Investing for Survival

https://www.barchart.com/stocks/signals/new-recommendations

Retail traders keep buying.

https://www.zerohedge.com/markets/retail-investors-keep-buying-despite-bearish-mood?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI5MTk2Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjU4Njg3OCwiZXhwIjoxNzk1MTc4ODc4LCJhdWQiOiJ6aC1naWZ0In0.jLkiLRfmmTLzoI8Si1a_QAfriU4BlQDVPckb3iGDPLI

Is gold bottoming?

https://talkmarkets.com/article/if-you-own-silver-or-gold-you-need-to-watch-this-signal-closely

Wednesday morning setup: US futures are higher as blowout results from SpaceX and a monster preannouncement from Super Micro gave the battered AI trade a reason to bounce, while Elon Musk's open endorsement of a SpaceX-Tesla merger added to the buzz; but with more attacks on shipping around the Strait of Hormuz, oil is back on the rise and as a result Brent is again above $110 while French 10Y yields hit 5% for the first time since 2002. As of 8:00am ET, S&P futures are 0.3% higher while Nasdaq futures are up 0.6% and Dow futures are up 0.1%. That follows a session in which the S&P rose 0.3% to 7,712 with 403 advancers, the most since April, as the equal-weight index jumped 1.15% while the Nasdaq slipped 0.02% in yet another rotation day out of AI. In premarket trading, the AI complex is back in demand with SpaceX up 9.1% and Super Micro up 12.4%, confirming our post from last night, and Nvidia leads the Mag 7 with a 1.3% gain, while Netflix tumbles 6.2% on a soft Q4 guide and Intuitive Surgical slides 7.8%. The day's driver is AI (again), and this time it's the bulls' turn: SpaceX revenue of $14.6 billion crushed the $12.8 billion consensus and Super Micro guided fiscal Q1 sales to $18.5-19.5 billion vs its own prior $14.5-15.5 billion guide, reviving the AI trade one day after Korea's Elice IPO faceplant and Ken Griffin's warning that investors are "almost certainly" in an AI bubble. Treasuries are slightly cheaper across the curve, led by the front-end and belly, with the 10Y around 5.12% as stocks climb on better AI sentiment and a leg higher in oil adds to the upside pressure on yields ahead of today's $13 billion 20-year reopening; French bonds are the weak link in Europe, with the OAT-Bund spread widening to 158bps on fiscal worries and $110 crude, while gilts outperform even after UK CPI rose to an 11-month high of 3.5%, cementing a November BOE hike. The Bloomberg dollar index is little changed while the Aussie is the best G10 performer, rising 0.5% to 0.7036, the highest since Sept. 28, after hawkish RBA comments. In commodities, WTI rises 1.4% to about $99 and Brent 1.2% to $110, Dutch TTF gas jumps 4%, gold is flat near $4,120 and silver drops 1%. Bitcoin rises 0.8% to about $83,400. US economic data slate is empty after MBA mortgage applications fell 5.3% last week (7am); the Fed is in its external communications blackout ahead of next week's meeting. The Treasury will sell $75 billion of 17-week bills (11:30am) and $13 billion of 20-year bonds (1pm). Earnings from Meta, Tesla, IBM, Texas Instruments and Lam Research come after the close.

Fundamental

Headlines

The Economy

Weekly mortgage applications declined 5.3% while purchase allocations were down 7.3%.

Month to date retail chain store sales were up 9.0% versus +10.4% in the prior week.

September pending homes sales fell 7.3% versus forecasts of -0.5%.

International

The September Japanese trade balance was -Y531.6 billion versus predictions of -Y181.0 billion.

The September UK CPI was up 0.4% versus consensus of +0.3%; core CPI was up 0.2%, in line; PPI was up 1.5% versus +1.6%.

Other

Charts of the week.

https://www.carsongroup.com/wp-content/uploads/2026/10/ChartsoftheWeekOct12-16.pdf

Wall Street expectations for Treasury yields---higher for longer.

https://econbrowser.com/archives/2026/10/wall-street-expectations-for-treasury-yields-higher

Say goodbye to a housing recovery.

https://bonddad.blogspot.com/2026/10/september-new-housing-construction.html

Overnight News

Anthropic could spend $750 billion on additional computing power in the coming years, the WSJ reported, citing a draft IPO prospectus, while billionaire Ken Griffin said investors are "almost certainly" in the midst of an AI bubble.

Nvidia is in talks to invest hundreds of millions of dollars in Australian AI cloud provider Firmus.

Nasdaq futures rose after SpaceX and Super Micro topped forecasts, reigniting the AI trade. Adding to the buzz, Elon Musk said SpaceX and Tesla are studying a potential merger that would be the biggest ever.

Over the past two weeks, HFs aggressively net sold global Info Tech stocks at the fastest pace in the past decade (-3.3 SDs), driven by long-and-short sales. Net allocation to Global AI stocks now sits in the 38th percentile while aggregate long/short ratio is in the 6th percentile vs. the past year.

Persian Gulf oil exports have surpassed prewar levels, as an improvised shipping system under U.S. protection is helping tankers move oil through one of Iran’s fiercest waves of attacks in the Strait of Hormuz.

Benjamin Netanyahu is pushing to resume large-scale strikes against Iran and had instructed his military to plan for a major new offensive earlier this month, moves that risk plunging the region back into full-scale war.

Iran

Overnight news.

https://www.zerohedge.com/geopolitical/two-tankers-fire-oman-irgc-boasts-naval-mine-warfare

Inflation

Rents are re-accelerating.

https://wolfstreet.com/2026/10/19/single-family-multifamily-rents-in-the-us-and-22-large-us-metros-amid-massive-divergence-rents-are-re-accelerating/

Reality sucks.

https://alhambrapartners.com/weekly-market-pulse-reality-bites/?src=news

Billions in Nvidia chips sitting in Amazon warehouse collecting dust.

https://www.zerohedge.com/markets/billions-nvidia-chips-collecting-dust-amazon-warehouses-ais-paperweight-problem-goes?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI5MTA2Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjUyNTc0NSwiZXhwIjoxNzk1MTE3NzQ1LCJhdWQiOiJ6aC1naWZ0In0.c1cFte4o1g_NRv1g0oIKqmp6XzuMYdOv13wZZ7ytEgc

Datacenter bloodbath spreads down under.

https://www.zerohedge.com/markets/data-center-bloodbath-spreads-down-under-nextdc-implodes-45-mulls-force-majeure-angry?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI5MTQ5Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjU4NzQ5OSwiZXhwIjoxNzk1MTc5NDk5LCJhdWQiOiJ6aC1naWZ0In0.Aa6ZYOXXbcdFClvl9yxcF38manYL_HQh5ajmrJhVzc0

The Fed can kill the AI boom.

https://www.wsj.com/finance/investing/yes-the-fed-can-kill-the-ai-boom-3c25da2e?st=gUajHH&reflink=desktopwebshare_permalink

AI debt worries spark surge in default insurance trading.

https://www.ft.com/content/6dd31584-064c-4015-bf5d-e5747799ccd5?syn-25a6b1a6=1

Summary. Investors are racing to buy credit default swaps to protect their portfolios in the event the AI boom unravels, sending trading volumes surging for an instrument that shot to prominence during the global financial crisis. More than $9bn worth of CDS linked to bonds issued by Oracle, SpaceX, Alphabet, Amazon, Meta, Broadcom and Nvidia was traded on average each week in September, up from less than $2bn in July, according to Morgan Stanley Research. In a sign of investors’ increasing unease over the borrowing binge, the cost of buying CDS on many AI-linked companies has hit record highs this month. This so-called spread has in recent days climbed not only for companies that investors judge as riskier, such as AI cloud-computing provider CoreWeave, but also for those such as Microsoft that are seen as relatively safe.

Investing

Sometimes, knives just keep falling.

https://quoththeraven.substack.com/p/sometimes-knives-just-keep-falling?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

Everyone hates this bull market.

https://www.bloomberg.com/opinion/articles/2026-10-20/how-can-there-be-a-stock-bubble-in-such-a-hated-bull-market?utm_source=website&utm_medium=share&utm_campaign=copy

Summary: The current US bull market is the most distrusted rally in several decades, with many people skeptical of a rising market and expecting it to end in tears. The market is often compared to the internet craze of the late 1990s, but the mood is entirely different now, with reservations and warnings instead of excitement and optimism. The AI boom is seen as a threat by many people, and its impact on the market is significant, with AI-related companies dominating the leaderboard and accounting for a large portion of the market's value.

News on Stocks in Our Portfolios

What I am reading today

Reflections on the protests in France.

7 reflections on the situation in France - by Arnold Kling

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---Another AI faceplant; housing starts plunge

2026-10-20T06:03:05.765-07:00

The Morning Call

10/20/26

The Market

Technical

Monday in the charts.

https://www.zerohedge.com/markets/dead-cat-bounce-nasdaq-jumps-crwv-creeps-higher-bonds-bullion-dumped?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4OTY5Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjQ0MTcwOCwiZXhwIjoxNzk1MDMzNzA4LCJhdWQiOiJ6aC1naWZ0In0.vdR-P9I4PYoMTPG-OKtKtqC5GLAtu3e0wF1CPwM_kBE

Note: the S&P tried to trade back above its 50 DMA but failed. Follow through.

Monday in the technical stats.

https://www.barchart.com/stocks/signals/new-recommendations

Bulls unable to cash in on break out opportunity.

https://talkmarkets.com/article/equity-bulls-inability-last-week-to-cash-in-on-breakout-opportunity-likely-to-al

The best time to buy stocks is right now.

https://trendlabs.com/the-best-time-to-buy-stocks-is-right-now/

The latest from Goldman.

https://www.zerohedge.com/markets/squarely-chin-goldmans-pasquariello-says-record-tech-dump-cleared-decks-year-end-rally?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4OTQ3Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjQ0Mjg4OCwiZXhwIjoxNzk1MDM0ODg4LCJhdWQiOiJ6aC1naWZ0In0.q8t-ITGE_luigBHj7k5P9r6RkWSof3ZforWd_YUKdQ0

Something big is brewing in oil.

https://www.zerohedge.com/the-market-ear/oil-above-110-volatility-asleep-something-big-brewing?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI5MDI4Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjQ5NzE0MSwiZXhwIjoxNzk1MDg5MTQxLCJhdWQiOiJ6aC1naWZ0In0.JcGl6bXflhxPeJQwLsc3MrDpR3UzQbL4THNsMUqdk6c

Tuesday morning setup: US futures are lower, led by the Nasdaq, as Monday's AI relief bounce fizzled overnight after South Korean data-center firm Elice cratered more than 30% in its trading debut, reviving doubts about who exactly will earn a return on the AI capex binge, while OpenAI is reportedly rushing to raise about $30 billion ahead of Anthropic's IPO and French stress returned with a vengeance; as a result the OAT-Bund spread widened to a 151bps peak, swiftly approaching the 152bps high from just after the draft budget was presented. As of 8:00am ET, S&P futures are 0.2% lower while Nasdaq futures are down 0.7%; Dow futures are flat, in a repeat of yesterday's divergence when the S&P rose 0.41% and the Nasdaq jumped 1.11% while the Dow slipped 0.07% and almost two-thirds of S&P components fell (see our wrap of Monday's session). In premarket trading, Mag 7 names are mostly lower (AAPL -0.9%, META -0.4%, NVDA -0.4%), while levered AI names like CoreWeave and Nebius give back some of Monday's gains. The day's driver is AI (again): The spectacular collapse of Korean neocloud Elice, which as we flagged last night plunged 30% minutes after IPOing, hit chip-heavy Asian markets hardest with the Kospi tumbling 3.65% and Hynix slumping, and with the Fed in blackout ahead of the Oct. 28 FOMC, tech earnings are the only game in town this week. Treasuries are marginally firmer with the 10Y yield down 2bps at 5.12%, tracking a haven bid in Bunds even as French OATs underperform and Gilts lag after a hawkish UK jobs report. The dollar is modestly weaker, with the DXY in a 101.74-101.98 range and cable rising after UK unemployment unexpectedly fell to 4.7%. Brent holds above $110/bbl near a five-month high and European gas is back near €90/MWh, gold slips toward the bottom of its $4,116-4,147 range and copper hovers around $14,400/t. Bitcoin is choppy around $81-82k. US economic data slate includes ADP weekly employment (8:15am), September housing starts and building permits and the Philly Fed non-manufacturing survey (8:30am) and September pending home sales (10am). There are no Fed speakers as the Fed is in its blackout period ahead of next week's FOMC.

Fundamental

Headlines

The Economy

September housing starts fell 5.2% versus projections of up 1.9%; September building permits were down 0.2% versus -0.7%.

https://www.zerohedge.com/markets/housing-starts-collapse-near-covid-lows-homebuilder-confidence-crashes

The October housing index came in at 29 versus consensus of 32.

International

The August UK unemployment rate was 4.7% versus expectations of 4.9%; August average earnings (3mo/Y) were up 3.7% versus +3.8%.

August EU YoY construction output was up 1.4% versus estimates of down 2.3%; the October economic sentiment index was 18.5 versus 23.6.

September Grman PPI came in at +1.9% versus predictions of +0.8%; the October economic sentiment index was 28.1 versus 30.0.

Other

Latest 2027 nowcast.

https://econbrowser.com/archives/2026/10/nowcasts-and-weo-wsj-forecasts

Which points to stronger growth and the risk of higher inflation.

https://www.capitalspectator.com/gdp-nowcasts-point-to-faster-growth-as-inflation-risks-mount/

Consumer spending---income versus wealth.

https://talkmarkets.com/article/q3-earnings-season-preview-revenue-beats-lag-multi-sector-momentum-holds

Overnight News

Investors are racing to buy credit default swaps to protect their portfolios in the event the AI boom unravels, sending trading volumes surging for an instrument that shot to prominence during the global financial crisis.

Iran

Overnight news.

https://www.zerohedge.com/geopolitical/two-tankers-fire-oman-irgc-boasts-naval-mine-warfare

Houthis continue to escalate attacks on Saudi Arabia.

https://www.zerohedge.com/geopolitical/houthis-expand-saudi-aramco-airport-targets-us-issues-urgent-warnings-12-mideast

Fiscal Policy

The FY2026 budget deficit was $2 trillion---and no one cares.

https://talkmarkets.com/article/the-fy-2026-deficit-was-2-trillion-and-no-one-cares

America’s debt is coming for your wallet.

https://thehill.com/opinion/finance/6154138-national-debt-impact/

Inflation

The long history of under reporting inflation.

https://ritholtz.com/2026/10/underreporting-inflation/

Another AI faceplant.

https://www.zerohedge.com/markets/another-day-another-data-center-faceplant-koreas-biggest-ipo-year-craters-32-debut?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI5MDEyIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjUwMDYyMywiZXhwIjoxNzk1MDkyNjIzLCJhdWQiOiJ6aC1naWZ0In0.3VuuegCMRVgAFNQX8B8MKU_cZiIhqDjIf-fRE472xwc

AI agents disrupting software.

https://www.riskhedge.com/outplacement/ai-agents-are-already-disrupting-software-stocks

Morgan Stanley raises more concerns.

https://www.zerohedge.com/markets/people-power-and-politics-morgan-stanley-maps-three-ways-ais-16-trillion-capex-plan-can?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI5MDA5Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjQ5ODg1MSwiZXhwIjoxNzk1MDkwODUxLCJhdWQiOiJ6aC1naWZ0In0.bdDFmH396GFHPRV2bK-m2eRbod_IjkIAKL1qTueE7i4

Investing

Q3 earnings preview.

https://talkmarkets.com/article/q3-earnings-season-preview-revenue-beats-lag-multi-sector-momentum-holds

About next year’s earnings.

https://giftarticle.ft.com/giftarticle/actions/redeem/9ebaf0d9-b9e2-4cca-b879-f35020607064

Bubble warnings, but some aren’t convinced.

https://www.bloomberg.com/news/articles/2026-10-18/billionaires-warn-of-a-bubble-yet-howard-marks-is-unconvinced?utm_source=website&utm_medium=share&utm_campaign=copy

Summary: More professional investors are convinced the stock market is flirting with bubble conditions due to the artificial intelligence trade. Despite concerns, the forward P/Es of benchmark indexes like the S&P 500 and Nasdaq 100 have actually declined this year due to expectations of blockbuster earnings growth. Market pros point to symptoms of frothiness, including sky-high debt levels and unsustainable earnings growth expectations, but some aren't convinced a bubble has formed yet.

AI capex and earnings. What happens when the growth slows?

https://talkmarkets.com/article/ai-capex-and-earnings-what-happens-when-growth-slows

FOMOs roller coaster.

FOMO's Rollercoaster Versus FEMO's Steady Climb

Investors have decided that they don’t need energy.

https://trendlabs.com/investors-have-decided-they-dont-need-energy/

The course of Treasury yields.

https://wolfstreet.com/2026/10/17/long-term-treasury-yields-buffeted-by-hot-inflation-and-cracks-in-ai-mania/

Bond market’s big short gets wake up call.

https://www.bloomberg.com/news/articles/2026-10-18/bond-market-s-big-short-bet-gets-wakeup-call-as-ai-trade-wobbles?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc5MjQzMTkyMSwiZXhwIjoxNzkzMDM2NzIxLCJhcnRpY2xlSWQiOiJUTVpTNDNLSzNOWTgwMCIsImJjb25uZWN0SWQiOiJCMzFCNTRDQTI3MTE0NjAxOUQxMURCN0IxRUM4NTE2MyJ9.Pue5h1_5_vqGWY3aKrs21zcPAZHWxvwBuKYhVKWRK5E

News on Stocks in Our Portfolios

What I am reading today

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Monday Morning Chartology

2026-10-19T06:17:36.932-07:00

The Morning Call

10/19/26

The Market

Technical

I don’t need to tell you that the S&P had a lousy week. It (1) fail to break above its all-time high, (2) broke below a very short term uptrend, (3) reset its 50 DMA to resistance and (4) appears ready to challenge its 100 DMA. Further (1) there remains a minor gap up open at the ~7684 level, (2) breadth remains horrible (3) investors have started to question the viability of some aspects of the AI trade. On the other hand, (1) earnings and the economy remain quite strong, (2) while tech has been whacked, other sectors are starting to perform better and (3) seasonally, this has historically been a Market positive time of the year. Bottom line, I think it too soon to get beared up although I think it would pay to examine one’s tech holdings carefully if you are overweight this sector. On the other hand, I think prudence is the watchword on any purchases. Fiscal policy, monetary policy, war, oil, tariffs and the upcoming election make me very nervous.

Nine charts on the effect of the mid-term elections.

https://www.carsongroup.com/insights/blog/nine-charts-on-midterm-elections/

The bond market continued its rally last week. That suggests to me that the bonds boys are starting to worry about the credit health of the AI sector (retreat to safety). On the other hand, the longer term pin action remains pretty dismal. TLT continues to trade down across all timeframes and is below all three DMAs. So, I need to see some break in longer term downward momentum before attributing the recent price action to anything other than noise.

Despite all the excitement in the stock and bond markets last week, GLD offered no reaction. It remains below all three DMAs and has now reset its short term uptrend to a trading range. There are a number of conflicting forces playing on the price of gold; and until it can break the current string of lower highs and lower lows, I am on the sideline.

While the dollar performed poorly last week, it remains on a pretty steep upward trajectory---likely reflecting the US as the cleanest shirt in a dirty laundry. While it has made a nice series of higher lows and higher highs, it remains in about the middle of a wide short term trading range,

Friday in the charts.

https://www.zerohedge.com/markets/pain-trade-was-long-ai-short-bonds-how-neocloud-burst-turned-hottest-inflation-week-year?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4NjgwIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjI0NDg5NiwiZXhwIjoxNzk0ODM2ODk2LCJhdWQiOiJ6aC1naWZ0In0.eNwd_vpwauC_L8Ws3DbcJBz5mYRrLnL1IPJFk91YFAI

Friday in the technical stats.

https://www.barchart.com/stocks/momentum

https://www.barchart.com/stocks/market-performance

https://www.barchart.com/stocks/sectors/rankings

https://www.barchart.com/stocks/signals/new-recommendations

Everyone is dumping AI.

https://www.zerohedge.com/the-market-ear/everyone-dumping-ai-and-anti-ai-trade-exploding?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4NzE0Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjE3MzgyNywiZXhwIjoxNzk0NzY1ODI3LCJhdWQiOiJ6aC1naWZ0In0.kBfViTQuGnV7xxZXNYLlYEEoBJXsqfaJoY1jg9vLXm0

Monday morning setup: US futures are higher - but well off session highs hit before the European open - as dip buyers storm back into chipmakers after the Nasdaq's worst week since the April 2025 tariff turmoil, while oil slides after President Trump waived Russian sanctions to seal a diesel deal and Energy Secretary Chris Wright said Persian Gulf flows have recovered to about 80% of pre-conflict levels; as a result Nasdaq futures are up more than 1% and the Philly semis index is set to snap its longest losing streak in 18 years, even as Europe slides on a weekend of riots in France. As of 8:00am ET, S&P futures were 0.4% higher at 7,741.75 while Nasdaq futures rose 1.1% to 29,705.50 and Dow futures are down 0.2%. That follows a Friday session in which the S&P fell 1.09% to 7,659 (sliding from flat just before the European close), the Nasdaq 100 sank 2.5% and the SOX tumbled 3.8% for an eighth straight loss, capping a week in which the SOX lost 11.4%, the Nasdaq 4.5% and CoreWeave a quarter of its value. In premarket trading, semis lead with Intel up 4.2% on a JPMorgan upgrade and Nvidia up 1.4%, neoclouds and optical names are bid (CoreWeave +6% after a Goldman upgrade from Neutral ($139PT) to Buy ($106PT?!) week in which it became "the market's beta barometer"), Disc Medicine soars 35% ahead of Phase 3 data and Cleveland-Cliffs jumps 13% after an earnings beat. The day's driver is Washington's Russia pivot: Trump signed an executive order waiving Graham Act sanctions, restrictions and duties on Russian energy revenues (Russia will initially supply over 300k tonnes of diesel), Putin proposed a summit with Trump and Xi to negotiate an end to the war, and Zelenskyy accused Trump of pressuring Kyiv to surrender, which has sent Brent down 1.2% to $108.59. Treasuries dip slightly with shorter-dated yields edging higher in a bear flattener as traders keep a muted bid for an October hike, leaving the 10Y at 5.08% after last week's 16.5bp plunge (its biggest weekly drop since August 2025), while French bonds tumble after the riots, with the OAT-Bund spread widening to 146bps. The dollar index is up 0.1% to 101.93, with the euro the G10 laggard below $1.12 and the Aussie leading after strong Chinese data. In commodities, WTI is little changed near $101.30, European gas (Dutch TTF) hit its highest since 2022, gold is up 0.1% at $4,169 and silver adds 0.9% to $57.49. Bitcoin rises 2.5% to about $82,850 after briefly topping $83,000. US economic data slate includes the October NAHB housing market index (10am). The Fed is in its external communications blackout through Oct. 29, so there are no Fed speakers. The Treasury sells $95 billion of 13-week and $82 billion of 26-week bills at 11:30am.

Fundamental

Headlines

The Economy

Last week was another slow one for the volume of US stats. In total, they were balanced. However, they did reflect a growing consensus among economists/investors---an expanding economy (three positive primary indicators, no negatives) and hotter inflation (two negative price measures, no positives). Overseas, the data was more plentiful and also balanced with two positive, two neutral and two negative inflation points.

These reports directionally support both my forecasts for growth (muddle through) and inflation (good as it is going to get but not any worse). But they hint at growth being stronger and inflation perhaps being higher than I thought. Of course, this is only a single week worth of data. So it is too soon to alter my forecast. But as I noted above, it is a theme that gained momentum last week.

The economic issues that I continue to fret over are:

(1) Fed policy. If inflationary pressures are accelerating, how much weight should the Fed give to the fact that some of that pressure is the result of supply shortages [primarily oil] versus demand pull?

On its face, it suggests a Fed reticent to raise rates because the problem [inflation] will cure itself as supply shortages are reconciled. But, as I pointed out last week, there are a number of problems with that notion.

[a] the conflicts in Ukraine and Iran are destroying infrastructure [production facilities, refining capacity, pipelines] and depleting global oil reserves to such an extent that supply shortages are not going to be alleviated when, as and if those conflicts end. Indeed, depending on the ultimate disposition of tanker transit out of the Persian Gulf and the Red Sea, a new permanent cost [transit fees] could be added to the price of oil.

[b] the longer inflation remains elevated, the more likely the mind set of consumers and businesses will view it as more permanent, increasing the need for Fed action.

[c] not all inflationary pressures are the result of supply shortages. The egregious national deficit and the enormous AI buildout spend are juicing economic growth with the former clearly an unnecessary accelerant. Plus, Trump’s tariffs flow directly into the price of goods.

https://cafehayek.com/2026/10/inescapable-tariffs-raise-prices.html

[d] the risks from poor monetary policy and the level of interest rates are not confined to the US. Europe and Japan are also having their issues which could potentially compound our own.

In short, I think that the Fed has a very narrow window in which to tighten policy enough to curb inflationary forces without stymying economic growth. Indeed, it may already be too late. Even if it is not, the Fed’s historical record of instituting the wrong policy at virtually every critical junction is spotless. So, it would be remiss not to factor in the likelihood of another policy mistake. And again if history repeats itself, the Fed will err on the side of policy weakness. Meaning economic growth with higher inflation in the short term; followed by an overtightening that leads to lower inflation but lower growth {recession?}

https://www.axios.com/2026/10/15/fed-inflation-ppi-warsh

The case for another rate hike is growing.

https://www.capitalspectator.com/the-case-for-another-rate-hike-is-growing-stronger/

Lance Roberts disagrees.

https://talkmarkets.com/article/bad-inflation-cures-itself-good-inflation-doesnt

(2) the health of the AI buildout. Last week, we potentially got the first signs that all the problems I have been concerned about---[a] the accounting of the buildout---enormous off balance sheet financing, [b] as well as the sheer magnitude of the financings [c] the level of future revenue needed to provide a sufficient return on investment and [d] the lack of any evidence showing increased productivity of the AI providers---were manifesting themselves: [a] Goldman and Morgan’s unwillingness to underwrite the Volta offering, [b]the CoreWeave revenue short fall, [c] the OpenAI revenue shortfall and [d] hints that investors will lower Anthropic’s valuation in its upcoming offering. It is too soon to know the impact on AI valuations, but it is clearly a warning.

https://www.gartner.com/en/newsroom/press-releases/2026-10-14-gartner-says-over-us-dollars-three-and-a-half-trillion-of-artificial-intelligence-infrastructure-spending-could-be-exposed-to-impairment-by-the-end-of-2030

I want to emphasize two things.

[a] if the boom in the railroads, the electricity infrastructure, radio, and the internet are any guide, then this technology will almost surely prove its economic value but only after initial excessive overbuilding and the failure of multiple companies. Who those winners are, I haven’t a clue and likely neither does anyone else. As I have noted before, I continue to hold positions in both the chip manufacturers and the hyperscalers---although their performances has been such that I have Sold Half of virtually every stock. That said, I have my finger on the trigger for several holdings. And should the negative case appear the more likely outcome, I will take some more money off the table. Friday, I sold my entire position in Oracle.

[b] I continue to be focused on the economics of the AI buildout not the doomsday ‘we will all be dead in ten years’ variety. I made clear …. that I am quite cynical about the motivations of the doomsayers whether they are from the industry (who want the government to impose regulations that would squash potential competition) or government (who never lets a crisis go to waste in order to impose further on our collective liberties)

My bottom line remains unchanged: my doubts on the trajectory of the economy/inflation/AI buildout are increasing. Enough so that I have taken steps toward a (1) stronger growth, higher inflation, (2) AI consolidation scenario by nibbling at both a dividend growth and a TIPS ETF as well as reducing my exposure to the AI tech sector.

https://doubleline.com/wp-content/uploads/DoubleLine_Diversifying-Equity-Exposure_October-2026.pdf

Treasuries rally against turbulence in AI.

https://giftarticle.ft.com/giftarticle/actions/redeem/9be4ddc8-7d9d-4d0b-ac46-733e7043c93a

From late Friday:

September industrial production rose 0.7% versus consensus of +0.4%.

https://bonddad.blogspot.com/2026/10/insutrial-production-primarily-powered.html

International

Q3 YoY Chinese GDP grew 4.5% versus forecasts of +4.4%; September YoY industrial production was up 5.5% versus +5.4%; September YoY retail sales were up 1.1% versus +0.5%; the September unemployment rate was 5.2% versus 5.3%.

Other

Why rates keep rising.

https://www.apollo.com/wealth/insights-news/insights/daily-spark/why-rates-keep-rising-expected-ai-returns-exceed-the-fed-funds-rate

Inflation

The cost of living and wages.

https://econbrowser.com/archives/2026/10/the-cost-of-living-and-wages

The incomplete story about data center electricity use.

https://www.realclearmarkets.com/articles/2026/10/16/americans_are_being_fed_an_incomplete_story_about_data_centers_1211672.html

The potential AI air pocket.

https://www.zerohedge.com/ai/we-could-hit-ai-air-pocket-deutsche-prices-superintelligence-900-billion-training-run

Memory meltdown.

https://www.zerohedge.com/the-market-ear/memory-meltdown-unstoppable-uninvestable?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4NzExIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjE3NTMwOSwiZXhwIjoxNzk0NzY3MzA5LCJhdWQiOiJ6aC1naWZ0In0.edeiUVpQlJIxJuzasIb0YIMFc-jXMuOxlYlQskA1UBc

The AI unwind has entered phase two.

https://www.zerohedge.com/markets/it-was-gross-goldman-says-ai-unwind-has-entered-phase-two-106-billion-debt-bill-comes-due?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4NjkyIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjE3NjE4OCwiZXhwIjoxNzk0NzY4MTg4LCJhdWQiOiJ6aC1naWZ0In0.-XdQNyLpawNxR7DlVDf3zFLU0CClJ1zSMwUJKa_zQ3s

Neocloud nightmare.

https://www.zerohedge.com/markets/neocloud-nightmare-spreads-nscale-microsoft-walks-uk-deal-ipo-investors-slash-30-billion?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4ODcxIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjQxNDUwOCwiZXhwIjoxNzk1MDA2NTA4LCJhdWQiOiJ6aC1naWZ0In0.Fi7csepD0micScQLt2-MlhxKgGoqutowCGFKoawXHs4

Goldman upgrades CoreWeave.

https://www.zerohedge.com/markets/wall-st-goes-defense-crwv-rallies-after-goldman-says-buy-jpm-upgrades-intc?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4OTMyIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjQxNDk0MiwiZXhwIjoxNzk1MDA2OTQyLCJhdWQiOiJ6aC1naWZ0In0.3pRXYluRAy5t7QkF3rFkhhMeT0qJyTrTsrY6vH6NKWA

Investing

Boring is starting to look good.

https://quoththeraven.substack.com/p/going-old-school-with-boring-blue?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

Have rates tipped the scales toward value investing?

https://www.advisorperspectives.com/commentaries/2026/10/16/rate-hikes-tipped-scales-value-equities

Why bad news for the bond market may be good news for investors.

https://www.nytimes.com/2026/10/16/business/bonds-investors-interest-rates.html?unlocked_article_code=1.JFE.YaFq.8ygwTcEnjyRO&smid=url-share

The latest from BofA.

https://www.zerohedge.com/markets/hartnett-sell-signal-over-now-watch-chip-prices?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4ODE4Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjM2MDEyMywiZXhwIjoxNzk0OTUyMTIzLCJhdWQiOiJ6aC1naWZ0In0.iQU_W1NgD0Kjg9YA-QUIVPEavG0Sv0hlRByv2XpFgo0

News (but not a Buy recommendation) on Stocks in Our Portfolios

Hershey.

https://www.zerohedge.com/markets/cocoa-grindings-crush-estimates-chocolate-stocks-rise-hershey-buy

What I am reading today

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---A fourth crack

2026-10-16T06:09:10.902-07:00

The Morning Call

10/16/26

The Market

Technical

Thursday in the charts.

https://www.zerohedge.com/markets/ai-jesus-saves-world-again-market-breaks-bond-yields-tumble-oil-spikes?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4NTg5Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjA5NjE3OSwiZXhwIjoxNzk0Njg4MTc5LCJhdWQiOiJ6aC1naWZ0In0.z58w9gdEw4t2xXibEV8YER9T0NLz_YWd7r_vITGW-LQ

Note: the S&P bounced off its 50 DMA---clearly good news. But its advance was much less dramatic than the DJIA, keeping alive the notion that the rest of the Market is starting to catch up with the Mag 7. I nibbled at NOBL (dividend aristocrats) ETF and a TIPS ETF on the thought that (1) the aforementioned catch up would progress and (2) the term premium was at a level too attractive to pass up.

Thursday in the technical stats.

https://www.barchart.com/stocks/signals/new-recommendations

AI unwinds.

https://www.zerohedge.com/markets/ai-unwinds-hedge-funds-just-dumped-ai-stocks-2nd-fastest-pace-year-net-leverage-slides-6th?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4NTgwIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjA4OTAzOCwiZXhwIjoxNzk0NjgxMDM4LCJhdWQiOiJ6aC1naWZ0In0.QH5V5X1aKmG_vPm9T_ZnLBze85J_NXHcyRADRthbdw4

Five ominous charts.

https://talkmarkets.com/article/crash-alert-five-ominous-charts

On the other hand---the latest from Citadel.

https://www.zerohedge.com/markets/brace-much-more-meaningful-test-fundamental-backdrop-citadel-securities-chief-equity?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4NTQ5Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjA5NTAwOSwiZXhwIjoxNzk0Njg3MDA5LCJhdWQiOiJ6aC1naWZ0In0.SypVW16XFqW7UJesP3u25-I51es0oKrpnsfvEMcv1K0

Friday morning setup. US futures are higher, and small caps are leading, as the crowded-trade unwind that hammered chips, momentum and AI baskets all week takes a breather: Fed Chair Kevin Warsh said nothing about rates at the IMF gathering in Bangkok overnight (traders took the silence as a dovish gift, cutting October hike odds to 14% from 26%), Tesla jumped 5% after Musk unveiled his "flying" Roadster, and oil slipped after Trump said Iran had asked for a halt to US attacks but then it rebounded when the market realized Trump is just lying; as a result haven demand faded and the global bond rally stalled, with 10Y yields rising 6bps to 5.12%. As of 8:00am ET, S&P futures are 0.1% higher at 7,800, Nasdaq futures are down -0.2% and Dow futures are -0.2%; Russell 2000 contracts are up 0.5%. Yesterday the S&P rose 0.3% and closed within 1% of its record high after Jensen Huang rode to CoreWeave's rescue, even as the SOX fell for a 7th straight day and the Nasdaq barely eked out a gain. Premarket, all Mag 7 names except Amazon are higher led by Tesla, while CoreWeave (-3.9%), Strategy (-2.9%) and Netflix (-2.5%) lag and the AI baskets (semis and memory) remain in the red per JPM. The day's driver is Warsh (or rather what he didn't say): with the blackout starting Saturday, the Fed chair declined to push back on rate expectations and instead talked up a "massive investment surge" from AI. In rates, Treasuries slide with a mild bear steepening (2s flat, 10s +4bps, 30s +3bps per JPM) as the rebound in global stocks clips the haven bid; bunds and gilts are also lower by about 15 ticks with UK banks in focus after reports Chancellor Healey will raise their taxes. In FX, the Bloomberg Dollar Spot Index drops 0.4%, down a second day, with the kiwi and Aussie leading G10 and the euro set to end a five-week losing run. In commodities, WTI is down 1% near $97 and Brent trades around $105 but is still headed for a second weekly gain; gold is up 0.3% at $4,184, silver gains 0.8% and copper rises 1% in London. Crypto is mixed: Bitcoin is little changed around $82,000 while Ether bounces. US economic data slate includes September import/export prices (8:30am), industrial production and capacity utilization (9:15am), the federal budget balance (2pm) and August TIC flows (4pm); Fed speaker slate includes Goolsbee on Bloomberg TV at 6pm, the last word before the blackout. There are no coupon auctions, but Treasury's primary dealer questionnaire (noon ET) ahead of the Nov. 4 refunding is worth watching.

Fundamental

Headlines

The Economy

International

The August EU trade balance was -E16.1 billion versus estimates of +E14.7 billion; September CPI was +0.6%, in line.

Other

Retail sales are another plus for the economy.

https://bonddad.blogspot.com/2026/10/retail-sales-continue-this-years.html

Monetary Policy

With everything else going on yesterday, I failed to mention the release of the September FOMC minutes.

https://assets.realclear.com/files/2026/10/2947_fed_watcher_-_oct_14.pdf

Fiscal Policy

American free enterprise is under attack.

https://www.cato.org/restoring-free-enterprise/american-free-enterprise-under-attack

What the Iran war has cost America---so far.

https://www.zerohedge.com/political/iran-war-has-cost-nearly-2000-us-household-moodys-top-economist

Nvidia will blink first.

https://quoththeraven.substack.com/p/jensen-will-blink-first?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

A fourth crack.

https://www.zerohedge.com/markets/aftershock-anthropic-ipo-investors-mark-valuation-down-15-trillion-growth-slowdown-sinks?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4NjIwIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjE1NTcxNSwiZXhwIjoxNzk0NzQ3NzE1LCJhdWQiOiJ6aC1naWZ0In0.89JNxu0zcNRZxIMpQYrkEXO_OPYSPtbjmz2IS5DGsG8

Investing

Outlook for October S&P dividends.

https://politicalcalculations.blogspot.com/2026/10/the-outlook-for-s-500-dividends-in.html

When do fundamentals matter?

https://behaviouralinvestment.com/2026/10/13/when-do-fundamentals-matter/

Opportunities in bonds?

https://www.advisorperspectives.com/commentaries/2026/10/15/yields-soaring-elevating-investor-opportunities

Inflation concerns push yields further above fair value.

https://www.capitalspectator.com/inflation-concerns-push-10-year-yield-further-above-fair-value/

Bitcoin will become less volatile.

https://www.zerohedge.com/crypto/bitcoin-will-become-less-volatile-and-larger-gold-bitcoin-standard-author

News on Stocks in Our Portfolios

What I am reading today

Non state alliances are reshaping the global order.

https://www.nakedcapitalism.com/2026/10/how-non-state-alliances-are-reshaping-the-global-order.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---Cracks in the AI story.

2026-10-15T06:17:07.777-07:00

The Morning Call

10/15/26

The Market

Technical

Wednesday in the charts.

https://www.zerohedge.com/markets/hawks-circle-soaring-cpi-lifts-dollar-hammers-everything-else?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4NDIwIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjAwOTUxMSwiZXhwIjoxNzk0NjAxNTExLCJhdWQiOiJ6aC1naWZ0In0.PhP-JYllp8vkBvGWSs1Per7tcvqC-2HpDTVUy9rR0f0

Note: for a second time in a row, the S&P failed to successfully challenge its former high. It is now sitting on its 50 DMA (i.e., support). Let’s see how it handles that. That said, the rest of the Market held its own. Our portfolios were up on the day, as everything else offset the decline in the AI related stocks. So this may not be a sign that the Market is headed lower---just the big tech names. It is too early to tell, but I am planning at strategy based on that assumption.

Wednesday in the technical stats.

https://www.barchart.com/stocks/signals/new-recommendations

King dollar is crushing everything.

https://www.zerohedge.com/the-market-ear/king-dollar-crushing-everything?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4NDE1Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjAwNzQyMSwiZXhwIjoxNzk0NTk5NDIxLCJhdWQiOiJ6aC1naWZ0In0.RtEWXB5mwBWZmbNSZabv8B81w2Cnkp-wVeL78x4Gvy8

Thursday morning setup: US futures are lower as the AI unwind goes global - Korea's Kospi crashed into a bear market and tripped circuit breakers, CoreWeave bonds sank deeper into distress and Anthropic's still-blistering but slowing growth failed to impress - while yesterday's hot CPI scare has morphed into a growth scare; as a result Treasuries are ripping higher with 10Y yields tumbling 10bps to 5.08%, the lowest since Sept. 23. As of 6:20am ET, S&P futures are 0.3% lower at 7,749 while Nasdaq futures slide 1.1% to 29,857 and Dow futures are up 0.2%; small caps are the odd man out with Russell 2000 futures up 0.3%. Yesterday the S&P 500 fell 1.1% to its worst day since July, the Nasdaq 100 lost 2% and the SOX dropped for a sixth straight session. Premarket, Mag-7 and AI baskets are all lower with Apple the only Mag 7 name in the green; chipmakers, memory, neoclouds and AI infrastructure names are all sliding, with CoreWeave down another 6-7% after imploding 15% yesterday as its bonds traded at distressed levels. The day's driver is AI financing (again): Anthropic's $16.8 billion Q3 revenue implies slowing growth, and a Gartner report that $3,5 trillion of AI infrtastructure spending could be exposed to impairment by 2030 is making the rounds. Bonds rally across the curve in a bull flattener with yields down 7-11bps, as the AI selloff pushes investors into havens and odds of an October Fed hike slide back to around 30% from a post-CPI intraday peak of 58%; bunds and gilts also rally about 10bps, helped by the pullback in energy. The dollar is lower, with the Bloomberg Dollar Spot Index down 0.3%-0.4% and the Swiss franc leading G-10 gains while the Aussie slumps after a weak jobs report. In commodities, Brent drops almost 2% to $104 on the risk-off tone and talk of the US easing shadow fleet sanctions, gold jumps 1.3% to $4,158 and silver is up 2.1%, while copper slides. Bitcoin is down 0.6% near $81,200. US economic data slate includes September retail sales, PPI, October Empire manufacturing and Philly Fed, and weekly jobless claims (all 8:30am) and August business inventories (10am). Fed speaker slate includes Goolsbee (10am), Hammack (4:30pm) and Chair Warsh, who has a fireside chat with the IMF's Georgieva in Bangkok at 11:30pm ET before the blackout. Treasury sells $110 billion of 4-week and $105 billion of 8-week bills at 11:30am.

Fundamental

Headlines

The Economy

Weekly jobless claims totaled 199,000 versus projections of 200,000.

September CPI was up 0.6%, in line; the core CPI was up 0.3% versus +0.2%.

https://www.zerohedge.com/markets/rate-hike-odds-bond-yields-explode-higher-after-hotter-expected-cpi

More analysis.

https://bonddad.blogspot.com/2026/10/september-cpi-shows-widespread-movement.html

September PPI was up 1.3% versus consensus of +0.5%; core PPI was up 0.7% versus +0.3%.

https://www.zerohedge.com/markets/inflation-broadening-out-producer-prices-soar-most-4-years

September retail sales rose 0.8% versus estimates of +0.3%; ex autos they were up 0.9% versus +0.5%.

The October New Your Fed manufacturing index came in at 25.5 versus expectations of 10.3; the October Philadelphia Fed manufacturing index was 20.9 versus 28.4.

International

August Japanese machinery orders were up 5.2% versus forecasts of +3.0; final August industrial production fell 2.4% versus -1.7%.

August UK GDP grew 0.1% versus predictions of -0.1%; August industrial production was up 0.8% versus -0.1%; the August trade balance was -L920 million versus -L3.1 billion; August YoY construction output declined 1.8% versus -1.6%.

August EU industrial production declined 0.5% versus consensus of 0.0%.

Other

Home buying slump hits six weeks.

https://www.bloomberg.com/news/articles/2026-10-14/us-mortgage-rates-hit-7-5-extending-slump-in-purchase-activity?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc5MTk5MTU3NiwiZXhwIjoxNzkyNTk2Mzc2LCJhcnRpY2xlSWQiOiJUTVVZOE9UOTZPU0kwMCIsImJjb25uZWN0SWQiOiJCMzFCNTRDQTI3MTE0NjAxOUQxMURCN0IxRUM4NTE2MyJ9.-P02mqZ3R2OAyzrobYTnnZrZzCMFOTrcTZayY_mHftQ

Fiscal Policy

There is no winning the AI race without global workers.

https://www.realclearmarkets.com/articles/2026/10/14/theres_no_ai_victory_for_the_us_without_the_worlds_workers_1210968.html

A second crack?

https://quoththeraven.substack.com/p/coreweave-dont-say-i-didnt-warn-you?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

A third crack?

https://www.zerohedge.com/markets/anthropic-says-q3-revenue-jumped-168-billion-and-turned-adjusted-profitable-run-rate-math?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4NDcxIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MjA2ODk0OCwiZXhwIjoxNzk0NjYwOTQ4LCJhdWQiOiJ6aC1naWZ0In0.-X7zW5yd336EA2nA2qZfWsxJ4i9v5J-KMrFZPA8RqLE

Investment bubbles are a feature of capitalism.

https://www.zerohedge.com/markets/dowd-investment-bubbles-are-feature-capitalism-not-bug

Investing

Proceed with caution.

Continue To Proceed With Caution

Dispelling two bull market worries.

https://www.marketwatch.com/story/investors-worry-the-bull-market-is-getting-old-but-history-shows-it-can-continue-to-age-gracefully-0402e69c?st=yypMDV

That pesky ‘term premium’.

https://www.nytimes.com/2026/10/13/business/term-premium-bond-yields.html

Investors locking in higher yields.

https://giftarticle.ft.com/giftarticle/actions/redeem/7afe1319-c9c0-40e5-83f2-4d08b1304b39

How much money is enough?

https://open.substack.com/pub/spilledcoffee/p/how-much-is-enough?utm_campaign=post-expanded-share&utm_medium=web

The nightmare scenario.

https://www.zerohedge.com/markets/nightmare-scenario-move-creator-bassman-warns-6-20y-could-unleash-convexity-vortex?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4MzEyIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTk5MDMwMSwiZXhwIjoxNzk0NTgyMzAxLCJhdWQiOiJ6aC1naWZ0In0.8KAqXXefrBMtuI5bB3blDV0Vi-Ulyt4IkNxKkAnTRsU

Note: Cheapest to Deliver (CTD) is the specific bond from a basket of eligible government or Treasury securities that a short position holder (the seller) chooses to deliver when settling a bond futures contract, because it costs them the least amount of money to acquire and deliver.

AI rains on the tech parade.

https://talkmarkets.com/article/openai-rains-on-the-tech-parade

Where the gold market is headed.

https://talkmarkets.com/article/5-charts-revealing-where-the-gold-market-is-headed-next

News on Stocks in Our Portfolios

BlackRock

https://talkmarkets.com/article/blackrock-stock-jumps-3-after-earnings-beat-as-assets-climb-to-155-trillion

What I am reading today

The social security COLA for 2027.

https://wolfstreet.com/2026/10/14/the-social-security-cola-for-2027-will-be-largest-since-2023/

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---Paul Tudor Jones' 2027 outlook

2026-10-14T06:09:22.327-07:00

The Morning Call

10/14/26

The Market

Technical

Tuesday in the charts.

https://www.zerohedge.com/markets/tech-wrecked-again-ai-credit-cracks-widen-bonds-bullion-black-gold-chop?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4MjcxIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTkyMzkwNiwiZXhwIjoxNzk0NTE1OTA2LCJhdWQiOiJ6aC1naWZ0In0.EKQPtfB8z-ELlgCBzUcJTLLKj36rh8qYAWbFGFHQ4cY

Tuesday in the technical stats.

https://www.barchart.com/stocks/signals/new-recommendations

Sprinting to stand still.

https://www.zerohedge.com/markets/sprinting-stand-still-goldmans-molavi-spots-two-three-capex-peak-signals-already-flashing?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4MTY5Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTg5ODEyNCwiZXhwIjoxNzk0NDkwMTI0LCJhdWQiOiJ6aC1naWZ0In0.jygeBM3bMX_tPY4HHsNPFcre1bzHmAEWvyJfi6gQTFo

Positioning is changing.

https://www.zerohedge.com/the-market-ear/tech-bonds-next-big-positioning-shock-taking-shape?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4Mjk5Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTkyNDk3OSwiZXhwIjoxNzk0NTE2OTc5LCJhdWQiOiJ6aC1naWZ0In0.cuzqtUmMfSGD2UpPPDnz24z242Q4gcije486Ep4wDmg

Memory meltdown.

https://www.zerohedge.com/markets/memory-meltdown-goldman-finds-fast-money-piled-nasdaq-top-and-asset-managers-havent-blinked?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4MzAxIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTk4Mjg3NCwiZXhwIjoxNzk0NTc0ODc0LCJhdWQiOiJ6aC1naWZ0In0.ZoKb2z3kXKp2gRSSymBm2tg4yVZgwW1vqkXkWdUC1-k

Wednesday morning setup: US futures are higher, with small caps leading and tech lagging, as traders brace for what is expected to be the hottest monthly CPI print since the spring, digest more escalation in the Gulf after Yemen's Houthis hit Saudi Aramco's Dhahran headquarters and vowed more strikes on Saudi airports and oil facilities, and countdown to Anthropic's pre-IPO investor day which one strategist warns "will move the entire market"; as a result oil is grinding higher while the bond rout takes another breather with the 10Y sliding to 5.20%. As of 8:15am ET, S&P futures are 0.2% higher at 7,872 while Nasdaq futures are down 0.1% and Dow futures are up 0.4%; Russell 2000 contracts are up 0.3%. On Tuesday, the S&P closed fractionally lower (-0.02%) as the Philly semi index posted a fifth straight drop - its longest losing streak since July - and the KBW Banks index slid 1.4% with all 24 members lower on day one of bank earnings. In premarket trading, Mag 7 names are mostly higher led by Alphabet, BlackRock jumps after pulling in $205 billion in new money, while Bank of America slips after a $1.21 billion money-laundering fine (as we reported yesterday) and an equities trading miss; memory names are again under pressure (MU -1.4%, SNDK -2.3%), extending the memory meltdown, even as ASML's beat-and-raise sparked a modest rally in Europe. The day's driver is CPI: consensus expects headline to jump 0.6% M/M and 3.6% Y/Y - the biggest monthly advance in five months on the back of surging gasoline prices - with core seen at 0.2%, while swaps price roughly 24% odds of a quarter-point hike at the Oct. 28 FOMC, meaning that the print "mostly decides December". Treasuries are slightly richer, with yields down about 1bp across the front-end and belly and the 10Y at 5.20%, dragged lower by a rally in gilts after BoE Chief Economist Huw Pill cast doubt on market pricing of four hikes by next summer and the FT reported Chancellor Healey will fund budget giveaways with taxes or spending cuts rather than more borrowing. The Bloomberg dollar index is little changed, while the Aussie is the best G-10 performer after blowout Chinese trade data. In commodities, WTI has swung between gains and losses and was last up around 1.6% as traders weigh the latest Middle East hostilities, after the IEA warned diesel supplies will remain constrained well into 2027 and OECD government oil stocks hit the lowest since 1989; gold slips 0.4% to $4,144 and silver drops over 1% to its lowest since August, while copper is firmer. Bitcoin is flat around $83,000. US economic data slate includes MBA mortgage applications (already out: -2.7%) and September CPI (8:30am); the Fed releases its Beige Book at 2pm. Fed speaker slate includes Barkin (1:30pm), Goolsbee (3pm) and Bowman (10:55pm). The Treasury sells $75 billion in 17-week bills at 11:30am.

Fundamental

Headlines

The Economy

Weekly mortgage applications fell 2.7% while purchase applications were down 0.4%.

Month to date retail chain store sales were up 10.4% versus 8.6% in the prior week.

September existing home sales rose 1.5% versus consensus of -0.3%.

https://bonddad.blogspot.com/2026/10/the-subpar-equilibrium-in-existing-home.html

International

September Chinese CPI rose 0.2% versus predictions of +0.3%; September YoY PPI was up 5.0% versus +4.5%; the September trade balance was +$133.5 billion versus +$118.5 billion.

September German PPI was up 1.9% versus estimates of +0.7%.

Other

Overnight News

Iran is deploying new tactics to target ships sailing through the Strait of Hormuz as it seeks to keep oil prices high and influence the US midterm elections, two senior Iranian officials told Reuters.

Oil edged higher as attacks on Saudi Aramco's headquarters added to a flare-up in the Middle East conflict, increasing uncertainty over a recovery in Persian Gulf energy flows.

Yemeni Army Spokesperson said operations towards Saudi airports and oil facilities will continue in the coming days and warned for global shipping companies, civilians and workers to evacuate such airports and firms, as they are legitimate targets.

Fiscal Policy

The burden is ours, not our grandchildren’s.

https://www.realclearmarkets.com/articles/2026/10/13/were_burdening_the_children_is_an_abjectly_keynesian_fatuity_1210908.html

The huge lurking leverage in AI.

https://giftarticle.ft.com/giftarticle/actions/redeem/9981aaea-42af-480e-a783-ea7976c2b0f5

The 11% AI chip loan the big banks refused to underwrite.

https://www.zerohedge.com/ai/when-goldman-jpm-wont-hold-it-should-you-11-ai-chip-loan-banks-refused-underwrite?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4MjEzIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTkyMDgxNywiZXhwIjoxNzk0NTEyODE3LCJhdWQiOiJ6aC1naWZ0In0.vYlKzg3GwpoBcsWK4G4mBD0QPDLm-czFT9DAhlBVxZs

One more problem for the hyperscalers.

https://www.zerohedge.com/energy/big-tech-pushes-back-paying-grid-was-crumbling-long-ai

Tariffs

Manufacturing surged when tariffs were lifted.

https://thedailyeconomy.org/article/manufacturing-surged-when-tariffs-were-lifted/

Investing

Paul Tudor Jones versus Goldman on the 2027 market outlook.

https://www.zerohedge.com/markets/ill-be-short-whole-year-paul-tudor-jones-warns-looming-dot-com-style-equity-supply-tsnuami

Stocks keep climbing but leadership may be changing.

https://www.capitalspectator.com/stocks-keep-climbing-but-market-leadership-may-be-shifting/

Will bonds blow up?

https://trendlabs.com/will-bonds-blow-up/

The starting yield on a bond largely dictates your future return.

https://bondvigilantes.com/blog/2026/10/bonds-have-their-mojo-back/

The latest from Morgan Stanley.

https://www.zerohedge.com/markets/feds-unpaid-intern-ms-wilson-says-tighter-financial-conditions-are-already-doing-warshs-job?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4MjU5Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTkyMjc0OCwiZXhwIjoxNzk0NTE0NzQ4LCJhdWQiOiJ6aC1naWZ0In0.eSeAaInacXpDKTYleDqvU7x5FRTfS5LutZ-H-Tu2iS8

News on Stocks in Our Portfolios

What I am reading today

New era of investment for the defense industry.

https://www.realclearmarkets.com/articles/2026/10/13/a_new_era_of_investment_for_the_defense_sector_1211123.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---Broadcom CEO says investors are gambling in a casino

2026-10-13T06:06:04.656-07:00

The Morning Call

10/13/26

The Market

Technical

Monday in the charts.

https://www.zerohedge.com/markets/crude-continues-crash-credit-closed-tech-tumbles-breadth-bounces?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4MTQyIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTgzNjkwMywiZXhwIjoxNzk0NDI4OTAzLCJhdWQiOiJ6aC1naWZ0In0.QdOMYMGmH2sY4u5iMqZcXP5gYO88dA26I-JJGSSDSR8

Monday in the technical stats.

https://www.barchart.com/stocks/signals/new-recommendations

No offense is being played.

https://www.zerohedge.com/markets/no-offense-being-played-hedge-funds-add-gross-cut-nets-ctas-hit-target-and-buybacks-go-dark?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4MTQ5Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTgzODQ0MiwiZXhwIjoxNzk0NDMwNDQyLCJhdWQiOiJ6aC1naWZ0In0.N8kiDjUJmyg1F9flfgALacFORxBlz3b6Q_AE4Hk138s

Bond shorts are sitting on a powder keg.

https://www.zerohedge.com/the-market-ear/bond-shorts-are-sitting-powder-keg?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4MjE5Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTg5NjE3MSwiZXhwIjoxNzk0NDg4MTcxLCJhdWQiOiJ6aC1naWZ0In0.tZIm_oakWLDXIO4hrHh8NqXmBW_vr06vVSXf9zwhDBE

Gold tumbles as oil shock fuels dollar rally.

https://talkmarkets.com/article/gold-tumbles-as-oil-shock-fuels-us-dollar-rally-and-fed-hike-bets

Tuesday morning setup: US futures are mixed with the Nasdaq lagging as the AI rout that started on Wall Street on Monday ricocheted through Asia, where the Kospi crashed as much as 7% after Broadcom's Hock Tan likened AI investing to a casino and China's CXMT touted a denser memory chip design, while Q3 bank earnings kicked off with a FICC trading miss at JPMorgan; as a result, a flight to safety sent 10Y yields 5bps lower to 5.19% as cash Treasuries reopened after the holiday, while Brent slid back toward $105. As of 8:00am ET, S&P futures are down 0.1% around 7,850 while Nasdaq futures slide 0.7%, Dow futures are up 0.7% and Russell 2000 futures rise 0.3%. That follows a session in which the S&P dipped 0.1% and the Nasdaq 100 fell 0.7% on what was the lowest volume session in 23 years, with the SOX down 2.7% for its fourth straight decline even as two-thirds of S&P members rose. In premarket trading, memory names are getting hammered again (Western Digital -4.5%, Seagate -4.1%, Sandisk -3.7%, Micron -2.8%) and Nvidia is the worst of the Mag 7, down 0.9%, while JPMorgan is flat after FICC revenue of $5.37BN missed the $6BN estimate but the company guided NII higher; UnitedHealth rises 2.8% after raising its guidance. The day's driver is AI angst (again): Hock Tan's warning that financing the buildout, not chip supply, is the problem (as we discussed yesterday) was the spark, while CXMT's progress on new DRAM architecture did the rest in Seoul, where Samsung and SK Hynix lost around 8% and 10%. Treasuries rallied, with yields down 2-5bps led by the 10Y, after Fed Governor Waller said the surge in long-term yields is doing some of the work of tighter policy, while bunds and gilts gained as lower energy prices eased inflation worries. The BBG dollar index is down 0.2%, snapping a four-session winning streak, and the yen leads G10 after a report that the BOJ is leaning against a back-to-back hike in October. In commodities, WTI is down about 1.5% near $92.3 and Brent is 1.7% lower to $104.6; gold rises 0.3% to around $4,190, silver is up 0.4% near $60.5 and copper is flat. Bitcoin regains $83,000. US economic data slate includes September NFIB small business optimism (already out: 97.9 vs est. 98.2), ADP weekly employment change (8:15am), September existing home sales (10am) and the September federal budget balance (2pm). Fed speaker slate includes Goolsbee (7am and 10am), Barkin (1pm) and Collins (4pm). The Treasury sells $95BN of 13-week and $82BN of 26-week bills at 11:30am and $95BN of 6-week bills at 1pm.

Fundamental

Headlines

The Economy

The September small business optimism index came in at 97.9 versus estimates of 98.0.

International

September Japanese PPI was down 0.3% versus projections of +0.5%.

September German CPI was +0.6%, in line.

Other

World’s energy order being tested again.

https://www.nytimes.com/2026/10/12/business/middle-east-oil-exports-houthi-saudi.html?unlocked_article_code=1.IFE.ajsv.FwxO345i4bvj&smid=url-share

A super El Nino is looking more likely.

https://www.bloomberg.com/news/articles/2026-10-12/what-is-a-super-el-nino-how-it-affects-weather-and-food-production?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc5MTgyOTM5MCwiZXhwIjoxNzkyNDM0MTkwLCJhcnRpY2xlSWQiOiJUTU44RjBUOU5KTFkwMCIsImJjb25uZWN0SWQiOiJCMzFCNTRDQTI3MTE0NjAxOUQxMURCN0IxRUM4NTE2MyJ9.Z1dHmh9t7HuA7sX6kTSxKSx_6Pj6jiEqRgRw_NRVlV8

A wealth boom and price shock collide.

https://www.reuters.com/business/finance/us-a-wealth-boom-price-shock-collide-2026-10-12/

Overnight News

Iran is fortifying its defenses, rallying loyalists, and hinting that their forces could conduct land incursions into neighboring countries as it threatens a wider, harsher response against the U.S. and its Gulf allies as it prepares for potential American attacks after the midterms and seeks to deter them.

JPMorgan and Goldman Sachs have taken a rare move to limit exposure on a $5 billion loan sale for AI startup Volta Infrastructure as investors demand higher yields for risky debt tied to the AI boom.

Monetary Policy

Rising bond yields are no excuse for central bank inertia.

https://www.bloomberg.com/opinion/articles/2026-10-12/rising-bond-yields-are-no-substitute-for-tighter-monetary-policy?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc5MTgyOTg2OCwiZXhwIjoxNzkyNDM0NjY4LCJhcnRpY2xlSWQiOiJUTVNFQzFOM04wOTUwMCIsImJjb25uZWN0SWQiOiJCMzFCNTRDQTI3MTE0NjAxOUQxMURCN0IxRUM4NTE2MyJ9._EDniFJ0PZx3K_9VvWnuOsPs6U7Ft2Kz4ra1e6jCGEM

Fiscal Policy

Rising concerns over government debt.

https://giftarticle.ft.com/giftarticle/actions/redeem/4b06e5f6-793c-4c24-a347-f5a0cf194558

Inflation

The Houthi escalation raises the risk of higher inflation.

https://www.capitalspectator.com/a-new-middle-east-flashpoint-raises-the-stakes-for-inflation/

Broadcom CEO says investors are gambling in a casino.

https://www.zerohedge.com/markets/hock-tan-warns-ai-investors-are-gambling-casino-whose-chips-his-own-credit-paying

Microsoft slashes token costs

https://www.realclearmarkets.com/articles/2026/10/12/microsofts_slash_of_ai_token_costs_should_have_ai_investors_fearful_1210780.html

How the AI boom ends.

https://www.wsj.com/opinion/how-the-ai-boom-ends-0d9d47e7?st=HHggsp&reflink=desktopwebshare_permalink

Investing

The Market’s margin of error has narrowed.

https://www.briefing.com/todays-free-feature

Why stocks are rising despite higher interest rates.

https://www.carsongroup.com/insights/blog/heres-why-the-sp-500-just-hit-a-new-all-time-high-despite-rising-interest-rates/

How long can above average returns last?

https://growordieinvesting.substack.com/p/how-long-can-above-average-returns?utm_campaign=post-expanded-share&utm_medium=web

Is the ten year Treasury finally a buy?

https://talkmarkets.com/article/bonds-at-5-is-the-10-year-treasury-finally-a-buy

Why is China stacking gold?

https://talkmarkets.com/article/why-is-china-stacking-gold

AI is no longer a brain in a jar.

https://www.riskhedge.com

The stock market is not the economy.

https://open.substack.com/pub/samro/p/the-stock-market-is-not-the-economy-2026?utm_campaign=post-expanded-share&utm_medium=web

Counterpoint.

https://talkmarkets.com/article/monthly-macro-monitor-the-stock-market-is-the-economy

Five steps to take right now (in your portfolio).

https://ritholtz.com/2026/10/5-steps-to-take-right-now/

News on Stocks in Our Portfolios

What I am reading today

The gambling epidemic.

https://www.advisorperspectives.com/commentaries/2026/10/12/gen-z-bets-against-future

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

Monday Morning Chartology

2026-10-12T06:05:16.781-07:00

The Morning Call

10/12/26

The Market

Technical

The S&P had a see saw week, closing above its all-time high on Tuesday, then falling back below it on Wednesday (negating the break), then back above it again on Friday. If it remains there through the close on Wednesday, the challenge will have been successful. The rest of the technicals suggest success: it remains above all DMAs and in uptrends across all time frames. Still, there are some minor negatives. (1) a minor gap up open at the ~7684 level, (2) breadth remains horrible and (3) the bond Market is not being particularly supportive. At the moment, I see no reason to get beared up. On the other hand, the bond market’s pin action makes me nervous as do the fundamentals (fiscal policy, monetary policy, war, oil, tariffs). So until I see more convincing upside momentum, I will continue to sit on my hands.

While the bond market rallied last week, the longer term pin action remains pretty dismal. TLT continues to trade down across all timeframes and is below all three DMAs. That suggest that the bond boys are much less sanguine than stock investors about inflation, interest rates, the course of oil prices, the federal deficit and the financials of the AI buildout. I don’t see anything that would suggest a reversal in either the aforementioned numbers or bond market sentiment… for the long bond to rise enough to even challenge the upper boundary of its very short term downtrend is going to take a series of very positive developments.

https://www.bloomberg.com/news/articles/2026-10-09/wall-street-sees-an-ominous-sign-in-bond-market-s-latest-selloff?utm_source=website&utm_medium=share&utm_campaign=copy

Gold was on the same roller coaster ride as stock and bonds. While it finished up on the week, it remains below all three DMAs and has now reset its short term uptrend to a trading range. There are a number of conflicting forces playing on the price of gold; and until it can break the current string of lower highs and lower lows, I am on the sideline.

https://talkmarkets.com/article/gold-reclaims-4200-as-weak-us-sentiment-revives-bullion-demand

Death of the old playbook.

https://www.zerohedge.com/the-market-ear/gold-diggers-and-death-old-playbook?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3OTYwIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTczNzk5NSwiZXhwIjoxNzk0MzI5OTk1LCJhdWQiOiJ6aC1naWZ0In0.5W2R9dxnQ65pcZfE2EJioGBLiZMpPxDJLEhAKkXHs5E

The dollar’s pin action is improving---making a nice series of higher lows and higher highs. It is now in about the middle of a wide short term trading range, So, very short term the bias is up---which will likely continue as long as rates are rising and the rest of the world is having fiscal/interest rate problems---while longer term it is neutral.

Friday in the charts.

https://www.zerohedge.com/markets/hormuz-hurricanes-hikes-hiccups-ais-accounting-trump-puts-war-election-timer-junk-quietly?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3ODI2Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTU3NzI0NSwiZXhwIjoxNzk0MTY5MjQ1LCJhdWQiOiJ6aC1naWZ0In0.G4ziRPn4o7ohxRfBY-gash_swaFC2qwv-tjWIqcKFJQ

Friday in the technical stats.

https://www.barchart.com/stocks/signals/new-recommendations

The latest from Goldman.

https://www.zerohedge.com/markets/higher-probability-vix-25-spx-2-hedge-funds-dump-tech-goldman-finds-records-everywhere?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI4MDM4Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTgwOTgzOSwiZXhwIjoxNzk0NDAxODM5LCJhdWQiOiJ6aC1naWZ0In0.O4WjkcKLMy5Sx2LJtQ_0uYT-t2AtNuVsssI67JJ-UCU

Monday morning setup: US futures are flat, with S&P contracts clinging to small gains and the Nasdaq slipping into the red as memory stocks slide, after a weekend of contradictory geopolitical headlines whipsawed oil (see below). As of 8:00am ET, S&P futures were 0.1% higher at 7,865 while Nasdaq futures were down 0.1%. Dow futures are up about 0.1%. That follows a Friday session in which the S&P rose 0.6% to cap a 1.2% weekly gain (after a record close on Wednesday) and the Dow jumped 0.8%. In premarket trading, Meta leads the Mag 7 higher (+1.8%) while memory names slide, with Micron down 2.1% after Samsung and SK Hynix tumbled more than 4% in Seoul with buyback quotas now largely completed; T-Mobile rebounded 1.1% on a Raymond James upgrade after Friday's SpaceX-spectrum puke, CCC Intelligent jumps 8.3% on buyout talks with GTCR and Elliott and IREN rises 5% on a reported cloud deal with Anthropic. The day's driver is oil (again), and the market can't decide which war to price: WTI is up 1.2% at $93.00 and Brent is at session highs, above $106 having traded in a $102.33-$106.17 range, as Iran insists Hormuz stays shut until all seven of its conditions are met and Trump mulls joining Saudi strikes on the Houthis. There is no cash Treasury trading today for the Columbus Day holiday; Treasury futures drift lower led by the ultras, implying slight bear steepening, while bunds and gilts are higher (10Y gilt yield down 4bps to 5.41%, bund down 2bps to 3.46%) as diesel prices fall following US efforts to release Russian fuel to the market. The Bloomberg dollar index is steady with the Swiss franc the weakest G10 currency and the pound outperforming ahead of PM Burnham's speech on EU ties, while India's rupee jumped more than 1% after the RBI's strongest support measures since the 2013 taper tantrum. In commodities, spot gold slipped to a $4,168 low, silver is near $60.70, copper extends Friday's rebound as Chinese buyers return from Golden Week, Dutch TTF is firmer at up to €82.90/MWh and US natgas is down 2.5% to $3.14. Bitcoin reversed from a peak of $84,260 to trade near $83,300. There is no US economic data today; Fed speaker slate includes Hammack (12:10pm). The US cash bond market is closed for Columbus Day; stock markets are open.

Fundamental

Headlines

The Economy

Last week was a slow one for US stats. What there was, was slightly negative with no primary or inflation numbers. Overseas, the data was more plentiful but also slightly downbeat with one neutral price measure. These reports keep both my forecasts for growth (muddle through) and inflation (good as it is going to get but not any worse) on track.

The economic issues that I continue to fret over are:

(1) what is the appropriate monetary policy given that a good deal of the upward inflation pressure is the result of supply shortages [primarily oil] versus demand pull?

On its face, it suggests a Fed reticent to raise rates because the problem [inflation] will cure itself as supply shortages are reconciled. The problem number one is that the conflicts in Ukraine and Iran are destroying infrastructure [production facilities, refining capacity, pipelines] and depleting global oil reserves to such an extent that supply shortages are not going to be alleviated when, as and if those conflicts end. Indeed, depending on the ultimate disposition of tanker transit out of the Persian Gulf and the Red Sea, a new permanent cost [transit fees] could be added to the price of oil.

Second, as these conflicts drag on, at some point, the mind set of consumers and businesses becomes attuned to the oil shortage induced inflation and view it as more permanent, increasing the need for Fed action.

Oil reserves hit rock bottom.

https://www.zerohedge.com/markets/nothing-left-drain-goldman-finds-near-record-22-oil-risk-premium-global-stocks-hit-rock?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3OTMzIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTczOTA3NSwiZXhwIjoxNzk0MzMxMDc1LCJhdWQiOiJ6aC1naWZ0In0.jxAtUSQX3JdcwBXa-wwu5LtIyEzQuU3d81dV2P5zaz0

Third, not all inflationary pressures are the result of supply shortages. The egregious national deficit and the enormous AI buildout spend are juicing economic growth with the former clearly an unnecessary accelerant.

Fourth, Trump’s tariffs flow directly into the price of goods.

https://www.cnbc.com/2026/10/08/inflation-tariffs-trump-fed-consumer-goods.html

Finally, the risks from poor monetary policy and the level of interest rates are not confined to the US. Europe and Japan are also having their issues which could potentially compound our own---increasing the odds of a stumble in the global fixed income market.

In short, I think that the Fed has a very tight rope on which to walk. And given its historical record of instituting the wrong policy at virtually every junction, I would be remiss if I didn’t factor in the likelihood of another policy mistake.

Interest rates and the demand for money.

https://scottgrannis.blogspot.com/2026/10/thinking-about-higher-interest-rates.html

(2) the health of the AI buildout. In this letter, I have noted numerous potential problems: [a] the accounting of the buildout---enormous off balance sheet financing, [b] as well as the sheer magnitude of the financings [c] the level of future revenue needed to provide a sufficed return on investment and [d] the lack of any evidence showing increased productivity of the AI providers. At this moment, I am not smart enough to know whether any of the concerns will prove valid. But I believe that until there is some visibility to the resolution of these issues, some caution is necessary---both from the macro point of view as well as the company specific. My position remains unchanged: I continue to hold positions in both the chip manufacturers and the hyperscalers---although their performances has been such that I have Sold Half of virtually every stock. That said, I have my finger on the trigger for several holdings. And should the negative case appear the more likely outcome, I will take some more money off the table.

Massive capital destruction.

https://www.zerohedge.com/ai/ais-2008-moment-jefferies-sees-massive-capital-destruction-two-cash-burning-labs-owe-half-23?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3OTUxIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTczNzc2NywiZXhwIjoxNzk0MzI5NzY3LCJhdWQiOiJ6aC1naWZ0In0.nPQWa9VWwTBQH_GZpz03eW_GKYn3LE0J5-7AsUfEn38

I want to emphasize that the issue that I am focused on is the economics of the AI buildout not the doomsday ‘we will all be dead in ten years’ variety. I made clear …. that I am quite cynical about the motivations of the doomsayers whether they are from the industry (who want the government to impose regulations that would squash potential competition) or government (who never lets a crisis go to waste in order to impose further on our collective liberties)

https://thehill.com/opinion/technology/6131723-ai-online-scam-losses/

My bottom line remains unchanged: my doubts on the trajectory of the economy/inflation/AI buildout are increasing. That said, there are always risks/potential economic/Market valuation worries and, to date, none have become openly manifest. So, as long as earnings growth remains strong and the economy continues to grow, I can’t see a recession or a major Market sell off. Higher inflation and the Fed’s response to it is another matter.

https://www.capitalspectator.com/us-economic-growth-expected-to-strengthen-in-q3-gdp-report/

From late Friday:

The October preliminary consumer sentiment index was 46.3 versus forecasts of 47.6.

https://mishtalk.com/economics/consumer-sentiment-current-conditions-index-drop-to-record-low/

International

Other

The US economy: AI and everything else.

https://bonddad.blogspot.com/2026/10/the-us-economy-right-now-ai-vs.html

Iran

Overnight news

https://www.zerohedge.com/geopolitical/saudis-vow-retaliation-after-deadly-airport-strike-houthi-threat-puts-gulf-edge

Fiscal Policy

Repeated Treasury interventions risk erosion of credibility.

https://giftarticle.ft.com/giftarticle/actions/redeem/f8eaf61e-0a2b-450b-b886-f23bd3652b42

It is a depressing time to care about free markets.

https://www.advisorperspectives.com/articles/2026/10/08/depressing-time-care-free-markets

The Financial System

Can anyone trust private credit valuations?

https://www.semafor.com/article/10/06/2026/the-worry-hanging-over-private-credit-can-anyone-trust-the-numbers

The status of commercial real estate debt.

https://wolfstreet.com/2026/10/08/status-of-the-commercial-real-estate-debt-and-who-owns-it-in-2026/

Investing

The worse borrowers in America.

https://trendlabs.com/the-worst-borrowers-in-america/

Update on valuations.

https://www.advisorperspectives.com/dshort/updates/2026/10/08/market-valuation-is-the-market-still-overvalued

The equity premium has vanished.

https://www.zerohedge.com/markets/equity-risk-premium-has-vanished-and-stocks-arent-cheap

The latest from BofA.

https://www.zerohedge.com/markets/hartnett-most-bullish-thing-fed-can-do-now-hike?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3OTgxIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTgwNzU3MywiZXhwIjoxNzk0Mzk5NTczLCJhdWQiOiJ6aC1naWZ0In0.0xSs6HweUtXGWESuWDovjgk56VBstoOJFRvVpLTZsbk

News (but not a Buy recommendation) on Stocks in Our Portfolios

What I am reading today

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 crowding out effecr is immense

2026-10-09T06:12:38.108-07:00

The Morning Call

10/9/26

The Market

Technical

Thursday in the charts.

https://www.zerohedge.com/markets/headline-roulette-back-ai-angst-mideast-missiles-spark-chaos-capital-markets?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3NzA0Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTQ5MDYxOCwiZXhwIjoxNzk0MDgyNjE4LCJhdWQiOiJ6aC1naWZ0In0.ayfK8qEQhcClsOPka6anBRsurvqTd_sZHg675POIrs8

Note: the S&P failed the break to new highs, meaning Tuesday’s spike had no follow through momentum. So, we are still stuck in a trading range albeit at a very high level. The thing that I am watching now is whether the index makes a second higher low (good news) or not.

Thursday in the technical stats.

https://www.barchart.com/stocks/signals/new-recommendations

The room at the top is crowded.

https://talkmarkets.com/article/the-room-at-the-top-of-the-sp500-has-become-twice-as-crowded

A decade of bad breadth.

https://talkmarkets.com/article/decade-of-bad-breadth

Dealing with narrowing breadth.

https://talkmarkets.com/article/a-bull-market-party-with-a-very-small-guest-list

Friday morning setup: US futures are higher as a trifecta of AI relief, easing geopolitical tensions and fading energy prices has lifted sentiment into the final trading day of the week: OpenAI walked back Thursday's FT-sparked revenue scare by telling people it expects to reach or exceed $70 billion in annualized revenue by year-end, while President Trump said the US would not attack Iran before the November midterms; as a result Nasdaq futures are up 0.8% and Brent has slipped back toward $102 after nearly touching $106 on Thursday. As of 7:15am ET, S&P futures are 0.4% higher at 7,850 while Nasdaq futures are up 0.8% and Dow futures rise 0.2%. That follows a session in which the S&P fell 0.47% to 7,765 and the SOX tumbled 3.4% after the FT reported OpenAI's annualized revenue was about $50 billion, even as two thirds of S&P members finished higher. In premarket trading, tech leads with Nvidia up 2% and the SOXX ETF up 1.9%, while Apple is the notable Mag 7 laggard, down 2% on a report it cut iPhone 18 Pro component orders, confirming our article from yesterday; telecoms are getting crushed (AT&T, Verizon and T-Mobile all down 6-7%) after SpaceX bought a nationwide low-band spectrum portfolio, tower stocks jump and Humana soars 15% on better Medicare Advantage ratings. The day's driver is oil (again), but this time on the way down: WTI is down 0.9% to $90.67 and Brent is down 1.3% to $102.92 even as Hurricane Isaias has shut in some 1.3 million b/d, or 63%, of Gulf of Mexico crude output. Treasuries are the exception to the global bond relief rally: yields are 1-2bps cheaper across the curve, led by the front-end, with the 10Y around 5.245% after Thursday's 6bp bull-flattening rally, while bunds and gilts outperform after Christine Lagarde told finance ministers the ECB has tools for disorderly spread moves. The Bloomberg dollar index is down 0.1%, with the yen the only G10 currency lagging. In commodities, gold is up about 1.3% and has climbed as high as $4,208, silver is up 2% to above $60, US natgas is down 1.5% to $3.12 and copper is firmer. Bitcoin adds about 1%, trading near $82,500. US economic data slate includes the October preliminary University of Michigan sentiment and inflation expectations (10am). Fed speaker slate includes Collins (4pm). The US bond market is closed on Monday.

Fundamental

Headlines

The Economy

International

August Japanese household spending rose 0.1% versus consensus of +0.5%; September YoY machine tool orders were up 60.4% versus +61.0%.

Other

Hurricane Isaias causes partial shutdown of Gulf oil production.

https://www.zerohedge.com/weather/25-us-offshore-gulf-oil-output-shut-hurricane-isaias-nears-threatens-refineries

Edging toward a fiscal crisis.

https://www.axios.com/2026/10/07/france-global-bond-markets

Taxes have consequences.

https://www.powerlineblog.com/archives/2026/10/taxes-have-consequences.php

The correlation of new jobless claims to future recession.

https://bonddad.blogspot.com/2026/10/new-jobless-claims-continue-near.html

Iran

Overnight news.

https://www.zerohedge.com/geopolitical/iran-expands-tanker-assault-beyond-narrow-confines-hormuz-rare-escalation

Monetary Policy

The ECB QT continues---and to what effect?

https://wolfstreet.com/2026/10/08/still-qt-plus-renewed-rate-hikes-at-the-ecb-despite-surging-bond-yields-in-the-euro-area/

The Morning Call---A debate on how the bubble bursts

2026-10-08T06:12:55.368-07:00

The Morning Call

10/8/26

The Market

Technical

Wednesday in the charts.

https://www.zerohedge.com/markets/stocks-slide-all-time-high-amid-rising-turmoil-just-below-surface?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3NTc0Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTQwNDA2OSwiZXhwIjoxNzkzOTk2MDY5LCJhdWQiOiJ6aC1naWZ0In0.DPn2TP-SUMaN6n4tf3g0aR5efQfgui8ZcbjcFK4g8eY

Note: the S&P ended the day right on its former all-time high, closing one of the two gap up opens I mentioned yesterday. For this current break to be successful, the index clearly has to close today right on or higher than the former high in order to not negate this break.

Wednesday in the technical stats.

https://www.barchart.com/stocks/signals/new-recommendations

The asymmetry has shifted.

https://www.zerohedge.com/markets/asymmetry-has-shifted-goldman-vol-trader-steps-ai-train-hedge-funds-most-crowded-mag-7?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3NDkwIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTQwMjkzNCwiZXhwIjoxNzkzOTk0OTM0LCJhdWQiOiJ6aC1naWZ0In0.jvkfjqo6nWBmET_3_ufdnwJaFCh9dmGECEKyqyQaxVw

Q4 equity performance in a mid-term election year.

https://chartkidmatt.com/p/here-s-your-seasonal-playbook

Thursday morning setup: US equity futures are lower, extending Wednesday's decline, with the S&P sliding further from Tuesday's record high as oil spikes on reports that Trump may order fresh strikes on Iran before the midterms, a tanker was hit off Qatar in the first strike deep inside the Persian Gulf in about a month, and an approaching storm has shut some US output; as a result the global bond rout picks up where it left off with 10Y yields hitting 5.35%. As of 8:00 am ET, S&P futures are 0.4% lower at 7,820 and Nasdaq futures are down 0.5%, while Dow and Russell futures are both down 0.8%. This follows a session in which the S&P (-0.2%) slipped from its record, almost three-quarters of the index fell and the Russell 2000 (-1.3%) sank to a 4-month low. In premarket trading, Tesla and Nvidia underperform their Mag 7 peers as chip, growth, and AI-related stocks trend lower, while Microsoft and Apple edge higher; Defensives lead Cyclicals with Energy the bright spot as hurricane Isaias forces Gulf producers to shut in wells. Wolfspeed soars 17% on a $1.5 billion DoD loan commitment and Palantir gains 2.2% on a Goldman upgrade. The day's driver is oil (again): Brent has jumped 5% to above $105 and WTI is up around 5% after The Atlantic reported the White House asked the Pentagon for Iran strike options that could be executed before November, a tanker was hit off Qatar and the Houthis fired a ballistic missile at Riyadh's airport. Treasuries are 5-7bp cheaper across the curve with the belly leading, and the 10Y is near session highs around 5.35%, a whisker from Wednesday's 24-year high of 5.36%, ahead of today's $22BN 30Y reopening. The Bloomberg dollar index is flat near a 3-month high and the DXY trades around 102.36; USDJPY is at 158.2 and EURUSD is stuck near 1.12, its lowest since May 2025. In commodities, Energy is bid while the rest of the complex is weaker: gold is up 0.3% to $4,123, silver is down 1.4% at $58.90, US natgas is up 1% to $3.24 and European TTF gas is above €80/MWh. Bitcoin is down 0.5% at around $83,000. US economic data slate includes initial jobless claims (8:30am, est. 200k) and August wholesale inventories (10am). Fed speaker slate includes Kashkari (10:40am) and Musalem (1:40pm); Waller already spoke at 4:30am. Treasury sells $22BN of 30-year bonds at 1pm.

Fundamental

Headlines

The Economy

Weekly initial jobless claims totaled 197,000 versus estimates 0f 200,000.

https://www.zerohedge.com/markets/jobless-claims-confirm-low-hire-low-fire-economy

International

The August German trade balance was +E19.5 billion versus expectations of +E19.0 billion.

Other

What is driving consumer spending?

https://talkmarkets.com/article/worried-consumers-keep-spending-heres-why

Iran

Overnight news.

https://www.zerohedge.com/geopolitical/pezeshkian-calls-iranians-ration-electricity-stand-us-negotiations-stalemated

Monetary Policy

The Fed released the minutes of September FOMC meeting---which were hawkish in tone.

https://www.zerohedge.com/markets/fomc-minutes-show-all-19-fed-officials-supported-rate-hike-most-assess-another-hike-year

The Fed has missed its inflation goal 66 months in a row.

https://quoththeraven.substack.com/p/the-fed-has-missed-its-inflation?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

Fiscal Policy

The SEC is watching.

https://reason.com/2026/10/06/the-sec-is-watching-american-investors-trades-thats-a-privacy-nightmare/

Trusting Mark Zuckerberg.

https://alhambrapartners.com/weekly-market-pulse-the-new-luddite-revolution/?src=news

Reconciling AI expected revenues to capex.

https://econbrowser.com/archives/2026/10/reconciling-expected-revenues-to-expenditures

SpaceX credit risk hits new high.

https://www.zerohedge.com/markets/spacex-credit-risk-hits-new-high-ai-debt-binge-fears-spook-bondholders

The Financial System

Deeply distressed loans rise to the highest levels since the pandemic.

https://www.bloomberg.com/news/articles/2026-10-06/deeply-distressed-us-loans-rise-to-highest-level-since-pandemic?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc5MTM5NzI1NiwiZXhwIjoxNzkyMDAyMDU2LCJhcnRpY2xlSWQiOiJUTUhRVUFUM0JaTUwwMCIsImJjb25uZWN0SWQiOiJCMzFCNTRDQTI3MTE0NjAxOUQxMURCN0IxRUM4NTE2MyJ9.LM8INpIH3ZRQWxC8gX6emNgapi4Zuxe7bRPd-cVjSoo

Surging rates causing a problem for commercial real estate industry.

https://www.wsj.com/real-estate/commercial-real-estate-interest-rates-22d04b1b?st=9GuQG4&reflink=desktopwebshare_permalink

Investing

Getting bonds (and diversification) wrong.

https://behaviouralinvestment.com/2026/10/06/getting-bonds-and-diversification-wrong/

A debate on how the bubble bursts.

https://www.zerohedge.com/markets/not-spectacular-enough-novogratz-says-ai-biggest-bubble-our-lifetime-and-you-should-buy-it?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3NjAwIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTQ2MzM0OSwiZXhwIjoxNzk0MDU1MzQ5LCJhdWQiOiJ6aC1naWZ0In0.duu3C0_HlQAGieUPkDKb9eufbf-DAYgC6iRZfvPGo6s

News on Stocks in Our Portfolios

What I am reading today

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---Stocks and bonds are pricing in two radically different scenarios

2026-10-07T06:09:15.301-07:00

The Morning Call

10/7/26

The Market

Technical

Tuesday in the charts.

https://www.zerohedge.com/markets/le-pen-pause-markets-calm-after-storm-next-storm?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3NDE1Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTMxODA3NiwiZXhwIjoxNzkzOTEwMDc2LCJhdWQiOiJ6aC1naWZ0In0.cz4m0i_G9lM9USEVcfV-yg6E5R7-dRQWv9oODyhoFdg

Note: the S&P hit a new all-time high yesterday. If it remains there through the close on Friday, it will mark the resumption of upward momentum. Meantime, it has two small gap up opens to contend with. Confusing the situation is the radically different pin action in bonds versus stocks (see below). I am waiting until at least Friday’s close before getting too jiggy.

Tuesday in the technical stats.

https://www.barchart.com/stocks/signals/new-recommendations

Tech just broke out.

https://www.zerohedge.com/the-market-ear/tech-just-broke-out-then-we-saw-2000-analog?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3NDA2Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTMxODU1OCwiZXhwIjoxNzkzOTEwNTU4LCJhdWQiOiJ6aC1naWZ0In0.RrmZrsvVRTVr2rEBFLLipraMlKH7v8eQoQN18xMgTzY

Stocks and bonds are pricing in fundamentally different scenarios.

https://www.zerohedge.com/markets/bonds-stocks-are-pricing-fundamentally-different-macro-regime-deutsche-watching-these-5?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3NDA1Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTM3NzAzOCwiZXhwIjoxNzkzOTY5MDM4LCJhdWQiOiJ6aC1naWZ0In0.CQZDKM9aAOe4J2GyNoQxbpF7nQO1pbXyC9oxiiKmlRQ

The above in the charts.

https://www.zerohedge.com/the-market-ear/long-trade-got-harder-hedge-got-cheaper?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3NTA3Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTM3ODEzOCwiZXhwIjoxNzkzOTcwMTM4LCJhdWQiOiJ6aC1naWZ0In0.pF3gvmt4dmUaI6sET02cY2ua10p3lwrPZHwS1d7FkMk

Time to buy bitcoin?

https://www.marketwatch.com/story/bitcoins-big-bounce-has-graduated-to-a-longer-term-uptrend-is-it-too-late-to-buy-a9bc585c?st=TD2bgm

Wednesday morning setup: US equity futures are sliding from Tuesday's record close as oil climbs back above $100, global bond yields resume their ascent and the AI bubble debate makes an unwelcome comeback. As of 8:00am ET, S&P futures are 0.4% lower, trading around 7,844, while Nasdaq 100 and Dow futures drop 0.6%; small caps are also under pressure with Russell 2000 futures down 0.3-0.4% as usual. On Tuesday, the S&P 500 rose 0.6% to close at a record high for the first time since August 13, its fourth consecutive advance and longest winning streak in about two months, with the Nasdaq 100 also closing at an all-time high. Premarket, the Mag 7 are mixed (Apple +0.4%, Tesla -0.8%) while Memory, Semis and Software are all lower as the AI theme sees some profit-taking following a slide in Korea's Kospi; Constellation Brands slides 4.7% after the Corona brewer reaffirmed guidance, Neogen jumps 11% on an earnings beat, and SpaceX falls 2% on a report it is seeking to raise $40 billion in a chip-backed SPV to buy Nvidia chips. The day's driver is once again oil: Iran has increased the pace of attacks on tankers in the Strait of Hormuz just as shipments through the chokepoint approach prewar levels, sending Brent up 1.4% to $101.94 and WTI up 0.7% to $90.02. That has pushed Treasuries lower, with the long end leading: the 30-year yield climbed 5bps to 5.70%, the highest since 2002, while the 10Y trades around 5.335%, up 5bps, and 2s10s is 4bps steeper. The Bloomberg Dollar Spot Index rose 0.3%, approaching its highest levels since June, as the euro slid to a 16-month low against the pound amid renewed French fiscal angst, with the OAT-Bund spread back out to 138bps. Gold dropped 1% to around $4,121 and silver fell 1.9% to $60.21, while copper is flat with Chinese buyers still away for Golden Week. Bitcoin is down 2.4% near $83,600. US economic data slate includes MBA mortgage applications (7am, -4.2%), September NY Fed 1-year inflation expectations (11am), FOMC minutes from the September 16 meeting (2pm) and August consumer credit (3pm). The Treasury sells $39 billion of 10-year notes in a reopening at 1pm.

Fundamental

Headlines

The Economy

Weekly mortgage applications declined 4.2% while purchase applications were down 2.1%.

Month to date retail chain store sales were up 8.6% versus up 8.2% in the prior week.

The August trade balance was -$105.6 billion versus forecasts of -$102 billion.

https://mishtalk.com/economics/excluding-liberation-day-tariff-distortions-trade-deficit-biggest-in-history/

The latest Atlanta Fed Q3 GDP growth nowcast was 3.7%, in line with its previous calculation.

The October small business optimism index was reported at 46.8 versus predictions of 48.5.

International

August Japanese average earnings were up 3.8% versus consensus of +3.7%; the August preliminary leading economic indicators index came in at 118.0 versus 118.1.

August German industrial production was up 1.0% versus expectations of +0.5%.

Other

Leading indicators from the September employment report continue positive trends

https://bonddad.blogspot.com/2026/10/leading-indicators-from-setpember.html

The mighty American consumer.

https://www.wsj.com/economy/consumers/american-economy-consumer-profile-33903de1?st=AZAU4Z&reflink=desktopwebshare_permalink

Iran

Hormuz work arounds.

https://www.zerohedge.com/energy/standard-chartered-says-hormuz-oil-flows-are-far-normal

The rising real price of capital.

https://www.zerohedge.com/markets/bullish-diffusion-intelligence-citadel-securities-bond-boss-warns-about-rising-real-price?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3MzE2Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTI5Mzk2OCwiZXhwIjoxNzkzODg1OTY4LCJhdWQiOiJ6aC1naWZ0In0.TVt4XqvC6gkX1Y-OmtFzr9XRxXJYiQ1RFRy6WJlTpIY

The application phase of AI is here.

https://www.riskhedge.com

What history tells about the AI debate.

https://www.city-journal.org/article/artificial-intelligence-safety-technology-innovation-history?utm_source=virtuous&utm_medium=email&utm_campaign=cjdaily&vcrmeid=hxRhHKikS0a0YzA6jYJMYw&vcrmiid=moIh8Omcp0KyHMIjT0IlgQ

No signs of AI in the productivity data.

https://www.apollo.com/wealth/insights-news/insights/daily-spark/No-signs-of-AI-in-the-productivity-data

New Innovation Is Required to Fund AI’s $6 Trillion Buildout

https://www.bain.com/insights/new-innovation-is-required-to-fund-ais-6-trillion-buildout-technology-report-2026/

Wall Street banks launch record $60bn chip deal for Broadcom and Anthropic.

https://giftarticle.ft.com/giftarticle/actions/redeem/41bb2a07-3aca-4c38-83a7-0313ef558395

Oracle takes another blow.

https://www.zerohedge.com/markets/lighthouse-goes-dark-after-jupiter-oracles-13gw-wisconsin-data-center-next-face-major?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3NDI2Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTMxNzIzMSwiZXhwIjoxNzkzOTA5MjMxLCJhdWQiOiJ6aC1naWZ0In0.-Mww6wC4Ktpa38Of0gnE535pcwNT0VTDQ2tNnyNViu4

The Financial System

Office CMBS Delinquency Rate Re-Spikes to 12.2%, Far Worse than Financial Crisis Peak.

https://wolfstreet.com/2026/10/05/office-cmbs-delinquency-rate-re-spikes-to-12-2-far-worse-than-financial-crisis-peak-as-end-of-extend-and-pretend-looms/

The bond vigilantes find new reasons to worry.

https://www.capitalspectator.com/bond-vigilantes-find-new-reasons-to-worry/

Investing

What is driving earnings higher?

https://www.zerohedge.com/markets/sp-2-micron-and-nvidia-alone-will-deliver-third-q3-earnings-growth-median-stock-barely?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3MzMwIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTMxNjM0NiwiZXhwIjoxNzkzOTA4MzQ2LCJhdWQiOiJ6aC1naWZ0In0.8opjlGcD5-k8lkm0T8dabrf2Do4T1Loxbfgo3Wd6NMQ

What is driving rates higher?

https://ritholtz.com/2026/10/what-is-driving-rates-higher-and-bonds-lower/

News on Stocks in Our Portfolios

What I am reading today

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--When does the credit party end?

2026-10-06T06:16:40.660-07:00

The Morning Call

10/6/26

The Market

Technical

Monday in the charts.

https://www.zerohedge.com/markets/crazy-continues-stocks-breadth-down-yields-oil-down?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3Mjk1Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTIzMjg3MSwiZXhwIjoxNzkzODI0ODcxLCJhdWQiOiJ6aC1naWZ0In0.FDKMkQZvoRh8prq6nCmQes0rfJodaxfwv-EfZCwMBGo

Monday in the technical stats.

https://www.barchart.com/stocks/signals/new-recommendations

Asset managers dumping S&P futures.

https://www.zerohedge.com/markets/64-billion-quiet-selling-goldman-shows-asset-managers-dumping-sp-futs-soft-data-rally?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3MjgyIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTIzMTQyNSwiZXhwIjoxNzkzODIzNDI1LCJhdWQiOiJ6aC1naWZ0In0.Yhu8J6KDP-kw0hCHh74WieifzgGs3cHe4ISSQ3wlDZc

Tuesday morning setup: US equity futures are higher for a fourth day, putting the S&P on course for its longest winning streak in two months, and on pace for a record open. Tech is leading again, though the rest of the market is finally joining in, and the bond market has stopped screaming for a few hours. As of 8:00am ET, S&P futures are 0.5% higher at 7,865 and Dow futures are up 288 points; Nasdaq futures were up 0.3% and follows a session in which the Nasdaq and the Mag 7 printed fresh records even as the 10Y closed at a post-2002 high of 5.31%. In premarket trading, semis lag Nasdaq futures as the Mag 7 and Software outperform; Cyclicals ex-Energy lead Defensives and most sectors are indicated higher, which JPM calls a "notable broadening." Nvidia is on the verge of becoming the first $6 trillion company, Constellation Energy jumps after inking an 890 MW nuclear deal with Google, and Option Care soars 23% on a report of a McKesson/CD&R bid. Today's sentiment tailwind is oil: WTI is down about 2% to $87.62, and Brent has slipped back below $100, touching $98.47. Saudi Arabia says its East-West pipeline is back to 5.8 million b/d. The oil drop helps global bonds catch a bid, led by a sharp rally in French and Italian debt as Marine Le Pen unveils her budget plans. The 10Y yield is down about 4bps to 5.27%, and the curve is bull flattening, with 2s10s about 2.5bps tighter. The Bloomberg dollar index is down 0.2% at the day's low after setting a 52-week high yesterday; cable is at its highest since October 1 and the euro has pared Monday's losses. In commodities, Energy is under pressure while Ags and Metals are bid gold has rebounded from $4,104 to above $4,150, silver is little changed around $61, and US natgas is up 0.3% to $3.08, while European TTF gas jumps more than €3/MWh. Bitcoin dipped toward $85,000 overnight before recovering to $86,000. US economic data slate includes the ADP weekly employment change (8:15am ET) and the August trade balance (8:30am). Fed speaker slate includes Williams (9:05am), Musalem (10:45am), Bowman (10:46am), Schmid (1:15pm) and Logan (7pm). Treasury sells $58bn in 3-year notes at 1pm.

Fundamental

Headlines

The Economy

The September services PMI was 58.8 versus estimates of 58.7; the September composite PMI was 58.4, in line.

The September ISM services index was 54.9 versus expectations of 55.0.

https://bonddad.blogspot.com/2026/10/economically-weighted-ism-indexes-for.html

International

August German factory orders fell 10.6% versus consensus of -1.0%.

The September Japanese consumer confidence index came in at 35.4 versus predictions of 35.3.

September EU retail sales were up 0.1% versus forecasts of +0.2%.

The September EU construction PMI was 43.4 versus projections of 43.0; the September German construction PMI was 43.5 versus 48.0; the September UK construction PMI was 46.1 versus 45.2.

Other

Production over consumption is the source of growth.

https://www.forbes.com/sites/johntamny/2026/10/04/who-needs-central-planning-when-we-have-conservatives/

The economy is not working like it should.

https://quoththeraven.substack.com/p/the-nerve-center-of-our-economic?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

Euro hits seventeen month low.

https://www.bloomberg.com/news/articles/2026-10-05/euro-falls-to-17-month-low-on-region-s-fiscal-political-risks?utm_source=website&utm_medium=share&utm_campaign=copy

France is cracking, the euro is imploding.

https://www.zerohedge.com/the-market-ear/france-cracking-euro-imploding-and-now-dirty-sanchez-joins-mess?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3MjI0Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTIzMTc5OCwiZXhwIjoxNzkzODIzNzk4LCJhdWQiOiJ6aC1naWZ0In0.P6DWSxjaJsFIL70jHVYwP-wh2seSfgfl3c8In6KvERU

Iran

Overnight news.

https://www.zerohedge.com/geopolitical/houthis-seize-yemen-parliament-speakers-home-cut-taiz-aden-lifeline-all-out-war-erupts

Inflation

Truckers are having a tough time surviving.

https://www.wsj.com/economy/truckers-are-using-every-trick-they-can-to-survive-soaring-diesel-prices-0af349aa?st=m3Qoi7&reflink=desktopwebshare_permalink

Robots are not coming for your job.

https://www.apollo.com/wealth/insights-news/insights/daily-spark/robots-are-not-coming-for-your-job

When does the credit party end?

https://www.zerohedge.com/markets/when-does-credit-party-end-goldman-morgan-stanley-map-ai-debt-binge-edges-start-crack?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3MzExIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTI5MjAwMywiZXhwIjoxNzkzODg0MDAzLCJhdWQiOiJ6aC1naWZ0In0.hzorpS5QKvVy0NmfzG-kAmk0eh-jz4eNiAmrNmZB3T0

Tariffs

The simple case for free trade.

https://thedailyeconomy.org/article/keep-the-case-for-free-trade-simple/

Investing

The AI wealth effect.

https://www.axios.com/2026/10/01/ai-wealth-stocks-economy

Is it time to nibble at bonds?

https://wolfstreet.com/2026/10/03/a-wild-week-for-10-year-30-year-treasury-yields-is-there-blood-in-the-streets-yet-is-it-good-enough-for-me-to-nibble/

Treasury yields haven’t cracked the bull market…yet.

https://www.capitalspectator.com/rising-treasury-yields-havent-cracked-the-bull-market-yet/

The math that breaks retirement.

https://talkmarkets.com/article/sequence-of-return-risk-the-math-that-breaks-retirements

Global pension funds cut US equities exposure.

https://giftarticle.ft.com/giftarticle/actions/redeem/6ff32057-a20f-41ac-8ced-9a33d86adbcf

News on Stocks in Our Portfolios

What I am reading today

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

Monday Morning Chartology

2026-10-05T06:28:16.006-07:00

The Morning Call

10/5/26

The Market

Technical

The S&P was up on the week, all of it coming on Friday following the nonfarm payrolls number. While it remains above all DMAs and in uptrends across all time frames, there are some minor negatives. (1) the rise Friday was on a gap up open which needs to be filled, (2) breadth remains horrible and (3) despite the stock boys getting jiggy with the aforementioned payrolls report, the guys in the bond pits weren’t buying it [see below]. Overall, the index is in a trading range of sorts with the short term techincals tilted negative and the longer term technicals quite positive. Hence, I see no reason to get to get beared up. On the other hand, the bond market’s pin action makes me nervous as do the fundamentals (fiscal policy, monetary policy, war, oil, tariffs). So until I see more convincing upside momentum, I will continue to sit on my hands.

Which way will the breadth spread narrow?

https://www.marketwatch.com/story/the-stock-market-is-anything-but-normal-right-now-and-these-charts-show-it-91ea187d?st=dHsibE

As I said above, despite the enthusiasm of stock investors over the jobs report, there was no joy in bond land. TLT continues to trade down across all timeframes and is below all three DMAs. It says that the bond boys are not nearly as sanguine about rates and inflation as their stock counterparts. I don’t see anything that would suggest a reversal… for the long bond to rise enough to even challenge the upper boundary of its very short term downtrend is going to take a series of very positive developments.

https://mishtalk.com/economics/in-big-warning-to-the-fed-bond-yields-rise-despite-weak-jobs/

Gold made a gap down open on Monday and later negated its short term uptrend. Then it responded to the payroll number by following the bond market’s take. While the gap down open offers some short upside draw, longer term it remains below all three DMAs. There is likely more downside to come.

https://talkmarkets.com/article/gold-fails-at-4200-despite-nfp-miss-as-us-yields-climb

The dollars pin action was a bit confusing. Of late it has been taking its lead from yields---rising long with them. Yet Friday it fell in the face of higher yields. Perhaps it was just noise or it was responding to Thursday gap up open. Overall, it still remains in an extremely wide trading range. On a very short term basis, it is in a clear uptrend that will likely continue if interest rates continue to move higher.

Friday in the charts.

https://www.zerohedge.com/markets/bond-vigilantes-battle-bad-news-buyers-black-gold-bullion-drop-bitcoin-pops?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3MDU5Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDk3MzI0MywiZXhwIjoxNzkzNTY1MjQzLCJhdWQiOiJ6aC1naWZ0In0.AYGn1MMXRywShKQUQGGNxqvmf-MAtV5PWTMOzuahXaY

Friday in the technical stats.

https://www.barchart.com/stocks/momentum

https://www.barchart.com/stocks/market-performance

https://www.barchart.com/stocks/sectors/rankings

https://www.barchart.com/stocks/signals/new-recommendations

The latest from Citadel.

https://www.zerohedge.com/markets/lockd-and-re-load-rubner-flips-bullish-buyers-are-coming-back?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2OTkwIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDk3MDk5NSwiZXhwIjoxNzkzNTYyOTk1LCJhdWQiOiJ6aC1naWZ0In0.SMSD8FCit12khIuw4WPrI53DgwYOqzme8bjwrICyejw

The latest from Goldman.

https://www.zerohedge.com/markets/correlated-almost-nothing-itself-goldmans-top-derivs-trader-says-sp-no-longer-clearing?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3MjEwIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTIwNDQyOSwiZXhwIjoxNzkzNzk2NDI5LCJhdWQiOiJ6aC1naWZ0In0.Pp1Y1K9K-D6tBIHtn6_YS258YvdYUN5UhWbXGtKhnCA

Monday morning setup: Futures are lower to start the week and global markets struggle for direction, as political upheaval and mounting concern over Europe’s public finances dampened risk sentiment and sent the euro to a 17-month low against the dollar while the US yield curve twists steeper and USD appreciates. As of 8:00am ET S&P futures are down 0.1% and Nasdaq futures slip 0.2% from their record close on Friday, as most Mag 7 stocks are lower although Nvidia climbs another 0.6% after partner Hon Hai Precision Industry reported better-than-expected quarterly revenue, pointing to sustained and elevated spending on AI infrastructure. In premarket trading, tech is lower with Semis / Memory lagging, Mag7 and Software flat. Intel tumbles 4% after a report on discussions of a potential collaboration between Taiwanese chip giant TSMC and Elon Musk’s Terafab, which Intel joined in April. Cyclicals ex-Energy are flat to Defensives with the market looking to broadening if yields stabilize. Brazil-related names are higher following preliminary election results which show Bolsonaro defeating Lula, and EWZ +11.9% pre-market. The CAC 40 in Paris was the main weak spot in Europe. Asian stocks played catch-up with Friday’s US rally. US bond yields fluctuated, with the short end leading as the selloff in Treasuries showing few signs of abating, and traders on alert for signs of bond market contagion in Europe. German bunds affirmed their haven appeal as they outperformed in Europe. French bonds were mixed, while Spanish debt lagged. Currency markets showed the biggest reaction as the euro dropped 0.5% against the dollar. Commodities are higher led by Ags and Metals with Precious leading Base; crude is lower despite unconfirmed, opposing headlines that the Saudi East/West pipeline has been shut. US economic data slate includes September services PMI (9:45am) and ISM services index (10am). Fed speaker slate empty for the session.

Fundamental

Headlines

The Economy

Lots of stats last week. In the US, they were mixed with four positive and three negative primary indicators and two positive, one neutral and one negative inflation number. Overseas, the data was very downbeat, including three negative price measures.

These reports keep both my forecasts for growth (muddle through) and inflation (good as it is going to get but not any worse) on track. They don’t, however, resolve one of the major economic issues facing us right now: what is the appropriate monetary response to inflation that is being driven largely by supply shortages versus demand pull?

Many saw the answer in Friday’s nonfarm payroll report (quite disappointing if you remember). My first thoughts when I saw that datapoint was (1) politics [i.e., midterm elections] played a role and/or (2) it was a one off number. What I failed to consider were the seasonal factors which appear to be the real culprit.

https://www.zerohedge.com/markets/inside-jobs-rollercoaster-how-augusts-seasonal-gift-came-due-september-and-squeezed-bond?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3MDU0Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTAzNzIzMiwiZXhwIjoxNzkzNjI5MjMyLCJhdWQiOiJ6aC1naWZ0In0.r6_RraPnfhyvE9hULwHfbGnebs1FiMDsxGVg2Shf0As

Which the household survey gave credence to. Leaving me questioning how much attention anyone should have paid to the number.

https://www.zerohedge.com/markets/jobs-huge-miss-sept-payrolls-plunge-just-29k-below-all-estimates-july-revised-negative

Nonfarm payrolls in the charts.

https://econbrowser.com/archives/2026/10/employment-release-and-business-cycle-indicators-3

The quantitative analysis.

https://bonddad.blogspot.com/2026/10/september-jobs-report-weakly-positive.html

As an aside:

(1) if it is a true reflection of the current labor market and it is starting to weaken, that would suggest that the current bout with inflation is supply driven hence a lesser need to raise rates further. And if that is so, then as I noted in Friday’s Morning Call, we may have seen a peak in interest rates. That is the good news.

(2) on the other hand, if inflation is supply driven, then [a] given the lack of visibility of an end to the Iranian and Ukrainian wars, that problem is not going to be resolved anytime soon and [b] if the payroll number is a sign of the economy weakening, then [a] plus [b] equals stagflation---something that I have expressed my concern about numerous times in these pages. That is the bad news.

Bottom line: I think that the payroll report was much ado about nothing. Though I will be paying closer attention to additional data, including reactions from Fed members.

Going back to the issue of whether or not the current pulse of inflation is supply driven, it appears that the kinetic war in the middle East picked up as Iran upped its attacks on shipping through the Strait of Hormuz and Trump ordered a third carrier fleet to the area. That certainly suggests little relief on oil prices/supply.

This doesn’t help.

https://www.zerohedge.com/geopolitical/putin-ready-use-all-weapons-including-nuclear-if-kaliningrad-attacked

Nor does the outrageous level of government debt worldwide.

https://www.wsj.com/finance/investing/high-government-debt-is-adding-fuel-to-the-global-bond-market-selloff-a93fa0fe?st=WnDtt4&reflink=desktopwebshare_permalink

Finally, I continue to stew over the health of the AI buildout and the economic implications of a significant over investment. Though I am not yet bailing out of my AI related holdings. I continue to hold positions in both the chip manufacturers and the hyperscalers---although their performances has been such that I have Sold Half of virtually every stock. That said, I have my finger on the trigger for several holdings. And should the negative case appear the more likely outcome, I will take some more money off the table.

https://www.nytimes.com/2026/10/02/business/ai-stocks-bonds-economy.html?unlocked_article_code=1.FlE.TvnH.klDwVgpxOLwE&smid=url-share

Toshiba breaks ‘supply discipline’ pact.

https://www.zerohedge.com/markets/seagate-western-digital-crater-after-toshiba-breaks-hard-drive-supply-discipline-pact

AI circular financings increasing

https://www.zerohedge.com/markets/amazon-broadcom-pile-balance-sheet-spvs-ai-circularity-undeniably-increasing?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3MDYyIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDk3NDg0MiwiZXhwIjoxNzkzNTY2ODQyLCJhdWQiOiJ6aC1naWZ0In0.-FTlxn1ekmzBsToNJLvSZvMCPZ-cwhx2NFYsPBI2_f0

https://www.realclearmarkets.com/articles/2026/10/02/we_need_a_serious_discussion_about_ai_risks_1209080.html

My bottom line remains unchanged: my doubts on the trajectory of the economy/inflation/AI buildout are increasing and Friday’s nonfarm payroll number doesn’t help. However, as long as earnings growth remains strong, I can’t see a major Market sell off. Higher inflation is another matter.

https://www.axios.com/2026/10/02/bond-market-zig-zags-threaten-sp-500s-smooth-ride

International

August EU PPI came in at 1.9%, in line.

The September Japanese services PMI was 51.3 versus forecasts of 51.6; the composite PMI was 52.3 versus 52.5; the September German services PMI was 52.9, in line; the composite PMI was 53.8, in line; the September EU services PMI was 53.0, in line; the composite PMI was 53.1, in line: the September UK services PMI was 52.1 versus 52.7; the composite PMI was 52.0 versus 51.7.

Other

Iran

Overnight news.

https://www.zerohedge.com/energy/saudi-east-west-pipeline-hit-new-attack-still-flowing-normal

‘Decision week’.

https://www.zerohedge.com/geopolitical/iran-decision-week-trump-teases-easy-way-or-hard-way-tankers-burn-rial-craters-and

Investing

What if interest rates keep rising into the 2040’s?

https://trendlabs.com/what-if-interest-rates-keep-rising-into-the-2040s/

Capitalizing on dispersion.

https://www.advisorperspectives.com/commentaries/2026/10/02/four-ways-capitalize-dispersion

What is driving crypto?

https://www.zerohedge.com/crypto/amid-debasement-dc-doubts-drive-citi-hike-crypto-price-targets?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3MDMzIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTAzNzE1MCwiZXhwIjoxNzkzNjI5MTUwLCJhdWQiOiJ6aC1naWZ0In0.NZwL6yX7B3nIT_RaHsP3ckeSQBJlwnTb-UBGDzRK-M8

The latest from BofA.

https://www.zerohedge.com/markets/tail-two-cities-hartnett-says-start-adding-some-bonds?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3MTU0Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTEyNzE3NywiZXhwIjoxNzkzNzE5MTc3LCJhdWQiOiJ6aC1naWZ0In0.bTJtlSQ6Bzm4GEGpSJ7eVGlHEyE-Ttr7KLPYGYo9VSw

News (but not a Buy recommendation) on Stocks in Our Portfolios

What I am reading today

The twelfth century military disaster that changed global finance.

https://bigthink.com/books/a-fabulous-debt/

The tyranny of one man’s opinion.

https://www.zerohedge.com/political/tyranny-one-mans-opinion

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---Did we just see the peak in yields? Follow through.

2026-10-02T06:12:36.369-07:00

The Morning Call

10/2/26

The Market

Technical

Thursday in the charts.

https://www.zerohedge.com/markets/red-october-stocks-bonds-black-gold-bounce-together?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2OTM4Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDg4NjYyMiwiZXhwIjoxNzkzNDc4NjIyLCJhdWQiOiJ6aC1naWZ0In0.Xh2f99vTXP25LTp6qkWpkob9CuAuc9Gr8UZKfmYqv1g

Thursday in the technical stats.

https://www.barchart.com/stocks/signals/new-recommendations

The DJIA breaks down.

https://talkmarkets.com/article/dow-jones-breaks-down-as-bond-market-turmoil-raises-equity-risks

The latest from Goldman’s desk.

https://www.zerohedge.com/the-market-ear/king-dollar-back-and-europe-cracking?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2OTQxIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDg4MDY4MSwiZXhwIjoxNzkzNDcyNjgxLCJhdWQiOiJ6aC1naWZ0In0.zAnPhEFjEYdeS_KjjcjWTuI7oOYSY5HoObUwlT2i0RI

King dollar is back.

Friday morning setup

https://www.zerohedge.com/markets/massive-short-squeeze-yields-rate-hike-odds-plummet-after-piss-poor-payrolls-print

Fundamental

Headlines

The Economy

August construction spending was up 0.9% versus estimates of 0.0%.

The September final manufacturing PMI came in at 55.9 versus projections of 57.0.

The September ISM manufacturing index was 54.5 versus consensus of 55.0.

https://bonddad.blogspot.com/2026/10/the-inflationary-ai-data-center-boom.html

September nonfarm payrolls were up 29,000 versus expectations of up 90,000; the September unemployment rate was 4.2% versus 4.1%; September average hourly earnings rose 0.1% versus +0.3%.

https://www.zerohedge.com/markets/jobs-huge-miss-sept-payrolls-plunge-just-29k-below-all-estimates-july-revised-negative

International

The August Japanese unemployment rate was 2.5% versus forecasts of 2.4%; the September YoY CPI was 2.7% versus 2.3%; the YoY core CPI was 2.7% versus 2.4%.

The September EU flash CPI was +0.6% versus projections of +0.5%; YoY core CPI was 2.8% versus 2.5%.

Other

August median household income.

https://politicalcalculations.blogspot.com/2026/10/median-household-income-in-august-2026.html

Iran

Overnight news.

https://www.zerohedge.com/military/us-sends-another-carrier-more-marines-mideast-trump-threatens-post-midterm-bombing

Abu Dabai plans Hormuz bypass.

https://www.zerohedge.com/markets/zero-hormuz-abu-dhabi-crown-prince-readies-tens-billions-turn-fujairah-hormuz-bypass

Oil is flowing from the Middle East, but prices remain high, Why?

https://www.nytimes.com/2026/10/01/business/energy-environment/oil-prices-iran-war-trump.html?unlocked_article_code=1.FVE.m_ou.9V1rAe_v0UOC&smid=url-share

Fiscal Policy

Central banks cannot fix the sovereign debt problem.

https://www.zerohedge.com/markets/central-banks-cannot-fix-sovereign-debt-bubble

There is no free boom.

https://www.zerohedge.com/markets/there-no-free-boom?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NzU4Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDg2MDkzOCwiZXhwIjoxNzkzNDUyOTM4LCJhdWQiOiJ6aC1naWZ0In0.9PMIPwQ8xlMHVkIImIiyTYFrcnFalNEMwEsY-bg1c44

Data center boom faces increasing obstacles.

https://www.zerohedge.com/energy/data-center-boom-faces-mounting-obstacles

Tech’s trillion dollar internal inconsistency.

https://www.apollo.com/wealth/insights-news/insights/daily-spark/tech-trillion-dollar-internal-inconsistency

The catalyst for an AI bubble break.

https://www.gmo.com/globalassets/articles/quarterly-letter/2026/gmo-quarterly-letter_3q-2026.pdf

Even though I am skeptical of the ‘in ten years we will all be dead’ doomsday scenario, there are some potential ethical issues.

https://yoshuabengio.org/en/blog/why-are-ai-agents-lying-cheating-and-coordinating

Investing

These were all published before this morning’s nonfarm payroll report. The question arises---was this the peak in yields? Follow through.

Bond yields hit highest level since 2002.

https://www.nytimes.com/2026/10/01/business/bond-yields-10-year-treasury.html?unlocked_article_code=1.FVE.Sgzo.eyHLxhw4PEVM&smid=url-share

Bonds aren’t cheap yet.

https://www.zerohedge.com/markets/bonds-arent-cheap-yet-goldman-says-long-end-still-totally-bidless?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2OTAxIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDg2MjQ5MSwiZXhwIjoxNzkzNDU0NDkxLCJhdWQiOiJ6aC1naWZ0In0.ONxwCghl44hGsKzsdxqiu3zx-w9r1NbgVWzCsl2t05w

Ten year yields going to 8%.

https://www.zerohedge.com/markets/here-we-go-again-feds-original-sin-means-10y-yields-are-going-8-ts-lombard-warns?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2ODU4Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDg2NDI5NiwiZXhwIjoxNzkzNDU2Mjk2LCJhdWQiOiJ6aC1naWZ0In0.YzoaO8yhzxvs9WF7ZDbokcAi5mR-Kpugt8nOnZSez5c

Hedge funds are still buying Treasuries and that could be a problem.

https://talkmarkets.com/article/hedge-funds-are-still-buying-treasuries-and-that-could-become-a-problem

And the US isn’t the only one with bond market/interest rate problems.

https://www.zerohedge.com/markets/debt-crisis-back-european-bond-markets-crash-cds-explode-amid-france-budget-panic-contagion

Preserve and protect.

https://giftarticle.ft.com/giftarticle/actions/redeem/5ad6a151-f3ff-414a-bcf2-fba503290077

Where is the stock market volatility?

https://awealthofcommonsense.com/2026/10/where-is-the-stock-market-volatility/

News on Stocks in Our Portfolios

What I am reading today

Beware of ‘junk fees’ in your mortgage contract.

https://www.npr.org/2026/09/15/nx-s1-5968763/housing-home-buying-junk-fees

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---Everything is fine except everything

2026-10-01T06:07:40.704-07:00

The Morning Call

10/1/26

The Market

Technical

Q3 in the charts.

https://www.zerohedge.com/markets/third-quarter-ends-surging-yields-closing-24-year-high-stocks-yawn?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2ODQyIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDc5OTE2MywiZXhwIjoxNzkzMzkxMTYzLCJhdWQiOiJ6aC1naWZ0In0.7uKGGFtD0cDGdVu_vwWFRYOgZaBS-YfjVLAe_0rfLQI

Wednesday in the technical stats.

https://www.barchart.com/stocks/signals/new-recommendations

Frustration grows daily.

https://www.zerohedge.com/markets/frustration-continues-grow-daily-over-million-dollar-question?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NzIxIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDc3NDg3NSwiZXhwIjoxNzkzMzY2ODc1LCJhdWQiOiJ6aC1naWZ0In0.qW29mqaz3K7Nsnp5DeQ31OiZeFVBpqcerMpONkaZmEg

So does the number of stocks in a bear market.

https://www.marketwatch.com/story/you-might-be-shocked-by-how-many-stocks-are-in-a-bear-market-right-now-017c9cd8?st=krDmXZ

Thursday morning setup: The disconnect continues. With 10Y yields rising as high as 5.34% - a new 24 year high - before easing back US equities remain completely oblivious of the tightening in financial conditions and instead are obsessing with the memory bubble, and pushing higher on the first day of Q4 as strength in technology shares held up against volatility in bond markets and a renewed climb in oil. As of 8:00am ET, S&P 500 futures were up 0.4%, erasing an earlier loss; Nasdaq 100 contracts rose 0.7% with memory and semis providing support following an upbeat forecast from chipmaker Micron. Mag 7 and software firms were also stronger as the Nasdaq remains in a debt-funded world of its own. The AI theme is boosting Indu / Utils while the most other sectors are lagging as usual. In the near-term, with yields and the dollar higher, the market seems comfortable reverting to portions of the Q2 playbook which was dominated by Tech / Semis. Meanwhile, Russell 2000 small caps struggles in the face of the highest bond yields in a generation; JPM points out that "more than 40% of the index are unprofitable companies though squeeze risk exists with a MidEast deal." Tempering sentiment were swings in global yields, with the yield on 10-year Treasuries briefly touching the highest since 2002 before pulling back; it was trading at 5.27% last. JPMorgan's market intel suggests that bonds are oversold but may take some time to find a support level. USD continues its bull run, setting a new 52-wk high this morning before erasing gains. Commodities are mixed but higher with crude and Ags leading; Base over Precious with gold/silver flat. The US economic data slate includes weekly jobless claims (8:30 a.m.), September final S&P Global US manufacturing PMI (9:45 a.m.), September ISM manufacturing and August construction spending (10 a.m.) ahead of the NFP tomorrow, which may have an upside surprise given the ADP print yesterday.

Fundamental

Headlines

The Economy

Weekly initial jobless claims totaled 197,000 versus expectations of 200,000.

The September Chicago PMI was 58.8 versus consensus of 51.2.

International

The August EU unemployment rate was 6.4%, in line.

The September Japanese manufacturing PMI was 54.1, in line; the September German manufacturing PMI was 53.9 versus 53.8; the September EU manufacturing PMI was 52.9 versus 52.7; the September UK manufacturing PMI was 51.9 versus 52.0.

The Q3 Japanese large manufacturers index was 24 versus predictions of 25; the Q3 nonmanufacturers index was 35 versus 36; the Q3 small manufacturers index was 14 versus 12.

Other

Strategic petroleum reserves thru 9/18.

https://econbrowser.com/archives/2026/09/strategic-petroleum-reserves-through-9-18

Treasury yields keep rising; can the economy keep up?

https://www.capitalspectator.com/treasury-yields-keep-rising-can-the-economy-keep-up/

With the revisions in the personal income stat, the consumer is looking much stronger.

https://bonddad.blogspot.com/2026/09/august-personal-income-and-spending.html

With revision, core PCE looked cooler than expected.

https://www.zerohedge.com/economics/core-pce-prints-cooler-expected-due-change-methodology-savings-rate-plunges-3-year-low

Iran

Gulf exports back to pre-war levels.

https://www.zerohedge.com/energy/gulf-exports-roar-back-pre-war-levels-goldman-says-blas-sees-trump-has-advantage-hormuz

Fiscal Policy

WSJ poll shows Americans are increasingly in favor of populist policies.

https://www.wsj.com/politics/policy/americans-want-populist-policies-that-defy-traditional-political-labels-119b29b9?st=kEUqb6&reflink=desktopwebshare_permalink

National debt is a growing threat.

https://www.advisorperspectives.com/commentaries/2026/09/30/national-debt-growing-threat

Inflation

Inflation remains a problem no matter how you slice it.

https://www.carsongroup.com/insights/blog/inflation-remains-a-problem-no-matter-how-you-slice-and-dice-the-data/

Solving the AI ‘doomsday’ scenario.

https://theconversation.com/the-war-games-problem-computer-science-has-long-understood-what-it-takes-to-keep-ai-under-control-292884

Hyperscalers are repricing long term debt but not displacing corporate date.

https://www.advisorperspectives.com/commentaries/2026/09/30/hyperscalers-repricing-not-displacing

KKR warns of growing credit risk from AI borrowing spree.

https://www.ft.com/content/33449ea5-428b-4080-bdf6-ff5843bbd3cd?syn-25a6b1a6=1

Summary: Global credit markets could face significant volatility if there is a downturn in the booming AI sector, as rising debt levels among tech borrowers leave investors exposed to “an unusually concentrated investment cycle”, KKR warned in a report on Wednesday. It added that the true extent of AI exposure could be much bigger because of the growing use of off-balance-sheet financing, meaning that many portfolios could have a greater weighting in the sector once credit guarantees, leases and other future commitments are included. Please use the sharing tools found via the share button at the top or side of articles. AI-linked debt currently amounts to about $600bn, or around 6.3 per cent of the US investment-grade market. In comparison, the highest sector exposure in the index was only 2.6 per cent on average over the past 29 years, KKR found. Even if the largest hyperscalers, including Oracle, Amazon, Meta, Google, Microsoft and SpaceX, each hit a maximum index weighting of 3 per cent — the typical single-issuer limit for a bond portfolio — they could only raise up to $1.7tn from the high-grade bond market, leaving more than $6tn of expected capital expenditure unfunded, it added.

Investing

Everything is fine except everything.

https://quoththeraven.substack.com/p/everything-is-fine-except-for-everything?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

What is normal for long term interest rates?

https://ritholtz.com/2026/09/the-aberrational-century/

The bull case: resilient growth.

https://talkmarkets.com/article/resilient-growth-should-underpin-equity-gains

News on Stocks in Our Portfolios

What I am reading today

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---Taking the punch bowl away

2026-09-30T06:15:01.528-07:00

The Morning Call

9/30/26

The Market

Technical

Tuesday in the charts.

https://www.zerohedge.com/markets/weird-fking-day-bonds-down-oil-down-stocks-down-dollar-gold-ahead-macromicro-maelstrom?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NzAxIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDcxMzc5MywiZXhwIjoxNzkzMzA1NzkzLCJhdWQiOiJ6aC1naWZ0In0.jOibLcrnULhTJhmfgJXjpDrLD6GrsqovdROaF0tdd8s

Tuesday in the technical stats.

https://www.barchart.com/stocks/signals/new-recommendations

The latest from Goldman’s desk.

https://www.zerohedge.com/markets/rates-move-getting-too-punitive-ignore-goldman-sees-10y-through-critical-barrier-month-end?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NjQ3Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDcxNDc5NCwiZXhwIjoxNzkzMzA2Nzk0LCJhdWQiOiJ6aC1naWZ0In0.86PnETd6geT-NG541kSGErA1wkb13I_Ol8em7jaSK6w

Wednesday morning setup: Futures are higher with S&P leading both tech and small caps ahead of today's core PCE data and Micron earnings after the close, as yields remain sticky, unchanged from yesterday's multi-decade highs, and the USD fractionally lower. As of 8:00am ET, S&P futures are flat, with Nasdaq futures down fractionally as semis dip -20bp lagging the broader Tech tape but leading Software (-54bp) and Memory (-80bp) after Korea's Kospi closed lower erasing an early bounce. In premarket trading, Mag7s are the leaders (+28bp) ahead of Micron later. Ex-Tech, the other major sectors are indicated higher pointing to an ‘Everything Rally’ / broadening, albeit on low volume and conviction. With US/Iran deal optimism supporting markets, JPM's market intel desk, which this week reverted back to being tactically bullish, says that an actual deal likely triggers a tactical squeeze / broadening. Treasuries were little changed a day after 30-year yields hit their highest since 2002. The dollar held near its highest level since July. Commodities are rebounding led by energy: Brent rose modestly to above $103 a barrel, up about 14% for the month despite signs that crude flows from the Middle East are returning to pre-war levels; WTI is above $90/bbl, base metals are leading precious (gold flat; silver down), and ags seeing a broad-based bid. Today’s macro focus is on PCE and 4x Fed speakers with yesterday’s highlight being Williams whose comments pointing to 1x more hike in 2026, not 2x. If PCE prints cooler, we may see a material repricing in bond yields lower.

Fundamental

Headlines

The Economy

Weekly mortgage applications fell 6.0% while purchase applications were down 4.0%.

Month to date retail chain store sales were up 8.2% versus +7.6% in the prior week.

The July home price index was up 0.3% versus forecasts of up 0.1%.

The July Case Shiller home price index was flat versus predictions of +0.2%.

Final Q2 GDP growth was +2.2% versus estimates of +1.5%; final Q2 PCE was +6.1% versus +6.4%; Q2 final core PCE was +3.3% versus +3.6%; final Q2 retail sales were up 2.8% versus +2.2%; final Q2 corporate profits were up 7.7% versus +8.2%.

August personal income was up 0.2% versus expectations of up 0.4%; August personal spending was up 0.9% versus +0.8%.

August job openings (JOLTS) totaled 7.08 million versus consensus of 7.23 million.

https://bonddad.blogspot.com/2026/09/august-jolts-report-shows-labor-market.html

The August PCE was up 0.3% versus projections of +0.4%.

The September consumer confidence index came in at 81.9 versus forecasts of 89.2.

https://talkmarkets.com/article/confidence-slips-way-below-consensus

International

Q2 UK business investment grew 1.8% versus predictions of +1.7%; Q2 GDP was up 0.5% versus +0.4%.

August Japanese preliminary industrial production fell 1.7% versus estimates of +1.7%; August retail sales declined 1.2% versus -1.0%.

August German retail sales were up 1.3% versus expectations of +1.5%; the September unemployment rate was 3.0% versus 3.2%; September CPI was up 0.6% versus +0.5%.

The September Chinese manufacturing PMI was 52.1 versus consensus of 51.6; the services PMI was 51.6 versus 51.1; the composite PMI was 52.4 versus 52.3.

Other

Unwinding the yen carry trade.

https://www.nytimes.com/2026/09/28/opinion/bond-market-japan-yen.html?unlocked_article_code=1.E1E.dRZI.7DdsY5IwWaS4&smid=url-share

Why the economy has been so resilient to soaring interest rates and higher oil prices.

https://www.zerohedge.com/economics/why-has-us-economy-been-so-resilient-soaring-rates-and-higher-oil-prices-goldman-explains?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NzQxIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDc3MzY3MCwiZXhwIjoxNzkzMzY1NjcwLCJhdWQiOiJ6aC1naWZ0In0.p5fT0DqWpSurVa9VfrsJ7PUnc7onsOaOb7gSnLzouSo

Iran

Overnight news.

https://www.zerohedge.com/geopolitical/iran-says-it-received-official-us-counter-offer-ending-war

Fiscal Policy

Getting control of the national debt.

https://www.washingtonpost.com/opinions/interactive/2026/09/28/nations-success-depends-fiscal-space-america-is-almost-out/

Tariffs

How the US Canada trade war is intensifying.

https://www.bloomberg.com/news/articles/2026-09-29/why-the-us-canada-trade-war-is-escalating?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc5MDcwMjQ4MSwiZXhwIjoxNzkxMzA3MjgxLCJhcnRpY2xlSWQiOiJUTTJZTEpUOU5KTFQwMCIsImJjb25uZWN0SWQiOiJCMzFCNTRDQTI3MTE0NjAxOUQxMURCN0IxRUM4NTE2MyJ9.VCvy0pqmGxc4EJvZu-anI3Ga_63CQ7AtEtdAfmLIJT4

The Financial System

A look inside the repo market.

https://wolfstreet.com/2026/09/28/biggest-borrowers-lenders-in-the-13-5-trillion-repo-market-how-the-hedge-fund-basis-trade-money-market-funds-fit-in/

Investing

A preview to Q3 earnings season.

https://talkmarkets.com/article/what-will-the-q3-earnings-season-show-2

Rising government debt bodes well of stocks and bonds. (If this is true, then does bringing down the debt bodes ill for stocks and bonds?)

https://www.realclearmarkets.com/articles/2026/09/29/a_rising_national_debt_bodes_well_for_stocks_and_bonds_1208441.html

The upside to rising yields.

https://www.fortunesandfrictions.com/post/bottom-feeders

High interest rates crush dividend stocks.

https://www.bespokepremium.com/interactive/posts/think-big-blog/higher-rates-crush-dividend-stocks

Taking the punch bowl away.

https://www.advisorperspectives.com/commentaries/2026/09/29/taking-punchbowl-away-from-party

The perils of averaging down.

https://talkmarkets.com/article/the-cheap-stock-that-kept-getting-cheaper

The latest from JP Morgan.

https://www.zerohedge.com/markets/after-perfectly-timing-market-2026-jpmorgans-trading-desk-turns-tactically-bullish?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2Njc5Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDcwNTY4NywiZXhwIjoxNzkzMjk3Njg3LCJhdWQiOiJ6aC1naWZ0In0.bxamjlTAbXhS-mPgQa3-GZ1c9DD9H_llWbJbi6B1K1w

Investor Alert

In the quarterly review of AbbVie, it failed to meet the minimum financial requirements for inclusion in the Dividend Growth Universe. Accordingly, the Dividend Growth Portfolio Sold its position in ABBV.

GLD fell below the lower boundary of its short term uptrend. I Sold my trading position in GDX.

https://www.zerohedge.com/the-market-ear/golds-stress-test?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NzAwIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDcwNjEzNCwiZXhwIjoxNzkzMjk4MTM0LCJhdWQiOiJ6aC1naWZ0In0.v_H-OQ9EsNwixfGCbGSRBA9xDPH0bq2ymTx2tgb3h50

News on Stocks in Our Portfolios

What I am reading today

Senate passes ‘Protest college sports’ act. (At last)

https://www.zerohedge.com/political/senate-passes-protect-college-sports-act

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---What if the emperor has no clothes?

2026-09-29T06:08:29.426-07:00

The Morning Call

9/29/26

The Market

Technical

Monday in the charts.

https://www.zerohedge.com/markets/bullion-battered-hormuz-headline-roulette-sparks-chaos-across-markets-ahead-macro-tsunami?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NTU0Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDYyNjM3OSwiZXhwIjoxNzkzMjE4Mzc5LCJhdWQiOiJ6aC1naWZ0In0.3rLadtD4vRlLCbXZKrJpg2rs_b304ZMPIbMZA9wNCEU

Monday in the technical stats.

https://www.barchart.com/stocks/signals/new-recommendations

The message from Market breadth.

https://www.advisorperspectives.com/commentaries/2026/09/28/message-market-breadth

Record highs, record angst.

https://www.zerohedge.com/markets/record-highs-record-angst-goldman-tech-desk-finds-median-stock-16-underwater-breadth?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NDYzIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDYyNTEyNywiZXhwIjoxNzkzMjE3MTI3LCJhdWQiOiJ6aC1naWZ0In0.Qk6JvjVsy93aHKhlkrBGbPQe15De5X4HvBw1X50kwZ4

Nvidia launches $150 billion stock buyback.

https://www.wsj.com/tech/ai/nvidia-adds-record-150-billion-to-stock-buyback-910f96a8?st=LzZd8H&reflink=desktopwebshare_permalink

The bond market is screaming.

https://www.zerohedge.com/the-market-ear/bond-market-screaming-stocks-dont-care?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NjE0Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDY4NjkyOSwiZXhwIjoxNzkzMjc4OTI5LCJhdWQiOiJ6aC1naWZ0In0.Xlrrf8pB3pTU8RXx94qmfv6kqN5Xx60WokplWDW97do

Gold under pressure.

https://talkmarkets.com/article/gold-under-pressure-as-fed-rate-bets-rise-ahead-of-us-jobs-data

Tuesday morning setup: US equity futures have reversed earlier losses and trade in the green, near session highs, as bond yields drop across the curve, following a decline in oil which has also hit the dollar, despite lack of any tangible news out of Iran and as traders brace for the week’s first labor data following a never ending firehose of artificial-intelligence news and events. As of 8:15am ET, S&P futures rose 0.2% while Nasdaq futures gained 0.4%, as Mag7, semis, and memory stocks all see a mild bid while software is weaker; EU Semis are up more than 3% so we may see US get active as the market opens. The AI theme is also creating a bid across industrials and utilities; cyclicals leading defensives with notable weakness in Staples. Energy names are lower with crude prices. The commodities complex is mostly lower with gold seeing a moderate bid and some Ags higher. Oil is at session lows, down 2% as Saudi Arabia resumed flows through a key pipeline after comments from the Qatar Foreign Ministry on possible US-Iran solutions. Overall price action looks like a cautious re-risking with guarded optimism around a US / Iran deal. Today’s macro data focus is on JOLTS ahead of Friday’s NFP and another batch of Feds peakers.

Fundamental

Headlines

The Economy

The September Dallas Fed manufacturing index came in at 9.8 versus consensus of 1.0.

https://www.zerohedge.com/markets/we-cant-do-any-planning-dallas-fed-manufacturers-uniformly-negative

International

The July Japanese leading economic indicators were reported at 97.9 versus expectations of 99.0.

The September EU economic sentiment index was 97.9 versus estimates of 99.0; the industrial sentiment index was -3.8 versus -4.7; the services sentiment index was 6.1 versus 6.5; the consumer confidence index was -11.5 versus -16.5.

Other

The reindustrialization of America is underway.

https://www.apollo.com/content/dam/apolloaem/documents/insights/the-reindustrialization-of-america-is-underway.pdf

Iran

Just another TACO Monday.

https://www.zerohedge.com/geopolitical/ayatollah-vows-expel-enemy-arabian-sea-trump-says-talks-continue-week

Overnight news.

Iran’s ability to choke off oil flowing through the Strait of Hormuz—and use that as leverage in talks with the U.S.—is breaking down, raising the risk it will resort to military escalation to bolster its position.

Crude oil exports from key Middle East producers rebounded in September to 16.328 million barrels per day (bpd), the highest since the US-Israeli war on Iran started in late February, data from Kepler showed on Monday, as Saudi Arabia and the United Arab Emirates boosted exports.

President Trump is willing to give Iran sanctions relief and release Iranian frozen funds in return for concrete Iranian steps regarding the nuclear program, U.S. officials say. But Trump took to Truth Social Monday evening to say such reports were "untrue.

AI is repricing capital before it reprices the economy.

https://www.realclearmarkets.com/articles/2026/09/28/ai_is_repricing_capital_before_it_reprices_the_economy_1208351.html

What happens if the AI bubble bursts?

https://www.nytimes.com/2026/09/26/opinion/ai-bubble-banking-crisis-too-big-to-fail.html?unlocked_article_code=1.ElE.X8v4.LjB-IIZA44Es&smid=url-share

The AI earnings headwind.

https://open.substack.com/pub/samro/p/ai-depreciation-expense-earnings-accounting-headwind?utm_campaign=post-expanded-share&utm_medium=web

What if the emperor has no clothes?

https://quoththeraven.substack.com/p/its-official-the-ai-emperor-has-no?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

Investing

Inversion of the yield curve becomes the new risk.

https://www.bloomberg.com/news/articles/2026-09-27/the-bond-market-is-getting-closer-to-sounding-alarm-on-economy?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc5MDYxNTYyMSwiZXhwIjoxNzkxMjIwNDIxLCJhcnRpY2xlSWQiOiJUTFE3TFRUOU5KTFgwMCIsImJjb25uZWN0SWQiOiJCMzFCNTRDQTI3MTE0NjAxOUQxMURCN0IxRUM4NTE2MyJ9.79c-wiJhQlfIHRb6NMsvlgvGiRqmYbcQyijW0RCyfq0

At what yield level does the economy and Markets implode?

https://talkmarkets.com/article/at-what-yield-do-markets-and-the-economy-implode

Another infallible indicator bites the dust.

https://bonddad.blogspot.com/2026/09/another-infallible-economic-indicator.html

The bond selloff deepens.

https://giftarticle.ft.com/giftarticle/actions/redeem/7d8de839-2d31-44ee-b07b-02c9992f3011

This is your father’s Market.

https://talkmarkets.com/article/weekly-market-pulse-finally

Optimism wins as an investment strategy.

https://talkmarkets.com/article/investor-optimism-wins-as-an-investment-strategy

News on Stocks in Our Portfolios

What I am reading today

Adding leverage to America’s gambling problem.

https://quoththeraven.substack.com/p/adding-leverage-to-americas-gambling?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

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

Monday Morning Chartology

2026-09-28T05:59:35.809-07:00

The Morning Call

9/28/26

The Market

Technical

The S&P was up on the week, negating a very short term downtrend thereby remaining above all DMAs and in uptrends across all time frames. This suggests that this recent small correction is just that---small. So, at this point, there is no reason to get beared up. There are some negatives: (1) last week’s rise was kicked off by a big gap up open which needs to be filled and (2) breadth is horrible. Still it suggests that the long term uptrend is solid and will remain so as long earnings growth stays strong (which it has). On the other hand, the fundamentals (fiscal policy, monetary policy, war, oil, tariffs, Oracle’s force majeure) give me the willies. So I will continue to sit on my hands (though I bought a small position in TJX last week).

Conversely, there was no joy in bond land. TLT continues to trade down across all timeframes and is below all three DMAs. It says that the bond boys are not nearly as sanguine about rates and inflation as their stock counterparts. I don’t see anything that would suggest a reversal… for the long bond to rise enough to even challenge the upper boundary of its very short term downtrend is going to take a series of very positive developments.

I was a bit surprised that the plunging long bond didn’t have a greater impact on GLD. While it declined, falling below both its 50 and 100 DMAs, it held above the lower boundary of its short term uptrend. That said, the pin action in TLT and UUP only adds to my uncertainty over GLD’s direction. If it confirms a break of the short term uptrend, I will Sell my GDX position.

Gold is breaking.

https://www.zerohedge.com/the-market-ear/gold-breaking-just-weeks-after-record-speculative-buying?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NDg0Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDU5ODM0NywiZXhwIjoxNzkzMTkwMzQ3LCJhdWQiOiJ6aC1naWZ0In0.Agg7Aw33yvQtjcUECR0GG0pHGvbRKPNn9C302n-hZ60

The dollar had another great week, driven by the rise in interest rates. However, it still remains in an extremely wide short term trading range. On a very short term basis, it is in a clear uptrend that will likely continue as interest rates move higher.

Friday in the charts.

https://www.zerohedge.com/markets/shaken-stirred-agents-beat-bonds-week-punchy-pmis-diplomatic-duds-energy-angst?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2MzA2Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDM2Nzc3MywiZXhwIjoxNzkyOTU5NzczLCJhdWQiOiJ6aC1naWZ0In0.ZJ6EeHGoa3FYTRpXzt4Wd3HgAwg3Gx8el9FiKgj86q0

Friday in the technical stats.

https://www.barchart.com/stocks/momentum

https://www.barchart.com/stocks/market-performance

https://www.barchart.com/stocks/sectors/rankings

https://www.barchart.com/stocks/signals/new-recommendations

The latest from Goldman’s lead hedge fund trader.

https://www.zerohedge.com/markets/equities-stuck-frustrating-cat-and-mouse-game-rates-goldman-hedge-fund-honcho-suggests?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2MjkwIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDM2NjQwMiwiZXhwIjoxNzkyOTU4NDAyLCJhdWQiOiJ6aC1naWZ0In0._s5RoXkQddgNAw7TjHu1tXzTYtyr5skRRtRPjJKhQbQ

The latest form Goldman’s derivatives trader.

https://www.zerohedge.com/markets/not-seen-2000-top-goldman-derivs-trader-says-equities-refuse-price-any-panic?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NDU2Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDU5ODk4NiwiZXhwIjoxNzkzMTkwOTg2LCJhdWQiOiJ6aC1naWZ0In0.YIx65kVgwAjoGZuL3xmaN5wJL5WCKvBPCkIhR_hnJLY

Monday morning setup: US futures are lower with Tech underperforming, alongside a drop in treasuries, as fading hopes for an imminent breakthrough in the Iran war sent oil prices higher and reignited worries that inflation is heating up. As of 8:00am ET, S&P 500 futures are down around 0.5% with Nasdaq futures sliding by 0.8% as semis and memory stocks underperform the group. Defensives are leading cyclicals with credit cards, defense, energy, insurance, and restaurants acting as pockets of strength. Oil is sharply higher after Iran stuck to its seven-day proposal for reopening the crucial Strait of Hormuz, saying it won’t soften its conditions, while Donald Trump sent mixed signals about his willingness to reach a deal. He told Axios that Tehran has overplayed its hand but added that he expects negotiations to resume this week. Adding to tensions, UK police are investigating a potential terror plot after five men were arrested near an air base used in US strikes against Iran. The jump in oil has pulled bond yields 4-7 bps higher as the curve flattens, the 10Y trading at 5.21% after hitting a new multi-decade high of 5.23% earlier. The DXY dollar index is higher despite weakness in USD/JPY and GBP/USD. Commodities are mixed with energy leading, metals under pressure dragged by precious which appears to be driven by temporary higher margin requirements in China for Golden Week; ags are lower. More than a dozen Fed officials are scheduled to speak this week beginning Monday, and heavy US economic slate includes September employment report Friday. Today's US economic data slate includes only September Dallas Fed manufacturing activity at 10:30 a.m. Fed speakers include Bowman (8:15 a.m.), Cook (1:25 p.m.) and Barkin (1:30 p.m.).

Fundamental

Headlines

The Economy

Last week, the US stats were upbeat as were the primary indicators---one plus, one neutral. No inflation numbers. Overseas, the data was also positive with no price measures.

In speech last week, Chicago Fed chief Goolsbee provided a possible resolution to this dilemma, pointing out that higher interest rates can have a restraining impact on some supply shortage problems. Meanwhile, several other Fed governors piled on the rate hike bandwagon. So, I think we can expect several more increases in the not so distant future. Whether Goolsbee is correct is another issue. So, until higher rates start showing up in lower inflation data, I don’t think that we can safely assume that the Fed has the problem in hand and inflation is headed lower; particularly in light of the fact that it does nothing to change the course of a misguided, gluttoness, irresponsible fiscal policy which I believe is a major contributor to our current inflation problem.

That said, I am not economist and can’t claim to have any clue as to the answer. But I think that it is important to hold this conundrum in the back of our mind as we view future economic data for signs that rate hikes are not the answer but rather the problem.

https://www.nytimes.com/2026/09/25/business/interest-rates-economy-markets-inflation-mortgages.html?smid=url-share

Wall Street faces a new rate regime.

https://www.bloomberg.com/news/articles/2026-09-24/us-treasury-yields-hit-5-as-wall-street-faces-new-rate-regime?utm_source=website&utm_medium=share&utm_campaign=copy

The rise in real rates.

https://econbrowser.com/archives/2026/09/is-it-real

What current yields are telling us.

https://talkmarkets.com/article/what-us-yields-are-saying-now-and-where-the-line-in-the-sand-sits-for-risk-marke

And what they don’t.

https://www.stockmarketmedia.com/2026-09-25/10-year-back-2007-levels

Despite everything in Washington, manufacturing is booming.

https://bonddad.blogspot.com/2026/09/despite-everything-in-washington.html

Another development that should be mentioned is Friday’s (for the umpteenth time) noise about a possible resolution to the war with Iran. This remains one of the ‘boy cries wolf’ situations where we have heard this routine so many times that the reasonable response at the moment is ‘I’ll believe it when I see it and I am sure not putting any money on it’. Trump’s subsequent comments confirm it.

https://quoththeraven.substack.com/p/dont-fall-for-it-nothing-has-changed?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

I continue to stew over the health of the AI buildout. And that wasn’t helped by Oracle’s Thursday force majeure notice on its huge New Mexico installation. Clearly, that supports the line of analysis questioning the viability of the spend.

https://quoththeraven.substack.com/p/force-majeure-is-not-a-city-in-france?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

While this certainly heightens my alert status, I am not yet bailing out of my AI related holdings. I continue to hold positions in both the chip manufacturers and the hyperscalers---although their performances has been such that I have Sold Half of virtually every stock. That said, I have my finger on the trigger for several holdings. And should the negative case appear the more likely outcome, I will take some more money off the table.

https://www.wsj.com/opinion/the-amazing-things-ai-is-already-doing-for-humanity-91ce0419?st=zzHpXc&reflink=desktopwebshare_permalink

My bottom line remains unchanged: my doubts on the trajectory of the economy/inflation/AI buildout are increasing. However, as long as earnings growth remains strong, I can’t see either an economic decline or a major sell off. Higher inflation is another matter.

https://www.capitalspectator.com/treasury-yield-surge-pressures-rate-sensitive-shares/

From late Friday:

The September final consumer sentiment index was 48.1 versus forecasts of 47.6.

https://mishtalk.com/economics/consumer-sentiment-drops-in-september-to-just-above-record-lows/

International

Other

Measuring government, household, and corporate debt as a percentage of GDP by nation.

https://politicalcalculations.blogspot.com/2026/09/ranking-government-household-and.html

Iran

Weekend news

Trump rejects Iran offer (don’t forget the Tucker Carlson assertion).

https://www.zerohedge.com/geopolitical/im-rejecting-their-deal-trump-blasts-iranian-proposal-amid-reports-hell-resume-bombing

Oil flowing through the Strait of Hormuz increases.

https://www.zerohedge.com/energy/hormuz-oil-flows-rebound-two-thirds-prewar-level-irans-grip-erodes-attacks-19-ships

Saudi Arabia restarts critical pipeline.

https://www.zerohedge.com/energy/saudi-arabia-restarts-critical-hormuz-bypass-pipeline

Fiscal Policy

Bond markets are the canary.

https://www.washingtonpost.com/opinions/2026/09/24/britains-high-bond-yields-are-warning-america/

A plea to make the dollar great again.

https://www.realclearmarkets.com/articles/2026/09/25/a_dollar_is_not_a_dollar_a_plea_to_make_dollar_policy_great_again_1208060.html

AI spending is up.

https://www.apollo.com/wealth/insights-news/insights/daily-spark/ai-adoption-is-spreading-ai-spending-is-concentrating

The Financial System

The commercial real estate losses are moving from paper to reality.

https://www.zerohedge.com/markets/commercial-real-estate-crash-moving-paper-losses-realized-losses

Investing

Even the richest Americans can’t beat the Market.

https://www.marketwatch.com/story/stop-trying-to-beat-the-market-even-the-richest-americans-cant-do-it-consistently-4560e275?st=1RucfK

The easy money fairy tale.

https://quoththeraven.substack.com/p/the-free-money-financial-fairy-tale?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

The latest from BofA.

https://www.zerohedge.com/markets/hartnett-unveils-two-numbers-trigger-risk-deleveraging-cascade?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NDA3Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDUyMzk5NSwiZXhwIjoxNzkzMTE1OTk1LCJhdWQiOiJ6aC1naWZ0In0.JmASx85GGXW4O2PfFJ-oKWMFu-3XtDkNsFgcfrLu7W4

News (but not a Buy recommendation) on Stocks in Our Portfolios

What I am reading today

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---What percentage of current profit margins are mean reverting?

2026-09-25T06:08:02.576-07:00

The Morning Call

9/25/26

The Market

Technical

Thursday in the charts.

https://www.zerohedge.com/markets/higher-oil-rates-finally-hit-stocks-hawks-circle-hormuz-hope-fades-hyperscalers-hiccup?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2MTc0Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDI4MjM0MSwiZXhwIjoxNzkyODc0MzQxLCJhdWQiOiJ6aC1naWZ0In0.5oq1-4qBEkzkkjZg302gBW42f4o0jA865MzZSy7NnlA

Thursday in the technical stats.

https://www.barchart.com/stocks/signals/new-recommendations

Deteriorating breadth.

https://www.marketwatch.com/story/fewer-stocks-are-carrying-the-market-than-at-any-time-since-the-dot-com-peak-4033c4bb?st=p9c2GV

Never short a dull market.

https://www.carsongroup.com/insights/blog/never-short-a-dull-market/

Friday morning set up: US futures erased earlier losses and are trading at session highs led by tech, as bonds steadied (with the 10Y at multi-decade highs of 5.17%) after oil’s latest rally lost steam, helping US stocks to extend gains for the week. As of 8:00am ET, S&P futures are up 0.4% setting up the benchmark to post its first weekly advance in three; Nasdaq futures gain 0.7% with chipmakers and memory storage names bouncing and Mag 7 stocks mostly higher, led by NVDA (+0.7%) and TSLA (+0.8%). Overnight, focus remains on the improved US-Iran rhetoric since noon yesterday: Iran proposed a 7-day plan to end the war (NYT), and the president says Tehran wants a deal with the US before the midterm elections (NBS). However, the reactions from the oil market were fairly modest, suggesting the market is still pricing a meaningful geopolitical premium; WTI fell 1.8% to $92.98. Bond yields fell 2-3bp at the front end; precious metals are higher, and ags are lower. US economic data slate includes August durable goods orders (8:30 a.m.), and the September University of Michigan sentiment (10 a.m.).

Fundamental

Headlines

The Economy

August durable goods orders were flat versus expectations of down 0.4%; ex transportation, they were up 0.3% versus up 0.6%.

https://www.zerohedge.com/markets/us-core-durable-goods-orders-rise-17th-straight-month-august

August new home sales rose 6.4% versus estimates of +3.2%.

https://bonddad.blogspot.com/2026/09/august-new-home-sales-consistent-with.html

The September Kansas City Fed manufacturing index was reported at 20 versus projections of 9.

International

The September UK consumer confidence index was -13 versus consensus of -16.

The October German consumer confidence index was -30.6 versus predictions of -27.4.

Other

Median new home prices per square foot.

https://politicalcalculations.blogspot.com/2026/09/median-new-home-sale-prices-per-square.html

The consumer is in great shape.

The Consumer Is Clearly in Good Shape - Wealth Management - Carson Group

Despite a lousy housing market.

https://www.bloomberg.com/news/articles/2026-09-24/mortgage-rates-at-7-push-sellers-to-cut-home-sale-prices?utm_source=website&utm_medium=share&utm_campaign=copy

The Trump Reversal Index.

https://www.zerohedge.com/markets/trump-reversal-index-hits-highest-level-march?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2MjYyIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDM0MTI3NywiZXhwIjoxNzkyOTMzMjc3LCJhdWQiOiJ6aC1naWZ0In0.tporGqtjlFcrygYDr5w285CKAG267YLfz8oYgtzowaw

Iran

Overnight news.

https://www.zerohedge.com/geopolitical/iran-proposes-7-day-roadmap-end-war-which-mimics-june-mou

China

Overnight news.

https://www.zerohedge.com/geopolitical/more-signaling-less-substance-barclays-pours-cold-water-trump-xi-summit

Monetary Policy

Fed on track for another rate hike in October.

https://www.capitalspectator.com/fed-on-track-for-second-rate-hike-just-ahead-of-elections/

Fiscal Policy

The federal debt chartbook.

https://talkmarkets.com/article/a-us-federal-budget-chartbook

The AI buildout is the biggest economic bet in US history.

https://www.wsj.com/economy/the-ai-build-out-is-becoming-the-biggest-economic-bet-in-u-s-history-c60716dd?mod=economy_lead_pos1

Oracle’s ‘Project Jupiter’ declares force majeure.

https://www.zerohedge.com/markets/oracles-massive-project-jupiter-data-center-declares-force-majeure-jeopardizing-entire-us?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2MTY4Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDI4MzAxMCwiZXhwIjoxNzkyODc1MDEwLCJhdWQiOiJ6aC1naWZ0In0.smedrewpUPdU2B8K9N7q8n6NdOxpTWhF9p9mQamTzx0

Tariffs

Unfathomable economic ignorance.

https://reason.com/2026/09/18/no-cutting-off-trade-with-europe-would-not-make-america-wealthier/

The Financial System

Rich people fleeing private credit haven’t learned their lesson.

https://www.bloomberg.com/opinion/articles/2026-09-24/rich-investors-fleeing-private-credit-pile-into-infrastructure-finance?utm_source=website&utm_medium=share&utm_campaign=copy

Investing

Math eventually wins.

https://quoththeraven.substack.com/p/bonds-are-about-to-crash-the-stock?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

Speaking of math, what percentage of current profit margins are mean reverting?

https://www.advisorperspectives.com/commentaries/2026/09/24/whats-holding-record-margins

Who are the best Market forecasters?

https://klementoninvesting.substack.com/p/who-forecasts-how

The bonkers ETF market.

https://www.etf.com/sections/etf-basics/bonkers-etf-market-zine-edition

News on Stocks in Our Portfolios

What I am reading today

American hubris.

https://arnoldkling.substack.com/p/american-hubris-1990s-style?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

US using lasers to down drones.

https://nypost.com/2026/09/24/us-news/us-military-spending-500m-on-war-ready-laser-weapons-experts/

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The Morning Call---Private credits soft defaults

2026-09-24T06:04:15.603-07:00

The Morning Call

9/24/26

The Market

Technical

Wednesday in the charts.

https://www.zerohedge.com/markets/better-data-energy-angst-spark-bond-bloodbath-dollar-jumps-stocks-dump?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2MDYxIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDIxMjI1NCwiZXhwIjoxNzkyODA0MjU0LCJhdWQiOiJ6aC1naWZ0In0.MFKC-hUAJlowNxLOB1wgjb24J6EOG2PhHaRWejsswqY

Wednesday in the technical stats.

https://www.barchart.com/stocks/signals/new-recommendations

Support for the bulls.

https://www.marketwatch.com/story/the-nasdaqs-rapid-rise-to-a-record-is-sending-a-message-to-investors-dont-wait-for-a-pullback-to-buy-5f533ed8?st=5FSyuM

Even more support.

https://giftarticle.ft.com/giftarticle/actions/redeem/38ec1a08-2dbd-451c-9eda-a605fd157d79

Counterpoint.

https://www.zerohedge.com/markets/market-warning-signs-and-perfect-hedge

King dollar explodes higher.

https://www.zerohedge.com/the-market-ear/king-dollar-explodes-higher-amid-bond-carnage?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2MDkzIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDIxMjUzNywiZXhwIjoxNzkyODA0NTM3LCJhdWQiOiJ6aC1naWZ0In0.p3W6QDbq9lAGa7_KXJN7ZxutC7oeQgf9hUlcJk1TuFA

Thursday morning set up: Futures are lower with Tech underperforming as part of a global risk-off tone with few areas of safety, driven by a global bond rout that has sent yields across the globe to levels not seen in a generation. As of 8:00am ET, S&P futures are 0.6% lower with Nasdaq futures sliding 1.0% and reflecting the fallout from Wednesday’s barrage of inflationary signals, which sent stocks in Asia and Europe lower. In premarket trading, semis and memory are lagging the broader tech tape for the 2nd day, with software seeing slight outperformance, but still lower. Defensives and energy are leading cyclicals. The yield curve is bear steepening with the back-end yields making multi-year highs; pushing the 10Y yield to 5.14% and the 30Y yield to the highest since 2004. This follows Wednesday’s US data and auction-led selling in US paper with an ascent in energy prices today driving the moves further. The rout in bonds swept into Asia, with yields in Japan, Australia and New Zealand climbing by more than 10 basis points on Thursday. The USD remains bid and DXY is less than 40bp from its 52-wk high. In commodities, energy and ags resume their leadership as the market reduces its optimism for an imminent solution in the MidEast; metals are weaker with precious lagging. The Trump-Xi meeting will be one to watch on today's calendar, following US Treasury Secretary Bessent's announcement of a two-month extension to the trade truce which appears to have disappointed markets as it was less than what China expected. US economic data slate includes 2Q current account balance and weekly jobless claims (8:30 a.m.), August new home sales (10 a.m.) and September Kansas City Fed manufacturing activity (11 a.m.)

Fundamental

Headlines

The Economy

Weekly initial jobless claims totaled 197,000 versus consensus of 201,000.

August building permits fell 2.1% versus expectations of -2.7%.

The September flash manufacturing PMI was 57.0 versus forecasts of 56.0; the flash services PMI was 58.7 versus 56.0; the flash composite PMI was 58.3 versus 55.2.

International

The September Japanese flash manufacturing PMI was 54.1 versus predictions of 55.0; the flash services PMI was 51.6 versus 52.7; the flash composite PMI was 52.5 versus 54.0.

The September German business climate index came in at 89.9 versus estimates of 89.0; the September current conditions index was 89.5 versus 89.0.

Other

ADP data shows manufacturing employment continues to decline.

https://econbrowser.com/archives/2026/09/manufacturing-employment-recovery-delayed

Counterpoint.

https://bonddad.blogspot.com/2026/09/the-rebound-in-manufacturing-employment.html

OECD says global growth stronger than expected but threats mount.

https://www.wsj.com/economy/global/global-economy-stronger-than-expected-but-threats-mount-oecd-says-7472619b?st=HpePwX&reflink=desktopwebshare_permalink

Don’t believe the hype about China buying oil.

https://www.bloomberg.com/opinion/articles/2026-09-23/china-isn-t-buying-more-oil-it-s-buying-from-different-markets?utm_source=website&utm_medium=share&utm_campaign=copy

Iran

Overnight news.

https://www.zerohedge.com/geopolitical/war-could-expand-indian-ocean-if-us-attacks-resume-iran-warns

Inflation

The path to lower inflation runs through Iran.

https://www.capitalspectator.com/the-path-to-lower-inflation-still-runs-through-iran/

Tariffs

The US is badly losing its trade war with China. As you know, I believe that imposing tariffs based on the US trade deficit is a losing game. However, using them as part of a program to stop Chinese theft of US intellectual property and exporting fentanyl to the US (and other nations assuming more responsibility for their own defense) is fair game. So, in my opinion, this analysis is only fair if progress marked in the satisfaction of those other goals is also included.

https://www.bloomberg.com/opinion/articles/2026-09-23/us-trade-policy-on-china-has-failed-by-its-own-standards?utm_source=website&utm_medium=share&utm_campaign=copy

Investing

Dividend demand revives.

https://www.advisorperspectives.com/commentaries/2026/09/23/dividend-demand-revives-market-leadership-shifts

Private credit’s soft defaults.

https://giftarticle.ft.com/giftarticle/actions/redeem/9098a3f9-5585-4f6a-9ecc-7f953fc2696c

News on Stocks in Our Portfolios

What I am reading today

Tips on how not to die in the great outdoors.

https://www.nakedcapitalism.com/2026/09/could-you-survive-the-oregon-trail-an-emergency-medicine-doctor-offers-tips-on-how-to-not-die-in-the-great-outdoors.html

When you can’t do one thing, do something else.

https://www.yearofmentalhealth.com/p/when-you-cant-do-one-thing-do-something

The messy drama over Jimmy Buffett’s $275 million trust.

https://www.wsj.com/style/lost-in-margaritaville-drama-jimmy-buffett-275-million-dollar-trust-65710c8d?st=ZwzT4Y&reflink=desktopwebshare_permalink

Trump’s landmark deal with Greenland.

https://www.zerohedge.com/geopolitical/us-establish-two-new-military-bases-greenland

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---Earnings mean reversion

2026-09-23T06:01:42.103-07:00

The Morning Call

9/23/26

The Market

Technical

Tuesday in the charts.

https://www.zerohedge.com/markets/big-tech-bid-banks-battered-agentic-anxiety-spreads-everything-else-hits-snooze?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1OTMzIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDExMTgzNiwiZXhwIjoxNzkyNzAzODM2LCJhdWQiOiJ6aC1naWZ0In0.zaK8qhTxSJSvsi1iVFL-0BUi9n2TT_vBWcUB9vdqP2w

Tuesday in the technical stats.

https://www.barchart.com/stocks/signals/new-recommendations

The latest from Goldman.

https://www.zerohedge.com/markets/yesterday-felt-proper-fomo-goldman-one-delta-desk-took-some-chips-table-sees-inference?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1ODkzIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDEwMzUzMSwiZXhwIjoxNzkyNjk1NTMxLCJhdWQiOiJ6aC1naWZ0In0.M_g2fGntAscO833XS-AAK64VvsPe2L7DMsNxEXqjUAI

Gamma squeeze the world.

https://quoththeraven.substack.com/p/gamma-squeeze-the-world?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

The crypto bear market is over.

https://www.riskhedge.com/the-jolt/the-crypto-bear-market-is-over

Wednesday morning setup: US equity futures are down modestly, but at session lows, as oil reverses earlier losses (crude was on pace for a sixth straight day of declines, its longest losing run in a year) sending Brent back over $100 and pushing 10Y yields back to 4.99%. As of 8:30am, S&P 500 futures were 0.1% lower with Nasdaq 100 futures sliding 0.3%, and also at session lows after hitting a record on Tuesday. In premarket trading, memory and semis are lower as Mag7/software are higher. Within SPX sectors, all of the majors have pockets of strength ex-Materials which are set to lag given the selloff in metals. Rising oil prices have also weighed on European equities, which have pared opening gains and left the Stoxx 600 down 0.5%, also at session lows. In Asia, Chinese and Hong Kong shares declined, trailing regional peers including South Korean and Taiwanese benchmarks. Oil remains the wildcard for stocks and bonds, while Meta’s Muse AI agent is reshaping sector rotation. Yields are notably higher, with 2Y yields rising to a 2 year high of 4.79% as the curve flattens aggressively, as the tactical market narrative seeks more color from UN meetings (US/China; US/Iran; NATO+UKR/Russia) before deciding direction. The USD rally continues with the DXY 75bp away from YTD highs set June 24. Commodities are lower ex-Energy which is seeing a bid within fuels / natgas and Brent is outperforming WTI. Base over Precious and Ags uniformly sold. The US economic calendar includes September S&P Global US manufacturing and services PMIs at 9:45 a.m. Fed speaker slate includes Governor Barr (10:05 a.m.) and Chicago’s Goolsbee (12 p.m.)

Fundamental

Headlines

The Economy

Weekly mortgage applications fell 1.5% while purchase applications were down 0.8%.

Month to date retail chain store sales were up 7.6% versus up 8.5% in the prior week.

The September Richmond Fed manufacturing index came in at -2 versus estimates of +5.

International

The September EU flash consumer confidence index was -16.5 versus expectations of -16.0.

The September German flash manufacturing PMI was 53.5 versus consensus of 54.0; the flash services PMI was 52.9 versus 50.0; the flash composite PMI was 53.1 versus 51.7; the September EU flash manufacturing PMI was 52.7 versus 52.6; the flash services PMI was 53.0 versus 51.5; the flash composite PMI was 53.1 versus 51.7; the September UK flash manufacturing PMI was 52.0 versus 51.5; the flash services PMI was 51.7 versus 52.0; the flash composite PMI was 51.7 versus 52.0.

Other

The problem with the level of interest rates versus that of economic growth.

https://alhambrapartners.com/weekly-market-pulse-what-now-2/?src=news

August real median household income.

https://econbrowser.com/archives/2026/09/real-median-household-income-down-relative-to-may

Iran

Overnight news.

https://www.zerohedge.com/geopolitical/cargo-vessel-struck-unknown-projectile-hormuz-casualties-reported

Inflation

Beware oil’s second strike on inflation.

https://www.wsj.com/economy/central-banking/beware-oils-second-strike-on-inflation-a07161d3?st=xvMWoB&reflink=desktopwebshare_permalink

As an example:

https://mishtalk.com/economics/the-average-supertanker-cost-is-1-2-million-per-day-up-from-29900/

Funding trouble in AI land.

https://www.zerohedge.com/technology/sb-energy-delays-ipo-funding-worlds-largest-data-center-amid-investor-revolt-public?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1OTc0Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDE2Mzk0MiwiZXhwIjoxNzkyNzU1OTQyLCJhdWQiOiJ6aC1naWZ0In0.PxaHtWOB5EDCl7kVBvaeNZbm3htcnGH2ZQDKOT4x2pE

Where intelligence and consciousness have to be separated.

https://www.realclearmarkets.com/articles/2026/09/22/where_intelligence_and_consciousness_have_to_be_separated_1207087.html

Do Covid and AI rhyme?

https://www.americanthinker.com/articles/2026/09/do-covid-and-ai-rhyme/

AI angst.

https://www.carsongroup.com/insights/blog/ai-angst/

Investing

Earnings mean reversion.

https://www.advisorperspectives.com/commentaries/2026/09/22/earnings-mean-reversion-estimates-snap-back

The historic divide between the bulls and the bears signals an earnings slowdown.

https://www.bloomberg.com/opinion/articles/2026-09-22/this-historic-divide-between-bulls-and-bears-signals-a-slowdown?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc5MDA5OTA1MCwiZXhwIjoxNzkwNzAzODUwLCJhcnRpY2xlSWQiOiJUTFJEMDNLR1pBSjMwMCIsImJjb25uZWN0SWQiOiJCMzFCNTRDQTI3MTE0NjAxOUQxMURCN0IxRUM4NTE2MyJ9.u4eKDr5Fzf1poybp1NbsZXZFyBUXnVIR-nfG-ePejWM

The bond market returns to normal.

https://mrzepczynski.blogspot.com/2026/09/what-is-fixed-income-market-telling-us.html

The resiliency of the high yield market.

https://bondvigilantes.com/blog/2026/09/the-honey-badger-market/

News on Stocks in Our Portfolios

What I am reading today

Another blight on our education system.

https://www.zerohedge.com/geopolitical/china-ranked-1-world-math-usa-27th

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The Morning Call--Goolsbee addresses the supply shortage/demand pull inflation dichotomy

2026-09-22T06:13:51.216-07:00

The Morning Call

9/22/26

The Market

Technical

Monday in the charts.

https://www.zerohedge.com/markets/big-tech-bitcoin-buying-panic-after-bessent-bullishness-black-gold-breakdown-trump-bad?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1ODEzIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDAyMTg1MiwiZXhwIjoxNzkyNjEzODUyLCJhdWQiOiJ6aC1naWZ0In0._IiX-Q_UGGMyNddzMcVRXhszLEcHUlVLjc-9JGIAtXg

Note: the S&P surged higher, pushing through the upper boundary of a very short term downtrend. Good news of course; and if you think that there is more to come, then the next visible resistance point is the upper boundary of the index’s short term uptrend (~8030). However, the pin action was on a large gap up open, introducing some downside pull. So the breakout isn’t as clear cut as it could otherwise be. Still it was impressive enough that I bought a one half position in TJX.

Monday in the technical stats.

https://www.barchart.com/stocks/signals/new-recommendations

The latest from Goldman’s head of hedge fund trending.

https://www.zerohedge.com/markets/goldmans-pasquariello-sees-tricky-footing-ahead-higher-stocks-yields-commodity-prices-year?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1ODA1Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDAyMDMzMiwiZXhwIjoxNzkyNjEyMzMyLCJhdWQiOiJ6aC1naWZ0In0.BjKsBHj4cauONm2kbtnwo1DVmy5BMZozavmwI-ylH1U

Update on the Bitcoin technicals.

https://www.zerohedge.com/crypto/after-billion-dollar-etf-inflow-bitcoin-breakout-outs-108k-sight?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1ODg3Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDA4MjM1OCwiZXhwIjoxNzkyNjc0MzU4LCJhdWQiOiJ6aC1naWZ0In0.7foZKb7CDqIVlAbWvXvdLjRInMpleeHz7VSXJXw2fA4

Tuesday morning setup. Futures are flat, having recovered a modest drop after the European open, following yesterday’s strong, positive performance despite energy prices and yields being lower for a second consecutive day. As of 8:00am ET, S&P and Nasdaq futures are fractionally in the green after an advance in tech giants and chipmakers drove the index to a one-month high. In premarket trading, semis are down ~60bp after a blistering 5-day run that added 11.2%. Memory names are weaker as Mag7 and Software remain bid. Alibaba ADRs (BABA) gain 3% as the company is rolling out what it calls China’s most powerful AI chip, an accelerator to compete with Nvidia Corp. Brent crude erased gains of as much as 2% to fall toward $98 a barrel. The reversal came after Japan’s Kyodo News Agency reported that Iran has proposed to reopen Hormuz within seven days if the US blockade is lifted. While Iran has since denied this report, a separate report that Saudis may restart the East-West pipeline helped sentiment. Treasury yields turned lower, with the 10-year rate down two basis points to 4.93%. The dollar barely budged while the entire commodity complex is lower, though Base Metals are a bid. These moves likely reflect growing optimism around a diplomatic solution in the Middle East and improved US / China relations, which combined will support AI and lower energy prices, and potentially lower tariff rates. Today’s macro data focus is on ADP’s weekly number, regional Fed activity indicators, and another Fed speaker. Looking ahead, highlights include UN Meetings: UN General Debate including Trump, Macron, Burnham; Trump-Zelensky meeting; Trump-Burnham meeting; Trump-Gulf Leaders meeting.

Fundamental

Headlines

The Economy

International

The September UK industrial trends orders index was -9 versus consensus of -34.

Other

Gold moving out of the US is not a big deal.

https://www.washingtonpost.com/opinions/2026/09/18/america-doesnt-need-worlds-gold/

Rising Q3 growth expectations.

https://www.capitalspectator.com/us-economy-picks-up-in-q3-as-rising-rates-threaten-momentum/

The inflationary expansion continues.

https://seekingalpha.com/article/4947978-weekly-indicators-the-inflationary-expansion-continues

Iran

Overnight news.

https://www.zerohedge.com/energy/brent-tumbles-below-100-after-report-says-iran-offers-reopen-hormuz-chokepoint

US attempts to shut down the Iranian airline industry.

https://www.zerohedge.com/geopolitical/bessent-declares-all-iran-airlines-be-shut-down-around-world-wednesday

Monetary Policy

The Fed is fighting the wrong war.

https://thehill.com/opinion/finance/6095830-fed-interest-rate-hike/

Counterpoint.

https://www.carsongroup.com/insights/blog/this-is-still-a-dovish-fed/

Where we should be based on the Taylor Rule.

https://econbrowser.com/archives/2026/09/where-should-we-be-taylor-rule-wise

Fed’s Goolsbee addresses the supply shortage/demand pull inflation dichotomy.

https://www.bloomberg.com/news/articles/2026-09-21/fed-s-goolsbee-says-road-to-2-inflation-may-not-be-painless?utm_source=website&utm_medium=share&utm_campaign=copy

When the leaders in AI all agree, read the fine print.

https://www.realclearmarkets.com/articles/2026/09/21/when_the_three_most_powerful_men_in_ai_agree_read_the_fine_print_1207085.html

Keep digging says the shovel salesman.

https://quoththeraven.substack.com/p/keep-digging-says-shovel-salesman?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

Investing

The latest from Morgan Stanley.

https://www.zerohedge.com/markets/morgan-stanleys-mike-wilson-warns-higher-yields-and-energy-prices-could-spark-10-market?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1ODQ2Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDA4MDg3NywiZXhwIjoxNzkyNjcyODc3LCJhdWQiOiJ6aC1naWZ0In0.O_kgZVNiE9jpBi5uhD0qj45Ce0KuJYa2UePYdHoIR6E

Playing the long game.

https://smeadcap.com/missives/no-country-for-old-or-young-men/?utm_campaign=Missives&utm_medium=email&_hsmi=439346167&utm_content=439149107&utm_source=hs_email

What does Dow 100,000 mean?

https://quoththeraven.substack.com/p/friends-dont-let-friends-wear-dow?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

Research indicates that you will take more risk after a loss.

https://talkmarkets.com/article/the-research-says-you-will-take-more-risk-after-a-loss-here-is-what-it-costs

News on Stocks in Our Portfolios

What I am reading today

Quote of the day.

https://cafehayek.com/2026/09/quotation-of-the-day-5507.html

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Monday Morning Chartology

2026-09-21T06:07:49.117-07:00

The Morning Call

9/21/26

The Market

Technical

The S&P was up on the week, closing back above its 50 DMA and its former all-time high. Short term, it has now set three lower highs and three lower lows. On a longer timeframe, the index is above all DMAs and in uptrends across all time frames. This suggests that this recent small correction is just that---small. So, at this point, there is no reason to get beared up. That said, the fundamentals (fiscal policy, monetary policy, war, oil, tariffs) give me the willies. So I will continue to sit on my hands.

Fear is gone; the risks aren’t.

https://www.zerohedge.com/the-market-ear/fear-gone-risks-arent?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1NzQ2Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4OTk5MzkwMSwiZXhwIjoxNzkyNTg1OTAxLCJhdWQiOiJ6aC1naWZ0In0.ADa_1k6QWMbEGc8hvQ3nuubhhPEIcBpW1IuJDnyr04o

TLT continues to trade down across all timeframes and is below all three DMAs. Last week’s rate decision changed nothing. … for the long bond to rise enough to even challenge the upper boundary of its very short term downtrend is going to take a series of very positive developments.

GLD staged a modest rally, bouncing off the lower boundary of its short term uptrend, its 50 DMA (resetting it to support) and its 100 DMA (now resistance; if it stays there through the close on Tuesday it will revert to support). I continue to have directional uncertainty due to the fundamentals that historically drive gold prices: …higher interest rates versus a love stew of the continuing inflationary pressures from lousy fiscal policy, the economic fallout from two wars and higher tariffs. While I am unsure of the outcome, for the moment I am holding on to my GDX.

The dollar had a great week, driven by the raise in interest rates. While it (1) negated a very short term downtrend and (2) reset its 50 DMA to support and is now above all three DMAs, it remains in an extremely wide trading range. Short term, it seems to be biding its time waiting for a clearer fundamental picture. Longer term, it remains in a ‘no man’s land’.

Friday in the charts.

https://www.zerohedge.com/markets/bitcoin-bullion-bid-amid-wild-week-energy-war-spreads-bankers-hike-ai-anxiety-peaks?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1NTMyIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4OTkzMDA2MSwiZXhwIjoxNzkyNTIyMDYxLCJhdWQiOiJ6aC1naWZ0In0.Ih4JgIbHO4NYN0gmlnaqiYukBkGRkzhyV_fe5Apmcv0

Friday in the technical stats.

https://www.barchart.com/stocks/momentum

https://www.barchart.com/stocks/market-performance

https://www.barchart.com/stocks/sectors/rankings

https://www.barchart.com/stocks/signals/new-recommendations

Monday morning setup: US futures are higher driven by Trump / Xi optimism around AI, Middle East, and trade with Middle East kinetic headlines over the weekend reflecting a pause to escalation. Sentiment was lifted by signs of progress on geopolitical issues: it’s a big week for talks, with Trump set for a summit with China’s Xi Jinping on Thursday and a possibility of talks with Iran’s president at the UN General Assembly. As of 8:00am ET, S&P futures are up 0.7%, rising to 7,770 and less than 1% from all-time highs, as Nasdaq futures gain 1.1%, with tech strength on full display in APAC trade and also leading in premarket US trading with broad-based strength across Semis, Memory, and Mag7. Cyclicals ex-Energy are leading Defensives with the AI theme boosting Tech / Industrials within Cyclicals. Within Defensives, both healthcare and staples have pockets of strength as today looks like a broad-based rally in both the SPX and within Tech. WTI is below $100, dropping for a fourth day, fuel prices are lower, while bond traders reckon the Fed will succeed in its fight against inflation helping drive bond yields lower as the yield curve bull flattens, as the USD drops to session lows. This is bidding up risk assets with Equities leading. The Fed’s Goolsbee speaks 6.30am with previous speakers Fri / Sun offering a hawkish view which reiterates Warsh’s key points. According to JPM, given the macro and earnings strength, the market may be underpricing the number of hikes through YE27. There is little on today's calendar: we get the Aug Chicago Fed Nat Activity Index (est. -0.04) at 8:30am ET.

Fundamental

Headlines

The Economy

Last week, the US stats were balanced as were the primary indicators---one plus, one minus. Overseas, the data was quite negative with one positive, two neutral and two negative inflation datapoints.

Regarding the US numbers, a balanced report generally tells us that the underlying trend in the economy (in this case growth) is intact. As noted, there were no inflation stats. That keeps my ‘good as it is going to get but not any worse’ forecast alive and well.

However, I would be remiss if I didn’t remind all that there is a number of analysts who I respect that point out that our current inflation is the result of supply shortages (oil, tariffs)---which is a problem that monetary policy can’t cure. Hence, raising interest rates is not the solution as it will only stifle demand (i.e., it will slow the economy down and perhaps push it into recession).

Which leads me to the first comment I have on last week’s major economic developments: the FOMC raised rates and the accompanying dot plot suggested there is more to come. It is clear that the bond market forced the Fed’s hand. So the bond boys apparently don’t agree with the above quoted analysis that current inflation is caused by supply shortages. The biggest reason for their concern, of course, would the irresponsible fiscal policy---increased demand driven by our horrendous deficit spending. And to be sure, there is truth to that.

The question is the extent to which rising prices are a function of raw material (oil) and self-inflicted (tariffs) shortages (oil) or demand driven by uncontrolled government spending. Clearly both are likely contributing but their relative impact is important because the remedy being applied (higher rates) only addresses demand-pull and if it is of lesser importance then a series of rate hikes would do more damage than help. At this point, I certainly have no clue to the answer. But I think that it is important to hold this conundrum in the back of our mind as we view future economic data for signs that rate hikes are the answer but rather the problem.

https://www.zerohedge.com/markets/fed-rate-hike-wont-fix-inflation-it-targets

Financial repression.

https://bondvigilantes.com/blog/2026/09/the-great-repression/

Second, the war in the Middle East continued to ratchet up. There are rumors of a massive increase of US arms shipments to Israel (see the Tucker Carlson’s assertions in last Thursday’s Morning Call) which could lead to a dramatic escalation in the fighting accompanied by a further decline in oil supplies. Clearly, that would only provide more ammo for the ‘supply driven inflation’ advocates.

Third: I continue to stew over the health of the AI buildout. I have already elaborated on the potential problems in earlier notes. So I won’t repeat them. What keeps me concerned is the continuous flow of analysis questioning the viability of the spend. To be sure, there is plenty of equally responsible analysis by equally responsible analysts confirming the positive case for the future payoff of the current spend rate.

My problem is that I am not smart enough to figure out which case is the more likely outcome. So, I continue to hold positions in both the chip manufacturers and the hyperscalers---although their performances has been such that I have Sold Half of virtually every stock. And I am not running for the hills in the rest of my Portfolios. That said, I have my finger on the trigger for several holdings. And should the negative case appear the more likely outcome, I will take some money off the table.

I want to emphasize that the issue that I am focused on is the economics of the AI buildout not the doomsday ‘we will all be dead in ten years’ variety. I made clear in last Friday’s Morning Call that I am quite cynical about the motivations of the doomsayers whether they are from the industry (who want the government to impose regulations that would squash potential competition) or government (who never lets a crisis go to waste in order to impose further on our collective liberties)

(3) No, AI Is Not About To End the World - by Quoth the Raven

Jeffery Gundlach’s thoughts.

https://www.marketwatch.com/story/i-just-want-out-why-jeffrey-gundlach-is-moving-his-money-as-far-from-ai-as-possible-and-what-hes-doing-instead-54281010?st=nFXEwb

Oracle loans fall to distressed level.

https://www.zerohedge.com/markets/oracle-loans-backing-massive-new-mexico-data-center-tumble-stressed-levels?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1NzE5Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4OTk5NDM0NiwiZXhwIjoxNzkyNTg2MzQ2LCJhdWQiOiJ6aC1naWZ0In0.ng7reyw9IAm464oAUj_KWJv996wrRK285HC-dKn7T6c

My bottom line remains unchanged: doubts on the trajectory of the economy/inflation/AI buildout are increasing---at least in my mind. Not yet enough to warrant a change in my outlook but enough to keep me on the sidelines with my finger on the warning light button.

https://www.nytimes.com/2026/09/17/opinion/us-economy-treasury-stable.html?unlocked_article_code=1.CFE.Thgm.VGQzXxZk1gFX&smid=url-share

The August Chicago national activity index came in at -0.04 versus forecasts of +0.2.

International

Other

The latest Q3 nowcast.

https://econbrowser.com/archives/2026/09/gdpnow-goes-gangbusters

The K shaped economy: reality or media driven?

https://talkmarkets.com/article/k-shaped-economy-reality-or-media-driven-perception

The state of goods production shows rebound continues but with a wobble.

https://bonddad.blogspot.com/2026/09/three-reports-on-state-of-goods.html

Overnight News

Ukraine pounds Moscow refinery.

https://www.zerohedge.com/political/ukraine-pounds-major-moscow-refinery-global-diesel-crisis-threatens-economic-shock

Monetary Policy

A hawk in dove’s clothing?

https://www.carsongroup.com/insights/blog/a-dove-in-hawks-clothing/

Bank of Japan raises rates.

https://www.wsj.com/economy/central-banking/bank-of-japan-raises-benchmark-interest-rate-to-1-25-highest-level-since-1995-2b28cbe9?st=d19MEZ&reflink=desktopwebshare_permalink

Fiscal Policy

The Fed can’t do it alone.

https://reason.com/2026/09/17/the-fed-cant-fight-inflation-alone-will-congress-do-its-part/

Treasuries have become unappetizing to foreign governments.

https://wolfstreet.com/2026/09/17/treasuries-have-become-badly-unappetizing-for-foreign-central-banks-governments/

Eroding the US status as a safe haven.

https://www.nytimes.com/2026/09/16/business/trump-debt-sanctions-global-economy.html?unlocked_article_code=1.CFE.BeLl.4VWjTyj2-1pR&smid=url-share

The Financial System

Private equity turns to more financial engineering.

https://giftarticle.ft.com/giftarticle/actions/redeem/fc4035a3-ec3c-44c0-a2f2-e17dc9b5a1b3

Investing

Margin debt increased in August.

https://www.advisorperspectives.com/dshort/updates/2026/09/17/margin-debt-finra-august-2026

Bulls still have the edge, but the margin is narrowing.

https://www.capitalspectator.com/the-bulls-still-have-the-edge-but-the-margin-is-narrowing/

News (but not a Buy recommendation) on Stocks in Our Portfolios

What I am reading today

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--A review of past Fed rate hiking cycles

2026-09-18T06:15:59.616-07:00

The Morning Call

9/18/26

The Market

Technical

Thursday in the charts.

https://www.zerohedge.com/markets/oil-slump-soothes-warsh-hangover-stocks-bonds-gold-all-soar?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1NDMxIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4OTY3NjQzNSwiZXhwIjoxNzkyMjY4NDM1LCJhdWQiOiJ6aC1naWZ0In0.0MWMuK4y3ZKwv0tcCG4ZrPMtqqKIa9X4DuW9gQ273GE

Note: the S&P ended back above its former all-time high and its 50 DMA (negating the recent reset) but remains in a very short term downtrend. I will continue to sit on my hands at least until it trades out of that downtrend.

Thursday in the technical stats.

https://www.barchart.com/stocks/signals/new-recommendations

Stocks are trapped.

https://www.zerohedge.com/the-market-ear/stocks-are-trapped-and-pressure-building?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1NTAwIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4OTczNTA4MiwiZXhwIjoxNzkyMzI3MDgyLCJhdWQiOiJ6aC1naWZ0In0.2txevSK_jINrhmvTbPwjknX-sOyvWp6awf0q0CGQrbU

But the pain trade is stocks move higher.

https://www.zerohedge.com/the-market-ear/everyone-just-turned-bearish-once-upside-now-main-pain-trade?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1NDg5Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4OTczNTQ0NywiZXhwIjoxNzkyMzI3NDQ3LCJhdWQiOiJ6aC1naWZ0In0.4TidirA98HGC_grkcv1fdqiXIYrlML6zGTT3MiNRWxM

Just not yet.

https://www.zerohedge.com/markets/amid-2nd-largest-opex-history-citadel-securities-chief-strategist-warns-september-weakness?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1NTA3Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4OTczNjE3OSwiZXhwIjoxNzkyMzI4MTc5LCJhdWQiOiJ6aC1naWZ0In0.iDe8c17SWx-X8JCDsB7qqjmxHvurbJPahXez79sQLTM

Friday morning setup: US stock futures are little changed on Friday, with big tech stocks rising while sentiment is supported by another modest decline in oil prices; a near-record $7 trillion quad-witching and index rebalances add to Friday's set-up. US tariff-delay hopes, a flattening US curve and softer diesel and WTI prices ease inflation concerns, while AI bulls are back in charge. As of 8:00am ET, S&P 500 futures rose 0.1% to 7,713.25, erasing modest gains, while Nasdaq futures rise 0.3% as the market momentum after the risk-on rally yesterday holding well into today’s session with Tech continuing its leadership. In premarket trading, Mag 7 stocks are mostly higher led by GOOG/L (+2.0%); AMZN is flat after the 5% rally yesterday amid a long-term deal with Generac. Meanwhile, Brent crude traded near $104 a barrel. The dollar climbed 0.2%, while gold rose toward $4,400 an ounce. Treasuries resumed losses after a brief rebound, with the 10-year yield up three basis points to 4.97%. Overnight, the BOJ hiked by 25bps as expected, but the vote split skewed dovish as two Takaishi-appointed members dissented, which sent the yen sharply lower (USDJPY breaking above 157 for first time since early Sept) and Japanese stocks rallying (Tech > Banks). The USD is higher post BOJ decision. Oil is unchanged this morning; both precious and base metals are higher. Today’s macro data focus is on Industrial Production and Leading Index which are not expected to be market moving.

Fundamental

Headlines

The Economy

August pending home sales rose 0.3% versus consensus of +0.2%.

International

July YoY EU construction output fell 2.0% versus projections of -1.0%.

August Japanese CPI was up 0.1% versus estimates of up 0.2%.

August German PPI was up 1.1% versus predictions of +0.4%.

August UK retail sales increased 0.5% versus forecasts of -0.2%; ex fuel, they were up 0.6% versus -0.2%.

Other

Are yesterday’s housing starts/building permits numbers a significant warning sign?

https://bonddad.blogspot.com/2026/09/august-new-housing-construction-saying.html

Iran

Trump concedes that he must act soon.

https://www.zerohedge.com/energy/crude-eases-china-reportedly-presses-iran-rein-houthis

Monetary Policy

A review of past Fed rate hiking cycles.

https://www.zerohedge.com/markets/why-warsh-has-hike-over-200bps-next-12-months-contain-inflation?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1NDIzIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4OTY3NTQ3MCwiZXhwIjoxNzkyMjY3NDcwLCJhdWQiOiJ6aC1naWZ0In0.9Mhoezr5GDiCMPo7pv-BPGf4lX5H_XUFPDy1OhsePgQ

What comes next?

https://www.nytimes.com/2026/09/17/business/economy/fed-interest-rates-warsh.html?unlocked_article_code=1.B1E.WQX4.YMSc7it4hzqQ&smid=url-share

The case for not raising rates.

https://www.realclearmarkets.com/articles/2026/09/17/warsh_just_broke_the_greenspan-bernanke_rule_and_the_us_will_pay_1206624.html

Trump can’t control bond yields.

https://www.capitalspectator.com/trump-can-pressure-the-fed-he-cant-control-bond-yields/

After a rate pause, will the Bank of England raise in November?

https://talkmarkets.com/article/bank-of-england-floats-a-november-rate-hike-if-energy-prices-dont-come-down

Inflation

Forget the inflation surveys, watch the bond market.

https://giftarticle.ft.com/giftarticle/actions/redeem/7d3e4f8b-b80d-4eab-be42-b0a73565eb7a

Recession

The global economy is running out of wiggle room.

https://www.nytimes.com/2026/09/17/business/economy/iran-war-energy-prices.html?unlocked_article_code=1.B1E.KEYF.BC8Wc8-gcbUp&smid=url-share

Another proposed reason for limits on AI. I am getting a bit tired of reading the scare stories about the harm AI will produce. To be sure, we have to be careful in managing its development. But this is starting to sound like a repeat of a long series of supposedly manmade dooms day forecasts generated by our intellectual elite/ruling class that include population growth (global hunger), depletion of natural resources, climate cooling, climate change and Covid---the intellectual elite fabricating the end of mankind so the unwashed will give them the power to usurp liberty in order to solve the problem---but which in the end really involved a few tweaks to the system So I include this not because I agree but as an illustration (in my opinion) of intellectual fear mongering. (1) the creative part of solving a mathematical problem is posing the question in the first place. Only a human can do that. (2) what difference does it make if it takes Einstein fifteen years to solve a mathematical problem versus a computer in fifteen seconds, the point of training future mathematicians is studying how the problem was solved.

https://terrytao.wordpress.com/2026/09/11/a-severe-misalignment-of-ai-in-mathematics/

Dems push for data center moratorium.

https://www.zerohedge.com/markets/ai-fuels-global-earnings-boom-dems-push-data-center-moratoriums-could-spark-global-stock

House passes bill to ensure data centers provide for their own energy needs. On the other hand, it makes sense that AI pay for its consumption of public resources. (a tweak)

https://www.zerohedge.com/political/house-passes-bill-ensure-data-centers-cover-their-own-energy-costs

Tariffs

Why is congress about to give Trump additional tariff authority?

https://www.cato.org/blog/why-congress-going-authorize-president-trump-raise-taxes-potentially-hundreds-billions-dollars

Investing

Long bonds are getting more attractive.

Sheesh, Bonds! - Wealth Management - Carson Group

The most crowded hedge fund positions.

https://www.zerohedge.com/markets/most-crowded-hedge-fund-stocks-and-themes-september-update?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1NDQ2Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4OTY3NDUxMSwiZXhwIjoxNzkyMjY2NTExLCJhdWQiOiJ6aC1naWZ0In0.88j7xOssuEEamZdnBSrHhz5ONhFqksR0xWWj3q5dnpo

Oil bears have one problem.

https://www.zerohedge.com/the-market-ear/oil-bears-have-one-problem-barrels-arent-there?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1NDM0Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4OTY3NTI1MiwiZXhwIjoxNzkyMjY3MjUyLCJhdWQiOiJ6aC1naWZ0In0.ZizHkHDwQ1uCz9b-Ih2BnLytNXXUOZ4KjwhbNCre_lM

News on Stocks in Our Portfolios

What I am reading today

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---Tucker Carlson's allegations on Iran war strategy

2026-09-17T06:20:44.421-07:00

The Morning Call

9/17/26

The Market

Technical

Wednesday in the charts.

https://www.zerohedge.com/markets/gold-yield-curve-tumble-after-hawkish-fed-hike-stocks-chop-crude-flops?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI1MzAwIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc4OTU5NjYzMSwiZXhwIjoxNzkyMTg4NjMxLCJhdWQiOiJ6aC1naWZ0In0.ZTxQxkJ7WBj3KJu7Fn77j6p-z4i7cYbmZI3iBTnyp0c

Note: the S&P apparently didn’t like the results of the FOMC meeting. At the close, it has now spent four trading days below its former all-time high, has reset its 50 DMA to resistance, is now challenging its 100 DMA (the Dow blew through its 100 DMA) and has made a fourth lower high and fourth lower low---clearly gaining some momentum to the downside. And, of course, this pin action fits with the seasonal pattern. That aside, whether this turns into a rout is open to question (the overnight recovery suggests investors are reconsidering their take on Fed policy). In my mind the answer hinges on whether the economy/corporate earnings will continue in an uptrend or are about to roll over---about which there is serious disagreement among the experts. For the moment, sitting on the sidelines is working. But ascertaining who is correct in the aforementioned debate is critical to what to do next. Right now, I don’t know.

Wednesday in the technical stats.