 

            Inflation

 

              Food prices continue to soar.

              https://www.zerohedge.com/commodities/global-food-prices-rise-again-hitting-new-decade-high

 

     Bottom line

 

            November dividends by the numbers.

            https://politicalcalculations.blogspot.com/2021/12/dividends-by-numbers-in-november-2021.html#.YajvldDMKUk

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

            Why the woke are the new Victorians.

            https://edwest.substack.com/p/why-the-woke-are-the-new-victorians

 

            Third worldizing America.

            https://townhall.com/columnists/victordavishanson/2021/12/02/third-worldizing-america-n2599978

 

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

 

 

 

The Morning Call--Sorry, Joe, it is not free

The Morning Call

 

12/2/21

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/omicrysteria-powellocalypse-slam-stocks-bond-yields-black-gold

 

The Dow fell below its 200 DMA; if it remains there though next Monday, it will revert to resistance. The S&P closed below the lower boundary of its short term uptrend for the second day; if it ends there today, it will reset to a trading range.

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

October construction spending was up 0.2% versus expectations of up 0.4%.

                          https://www.calculatedriskblog.com/2021/12/construction-spending-increased-02-in.html

 

The November final manufacturing PMI came in at 58.3 versus estimates of 59.1.

https://www.advisorperspectives.com/dshort/updates/2021/12/01/november-markit-manufacturing-11-month-low

 

The November ISM manufacturing index was reported at 61.1 versus predictions of 61.0.

https://www.advisorperspectives.com/dshort/updates/2021/12/01/november-ism-manufacturing-index-continued-overall-expansion-despite-obstacles

 

                        International

 

The October EU unemployment rates was 7.3%, in line; October PPI was 5.4% versus 3.5%.

 

November Japanese consumer confidence came in at 39.2 versus consensus of 40.0.

 

                        Other

 

                          October median household income.

                          https://politicalcalculations.blogspot.com/2021/12/median-household-income-in-october-2021.html#.Yaepu9DMKUk

 

            The Fed

 

              The velocity of M2

              https://econbrowser.com/archives/2021/11/so-you-want-to-be-a-monetarist

 

            Fiscal Policy

 

              The absurdity of Biden’s claim that his infrastructure bill is free.

              https://townhall.com/columnists/byronyork/2021/12/01/the-bidenbuttigieg-pitch-its-all-free-n2599873

 

 

    News on Stocks in Our Portfolios

 

Kroger (NYSE:KR): Q3 Non-GAAP EPS of $0.78 beats by $0.11; GAAP EPS of $0.64 misses by $0.07.

Revenue of $31.9B (+7.3% Y/Y) beats by $680M.

 

What I am reading today

 

            Bitcoin and electricity

            https://marginalrevolution.com/marginalrevolution/2021/11/bitcoin-and-electricity.html

 

            Assured misery.

            https://www.collaborativefund.com/blog/assured-misery/

 

            Fossil fuels are good.

            https://www.masterresource.org/fossil-fuel-utility/brendan-spicked-fossil-fuels-good/

 

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

 

 

  

The Morning Call---Toot a loo 'transitory'

 

The Morning Call

 

12/1/21

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/powell-sparks-taper-tantrum-bonds-scream-policy-error

 

            More selling to come?

            https://www.zerohedge.com/the-market-ear/cdeaqkvcmc

 

Two items: (1) the Dow ended below its 100 DMA for the third day, reverting to resistance and (2) the S&P finished below the lower boundary of its short term uptrend; if it remains there through the close on Thursday, it will reset to a trading range. Even if this challenge is successful, remember from late Spring to mid Fall, the S&P broke its short term uptrend several times only to quickly reset to an uptrend. The point being that it is too soon to get squirrely.

 

            What the VIX is telling us….or not.

            https://www.zerohedge.com/the-market-ear/timetosell

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications fell 7.2% while purchase applications were up 5.1%.

 

Month to date retail chain store sales grew slightly faster than in the prior week.

 

The September Case Shiller home price index rose 0.8% versus consensus of +0.9%.

https://www.zerohedge.com/personal-finance/us-home-price-acceleration-slowed-very-modestly-september

 

The November Chicago PMI came in at 61.8 versus expectations of 67.0.

https://www.advisorperspectives.com/dshort/updates/2021/11/30/chicago-pmi-slips-in-november

 

November consumer confidence was reported at 109.5 versus predictions of 111.0

                          https://www.zerohedge.com/personal-finance/conference-board-confidence-slumps-november-hope-nears-5-year-low

 

The November ADP private payroll report showed job increases of 534,000 versus estimates of 525,000.

                                                  https://www.zerohedge.com/personal-finance/adp-signals-modest-slowdown-job-gains-november-despite-easiest-labor-market-ever

 

                        International

 

Q3 Japanese YoY capital spending was up 1.2% versus forecasts of +4.4%; the November final manufacturing PMI was 54.5 versus 54.2.

 

October German retail sales declined 0.3% versus projections of +1.0%; the November final manufacturing PMI was 57.4 versus 57.6.

 

The November EU final manufacturing PMI came in at 58.4 versus consensus of 58.6; the November UK final manufacturing PMI was 58.1 versus 58.2.

 

                        Other

 

            The Fed

 

How many times have I said in these pages that the Fed has never, ever, ever effectively managed a transition from easy to normal monetary policy? Yesterday, in his senate testimony, Powell said that the Fed is dropping ‘transitory’ from its inflation lexicon, sounding quite hawkish after a much more moderate narrative on Monday and apparently preparing the economy/Markets for the consequences a prolonged period of inflation and a tighter than heretofore expected monetary policy. Of course, given the Fed’s ‘on the one hand, on the other hand’ communication strategy, who knows what he will say today if the Market crashes. I tol’ you.

https://www.zerohedge.com/markets/stocks-bonds-tumble-powell-warns-accelerated-taper

 

              The end of free money.

              https://www.project-syndicate.org/commentary/great-inflation-bottlenecks-wage-price-spiral-by-hans-werner-sinn-2021-11

 

 

    News on Stocks in Our Portfolios

 

Mastercard (NYSE:MA) has announced a new share repurchase program to buyback up to $8B of its Class A common stock.

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.