The Morning Call---What is more important Fed plicy or fiscal policy?

 

The Morning Call

 

3/22/24

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/stocks-dollar-gain-good-news-bitcoin-bullion-black-gold-sink

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          February existing home sales rose 9.5% versus estimates of -2.5%.

                          https://www.advisorperspectives.com/dshort/updates/2024/03/21/existing-home-sales-jump-to-highest-level-in-a-year

 

The February leading economic indicators were up 0.1% versus predictions of -0.2%.

https://www.advisorperspectives.com/dshort/updates/2024/03/21/leading-economic-index-conference-board-february-2024

 

The March flash manufacturing PMI was 52.5 versus consensus of 51.7; the March flash services PMI was 51.7 versus 52.0; the March flash composite PMI was 52.2 versus 51.5.

 

                        International

 

                          February Japanese CPI was 0.0% versus expectations of +0.2%.

 

February UK retail sales were flat with March versus forecasts of -0.3%; ex fuel, they were up 0.2% versus -0.1%; the March consumer confidence index was -21 versus -19; the March industrial trend orders index was -18 versus -17.

 

The March German business climate index was 87.8 versus projections of 86.0; the March current conditions index was 88.1 versus 86.8.

 

                        Other

           

            The Fed

 

              The Fed’s conundrum.

              https://www.wsj.com/economy/central-banking/the-feds-conundrum-interest-rates-are-both-too-highand-too-low-f05a9d3a?mod=economy_lead_pos3

 

            Fiscal Policy

 

              Federal debt races towards a record.

              https://www.nytimes.com/2024/03/20/us/politics/debt-taxes-budget.html

 

            Inflation

 

              Who is in control? The Fed or Fiscal Policy? (must read)

              https://klementoninvesting.substack.com/p/is-the-fed-losing-its-independence

 

             On the other hand, maybe real inflation isn’t nearly as high as the numbers show.

              https://www.calculatedriskblog.com/2024/03/bofa-should-policy-be-set-on-oer-if.html

 

     Bottom line

 

            An industrial renaissance. A matter of national security.

            https://www.advisorperspectives.com/commentaries/2024/03/21/us-industrial-renaissance-matter-national-security

 

            Do magazine covers carry a market signal?

            https://ritholtz.com/2024/03/do-magazine-covers-contain-market-signals/

 

    News on Stocks in Our Portfolios

 

Nike press release (NYSE:NKE): Q3 Non-GAAP EPS of $0.98 beats by $0.23.

Revenue of $12.43B (+0.3% Y/Y) beats by $130M.

 

FedEx press release (NYSE:FDX): Q3 Non-GAAP EPS of $3.86 beats by $0.38.

Revenue of $21.7B (-2.3% Y/Y) misses by $380M.

 

 

What I am reading today

 

           

 

 

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The Morning Call---A perfect Alfred Hitchcock ending

 

The Morning Call

 

3/21/24

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/the-market-ear/semis-surge-volatility-crumbles-and-bulls-charge

 

            Inflation is back, baby.

            https://allstarcharts.com/inflation-is-back-baby/

 

            But will a real assets portfolio help our performance?

            https://www.capitalspectator.com/profiling-a-real-assets-portfolio-during-the-recent-inflation-surge/

 

            Persistence and performance.

            https://klementoninvesting.substack.com/p/persistence-performance

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications fell 1.6%while purchase applications were down 1.2%.

 

Weekly initial jobless claims totaled 210,000 versus projections of   215,000.

 

The March Philadelphia Fed manufacturing index came in at +3.2 versus estimates of -2.3.

 

                        International

 

The February Japanese trade balance was -Y379.4 billion versus predictions of -Y810.2 billion; the March flash manufacturing PMI was 48.2, in line; the March flash services PMI was 54.9 versus 53.4; the March flash composite PMI was 52.3 versus 50.9.

 

 

February German PPI came in at -0.4% versus forecasts of -0.1%; the March flash manufacturing PMI was 41.6 versus 43.1; the March flash services PMI was 49.8 versus 48.9; the March flash composite PMI was 47.4 versus 47.0.

 

February UK CPI was +0.6% versus expectations of +0.7%; the February UK core CPI was also +0.6% versus +0.7%; the March flash manufacturing PMI was 49.9 versus 47.8; the March flash services PMI was 53.4 versus 53.8; the March flash composite PMI was 52.9 versus 53.1.

 

The March EU consumer confidence index was -14.9 versus consensus of -15.0; the March flash manufacturing PMI was 45.7 versus 47.0; the March flash services PMI was 51.1 versus 50.5; the March flash composite PMI was 49.9 versus 49.7.

 

                        Other

 

February architectural billings continue to slow albeit and a more modest pace.

https://www.calculatedriskblog.com/2024/03/aia-moderation-in-slowdown-in-business.html

 

            The Fed

 

The FOMC ended it much anticipated March meeting yesterday, leaving rates unchanged---as expected.

https://www.calculatedriskblog.com/2024/03/fomc-statement-no-change-to-policy.html

 

With the ‘dot plot’ ever so slightly more hawkish (i.e., stronger growth, higher inflation).

              https://www.calculatedriskblog.com/2024/03/fomc-projections-and-press-conference.html

 

                  More analysis.

              https://www.zerohedge.com/markets/fomc-14

           

 Then, Powell delivered an Alfred Hitchcock ending.

            https://www.zerohedge.com/markets/dovish-powell-destroys-hawkish-dots-sends-stocks-gold-crypto-soaring

 

Yesterday’s FOMC statement, dot plot and Powell’s presser is a perfect example of why I am so cynical and so disbelieving of anything that the Fed does/says and why Harvard economist Greg Mankiw says ‘stop having news conferences’.  It is confusing at best, misleading at worst and confirms my belief that these guys don’t have a f**king clue what they are doing. My bottom line from this clown show is to start worrying more about inflation, and less about recession.

https://www.zerohedge.com/markets/did-you-spot-gorilla-feds-meeting-room (must read)

               

              The ECB could cut rates in June if inflation continues to slow.

              https://www.wsj.com/economy/global/ecb-could-cut-rates-in-june-if-inflation-continues-easing-lagarde-says-dbebe583?mod=economy_lead_story

            The Bank of England leaves rate unchanged.

            https://www.zerohedge.com/markets/boe-holds-rates-525-says-things-moving-right-direction

 

    Bottom line

 

            Bitcoin up.

            https://www.riskhedge.com/outplacement/bitcoin-up-stocks-down1/rcm

 

    News on Stocks in Our Portfolios

 

FactSet Research Systems press release (NYSE:FDS): Q2 Non-GAAP EPS of $4.22 beats by $0.34.

Revenue of $545.9M (+6.0% Y/Y) misses by $1.43M.

 

Accenture press release (NYSE:ACN): Q2 Non-GAAP EPS of $2.77 beats by $0.10.

Revenue of $15.8B (-0.1% Y/Y) misses by $40M.

 

Accenture (NYSE:ACN) declares $1.29/share quarterly dividend, in line with previous.

 

 

What I am reading today

 

           

 

 

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The Morning Call (early)

 

The Morning Call

 

3/20/24

 

I have surgery early tomorrow morning; so I post this Tuesday night.

 

The Market

         

    Technical

 

            Tuesday in the charts.

             https://www.zerohedge.com/markets/nvda-fails-impress-bonds-black-gold-bid-ahead-fed

 

            Blackout of buybacks threatens bull run.

            Blackout Of Buybacks Threatens Bullish Run - RIA (realinvestmentadvice.com)

 

            The import of a declining bond market.

            https://allstarcharts.com/re-your-bond-market-crash/

 

            Bullish commodities.

            https://entrylevel.topdowncharts.com/p/chart-of-the-week-bullish-commodities

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                        International

 

                        Other

 

            The Fed

 

              The Fed is playing a waiting game on rate cuts.

              https://www.wsj.com/economy/central-banking/federal-reserve-interest-rate-cuts-rules-bd19a124?mod=economy_lead_pos1

 

              Expectations for a June rate cut continue to fade.

              https://www.capitalspectator.com/expectations-for-june-rate-cut-continue-to-fade/

 

              There are still a lot of questions regarding the Fed’s balance sheet.

  https://www.bloomberg.com/news/articles/2024-03-19/fed-s-balance-sheet-discussions-this-week-explained?srnd=homepage-americas&embedded-checkout=true&sref=loFkkPMQ

 

 

            Inflation

 

              We should fear a sticky inflation mess.

              https://www.ft.com/content/482460c2-3ce8-44d3-af3c-afc5e523ccc8

 

              Fact checking ‘greedflation’.

              https://www.aier.org/article/fact-checking-greedflation/

 

              There goes the Fed’s inflation target.

              https://www.zerohedge.com/markets/there-goes-feds-inflation-target-goldman-sees-terminal-rate-100bps-higher-35

           

            Recession

 

              Lack of clarity remains.

              https://alhambrapartners.com/2024/03/17/weekly-market-pulse-an-economic-overview/?src=news

           

              Latest US recession probability.

              https://politicalcalculations.blogspot.com/2024/03/us-recession-probability-nears-double.html

 

              The latest macroeconomists survey.

              https://econbrowser.com/archives/2024/03/march-ft-booth-macroeconomists-survey-gdp-recession-r

 

              What soft landing?

  https://www.project-syndicate.org/commentary/us-economy-soft-landing-not-guaranteed-by-michael-r-strain-2024-03?utm_source=Project%20Syndicate%20Newsletter&utm_campaign=f4fd791645-ECON-NEWSLETTER_2024-03_14&utm_medium=email&utm_term=0_-e4393264df-%5BLIST_EMAIL_ID%5D&mc_cid=f4fd791645&mc_eid=8850557fd6

 

 

            The Election

 

              The 2024 swing states.

              https://www.nakedcapitalism.com/2024/03/introduction-to-swing-states-in-the-presidential-election-of-2024-general-survey.html

 

            Civil Strife

 

              They came for me; they can come for you.

              https://www.zerohedge.com/political/they-came-me-they-can-come-you-former-trump-adviser-peter-navarro-reports-prison

 

    Bottom line

 

            Economic conditions scream ‘buy gold’.

            https://www.zerohedge.com/economics/us-economic-conditions-scream-buy-gold

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            Quote of the day.

            https://cafehayek.com/2024/03/quotation-of-the-day-4580.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---The Fed and the Market back in cinque---at least for now

 

The Morning Call

 

3/19/24

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/big-tech-black-gold-surge-bonds-bitcoin-purged-ahead-fed

 

            Record low options skew shows investor confidence.

            https://www.ft.com/content/7314c9c3-318e-4ed2-935b-1dbfcbe95860

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

February housing starts rose 10.7% versus estimates of +7.0%; February preliminary building permits were up 1.9% versus -0.2%.

                          https://www.zerohedge.com/personal-finance/housing-starts-and-permits-surged-february-despite-plunging-rate-cut-odds

 

                          The Mrach NAHB housing index was 51 versus predictions of 48.

                          https://www.advisorperspectives.com/dshort/updates/2024/03/18/nahb-housing-market-index-builder-confidence-rises-to-eight-month-high

 

                        International

 

January Japanese industrial production fell 6.7% versus consensus of -7.5%; capacity utilization was down 7.9% versus -0.2%.

 

The March EU economic sentiment index was 33.5 versus expectations of 28.0; the March German economic sentiment index was 31.7 versus 30.5; the March German current conditions index was 80.5 versus -82.0.

 

                        Other

 

                          February LA Port traffic increased significantly.

                          https://www.calculatedriskblog.com/2024/03/la-port-traffic-increased-sharply-year.html

 

            The Fed

 

              Most now believe ‘higher for longer’.

              https://www.ft.com/content/9d58ff6a-c6c4-4740-b3aa-5699a865c7f4

 

              But also believe cuts are in store in 2024.

              https://www.cnbc.com/2024/03/18/fed-and-others-to-make-major-progress-on-rates-this-year-bis-chief.html

 

The Fed and the Market’s expectations are back in cinque; what it will take for them to remain there.

https://www.bloomberg.com/opinion/articles/2024-03-18/fed-rates-alignment-with-market-expectations-is-welcome-but-not-enough?srnd=homepage-americas&embedded-checkout=true&sref=loFkkPMQ

 

 

              What the end of Japan’s negative interest rate regime means.

  https://www.bloomberg.com/news/articles/2024-03-18/what-the-end-of-japan-s-negative-interest-rates-means?srnd=homepage-americas&embedded-checkout=true&sref=loFkkPMQ

 

 

            Fiscal Policy

 

              The best contrarian indicator.

              https://alhambrapartners.com/2024/03/15/the-best-contrarian-indicator/

 

            Inflation

 

I include this not for its conclusion but for its discussion of the differences in the math used to calculate CPI versus PCE.

https://www.advisorperspectives.com/commentaries/2024/03/18/forget-cpi-zoom-pce-price-index-particularly-core-measure

 

            The Financial System

 

$1 trillion in maturing commercial real estate loans this year could spell trouble for small banks.

              https://www.zerohedge.com/markets/1-trillion-2024-cre-maturities-could-lead-hundreds-bank-failures

 

            The coronavirus

 

              What the data says about pandemic school closures.

              https://www.nytimes.com/2024/03/18/upshot/pandemic-school-closures-data.html

 

              Covid lessons learned.

              https://scottgrannis.blogspot.com/2024/03/covid-lessons-learned.html

 

            Geopolitics

 

              Have you guys lost your mind?

              https://www.zerohedge.com/geopolitical/german-lawmaker-blistering-ukraine-speech-parliament-have-you-all-lost-your-minds

 

              Putin warns NATO and US.

              https://www.zerohedge.com/geopolitical/putin-warns-full-scale-ww3-victory-speech-should-west-send-troops

 

     Bottom line

 

            Household equity allocations suggest caution.

            Household Equity Allocations Suggests Caution - RIA (realinvestmentadvice.com)

 

            This is gonna hurt.

            https://allstarcharts.com/this-will-cause-so-much-pain/

 

            Lessons in the stock market.

            https://awealthofcommonsense.com/2024/03/20-lessons-from-20-years-of-managing-money/

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

            The vitamin D story

            Hello sunshine: the vitamin D story (nationalgeographic.com)

 

            Quote of the day.

            https://cafehayek.com/2024/03/quotation-of-the-day-4579.html

 

            How to change your psychology.

            https://traderfeed.blogspot.com/2024/03/how-to-change-your-psychology.html

 

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