The Morning Call---More disinflation, no recession

 

The Morning Call

 

1/26/24

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/bonds-black-gold-bid-stocks-skid-no-landing-narrative-gores-goldilocks

 

            Three divergences to watch.

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

 

            Volatility is currently mispriced.

            https://www.zerohedge.com/markets/ahead-feb-2-fireworks-goldman-spots-phenomenon-has-never-occured

 

            Six things to know about all-time highs.

            https://www.carsongroup.com/insights/blog/six-things-to-know-about-all-time-highs/

 

    Fundamental

 

          Headlines

 

                        US

                       

                          December new home sales rose 8.0%, in line.

                          https://www.advisorperspectives.com/dshort/updates/2024/01/25/new-home-sales-rebound-in-december

 

  The December PCE price index was reported at +.2%, in line; the core PCE price index was +0.2%, also in line.

  https://www.zerohedge.com/personal-finance/savings-rate-slumps-feds-favorite-inflation-signal-hits-2-handle

 

  December personal income was up 0.3%, in line; December personal spending was up 0.7% versus +0.4%.

 

 The January Kansas City Fed manufacturing index came in at -17 versus consensus of -21.

                          https://www.advisorperspectives.com/dshort/updates/2024/01/25/kansas-city-fed-manufacturing-activity-declined-january-2024

 

                        International

 

The November Japanese leading economic indicators were 107.6 versus projections of 107.7; the January YoY CPI was +1.6% versus +2.2%; the YoY core CPI was +1.6% versus +1.9%; the core YoY CPI, ex food and energy was +2.2% versus +2.5%.

 

January UK consumer confidence was -19 versus estimates of -21; February German consumer confidence was -29.7 versus -24.5.

 

                        Other

 

            The Fed

 

              The Fed risks getting caught up in politics.

              https://www.wsj.com/economy/central-banking/the-fed-risks-getting-caught-up-in-politics-whatever-it-does-6d33c941?mod=economy_lead_pos2

 

            Fiscal Policy

 

              The problem isn’t the process; it is the politicians.

              https://thehill.com/opinion/finance/4426637-the-budget-process-isnt-broken-the-problem-is-politics/

 

  We now have the biggest government in the history of the world.

  https://www.zerohedge.com/markets/us-has-biggest-govt-history-world-very-wide-margin

 

  Yesterday’s GDP number was great; but there is one problem.

  https://www.zerohedge.com/markets/gdp-number-was-great-there-just-one-huge-problem

 

Recession

 

  More disinflation, no recession. (must read)

  https://scottgrannis.blogspot.com/2024/01/more-disinflation-no-recession-us-king.html

 

China

 

  The $6 trillion stock wipeout spells big problems for Xi.

  https://www.bloomberg.com/news/features/2024-01-25/can-xi-jinping-reverse-china-s-6-trillion-stock-market-crisis?srnd=premium&sref=loFkkPMQ

 

     Bottom line

 

            Desperate times lead to predictable results.

            https://allstarcharts.com/desperate-times-lead-to-predictable-results/

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            The Misery Index and the 2024 election.

            https://ritholtz.com/2024/01/misery-index-2024-election/

 

            Friday morning humor.

            https://babylonbee.com/news/amy-coney-barrett-says-ruling-for-open-border-has-nothing-to-do-with-landscaping-work-she-needs-done-this-summer

 

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--Q4 GDP growth well above expectations

 

The Morning Call

 

1/25/24

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/big-tech-bid-bonds-bullion-battered-better-data-made-doves-cry

 

            Downside protection reset lower.

            https://www.zerohedge.com/the-market-ear/inverse-fear-and-upside-pain

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly initial jobless claims totaled 214,000 versus expectations of 200.000.

 

Q4 GDP growth was reported at 3.8% versus predictions of 2.0%; GDP sales were +3.2% versus +2.5%; real consumer spending was up 2.8% versus +2.6%; the price indicator was +1.5% versus +2.3%; the core PCE price index was +2.0%, in line.

 

December durable goods orders were flat with November versus forecast of up 1.1%; ex transportation, they were +0.6% versus +0.2%.

 

The December Chicago national activity index fell 0.15% versus consensus of +0.1%.

 

The December trade balance was -$88.4 billion versus estimates of -$88.0 billion.

 

                          December building permits were up 1.8% versus projections of +1.9%.

 

The January flash manufacturing PMI was 50.3 versus expectations of 47.9; the flash services PMI was 52.9 versus 51.0; the flash composite PMI was 52.3 versus 50.3.

                          https://www.zerohedge.com/economics/pmi

 

                        International

 

The January German business climate index came in at 85.2 versus predictions of 86.7; the January current conditions index was 87.0 versus 88.6.

 

                        Other

 

                          Architecture billings remain soft.

                          https://www.calculatedriskblog.com/2024/01/aia-architecture-firm-billings-remain.html

 

            The Fed

 

              The Fed kills free money arbitrage scheme.

              https://www.zerohedge.com/markets/fed-suddenly-kills-banks-free-money-bailout-fund-arbitrage-scheme

                

              The ECB leaves rates unchanged.

              https://www.zerohedge.com/markets/ecb-keeps-rates-unchanged-sees-declining-trend-inflation-continuing

 

            Fiscal Policy

 

              National debt per household

              https://politicalcalculations.blogspot.com/2024/01/the-national-debt-burden-grows-for-us.html

 

            Inflation

 

              Profits do not cause inflation.

              https://www.aier.org/article/profits-do-not-cause-inflation-causal-fallacies-as-economic-ignorance/

 

            Recession

 

              Consumers will continue to power growth in 2024.

              https://www.bloomberg.com/news/articles/2024-01-24/us-gdp-data-will-showcase-consumer-set-to-power-economy-in-2024?srnd=premium&sref=loFkkPMQ

 

  And recent nowcasts support that view.

  https://www.capitalspectator.com/us-growth-slowdown-expected-for-thursdays-q4-gdp-report/

 

  A deeper dive into those EU PMI’s reported yesterday.

  https://www.pmi.spglobal.com/Public/Home/PressRelease/3dbb92c8f7ba426ebf4c4334a384183d

 

              How Houthi attacks are impacting the global supply chain.

              https://www.bloomberg.com/news/features/2024-01-24/red-sea-maps-show-houthi-attacks-hitting-global-economy?srnd=premium&sref=loFkkPMQ

 

     Bottom line

 

            S&P 500 percent of time at new all-time highs.

            https://www.bespokepremium.com/interactive/posts/think-big-blog/sp-500-percent-of-time-at-new-highs

 

And so is the rest of the world.

https://www.riskhedge.com/outplacement/the-world-is-breaking-out1/rcm

 

Stocks usually rally into Fed rate cut.

https://www.zerohedge.com/markets/dotcom-history-rhymes-nasdaq-fed-cuts-loom

 

    News on Stocks in Our Portfolios

 

General Dynamics press release (NYSE:GD): Q4 GAAP EPS of $3.64 beats by $0.02.

Revenue of $11.67B (+7.1% Y/Y) beats by $200M.

 

Canadian National Railway press release (NYSE:CNI): Q4 Non-GAAP EPS of C$2.02.

Revenue of C$4.47B (-1.5% Y/Y).

 

Canadian National Railway (NYSE:CNI) declares CAD 0.845/share quarterly dividend, 7% increase from prior dividend of CAD 0.790.

 

Becton, Dickinson (NYSE:BDX) declares $0.95/share quarterly dividend, in line with previous.

 

Sherman Williams press release (NYSE:SHW): Q4 Non-GAAP EPS of $1.81 beats by $0.01.

Revenue of $5.25B (+0.4% Y/Y) beats by $20M.

 

What I am reading today

 

            How to avoid becoming miserably rich.

            https://tonyisola.com/2024/01/how-to-avoid-becoming-miserably-rich/

 

 

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--The S&P resets its intermediate term trend from a trading range to an uptrend

 

The Morning Call

 

1/24/24

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/crypto-carnage-continues-dollar-spikes-yield-curve-steepens-soft-data-slumps

           

Note: the S&P successfully completed its challenge of the upper boundary of its intermediate term trading range (and its all time high), resetting it to an uptrend. For traders, it is time to buy some participation (IWN, IWM, VYM, SPRX).

           

            The biggest risk to the Market is higher stock prices.

            https://www.zerohedge.com/markets/largest-downside-risk-stocks-nomura-fears-animal-spirits-will-force-dovish-trifecta-course

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications were up 3.7% while purchase applications were up 8.0%.

 

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

 

January Richmond Fed manufacturing index came in at -15 versus forecasts of -11.

 

                        International

 

The January flash EU consumer confidence index was -16.1 versus projections of -14.3; the January flash manufacturing PMI was 46.6 versus 44.8; the January flash services PMI was 48.4 versus 49.0; the January flash composite PMI was 47.9 versus 48.0.

 

The December Japanese trade balance was Y62.1 billion versus consensus of Y-122.1 billion; the January flash manufacturing PMI was 48.0 versus consensus of 48.2; the January flash services PMI was 52.7 versus 51.0; the January flash composite PMI was 51.1 versus 49.5.

 

The January German flash manufacturing PMI was 45.4 versus estimates of 43.7; the January flash services PMI was 47.6 versus 49.5; the January flash composite PMI was 47.1 versus 47.8.

 

The January UK flash manufacturing PMI was 47.3 versus 46.7; the January flash services PMI was 53.8 versus 53.2; the January flash composite PMI was 52.5 versus 52.2; the Q1 business optimism index was -3 versus -2.

 

                        Other

 

The Fed

 

  The ECB lacks the same flexibility in cutting rates as the Fed.

  https://www.zerohedge.com/markets/inflation-risks-upending-trader-bets-ecb-matching-fed-cuts

 

Fiscal Policy

 

  Do the rich move because of taxes?

  https://www.adamsmith.org/blog/it-isnt-true-that-the-rich-wont-move-over-tax-rates

 

Recession

 

  Is the recession finally here?

  https://alhambrapartners.com/2024/01/22/weekly-market-pulse-is-the-recession-finally-here/

 

              The missing link in the failed recession models?

              https://www.capitalspectator.com/__01-23-2024/

 

            China

 

              China eyes stock market rescue package.

              https://www.bloomberg.com/news/articles/2024-01-23/china-mulls-stock-market-rescue-package-backed-by-278-billion?srnd=premium&sref=loFkkPMQ

 

              It also cut the bank reserve ratio.

              https://www.zerohedge.com/markets/china-unexpectedly-cuts-required-reserve-ratio-desperate-bid-contain-market-collapse

 

    Bottom line

 

            Stocks hit new highs as disappointing data persists.

            All-Time Highs For Stocks As Bitter Economic Headlines Persist - RIA (realinvestmentadvice.com)

 

            Outperforming equal-weighted and cap-weighted portfolios.

            https://alphaarchitect.com/2024/01/equally-weighted-portfolios/

 

            2024 predictions from Goldman’s rates guru.

            https://www.zerohedge.com/markets/goldmans-rates-guru-sees-4-fed-cuts-2024-great-year-china-dollar-weakness

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            Quote of the day.

            https://cafehayek.com/2024/01/quotation-of-the-day-4521.html

 

Wednesday morning humor.

https://babylonbee.com/news/7-new-features-on-united-airlines-courtesy-of-drag-queen-ceo

 

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--The repo market may throw a fit

 

The Morning Call

 

1/23/24

 

The Market

         

    Technical

                

Monday in the charts.

https://www.zerohedge.com/markets/bitcoin-battered-bonds-black-gold-bid-leading-indicators-signal-recession

 

            Three more charts.

            https://www.zerohedge.com/the-market-ear/3-charts-pockets-market-are-stretched

 

            The S&P versus other benchmarks.

            https://www.capitalspectator.com/us-stock-market-at-record-while-drawdowns-prevail-elsewhere/

 

            Investors shift focus to Q2 2024.

            https://politicalcalculations.blogspot.com/2024/01/s-500-sets-new-record-high-as-investors.html

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

The December leading economic indicators were down 0.1% versus expectations of down 0.3%.

                             https://www.advisorperspectives.com/dshort/updates/2024/01/22/leading-economic-index-conference-board-signal-underlying-weakness

                                                         

                        International

 

                        Other

 

              The role politics play in sentiment.

              https://econbrowser.com/archives/2024/01/the-non-atavistic-component-republican-economic-sentiment-as-sentiment-jumps

 

              Update on high frequency indicators.

              https://www.calculatedriskblog.com/2024/01/update-on-high-frequency-indicators.html

 

The Fed

 

  The repo market may throw a fit.

  https://www.reuters.com/markets/us/market-repo-market-may-throw-fit-spur-fed-action-2024-01-22/

 

Fiscal Policy

 

  We don’t need another Budget Commission; we need political will.

  https://www.aei.org/economics/a-new-budget-commission-wont-have-a-plan-to-boost-political-will/

 

            Recession

 

              Why the global supply chain is about to get worse.

              https://www.fastcompany.com/91012196/why-the-global-supply-chain-is-about-to-get-a-whole-lot-worse

 

              Prepare for a very ugly two years in commercial real estate.

              https://www.zerohedge.com/markets/cantor-fitzgerald-ceo-says-prepare-very-ugly-two-years-cre-turmoil

 

            Civil Strife

 

              Clashing crises.

              https://www.advisorperspectives.com/commentaries/2024/01/21/clashing-crises-global-john-mauldin

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            Sports Illustrated RIP.

            https://www.realclearmarkets.com/articles/2024/01/22/bye_bye_to_sports_illustrated_you_literally_took_my_breath_away_1006279.html

 

            Tuesday morning humor.

           

 

 

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