7/14/25
The Market
Technical
The S&P closed basically flat on the week,
though it finished right on the uptrend off its 4/7 low---a slight warning sign.
On the other hand, it remains above all three DMAs and in uptrends
across all timeframes. Given that July is traditionally a good month for Mr.
Market….barring another s**t bomb from the Donald, we are likely to have
smooth sailing over the near term. Given valuation levels, I am not making any
new equity investments though traders might want to participate.
Frothy flows and a sell signal.
The latest from Goldman’s trading desk.
Summer melt up set up.
https://www.zerohedge.com/the-market-ear/summer-melt-set-7-trillion-sidelines-eye-nvda-btc
The bond guys continue to be under impressed with
the economic outlook---likely the result of the impending turmoil from the
Trump tariffs and the BBB. Having failed to push upwards through its 100 DMA
the prior week, last week it failed at 50 DMA. The good news I suppose is that
near in support exists at the lower boundaries of its very short term trading
range and its intermediate term downtrend. Given that it is in downtrends
across all time frames, below all DMAs and facing increased inflation from the
BBB, the assumption has to be that there is more downside.
GLD was up on the week, breaking above the short
downtrend off its 6/13 high as well as its 50 DMA. It is now above all DMAs and
in uptrends across all timeframes. The inflationary implications of the BBB
should keep it on an upward trajectory. I initiated trading positions in GDX
and ETH on Friday.
https://www.zerohedge.com/the-market-ear/btc-rockets-overbought-stratosphere-classic-vacuum-move
Gold locked and loaded.
https://www.zerohedge.com/the-market-ear/gold-locked-loaded-eyes-breakout-volatility-hits-lows
The dollar continued the rally it initiated the
prior week, pushing above a downtrend that started 12/19. It is still an ugly
chart but if it can successfully challenge its 50 DMA, perhaps there is some
hope that the worst is over.
Friday in the charts.
https://www.zerohedge.com/market-recaps/bitcoin-bullion-black-gold-soar-end-weak-week-stocks-bonds
Friday in the technical stats.
https://www.barchart.com/stocks/momentum
https://www.barchart.com/stocks/sectors/rankings
Bitcoin breaks out.
https://www.zerohedge.com/the-market-ear/moon-mode-melt-btc-breaks-out-200k-sight
Fundamental
Headlines
The
Economy
The stats last week were almost nonexistent. What
there was was upbeat. Overseas, data was also in short supply. But there were
four inflation indicators and they were either positive (one) or neutral
(three).
So, no real judgement about the economy can be made
(keeping me hopeful on my ‘muddle through’ call) from this data set. Although
clearly the inflation news is a plus (not in keeping with my ‘inflation is as
good as it is going to get’ scenario.
On the policy front:
(1) the FOMC minutes read slightly dovish
increasing the likelihood of a September rate cut---though I continue to
believe that would be a mistake given the inflationary bias of both tariff and
fiscal policies,
(2) tariff policy remains as confusing as ever. Trump’s
strategy seems to be to keep the opposition so befuddled that they will make
him an offer better than he would otherwise accept. Whatever the outcome, the
bad news is that it will be initially inflationary; the good news is that it is
a back doorway to raise taxes to pay for the BBB.
See the latest budget report.
https://tradingeconomics.com/united-states/government-budget-value
Bottom line. Short term, I remain in the ‘muddle
through’ camp. Longer term, current fiscal policy remains a major negative,
leaving the overall bottom line (i.e., larger deficits, more national debt) unchanged.
Which means slower growth and higher inflation.
As always, I have to include the caveat that this
is all dependent on Trump not turning everything on its head. So my conviction
level is low on economic growth but much higher on the long term outlook on inflation.
That said, stocks love to climb the
proverbial ‘wall of worry.’ Plus July is
historically a good month for stock prices. That leaves me on the sidelines but
anticipating reducing my equity exposure around mid-July or until this latest
run is over whichever comes last.
US
International
May Japanese industrial production fell 0.1% versus
estimates of a 0.5% gain.
Other
What it would take to initiate a recession
watch.
https://bonddad.blogspot.com/2025/07/putting-markers-down-what-will-it-take.html
Monetary Policy
Would
a change in the Fed chair really change Fed policy?
Fiscal Policy
A fiscal hawk’s defense of
the BBB.
https://www.cato.org/blog/fiscal-hawks-defense-gops-deficit-busting-budget-bill
Tariffs
A
trade economist on Trump’s hard ball tactics.
https://www.nytimes.com/2025/07/11/business/pietra-rivoli-tariffs.html
Looming copper tariffs leave US companies scrambling.
https://www.nytimes.com/2025/07/10/business/trump-copper-tariffs-prices.html
Trump’s
reign of tariffs isn’t over.
MARKET CALL: Trump's Reign Of Tariffs Ain't Over
Investing
Concentration in the S&P 500 has returned
to extreme levels.
https://www.apolloacademy.com/extreme-concentration-in-the-sp-500-2/
Are small caps next in line to shine?
https://www.advisorperspectives.com/commentaries/2025/07/11/small-caps-next-shine
Gold spikes as safe haven demand surges.
Does the Market care about tariffs anymore?
https://www.zerohedge.com/markets/does-market-care-about-tariffs-anymore
The latest from BofA.
https://www.zerohedge.com/markets/hartnett-stocks-crypto-loving-trump-policy-flipflop-detox-gorge
Investor Alert
In my quarterly review of my holdings,
Constellation Brands failed to meet the minimum quality standards for inclusion
in the Dividend Growth Portfolio. As a result the Dividend Growth Portfolio
will Sell its holding at the open.
News on Stocks in Our Portfolios
Fastenal GAAP EPS of $0.29 beats by $0.01, revenue of $2.08B beats by
$10M
Fastenal (NASDAQ:FAST) declares $0.22/share quarterly dividend.
What I am reading today
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