Monday, September 11, 2023

Morning Note: Important Stuff!

Clients, if you haven't taken in Friday's video commentary yet, please do... I think it does a nice job describing a few of the drivers of our present assessment and overall allocation... I'll include the player at the very bottom of this note.

The following from the widely followed/highly respected Sentix September Economic Report comports with our current view of overall general conditions:

Emphasis mine:

Sentix Economic Index: How much is missing before the crisis? 

• The "first mover" among the economic indicators is also in weak shape in September. The overall index for the euro zone falls again to -21.5 points. The situation score falls to its lowest level since November 2022.

 • Germany remains in recession, increasingly reminiscent of the slumps after the 2008 financial crisis or the first lockdown in 2020. We measure the fifth consecutive decline in the overall index and the lowest value of -33.1 points since October 2022. Situation at lowest level since July 2020! 

• Internationally, we measure a significant deterioration in the US. In Switzerland, the economy continues to slide and we are close to the recession threshold. The only bright spot remains the Japanese economy, which is benefiting relatively from the lax interest rate policy and the associated weak yen.

Commentary on the survey results for September 2023, How much is missing before the crisis?: 

The signs for the global economy sent out by the "first mover" among the economic indicators - the sentix economic index - point to a further downturn and a strengthening of the economic downturn forces. The situation in Germany remains particularly precarious. Here we are measuring the weakest situation values since July 2020, when the economy was slowed by the first Corona lockdown. Germany is also weighing heavily on the economy in the euro zone as a whole. The recession is progressing. But even for the USA, which has so far held up well and defied the restrictive FED policy, the economic data are falling markedly. The tipping point of a global recession is less distant than one might think.

And here's your weekly sector, region and asset class update: 

Asian stocks were mostly green overnight, with 10 of the 16 markets we track closing higher.

Same for Europe so far this morning, with 14 of the 19 bourses we follow trading up as I type.

US equity averages are up to start the session: Dow by 76 points (0.22%), SP500 up 0.39%, SP500 Equal Weight up 0.24%, Nasdaq 100 down 0.44%, Nasdaq Comp up 0.54%, Russell 2000 up 0.35%.

As for Friday’s session, US equity averages (save for small caps) closed slightly higher: Dow up 0.2%, SP500 up 0.1%, SP500 Equal Weight up 0.04%, Nasdaq 100 up 0.1%, Nasdaq Comp up 0.1%, Russell 2000 down 0.2%.

This morning the VIX sits at 14.30, up 3.22%.

Oil futures are up 0.15%, nat gas futures are up 0.38%, gold's up 0.38%, silver's up 0.90%, copper futures are up 2.36% and the ag complex (DBA) is up 0.69%.

The 10-year treasury is down (yield up) and the dollar is down 0.63%.

Among our 34 core positions (excluding options hedges, cash and money market funds), 26 -- led by URNM (uranium miners), DBB (base metal futures), EWZ (Brazil equities), XME (base metals miners) and MP Materials -- are in the green so far this morning... The losers are being led lower by Dutch Bros, Range Resources, TLT (long-term treasuries), XLE (energy stocks) and XLK (tech stocks).

Key question for investors:
"Can you observe without any prejudice, without taking any sides, without protecting your own personal conclusions, your beliefs, your dogmas, your experience and knowledge?
And therefore be totally free of all that to observe clearly?" 
--J. Krishnamurti

Have a great day!

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