Friday, March 5, 2021

The Morning Call--Technicals back a critical juncture

 

The Morning Call

 

3/5/21

 

The Market

         

    Technical

 

           

            The technicals continue to hover around critical support levels.  Yesterday, the long bond ended below the lower boundary of its very short term trading range, voiding that trend.  Minor support exists around four points lower; if that gives, then it is another 19 points to the lower boundary of its intermediate term uptrend.  With the Market worried about rising interest rates, this is clearly not a good sign.

 

            The S&P finished below the lower boundary of its short term uptrend for the second day; if it closes there today, it will reset to a trading range.

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/powell-plunges-markets-disorder

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

                          

                            January factory orders rose 2.6% versus consensus of +2.1%; ex                           were up 1.7% versus 1.9% in December.

 

                        International

 

                        Other

              

                          Median new home price decouples from median household income.

                          https://politicalcalculations.blogspot.com/2021/03/median-new-home-prices-decouple-from.html#.YEEqoWhKiUk

 

                                                   OPEC leaves production unchanged.

                          https://www.zerohedge.com/markets/oil-spikes-opec-meeting-starts-saudi-oil-minister-urges-supply-caution

                              

                                                   Nowcasts project strong Q1 GDP growth.

                          http://www.capitalspectator.com/us-economic-growth-estimates-for-q1-rise-sharply/

 

 

                               The Fed

 

                 Powell delivers a nothing burger.

                 https://www.ft.com/content/1feb5449-76f0-4f67-85b2-ab03f05d5a65

 

               Fiscal Policy

 

                 Will the stimulus package cause inflation?

                 https://www.washingtonexaminer.com/opinion/will-the-1-9-trillion-stimulus-package-cause-runaway-inflation

 

               Inflation

 

                 Food price inflation accelerates.

                 https://www.zerohedge.com/commodities/food-price-inflation-accelerates-ninth-consecutive-month-could-trigger-destabilization

 

              The coronavirus

 

                Which experts were right?

                https://spectator.org/covid-lockdowns-experts/

 

              Bottom line

 

                The latest from Jim Grant (must read).

                 https://www.zerohedge.com/markets/jim-grant-fed-has-left-us-bond-market-thats-all-destroyed

 

              More on valuations.

              https://www.advisorperspectives.com/dshort/updates/2021/03/02/is-the-stock-market-cheap

              https://www.advisorperspectives.com/dshort/updates/2021/03/03/market-cap-to-gdp-an-updated-look-at-the-buffett-valuation-indicator

 

    News on Stocks in Our Portfolios

 

Kroger (NYSE:KR): Q4 Non-GAAP EPS of $0.81 beats by $0.13; GAAP EPS of -$0.10 misses by $0.79.

Revenue of $30.74B (+6.4% Y/Y) misses by $50M.

 

 

What I am reading today

 

            Photos from Mars.

            https://www.bbc.com/news/in-pictures-56238018

 

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

 

 

 

Thursday, March 4, 2021

The Morning Call--Multiple technical challenges occurring again

 

The Morning Call

 

3/4/21

 

The Market

         

    Technical

 

            The S&P once again broke below the lower boundary of its short term uptrend; if it remains there through the close on Friday, it will reset to a trading range.  In addition, the long bond ended below the lower boundary of its very short term trading range; if it remains there through the close today, the trend will be voided.  Clearly, investors still have the willies.  Let’s see how this plays out.

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/stocks-bonds-battered-hindenburg-omen-strikes

 

            Is the puke coming?

            https://www.zerohedge.com/the-market-ear/c5qw7ew7b8

 

            NASDAQ breaks critical support level.

            https://www.zerohedge.com/markets/nasdaq-crashes-through-critical-resistance-gives-march-gains

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Q4 nonfarm productivity fell 4.2% versus expectations of -4.7%.

                              

                          Weekly jobless claims rose 745,000 versus projections of 750,000.

                             

The February services PMI was 59.8 versus estimates of 59.9; the   composite PMI was 59.5 versus 58.8; the February ISM nonmanufacturing index was 55.3 versus 58.7; February light vehicle sales were 15.7 million versus 16.1 million in January.

 

                        International

 

January EU retail sales declined 5.9 versus forecasts of -1.1%; the January unemployment rate was 8.1% versus 8.3%; the February construction PMI was 45.0 versus December’s 44.1.

 

The February German construction PMI was 41.0 versus consensus of 46.6; the February UK construction PMI was 53.3 versus 51.0.

 

February Japanese consumer confidence was 33.8 versus 29.6 reported in January.

 

                        Other

 

The Fed

 

The Fed released its latest Beige Book.  The most notable feature was it is starting to notice (drum roll, please)………inflationary pressures.  Who woulda thunk?

      https://www.zerohedge.com/markets/beige-book-escalates-inflation-warning-sees-most-prices-rising-moderately-some-notably

 

 

Fiscal Policy

 

  Bringing back earmarks would be a mistake.

  https://www.nationalreview.com/2021/03/dear-congress-bringing-back-pork-would-be-a-disaster/

 

Inflation

 

  Inflation comes for the profligate.

  https://lawliberty.org/inflation-comes-for-the-profligate/

 

  The opposite of 2008.

  https://www.epsilontheory.com/the-opposite-of-2008-2/

 

  The game is changing.

  https://www.advisorperspectives.com/commentaries/2021/03/03/inflation-the-game-has-shifted-from-limbo-to-hurdles

 

  The Fed versus the market.

  https://www.zerohedge.com/markets/how-high-could-inflation-soar-coming-months-and-what-will-fed-do

 

Speculation

 

  Everyone is talking bubbles. Is it time to act?

  http://www.capitalspectator.com/everyones-talking-bubbles-is-it-time-to-act/

 

The coronavirus

 

  The idiotsy of the lockdown (must read).

  https://www.aier.org/article/lockdowns-could-reshape-american-politics-for-a-generation-or-several/

 

Bottom line

 

  More on valuations.

  https://www.advisorperspectives.com/dshort/updates/2021/03/03/regression-to-trend-another-look-at-long-term-market-performance

 

   February dividends by the numbers.

  https://politicalcalculations.blogspot.com/2021/03/dividends-by-numbers-in-february-2021.html#.YEAS4WhKiUk

 

    News on Stocks in Our Portfolios

 

Brown-Forman (NYSE:BF.B): FQ3 GAAP EPS of $0.45 beats by $0.02.

Revenue of $911M (+1.3% Y/Y) beats by $8.71M.

 

General Dynamics (NYSE:GD) declares $1.19/share quarterly dividend, 8.2% increase from prior dividend of $1.10.

 

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.

 

 

 

Wednesday, March 3, 2021

The Morning Call--What if interest rates don't matter?

 

The Morning Call

 

3/3/21

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/rkt-takes-big-tech-black-gold-bitcoin-buck-stall-out

 

            Is a head and shoulders forming in the ‘hot’ stocks.

            https://www.zerohedge.com/the-market-ear/c5giawo4yi

 

            Is latest bullishness a contrary indicator?

            https://www.bloomberg.com/news/articles/2021-03-02/wall-street-bullishness-close-to-flashing-contrarian-sell-signal?srnd=premium

 

            Which assets are overheating as liquidity collapses?

            https://www.zerohedge.com/markets/temperature-check-which-asset-are-overheating-liquidity-collapses

 

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications rose 0.5% while purchase applications were up 2.0%.

 

The February ADP private payrolls report showed job increases of 117,000 versus predictions of 177,000.

                          https://www.zerohedge.com/personal-finance/goods-sector-jobs-tumble-most-april-adp-employment-gains-slow-february

 

                        International

 

                          The January EU PPI was 1.4% versus forecasts of 1.2%.

 

The February Japanese services PMI was 46.3 versus 46.1 recorded in    January.

 

The February Chinese Caixin services PMI was 51.5 versus 52.0 reported in January; the composite PMI was 51.7 versus 52.2 in January.

 

The February EU services PMI was 45.7 versus consensus of 44.7; the EU composite PMI was 49.8 versus 48.1; the German services PMI was 45.7 versus 45.9; the German composite PMI was 51.1 versus 51.3; the UK services PMI was 49.5 versus 49.7; the UK composite PMI was 49.6 versus 49.8.

                               

                        Other

 

                          January median household income.

                          https://politicalcalculations.blogspot.com/2021/03/median-household-income-in-january-2021.html#.YD59yuhKiM8

 

                          Over 11 million families at risk of losing housing.

                          https://www.calculatedriskblog.com/2021/03/cfpb-over-11-million-families-at-risk.html

 

                          Housing prices up 10% YoY in January.

                          https://www.calculatedriskblog.com/2021/03/corelogic-house-prices-up-100-year-over.html

 

            The Fed

 

              The Market demands more stimulus.

              https://www.zerohedge.com/markets/market-demands-further-intervention-gimme-moar-stimmie

 

            Inflation

 

              Shortages everywhere you look.

              https://awealthofcommonsense.com/2021/03/shortages-everywhere-you-look/

           

  Stagflation cometh.

              https://www.zerohedge.com/economics/stagflation-cometh

 

            Bottom line

 

              Update on valuations.

              https://www.advisorperspectives.com/dshort/updates/2021/03/02/the-q-ratio-and-market-valuation-february-update

                  https://www.advisorperspectives.com/dshort/updates/2021/03/02/is-the-stock-market-cheap

           

              What if interest rates don’t matter?

              https://awealthofcommonsense.com/2021/02/what-if-interest-rates-dont-matter-as-much-as-we-think/

 

              Buy the dip in bonds.

              https://www.zerohedge.com/markets/guggenheims-minerd-powell-has-made-it-clear-buy-dip-bonds

 

                  Gold is dead.

              https://www.zerohedge.com/crypto/gold-dead-move-billionaires-bet-bitcoin-draper-sees-5mm-price

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            Blindspot bias.

            https://incognitomoneyscribe.com/2021/03/02/minding-your-blind-spots/

 

 

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

 

 

 

Tuesday, March 2, 2021

The Morning Call--Unwelcome food inflation

 

The Morning Call

 

3/2/21

 

The Market

         

    Technical

 

            Yesterday’s notable pin action occurred in (1) the S&P which regained the lower boundary of its very short term uptrend, voiding last Thursday/Friday’s break.  That keeps it above both DMA and in uptrends across all time frames.  Thank you, Mr. Powell, and (2) the long bond was pounded again but held above the lower boundary of its short term trading range, leaving that level as support.

 

            Monday in the charts.

            https://www.zerohedge.com/markets/stocks-crypto-bond-yields-surge-amid-commodity-purge

 

            Are we bullish enough yet?

            https://thereformedbroker.com/2021/03/01/only-took-12-years-but-wall-street-has-finally-gotten-bullish-enough/

 

            How worrisome is the rise in interest rates?

            https://www.pragcap.com/how-worrisome-is-the-rise-in-interest-rates/

               

            BofA says 1.75% the tipping point for bonds.

            https://www.zerohedge.com/markets/bofa-175-tipping-point-bonds

 

            Bond market calling Fed’s bluff.

             https://www.zerohedge.com/markets/bond-market-calls-feds-bluff-biggest-short-ever

 

            Beware the great commodity bull.

            https://www.zerohedge.com/the-market-ear/c9j8qhclrp

 

            Is the worst over for the dollar?

            https://www.zerohedge.com/the-market-ear/czpvocr995

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

                           

                            Month to date retail chain store sales declined less than in the prior week.

 

The February manufacturing PMI was 58.6 versus forecasts of 58.5.

https://www.advisorperspectives.com/dshort/updates/2021/03/01/february-markit-manufacturing-production-growth-near-six-year-peak-but-price-gauge-highest-since-2011

 

The February ISM manufacturing index was 60.8 versus predictions of 58.8.

https://www.advisorperspectives.com/dshort/updates/2021/03/01/february-ism-manufacturing-index-continued-expansion

 

January construction spending rose 1.7% versus consensus of +0.8%.

                          https://www.calculatedriskblog.com/2021/03/construction-spending-increased-17-in.html

 

                        International

 

The January Japanese unemployment rate was 2.9% versus expectations of 3.0%.

 

January German retail sales fell 4.5% versus estimates of -0.3%.

 

The February EU flash CPI came in at 0.2%, in line with the January reading.

 

                        Other

                         Why the economy will run hot, then crash.

                          https://www.zerohedge.com/markets/sugar-rush-why-economy-will-run-hot-then-crash

                            

                          Framing lumber prices doubled YoY.

                          https://www.calculatedriskblog.com/2021/03/update-framing-lumber-prices-more-than.html

 

                          Update on seven high frequency indicators.

                          https://www.calculatedriskblog.com/2021/03/seven-high-frequency-indicators-for.html

 

            The Fed

 

              The Fed can’t force outcomes that the Market rejects.

   https://www.forbes.com/sites/johntamny/2021/02/28/the-federal-reserve-cant-force-outcomes-that-market-forces-reject/?sh=5f390af54e08

 

              Why this QE is different.

              https://global-macro-monitor.com/2021/02/25/why-this-qe-is-different-in-one-chart/

 

            Fiscal Policy

 

              The economy risks a speeding ticket.

              https://www.nytimes.com/2021/02/26/business/biden-stimulus-overheat-economy.html

 

                Inflation

 

              Are inflation fears justified?

              https://www.project-syndicate.org/commentary/long-term-inflation-risks-central-banks-globalization-by-kenneth-rogoff-2021-03?utm_source=project-syndicate.org&utm_medium=email&utm_campaign=authnote&

 

                  Central banks will happily ignore inflation mongers.

              https://www.reuters.com/article/us-global-economy-central-banks-analysis/analysis-central-banks-will-happily-ignore-inflation-mongers-idUSKCN2AT1KL

 

                  Unwelcome food inflation.

              https://www.zerohedge.com/commodities/unwelcoming-food-inflation-outpaces-inflation-and-incomes-destabilization-risks

 

                Bottom line

 

            What happens is bitcoin succeeds?  Substitute ‘gold’ for ‘bitcoin’ in this article and decide how valid his thesis is.

              https://www.nakedcapitalism.com/2021/02/what-happens-if-bitcoin-succeeds.html

 

 

    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.