The Morning Call---Goldman dissects Trump's economic plan

 

The Morning Call

 

3/26/25

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/market-recaps/stocks-eek-out-small-gains-amid-dismal-volumes-and-bad-breadth

 

            Elliott Wave analysis of gold.

            https://talkmarkets.com/content/commodities/elliott-wave-technical-analysis-gold-tuesday-march-25?post=488267

 

            Elliott Wave analysis of bitcoin.

            https://talkmarkets.com/content/market-commentary-education/bitcoin-still-shows-a-bullish-technical-picture?post=488116

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications fell 2.0% while purchase applications were up 1.0%.

 

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

 

The January Case Shiller home price index was up 0.1% versus forecasts of +0.2%.

 

                          February new home sales rose 1.8% versus predictions of +0.5%.

                          https://www.advisorperspectives.com/dshort/updates/2025/03/25/new-home-sales-rebound-below-forecast-february-2025

 

February durable goods orders were up 0.9% versus consensus of down 1.0%; ex transportation, they were up 0.7% versus +0.2%.               

 

  March consumer confidence came in at 92.9 versus expectations of 94.0.

                          https://www.advisorperspectives.com/dshort/updates/2025/03/25/consumer-confidence-sinks-four-year-low-march-2025

 

The March Richmond Fed manufacturing index was -4 versus estimates of +8.

                          https://www.advisorperspectives.com/dshort/updates/2025/03/25/richmond-fed-manufacturing-activity-slowed-march-2025

 

                        International

 

The January Japanese leading economic indicators were reported at 108.3 versus projections of 108.0.

 

February UK CPI was up 0.4% versus forecasts of +0.5%; core CPI was also up 0.4% versus +0.5%.

 

                        Other

 

                          Analysis of Monday’s PMI readings.

                          https://wolfstreet.com/2025/03/24/services-activity-jumps-in-march-cost-pressures-from-tariffs-staffing-well-up/

 

                          Overview of the housing market.

                          https://bonddad.blogspot.com/2025/03/the-housing-market-continues-its-slow.html

 

                          Monday in the economic charts.

  https://dailyshotbrief.com/the-daily-shot-brief-march-24th-2025/

 

                          Consumer spending slowing according to credit card company.

                          https://www.reuters.com/world/us/us-consumers-slow-spending-inflation-bites-synchrony-says-2025-03-25/

 

                          The economy is slowing but recession risks remain low.

                          https://www.capitalspectator.com/us-economy-is-slowing-but-recession-risk-remains-low/

 

                          Commercial real estate delinquency rates increased in Q4.

                          https://www.zerohedge.com/markets/commercial-real-estate-delinquency-rates-increase-4th-quarter

 

            Overnight News

 

GOP leaders said they’re getting close to agreeing on a plan to pass an extension   of Trump’s 2017 tax cuts and an increase to the debt ceiling. The CBO will today release its estimate for when the debt ceiling will be reached.

 

Fed's Goolsbee (2025 voter) said it may take longer than anticipated for the next cut to come because of economic uncertainty and ‘wait and see’ is the correct approach when facing uncertainty. Goolsbee also commented that market angst over inflation would be a red flag and believes borrowing costs will be a fair bit lower in 12–18 months, while he noted that if investor expectations begin to converge with those of American households, the Fed would need to act:

 

            Fiscal Policy

 

              The inconsistencies in Trump’s tariff/weak dollar scheme.

              https://alhambrapartners.com/weekly-market-pulse-a-risky-plan/?src=news

 

Here is a progressive response to DOGE. It would take me several pages to address the arguments presented; but I leave it to you to make your own judgment.

https://www.nakedcapitalism.com/2025/03/satyajit-das-doge-the-accelerant-in-american-decline.html

 

              More needed on infrastructure improvement.

              https://www.nytimes.com/2025/03/25/business/economy/us-infrastructure-federal-cuts.html

 

                  Goldman dissects Trump’s economic plan.

              https://www.zerohedge.com/geopolitical/trump-economic-plan-goldmans-ways-play-it

 

            Tariffs

 

              Quote of the day.

              https://cafehayek.com/2025/03/quotation-of-the-day-4959.html

 

              Trade war explodes across the globe.

              https://www.wsj.com/economy/trade/trade-war-explodes-across-world-at-pace-not-seen-in-decades-0b6d6513?mod=economy_lead_pos3

 

              Goldman predicts what to expect on April 2^nd.

              https://www.zerohedge.com/economics/negative-surprise-goldman-warns-market-expectations-far-trumps-april-2-reciprocal-tariffs

 

    Investing

 

            Leave being bullish or bearish to the media.

            https://www.advisorperspectives.com/commentaries/2025/03/25/despite-bearish-sentiment-retail-investor-buys-dip

 

            In praise of dividend growth stocks.

            https://politicalcalculations.blogspot.com/2025/03/investing-risks-and-returns-by-dividend.html

 

            There are now real alternatives to the US stock market.

            https://www.zerohedge.com/markets/are-there-now-real-alternatives-us-market

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

 

 

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The Morning Call---Devaluing the dollar will make America poor again.

 

The Morning Call

 

3/25/25

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/market-recaps/trump-tariff-roulette-sparks-surge-stocks-crypto-crude-bonds-bullion-sold

 

            For the bulls.

            https://investorplace.com/hypergrowthinvesting/2025/03/the-fed-just-gave-investors-a-big-reason-to-buy/

 

            Valuations, flows and seasonality.

            https://www.zerohedge.com/the-market-ear/valuations-flows-and-seasonality-all-say-one-thing-buy-us-fade-europe

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

February building permits declined 1.0% versus expectations of -1.2%; recall that February housing starts were up 11.2%.

 

The March flash manufacturing PMI was 49.8 versus consensus of 51.8; the flash services PMI was 54.3 versus 50.8; the flash composite PMI was 53.5 versus 51.5.

 

                        International

 

The March German business climate index came in at 86.7, in line; the March current conditions index was 85.7 versus 85.5.

 

                        Other

 

A good argument for why I am wrong on both economic growth and inflation.

https://www.advisorperspectives.com/commentaries/2025/03/24/illuminati-part-2-inflationista

 

Further evidence that my ‘muddle through’ scenario is hanging on by its fingernails.

https://bonddad.blogspot.com/2025/03/a-quick-and-dirty-update-employment-is.html

 

Monday in the economic charts.

https://dailyshotbrief.com/the-daily-shot-brief-march-21st-2025/

 

            Overnight News

 

A Trump administration proposal to impose stiff levies on Chinese-made ships entering US ports is sowing panic in the country’s agriculture industry, with farmers saying the added cost threatens to upend exports of wheat, corn, and soybeans. The US Trade Representative has recommended imposing fees of up to $1.5mm per port call on ships built in China or operated by companies with Chinese-built vessels, and hearings on the matter are scheduled for this week.

 

Ukraine unconditionally supports the idea of a full ceasefire with Russia, Kyiv’s Ambassador to the US Oksana Markarova said.

 

US President Trump signed an order imposing sanctions on countries importing Venezuelan oil and said tariffs for doing business with Venezuela will be on top of existing tariffs but added that not all tariffs will be included on April 2nd.

 

India proposed to remove the 6% tariff imposed on online advertisement services offered by companies such as Google (GOOG) and Meta (META), widely known as the Google tax from April 1st, which is a day before Trump's reciprocal tariffs take effect.

 

Subsequently, India is reportedly open to cutting tariffs on over half of US imports, worth USD 23bln, via Reuters citing sources; open to cutting tariffs to as low as 0 from a 5-30% range on 55% of US imports. Estimates a hit to USD 66bln worth of exports to the US from reciprocal tariffs. In return for tariff cuts, seeking relief from reciprocal tariffs.

 

            Monetary Policy

 

              The Fed faces a crisis.

              https://www.forbes.com/sites/steveforbes/2025/03/20/golds-3000-surge-why-the-fed-faces-an-existential-crisis/

 

The latter part of this article gets a bit too political for me; but the first three quarters are an interesting history of the evolution of the dollar based foreign exchange regime.

https://www.ft.com/content/8a71dceb-806f-4681-80f9-416aa4c366ca

 

            Fiscal Policy

 

            Devaluing the dollar will make America poor again.

            https://www.zerohedge.com/geopolitical/devaluing-us-dollar-how-make-america-poorer-again

 

            Inflation

 

              Is inflation necessary?

              https://talkmarkets.com/content/is-inflation-necessary?post=488052

 

            Recession

 

              US consumer melting down.

              https://www.zerohedge.com/economics/us-consumer-melting-down-heres-why

 

Tariffs

           

              Trump postpones ‘Liberation Day’.

              https://mishtalk.com/economics/trump-postpones-liberation-day-to-focus-on-the-dirty-15/

 

     Investing

 

            A crypto reserve misunderstands money.

            https://www.forbes.com/sites/johntamny/2025/03/23/a-crypto-reserve-misunderstands-money-shows-why-crypto-isnt-money/

 

            This timing system beats the Market by using the calendar.

            https://www.marketwatch.com/story/this-timing-system-beats-the-market-using-the-calendar-heres-what-it-says-now-9b69f419?st=LjFuU4

 

            Treasury yield curve re-inverts.

https://wolfstreet.com/2025/03/22/treasury-yield-curve-re-inverts-with-sag-in-the-middle-as-government-swats-down-10-year-yield-but-mortgage-rates-dont-follow-all-the-way-spread-widens/

 

 

            A comprehensive guide to retirement income strategies.

            https://talkmarkets.com/content/a-comprehensive-guide-to-retirement-income-strategies-for-a-secure-future?post=488143

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

                        Unusual potential discovery beneath the pyramids.

            https://www.zerohedge.com/geopolitical/researchers-claim-have-discovered-vast-city-underneath-egypts-pyramids

 

            Happiness isn’t everything.

            https://klementoninvesting.substack.com/p/good-news-happiness-isnt-everything

 

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Monday Morning Chartology

 

The Morning Call

 

3/24/25

 

 

The Market

         

    Technical

 

The S&P held above (1) its recent lows as well as (2) the upper boundary of the downtrend off the February 19 high. While the latest pin action doesn’t ‘feel’ like a bottom, I guess we have to be happy the stocks aren’t being pounded every day. Until the recent March 13 low is tested, I think doing nothing is the right long term strategy.  Traders might want to participate.

 

Is a bottom beginning to form?

Is The Correction Over? - RIA

 

We start to rally on March 23^rd.

https://www.zerohedge.com/the-market-ear/we-start-rally-again-march-23rd

 

 

 

 

The long bond was up on the week. While it failed to make a higher high (the bad news), it did manage to remain above its 100 DMA and in a very short term uptrend off its January 14 low (the good news). ‘the long bond has found at least a temporary bottom; and while this move has all the makings of a major change in momentum, it …….still has work to do before assuming a major bottom has been made.’  That could be good news (lower borrowing costs [mortgage rates] or bad news (impending recession). Unfortunately, I am clueless as to which.

 

 

 

 

 

GLD made yet another a new higher high last week. It remains well within a very short term uptrend and in uptrends across all other time frames as well as above all DMAs. If you held on to it, (unlike me), congratulations. Hang in there.

 

 

 

 

While the dollar managed to close higher on the week, it is nonetheless in a confirmed downtrend, remaining below all DMAs and in a very short term downtrend. The only positive that I can see is that it is holding above an uptrend line in its relative strength indicator (bottom of the page).

 

 

 

            Friday in the charts.

            https://www.zerohedge.com/market-recaps/stocks-rate-cut-hopes-rebound-tariff-flexibility-trumps-fedspeak

 

            The latest from Goldman’s trading desk.

            https://www.zerohedge.com/markets/positioning-has-been-heavily-purged-top-goldman-trader-says-difficult-be-particularly

 

            Rising risk of foreign pullback from US equities.

            https://www.apolloacademy.com/risk-rising-of-a-foreign-pullback-from-the-sp-500/

 

            Ahhhh…flexibility.

            'There Will Be Flexibility'

 

    Fundamental

 

       Headlines

 

              The Economy

 

Last week’s stats were mixed though the primary indicators were very positive (three plus, one negative). This is the third week in a row of relatively upbeat data offsetting that four week run of poor numbers. I am going to leave the red light flashing; but if this week is positive, I will like switch the warning light from red to yellow.

 

No inflation stats in the US but there were three upbeat datapoints among the generally favorable numbers coming from the rest of the world. That keeps my inflation forecast at risk.

 

Bottom line, I am holding to my ‘muddle through’ economy and maintaining my (wobbling) conviction that inflation has seen its lows.

 

Overshadowing all of this is the Trump revolution which keeps the level of uncertainty extremely high---adding to my lack of my confidence in my forecast.

 

                        US

 

The February Chicago national activity index came in at .18 versus forecasts of .08.

 

                        International

 

The March German flash manufacturing PMI was 48.3 versus projections of 47.0; the flash services PMI was 50.2 versus 51.6; the flash composite PMI was 50.9 versus 51.0; the March EU flash manufacturing PMI was 48.7 versus 48.2; the flash services PMI was 50.4 versus 51.0; the flash composite PMI was 50.4 versus 50.8; the March UK flash manufacturing PMI was 44.6 versus projections of 46.4; the flash services PMI was 53.2 versus 50.9; the flash composite PMI was 52.0 versus 50.3.

                                               

                        Other

           

                          The latest Q1 nowcasts.

                          https://www.calculatedriskblog.com/2025/03/q1-gdp-tracking-wide-range_21.html

 

                          The mortgage delinquency rate increased in February.

                          https://www.calculatedriskblog.com/2025/03/intercontinental-exchange-mortgage.html

 

                          Regional manufacturing new orders series deteriorating.

                          https://bonddad.blogspot.com/2025/03/regional-new-orders-deteriorate-sales.html

 

            Monetary Policy

 

              The Fed is always behind the curve.

              https://talkmarkets.com/content/economics--politics/fed-folly-on-full-display?post=487789

 

            Fiscal Policy

 

              No one in Washington is serious about spending cuts.

              https://www.nationalreview.com/corner/no-one-in-washington-is-serious-about-the-debt/

           

            Recession

           

This analyst believes recession is inevitable as DOGE works its way through government waste.

https://www.zerohedge.com/political/ed-dowd-fears-short-deep-recession-coming-doge-exposes-mind-shocking-fraud-propped-bidens

 

                Tariffs

 

              April 2, Liberation Day; expect to suffer.

              https://mishtalk.com/economics/trumps-tax-hike-liberation-day-day-begins-april-2-expect-to-suffer/

 

                Geopolitics

 

              Progress on Ukraine.

              https://www.zerohedge.com/geopolitical/waltz-reveals-topics-us-russia-talks-they-kick-riyadh

 

 

      Investing

 

                   Latest from BofA.

              https://www.zerohedge.com/markets/hartnett-sell-signal-over-april-2-looms

 

                  Worry more about certainty than uncertainty.

              https://www.zerohedge.com/markets/worry-more-about-certainty-uncertainty

 

    News on Stocks in Our Portfolios

 

What I am reading today

 

            Who was St. Patrick and why does he have a day?

            Who was Saint Patrick and why does he have a holiday?

 

            All governments suffer a recurring problem.

            https://thedailyeconomy.org/article/frank-herberts-amazing-dune-quote-all-governments-suffer-a-recurring-problem/

           

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