The Morning Call--Nobody knows what is happening

The Morning Call

 

8/25/23

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/stocks-plunge-nvidia-closes-barely-green-markets-sell-news

               

            S&P head and shoulders?

            https://www.zerohedge.com/the-market-ear/spx-and-hs

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

The August Kansas City Fed manufacturing index came in at 12 versus forecasts of -15.

 

                        International

 

The final Q2 German GDP growth rate was 0%, in line; the August business climate index was 85.7 versus 86.7; the August current conditions index was 89 versus 90.

 

The August YoY Japanese CPI was 2.9% versus estimates of 3.2%; YoY core CPI was 2.8% versus 2.9%.

 

                        Other

                       

                          LA port inbound traffic went down sharply in July.

                          https://www.calculatedriskblog.com/2023/08/la-port-inbound-traffic-down-sharply.html

 

            The Fed

 

              Macro illusions.

              https://marginalrevolution.com/marginalrevolution/2023/08/macro-illusions-which-ones-are-you-suffering-under.html

 

                  M2 continues to shrink.

              http://scottgrannis.blogspot.com/2023/08/the-most-important-variable-that-wont.html

               

              Nobody knows what is happening.

    https://www.reuters.com/business/fed-coming-up-snake-eyes-its-battle-with-spend-happy-consumers-2023-08-24/?utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=271585583&_hsenc=p2ANqtz-93P5s1OjOVygEyCi07kQySIGbKvsoFzvMrV28_b2bVoq4bTUjswx7OJYz-qV-bhEQmyfz-p0fsC4svtgYyaisngHNc9Q&utm_content=271585583&utm_source=hs_email

 

             Part 2.

   https://www.wsj.com/articles/return-of-high-interest-rates-central-banking-federal-reserve-u-s-economy-290da4d0?mod=hp_opin_pos_6&utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=271585583&_hsenc=p2ANqtz-_sK896LwBTAuWJV-6a12-5eW9naGI2R3TZJyVRnIFWaOZRRajcBszcpd5hZelP3uqxwHbqoyAvuJR1-xKhmBcj_pTZhg&utm_content=271585583&utm_source=hs_email#cxrecs_s

 

             Part 3.

             https://www.axios.com/2023/08/24/recession-indicator-us-economy-downturn

 

 

           Fiscal Policy

 

             FEMA officials enjoy $1000/night accommodations in Maui as fire victims suffer.

             https://pjmedia.com/news-and-politics/catherinesalgado/2023/08/23/fema-officials-enjoy-luxury-hotels-as-displaced-maui-residents-need-aid-n1721414

 

            Recession

 

              The latest Q3 GDP nowcast.

              https://econbrowser.com/archives/2023/08/q3-gdpnow-at-5-9-saar

 

            China

 

              China’s crisis of confidence in six charts.

  https://www.wsj.com/world/china/chinas-crisis-of-confidence-in-six-charts-8fd36f9f?mod=hp_lead_pos3&utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=271585583&_hsenc=p2ANqtz-_X7N7-HGDib5S52bwfY6A6zQ4D3_BSsAOwCdRVPBUXEvhmImOKJQpq5HVXmx_2qF9oqOo-R0ckMvSEmYS_G3AyO7w9-A&utm_content=271585583&utm_source=hs_email

 

     Bottom line

 

I have argued frequently in these pages that two of the negative consequences of the irresponsible management of monetary and fiscal policies was the misallocation and mispricing of assets and acting as an accelerant to income inequality---of which stock buybacks are part and parcel.   This author addresses that issue.  While he espouses some leftist ideologies in his comments and analysis, he nonetheless makes some very good points and a decent case for the need to reform the tax code to reduce the financial incentive for corporate executives to personally benefit from stock buybacks.

            https://www.nakedcapitalism.com/2023/08/the-scourge-of-corporate-financialization-income-inequity-employment-instability-productive-fragility.html

 

    News on Stocks in Our Portfolios

 

Altria (NYSE:MO) declares $0.98/share quarterly dividend, 4.3% increase from prior dividend of $0.94.

What I am reading today

 

            There is a way to get healthier without going to the gym.

            https://www.npr.org/sections/health-shots/2023/07/22/1189303227/neat-fitness-non-exercise-activity-thermogenesis

 

 

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--Is the sell-off over?

 

The Morning Call

 

8/24/23

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/bonds-bitcoin-big-tech-bullion-soar-bad-news-good-news-again

 

            Technical indicators suggest that the sell-off is over.

            https://investorplace.com/hypergrowthinvesting/2023/08/stock-indicators-strongly-suggest-stocks-are-about-to-soar/

 

            Four reasons bond yields are rising.

            https://www.morningstar.com/markets/4-reasons-bond-yields-are-rising

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Weekly jobless claims totaled 230,000 versus expectations of 240,000.

 

July durable goods orders fell 5.2% versus projections of -4.0%; ex transportation, there were up 0.5% versus +0.2%.

 

The July Chicago national activity index came in at .12 versus consensus of -.4.

 

                          July new home sales rose 4.4% versus estimates of -1.6%.

                          https://www.advisorperspectives.com/dshort/updates/2023/08/23/new-home-sales-rebound-in-july

 

The August flash manufacturing PMI was 47.0 versus predictions of 49.3; the flash services PMI was 51.0 versus 52.2; the flash composite PMI was 50.4 versus 52.0.

 

                        International

 

                        Other

 

The Fed

 

  EU PMIs pose a problem for the ECB.

  https://www.reuters.com/markets/europe/euro-zone-services-slide-deepens-economic-gloom-pmi-2023-08-23/

 

Recession

 

  Irresponsible fiscal policy is holding off the recession.

  https://www.advisorperspectives.com/commentaries/2023/08/23/inflation-recession-debt-lance-roberts

 

And what that means for the Fed’s monetary policy (this article by the Fed whisperer).

https://www.wsj.com/economy/central-banking/recession-fears-have-been-blown-out-of-the-water-long-serving-fed-president-says-da0b5461?mod=economy_lead_story

 

Mortgage rates up, applications down.

https://www.bloomberg.com/news/articles/2023-08-23/us-mortgage-rates-jump-to-7-31-highest-level-since-late-2000?srnd=premium&sref=loFkkPMQ

 

              US corporate bankruptcies are on the rise.

              https://www.zerohedge.com/markets/us-corporate-bankruptcies-are-rise

 

            China

 

               A crisis in China would pose difficult choices from both it and the US.

              https://www.washingtonpost.com/opinions/2023/08/21/paulson-china-economy-xi-jinping-test/

 

              Counterpoint.

              https://www.nytimes.com/2023/08/21/opinion/columnists/china-financial-crisis-economy.html

 

     Bottom line

 

            A look at the equity risk premium.

            https://www.capitalspectator.com/so-many-equity-risk-premium-models-so-little-time/

 

            The outlook for dividends.

            https://politicalcalculations.blogspot.com/2023/08/summer-2023-snapshot-of-future-for-s.html

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

            Thursday morning humor.

            https://babylonbee.com/news/biden-tells-fire-victims-he-sympathizes-because-one-time-he-walked-on-the-beach-without-sandals-and-the-sand-was-really-hot

 

            A doorstop worth $75,000.

            https://www.sciencealert.com/man-uses-strange-rock-as-doorstop-for-decades-it-turned-out-to-be-worth-a-fortune

\              

 

            The appalling idea of a national mission.

            https://www.adamsmith.org/blog/the-appalling-idea-of-a-national-mission

 

            Wrap your mind around this.

            https://bigthink.com/starts-with-a-bang/universe-wasnt-empty-before-big-bang/

 

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---How hard should the Fed squeeze to get to its 2% target?

The Morning Call

 

8/23/23

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/bjs-blows-it-dicks-shrink-consumer-concerns-spook-stocks-flattens-yield-curve

 

Tuesday’s technical take.

            Stock Market Rally Coming? And Investing In 2024. - RIA (realinvestmentadvice.com)

 

            NASDAQ, the bearish cross.

            https://www.zerohedge.com/the-market-ear/nasdaq-bearish-cross

 

            Is the correction over?

            https://alhambrapartners.com/2023/08/21/weekly-market-pulse-is-the-correction-over/

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

                           

Weekly mortgage applications fell 4.2% while purchase applications were down 5.0%.

 

                            July existing home sales fell 2.2% versus expectations of -0.5%.

                            https://www.advisorperspectives.com/dshort/updates/2023/08/22/existing-home-sales-fall-prices-remain-elevated

 

 

                                                         July building permits were up 0.1%, in line.

 

                            The August Richmond Fed manufacturing index came in at -7, in line.

                            https://www.advisorperspectives.com/dshort/updates/2023/08/22/richmond-fed-manufacturing-activity-remained-sluggish-august

                                                        

                        International

                           

The August Japanese flash manufacturing PMI was 49.7 versus forecasts of 49.5; the flash services PMI was 54.3 versus 53.6; the flash composite PMI was 52.6 versus 52.0; the August German flash manufacturing PMI was 39.1 versus 38.7; the flash services PMI was 47.3 versus 51.5; the flash composite PMI was 44.7 versus 48.3; the August EU flash manufacturing PMI was 43.7 versus 42.6; the flash services PMI was 48.3 versus 50.0; the flash composite PMI was 47.0 versus 48.5; the August UK flash manufacturing PMI was 42.5 versus 45.0; the flash services PMI was 48.7 versus 51.0; the flash composite PMI was 47.9 versus 50.8.

                            https://www.zerohedge.com/economics/yields-tumble-after-european-pmis-signal-stagflation-accelerating

 

                        Other

 

The Fed

 

  How hard should the Fed squeeze to get to its 2% inflation target?

  https://www.wsj.com/economy/central-banking/how-hard-should-the-fed-squeeze-to-reach-2-inflation-77dbf56f?mod=economy_lead_pos1

 

Recession

 

  S&P joins Moody’s in downgrading US banks.

  https://www.zerohedge.com/markets/sp-joins-downgrade-party-us-banks-due-tough-cliamte

 

China

 

  Why it is so hard for China to fix its real estate crisis.

  https://www.nytimes.com/2023/08/22/business/china-economy-property.html

 

     Bottom line

 

            Update on expected S&P earnings.

            https://politicalcalculations.blogspot.com/2023/08/summer-2023-snapshot-of-expected-future.html              

 

            Rates matter.

            http://mrzepczynski.blogspot.com/2023/08/in-case-you-forget-real-rates-matter.html

 

            But is it time to start nibbling at bonds?

            https://allstarcharts.com/the-biggest-question-i-have-right-now/

 

The macro-economic implications of rising real yields.

https://www.capitalspectator.com/analysts-assess-investing-macro-implications-of-rising-real-yields/

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

            Wednesday morning humor.

            https://babylonbee.com/news/hypocrite-christian-man-says-yoga-pants-are-sinful-but-now-his-wife-is-wearing-them-and-awoooga-all-aboard-matey

 

            Deepfake imposter scams are fueling a new wave of financial fraud.

https://www.bloomberg.com/news/articles/2023-08-21/money-scams-deepfakes-ai-will-drive-10-trillion-in-financial-fraud-and-crime?srnd=premium&sref=loFkkPMQ

                       

            The world’s happiest man.

            https://www.nytimes.com/interactive/2023/08/13/magazine/matthieu-ricard-interview.html

 

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---Why Xi Jinping is letting the Chinese economy flail

The Morning Call

 

8/22/23

 

The Market

         

    Technical

 

Monday in the charts.

https://www.zerohedge.com/markets/soaring-tech-stocks-shrug-sky-rocketing-treasury-yields-now

 

Three more charts.

https://www.zerohedge.com/the-market-ear/3-random-charts-we-are-watching

 

July margin debt up 4.2%.

https://www.advisorperspectives.com/dshort/updates/2023/08/21/margin-debt-up-july-2023

 

Surge in zero-day options sparking fear of increased volatility

https://www.ft.com/content/7799af5a-f62d-4905-8f88-8aa53e205e47

 

            Treasury yields surge to 16 year high.

            https://www.zerohedge.com/markets/treasury-yields-soar-16-year-high-30y-mortgage-rate-nears-21st-century-high

 

    Fundamental

 

       Headlines                                                                                  

 

              The Economy

 

                        US

 

Month to date retail chain store sales rose dramatically from the prior week.

 

                        International

 

                        Other

                         

                          Update on weekly leading economic indicator.

                          https://www.advisorperspectives.com/dshort/updates/2023/08/18/recessionalert-weekly-leading-economic-index

 

            China

 

              China’s Japanification.

              https://www.ft.com/content/52c805d5-c759-46cc-a0fe-2de2f2d71850

               

              China’s central bank makes smaller than expected reduction in key interest rate.

              https://www.nytimes.com/2023/08/21/business/china-central-bank-rate-cut.html

 

              Why Xi Jinping is letting the Chinese economy flail.

              https://www.bloomberg.com/news/features/2023-08-20/xi-jinping-is-running-china-s-economy-cold-on-purpose?srnd=premium&sref=loFkkPMQ

 

                             Can he deal with the consequences?

               https://www.nytimes.com/2023/08/20/business/china-property-crisis-country-garden.html

 

            Recession

 

              Vehicle miles driven increased in June.

              https://www.calculatedriskblog.com/2023/08/dot-vehicle-miles-driven-increased-28.html

 

     Bottom line.

 

            The folly of forecasts.

            https://ritholtz.com/2023/08/folly-of-forecasts-big-short-edition/

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            Stop asking random people stupid questions.

            https://thereformedbroker.com/2023/08/18/stop-asking-random-people-stupid-questions/

 

The biggest question mark in astronomy.

https://www.nytimes.com/2023/08/18/science/space/question-mark-space-webb-telescope.html

 

             

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