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Markets, Charts, and Football

Happy Market Update!

I hope you all had an enjoyable Thanksgiving time off with family…or hey, just by yourself. It’s been interesting week getting back in the swing of things after eating too much. But luckily had a lot of great football to watch. If you don’t know, I'm a huge Texas fan. My Dad went there in 1977 for a master’s in engineering…and I watched my first football game in the Austin stadium. Now of course, I don’t remember it…but the burnt orange has stuck through thick and thin...great years and horrible decades. This year, they are playing for the Big12 championship. And like a good father, I am indoctrinating my son into the Longhorn culture. So at 10am tomorrow morning, I will NOT be answering calls. Yes, I am an emotional fan…and yes, it does matter if they win or lose.

People all the time telling me that the offense didn’t care if I closed a deal or not. Yeah? Stupid. That’s what a non-sports fan says. Don’t believe me? Talk to a Broncos fan after a loss by 70 points on a Monday morning zoom office meeting. Too soon? Whatever. You are in the playoff hunt now. Just get there and beat Miami to keep them out of the Super Bowl.


There has been a lot of info out the past 2 weeks, so I’m just going to jump in without a great segway. We will get back to that next week…


Durable Goods. This chart shows that durable goods ordered had a significant drop. Then these orders are down, manufacturers are not planning on…well…manufacturing. The forecast was for a drop by 3.2% and it was worse at 5.4%. So will be something to watch into the next 2 quarters in our economy.

This next chart is about consumer sentiment. If you don’t feel good…you probably aren’t spending. That’s the idea behind this measure. The low in sentiment back in June and July 2022 was the high for inflation. That was even lower than sentiment in the Great Recession of the 2000s. That speaks volumes. By the way, our decline here since the summer is sending us back towards the late 2009 / early 2009 lows. For the older crowd like me…that should tell you something. When consumers are not in good spirits, they stop spending.

Good news? Sure! It’s the holiday season. That means Santa Claus rally?? No! That is actually a very specific time of the year…the last 5 trading days at the end of the year, and the first 2 trading days of the new year. So it’s still ahead. But not to worry. December is typically a strong month for stock and the economy. And the year before a presidential election? Check this out: December is usually higher in a pre-election year. Call your brokers! P.S. This is not stock or financial advice.

Don’t like that chart? Here’s more evidence just for the seasonality of the market. The blue line is us (within the past week or so). So that looks strong heading into the end of the year…even when it’s not a pre-election year. Call your…nevermind. I cannot give you advice.

No complaints about DC, Tim? Because it’s the holidays?! Not a chance in hell. DC doesn’t care about you and your holidays…I don’t give them time off then either. These people spend money like they are fighting over “Care Bears” in the early 1980s. This chart shows how much of our taxes are just paid to interest for the federal debt. I don’t know about you, but if the interest reaches the amount of taxes collected, I don’t know what they will do! Just kidding. They will raise taxes. For those of you who don’t like my charts, here is a mad face but with a Santa cap on.



10yr yield: Check out this face!! I think the bond market is telling us we are pass any more rate hikes. Another one now would take the market by surprise…and they don’t want that. How far will it go? The first I would like to see is that yellow horizontal line by the question mark. That was a key resistance level when we up that held for a while. Gotta get there and below it.

MBS: Remember up means lower rates. LFG! As the young kids say. The purple trendline is the 200 day moving average. Today looks like a significant close above that line. We haven’t seen a significant close above that level since the end of 2021. LFG!


I know you are probably wondering if Texas will make the college playoffs. They need some help, but I’m saying there’s a chance! First thing is first…don’t get ahead of yourself. Take care of your business and then freaking pray. A lot. If they can pull it out…I’ll say it’s for Tex! Hook ‘em!


What doesn’t kill us makes us stronger.


Tim

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