The Morning Call
.
1/12/26
The
Market
Technical
The S&P closed back above its all time
high. If it remains there through the close this Wednesday, the break will be
confirmed. In the meantime, it remains above all three DMAs and in uptrends
across all time frames. As you can see, resistance in the form of the upper boundary
of its very short term uptrend exists at ~7173.
I remain of the opinion that this a Market to
be traded not invested in---and I am sticking to it until there is some follow
through (in either direction).
Market breadth is
expanding.
https://trendlabs.com/jan-brady-just-made-a-new-all-time-high/
Part 2.
https://www.zerohedge.com/markets/process-broadening-leadership-remains-intact-top-goldman-trader
Despite
all the happy talk about lower rates/inflation, bond investors don’t seem to be
buying it. The long bond is below all three DMAs and in downtrends across all timeframes.
I continue to believe that the only circumstance I can see pushing rates meaningfully
lower would be a recession.
This is a twenty
year picture of gold. As you can see, it is quite extended on a short and
intermediate trem basis but has a ways to go to test the high of its long term
uptrend. I continue to hold my trading position in GDX. Emphasis on ‘trading’
given its short term geometric rise.
The dollar has bounced off the lower boundary of its short
term trading range for the third time---hopefully, that is a charm. Nonetheless,
it remains below all three DMAs; so, it still has a lot of work to do in order
to be anything but an ugly chart.
Friday in the
charts.
https://www.zerohedge.com/markets/stocks-oil-gold-soar-catalyst-heavy-week-sparks-rate-cut-odds-rout
Friday in the
technical stats.
https://www.barchart.com/stocks/momentum
https://www.barchart.com/stocks/sectors/rankings
https://www.barchart.com/stocks/signals/new-recommendations
Fundamental
Headlines
The
Economy
The US stats last week were mixed, though the
primary indicators were upbeat (two plus, no neutral, no minus) and no
inflation measures. Overseas, the data was slightly downbeat with two positive
and two negative price indicators.
Nothing in this data set to warrant a change
in my economic growth forecast (muddle through) though certainly Friday’s
nonfarm payroll number as well as the Atlanta Fed’s upward revision of Q4 GDP
point to continued growth in the economy.
However, contrary to Street (and my above
comment), this analysts sees the payrolls number as a recession warning.
https://bonddad.blogspot.com/2026/01/december-jobs-report-ringing-alarm.html
My ‘inflation is as good as it is going to
get’ prediction is not quite as solid---with many Street pundits suggesting
otherwise. While I have yet to see any solid data substantially confirming that
outlook, I nonetheless have to respect the degree of disagreement and keep the
yellow light flashing on this part of my forecast.
US
International
Other
Household net worth increased $6 trillion in
Q3.
https://www.calculatedriskblog.com/2026/01/feds-flow-of-funds-household-net-worth.html
The economy is Gen-shaped not K-shaped.
DEEP DIVE: US
Economy Is Gen-Shaped, Not K-Shaped
Overnight
News
DOJ launched
criminal probe of Powell. News accounts reckon that Trump’s poor ratings are due
to ‘affordability’. I would argue that it is due to his persistent erratic behavior
(not that I disagree with some of his policies) and childish name calling. This
one seems over the top and unless there is real substance to these charges, I think
that he just nailed the mid-terms for the dems. And unfortunately, he has provided
a precedent for future progressive presidents.
U.S. Treasury
Secretary Scott Bessent on Friday said the goal of the Trump administration's
launch of mortgage-backed securities purchases is to roughly match the rate at
which those bonds are rolling off the Federal Reserve's balance sheet.
Credit card and
bank shares fell premarket after Trump doubled down on a demand that issuers
lower rates to 10% by Jan. 20 and keep them there for a year. Capital One was
down nearly 9%.
A group of
countries led by the UK and Germany is discussing plans for a military presence
on Greenland to appease Trump and show that Europe is committed to Arctic
security, people familiar said.
President Trump is
scheduled to be briefed Tuesday on options to respond to the protests in Iran,
according to U.S. officials, a sign the president is considering reprimanding
the regime for its crackdown on demonstrators as he has repeatedly threatened.
Iran warns it will
hit American bases in the Middle East if the Pentagon launches strikes, along
with Israel and regional shipping lanes.
Israel and Hamas
are preparing for renewed fighting as the Palestinian militant group is
refusing to disarm, a requirement that is holding up progress on President
Trump’s peace plan for Gaza. Israel’s military has drawn up plans for a new
ground operation inside Hamas-controlled territory in Gaza.
Exxon CEO Darren
Woods offered the starkest assessment, telling Trump in the live-streamed
meeting in the East Room that Venezuela is “uninvestable” under current
conditions. He said major changes were needed before his company would return
to the country, and that big questions remain about what return Exxon could
expect from any investments.
Fiscal
Policy
G3 fiscal policy will be expansive in 2026.
https://www.apolloacademy.com/g3-fiscal-policy-very-expansionary-in-2026/
Goldman on Trump’s bond buying bonanza.
What is confusing
to me about Trump wanting to increase Venesuelan oil production, it is direct
opposition to his rationale for imposing tariffs, i.e., to help/protect American
producers.
Inflation
Here
is how tariffs are being passed on the US consumer.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5985094
Greenland
Why Trump wants Greenland.
https://unherd.com/2026/01/the-space-war-will-be-won-in-greenland/
Investing
The latest from
Citadel.
The latest from B of A.
https://www.zerohedge.com/markets/hartnett-normally-would-be-time-sell-not-time
The outlook for this earnings season.
MARKET
CALL: Earnings Powering The Bull Market
News on Stocks in Our Portfolios
What
I am reading today
What
happened to the Ark of the Covenent?
What happened to the Ark of the Covenant? Here’s what
we know. | National Geographic
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