The Morning Call---Is the era of big price hikes over?

 

The Morning Call

 

 10/25/24

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/market-recaps/traders-buy-everything-they-sold-yesterday-rate-cut-expectations-rebound

 

            Buying could get much bigger.

            https://www.zerohedge.com/the-market-ear/big-buying-could-get-much-bigger

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

September durable goods orders fell 0.8% versus projections of -1.0%; ex transportation, they were up 0.4% versus -0.1%.

 

                          September new home sales rose 4.1% versus consensus of -2.2%.

                          https://www.calculatedriskblog.com/2024/10/new-home-sales-increase-to-738000_24.html

 

The October Kansas City Fed manufacturing index was 0 versus predictions of -16.

 

The October flash manufacturing PMI was 47.8 versus forecasts of 47.7; the October flash services PMI was 55.3 versus 55.0; the October flash composite PMI was 54.3 versus 54.0.

 

                        International

 

The August Japanese leading economic indicators were reported at 106.9 versus expectations of 106.7; the October YoY CPI was 1.8% versus 1.7%; ex food and energy, it was 1.8% versus 1.0%.

 

The October UK consumer confidence index was -21, in line.

 

The October German business climate index was 86.5 versus estimates of 85.6; the October current conditions index was 85.7 versus 84.4.

 

                        Other

 

                          Mortgage delinquency rate increased in September.

                          https://www.calculatedriskblog.com/2024/10/ice-mortgage-delinquency-rate-increased.html

 

            Monetary Policy

 

              Why the negative effects of high interest rates on corporations have been small.

              https://www.apolloacademy.com/corporate-net-interest-payments-at-record-low-levels-despite-fed-hikes/

 

              The future of QT.

              https://wolfstreet.com/2024/10/22/feds-qt-balance-sheet-composition-and-ample-liquidity-dallas-feds-lorie-logan-outlines-the-future-of-the-balance-sheet/

 

            Inflation

 

I like this discussion on inflation and agree with much that the author says. But what he fails to say, in my opinion, is that it is the disconnect between government spending and government income (taxes) that is the precipitating factor aggravating inflation. Because the Fed had to fund that disparity---which increases the money supply which means more money chasing fewer goods which spawns inflation which incites the ‘bond vigilantes.’

https://disciplinefunds.com/2024/10/22/we-need-to-have-a-talk-about-bond-vigilantes/

 

              Is the era of big price hikes over?

              https://www.bloomberg.com/news/articles/2024-10-24/era-of-big-price-hikes-is-over-giving-comfort-to-the-fed?srnd=homepage-americas

 

            Recession

 

              Eurozone economic activity stagnates.

              https://www.wsj.com/economy/global/eurozone-activity-contracts-again-pmi-surveys-suggest-55991ed3?mod=economy_lead_pos1

 

            Tariffs

 

              The economic risks of tariffs.

              https://www.wsj.com/opinion/donald-trump-tariffs-economy-2024-election-kamala-harris-robert-lighthizer-29c07e94?mod=opinion_feat1_editorials_pos3

 

     Bottom line

 

            Where the risks are.

            https://www.zerohedge.com/markets/stock-markets-bogeyman-once-again-move

 

            Here is another argument for lower equity returns over the next ten years,

            Lower Forward Returns Are A High Probability Event - RIA

 

            Bonds face double whammy.

            https://www.zerohedge.com/markets/bond-bulls-face-risk-double-whammy-election-looms

 

            BRICS summit puts focus on dethroning the dollar.

            https://www.zerohedge.com/economics/brics-summit-puts-focus-dethroning-us-dollar-putin-unveils-brics-banknote

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

            Friday morning humor.

            9 Ways Trump Is Exactly Like Hitler | Babylon Bee

 

 

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The Morning Call--Latest nowcast points to strong Q3 growth but expect slowing in Q4

 

The Morning Call

 

10/24/24

 

 

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/traders-sell-everything-dollar-soars-3-month-highs

 

            Strong US economy and ‘Trump trade’ driving the dollar higher.

            https://www.ft.com/content/5f545c98-cfd2-432a-97b4-288d8f4cebb7

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Weekly initial jobless claims totaled 227,000 versus estimates of 242,000.

 

The September Chicago national activity index was -0.28 versus expectations of +0.2.

 

September existing home sales fell 1.0% versus forecasts of -1.6%; September building permits were down 3.1% versus -2.9%.

  https://wolfstreet.com/2024/10/23/demand-destruction-for-existing-homes-sales-in-2024-to-plunge-below-4-million-homes-lowest-since-1995-as-supply-spikes/

 

                        International

 

The Q4 UK business optimism index was reported at -2.4 versus projections of -3.0; the October industrial trends index was -27 versus -28.

 

                          The October EU flash consumer confidence index came in at 12.5, in line.

 

The October Japanese flash manufacturing PMI was 49.0 versus consensus of 49.9; the October flash services PMI was 49.3 versus 52.7; the October flash composite PMI was 49.4 versus 51.8; the October German flash manufacturing PMI was 42.6 versus 40.8; the October flash services PMI was 51.4 versus 50.6; the October flash composite PMI was 48.4 versus 47.6; the October EU flash manufacturing PMI was 45.9 versus 45.2; the October flash services PMI was 51.2 versus 51.5; the October flash composite PMI was 49.7 versus 49.8; the October UK flash manufacturing PMI was 50.3 versus 51.4; the October flash services PMI was 51.8 versus 52.4; the October flash composite PMI was 51.7 versus 52.6.

 

                        Other

 

                          The enormous net worth of the US private sector.

                          https://scottgrannis.blogspot.com/2024/10/the-enormous-net-worth-of-us-private.html

 

Changes in the data gathering methods in the University of Michigan consumer sentiment index.

                          https://econbrowser.com/archives/2024/10/why-so-glum-structural-break-in-michigan-sentiment

 

                          The latest Beige Book reflected sluggish economic growth.

                          https://www.zerohedge.com/markets/ugly-dovish-beige-book-warns-manufacturing-decline-most-districts-greenlights-further-rate

 

                          Architecture billings declined in September.

                          https://www.calculatedriskblog.com/2024/10/aia-architecture-billings-declined-in.html

 

            Fiscal Policy

 

              The state of the states (indebtedness).

              https://www.zerohedge.com/political/waste-day-states-are-811-billion-debt

 

            Recession

 

              Latest nowcast points to strong Q3 growth but expect slowing in Q4.

              https://www.capitalspectator.com/strong-us-growth-still-expected-for-next-weeks-q3-gdp-report/

 

            Geopolitics

 

              Zelensky offers step to negotiating table.

              https://www.zerohedge.com/geopolitical/zelensky-first-time-offers-russia-realistic-step-negotiating-table

 

     Botto line

 

            The ‘widow-maker- ETF.

            https://www.ft.com/content/ac4a175a-bf52-4be7-acd7-e3fd83756485

 

            Rising dividends boost outlook for stock prices.

            https://politicalcalculations.blogspot.com/2024/10/rising-dividend-outlook-boosting-stock.html

 

            What to do.

            https://paulpodolsky.substack.com/p/limbo-land

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            Quote of the day.

            https://cafehayek.com/2024/10/quotation-of-the-day-4804.html

 

            Stock up for survival.

            https://www.zerohedge.com/medical/stock-survival-essential-food-storage-tips-emergencies

 

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--Fears of globa inflation reigniting

 

The Morning Call

 

10/23/24

 

The Market

         

   Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/gold-hits-new-record-high-trump-trade-takes-crude-mega-caps-gain

 

            Buy signals and investing outcomes.

            Seasonality: Buy Signal And Investing Outcomes - RIA (realinvestmentadvice.com)

 

            Surging rates: the pressure is real.

            https://www.zerohedge.com/the-market-ear/surging-rates-pressure-real

 

            Dollar overbought.

            https://www.zerohedge.com/the-market-ear/king-dollar-overbought-still-control

 

            Insider selling soars to three year high.

            https://www.zerohedge.com/markets/us-insider-selling-soars-3-year-high-china-buybacks-surge-record

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications dropped 6.7% while purchase applications were down 5.0%.

 

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

 

The October Richmond Fed manufacturing index came in at -14 versus consensus of -18.

 

                        International

 

                        Other

 

                          Mortgage rates explode higher.

                          https://wolfstreet.com/2024/10/21/mortgage-rates-explode-to-6-82-10-year-treasury-yield-jumps-to-4-20-55-basis-points-since-monster-rate-cut/

 

            Fiscal Policy

 

              How the national debt will play out.

              https://arnoldkling.substack.com/p/how-the-national-debt-will-play-out

 

            Inflation

 

              Fears of global inflation reigniting.

              https://www.zerohedge.com/markets/global-inflation-reignition-sparks-bond-bull-panic

 

              Paul Tudor Jones: all roads lead to inflation.

              https://www.zerohedge.com/markets/all-roads-lead-inflation-election-looms-paul-tudor-jones-goldman-place-their-bets

 

            Recession

 

              Not all indicators point to no recession.

              https://www.advisorperspectives.com/dshort/updates/2024/10/22/cb-leading-economic-index-continues-to-fall-in-september

 

              IMF says risks are building to the downside.

              https://www.zerohedge.com/markets/risks-are-building-downside-imf-cuts-global-growth-forecast-warns-risks-record-100-trillion

 

            Tariffs

 

              Tariffs don’t save industries.

              https://thedailyeconomy.org/article/tariffs-dont-save-industries-markets-do/

 

     Bottom line

 

            Bonds slump globally.

            https://www.bloomberg.com/news/articles/2024-10-22/bonds-are-selling-off-everywhere-as-traders-trim-rate-cut-bets?srnd=homepage-americas

 

            Market confusion.

            https://www.bloomberg.com/opinion/articles/2024-10-22/fed-cuts-helter-skelter-in-bond-markets-as-doubts-harden?srnd=homepage-americas

 

            Have bond prices seen their high?

            https://www.capitalspectator.com/has-the-bond-market-rally-peaked/

 

            Citi cites risk of a 10% pullback.

            https://www.bloomberg.com/news/articles/2024-10-22/citi-says-us-equity-exposure-hits-levels-that-preceded-10-slide?srnd=homepage-americas

 

Ed Yardini’s response to Goldman’s forecast of a 3% stock market annual return over the next ten years (see yesterday’s Morning Call for that link).

Lost Decade Ahead For Stocks With Only 3% Annual Returns? (yardeniquicktakes.com)

 

            The front cover curse.

            The Front Cover Curse

 

    News on Stocks in Our Portfolios

 

Canadian National Railway press release (NYSE:CNI): Q3 Non-GAAP EPS of C$1.72 beats by C$0.02.

Revenue of C$4.11B (+3.0% Y/Y) beats by C$30M.

 

McDonald’s quarter pounder linked to E. coli.

McDonald's share price plummets on Quarter Pounder link to E.coli (NYSE:MCD) | Seeking Alpha

 

What I am reading today

 

           

 

 

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The Morning Call---Why the next decade might no be so positive

 

The Morning Call

 

10/22/24

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/bonds-bitcoin-dump-dollar-crude-jump-leading-economic-index-hits-8-year-lows

 

            Low stress levels.

            https://www.zerohedge.com/the-market-ear/lowest-stress-ahead-election-ever

 

            Precious metal momentum.

            https://www.zerohedge.com/the-market-ear/precious-metals-monster-momentum

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                        International

 

                        Other

 

                          The frozen housing market.

                          https://www.advisorperspectives.com/commentaries/2024/10/21/homes-frozen?firm=mauldin-economics

 

            Fiscal Policy

 

              The unsustainable national debt.

              https://blogs.lse.ac.uk/usappblog/2024/10/17/whoever-wins-the-election-will-inherit-an-unsustainable-national-debt-and-no-plan-to-address-it/

 

              Spending is the problem, not taxes.

              https://scottgrannis.blogspot.com/2024/10/federal-spending-is-problem-not-taxes.html

 

              Federal interest payments.

              https://econbrowser.com/archives/2024/10/federal-interest-payments-to-the-public-vs-to-the-rest-of-federal-government

 

            Tariffs

 

              Trump’s tariffs pose greater economic threat than his tax cuts.

              https://thehill.com/opinion/finance/4938752-trump-economic-policies-impact/

 

    Bottom line

 

            Why this earnings season could send stocks soaring.

            https://investorplace.com/hypergrowthinvesting/2024/10/why-this-earnings-season-could-send-stocks-soaring/

 

            But why the next decade may not be quite so positive.

            https://www.bloomberg.com/opinion/articles/2024-10-21/s-p-rally-wall-street-braces-for-a-lost-decade-but-not-yet?srnd=homepage-americas

 

            Sell bonds, buy gold.

            Sell Bonds, Buy Gold? (yardeniquicktakes.com)

 

            Why the West should be paying more attention to the gold price.

            https://www.ft.com/content/b5fb1e6b-bb8d-4ab5-9c92-f1f6fc40a54b

 

            Silver short squeeze.

            https://www.zerohedge.com/precious-metals/silver-squeeze-has-officially-begun

 

    News on Stocks in Our Portfolios

 

Sherwin Williams press release (NYSE:SHW): Q3 Non-GAAP EPS of $3.37 misses by $0.17.

Revenue of $6.16B (+0.7% Y/Y) misses by $40M.

 

Genuine Parts press release (NYSE:GPC): Q3 Non-GAAP EPS of $1.88 misses by$0.55.

• Revenue of $6B (+3.1% Y/Y) beats by $50M.

 

 

What I am reading today

 

            Learning from history.

            https://www.realclearmarkets.com/articles/2024/10/21/the_greatest_lesson_of_history_is_to_learn_history_1066365.html

 

            The laws of financial health.

            https://marknewfield.substack.com/p/the-laws-of-financial-health

 

 

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