Monday Morning Chartology

The Morning Call

4/24/17

The Market

         

    Technical

            The S&P made another try to challenge its very short term downtrend and was unsuccessful.  That is not to say that it won’t happen.  Clearly, if Trump/GOP delivers on its latest promises, the Averages will almost surely make a run at their former highs.

            Despite the renewed Trumpflation enthusiasm, bond investors don’t seem to be impressed.  TLT hardly reacted to last week’s news, remaining firmly in a five week rally.

            https://www.advisorperspectives.com/dshort/updates/2017/04/21/treasury-snapshot-the-recent-breakout-in-yields-appears-to-be-in-reversal

            GLD is making a second try at a successful challenge of the upper boundary of its short term downtrend, having already reset its 100 and 200 day moving averages.

            The dollar remains within two narrowing trading ranges defined by (1) the upper boundary of a very short term downtrend and the lower boundary of a short term uptrend and (2) its 100 and 200 day moving averages.

            The VIX held on to its recent strength and like bonds, demonstrated some skepticism about the enactment of any meaningful fiscal reform.

    Fundamental

       Headlines

            ***overnight, the French election results ended just as planned, making all happy; the April German business climate index came in above expectations.

       Investing for Survival

   

            Your brain wasn’t built to handle reality.

            https://www.bloomberg.com/view/articles/2017-04-03/your-brain-wasn-t-built-to-handle-reality

    News on Stocks in Our Portfolios

 

Kimberly-Clark (NYSE:KMB): Q1 EPS of $1.57 beats by $0.02.

Revenue of $4.48B (flat Y/Y) misses by $20M.

Illinois Tool Works (NYSE:ITW): Q1 EPS of $1.54 beats by $0.09.

Revenue of $3.47B (+6.1% Y/Y) beats by $70M.

The cash and stock deal values Bard (NYSE:BCR) at $317 per share, 25% above Friday's close. Bard owners will receive about $222.93 per share in cash and 0.5077 shares of Becton Dickinson (NYSE:BDX) for each share of Bard they hold.

The companies are expecting $300M of annual run-rate synergies by 2020, and revenue synergies by 2019. The deal is also anticipated to improve gross margins by about 300 basis points beginning in fiscal 2018, and increase the trajectory of EPS growth to the mid-teens.

The deal is hoped to close in fall 2017.

Economics

   This Week’s Data

            The March Chicago Fed national activity index was reported at 0.08 versus estimates of 0.3.

   Other

            US rig count continues to rise (medium):

            http://www.zerohedge.com/news/2017-04-21/rig-count-rise-continues-lead-us-crude-production-20-month-highs

            OPEC losing credibility---like they ever had it (short):

            http://www.zerohedge.com/news/2017-04-21/opec-rumor-mill-utterly-fails-oil-tumbles-production-cut-deal-extension-chatter

Politics

  Domestic

Quote of the day (short):

http://cafehayek.com/2017/04/quotation-of-the-day-2052.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+CafeHayek+%28Cafe+Hayek%29

  International War Against Radical Islam

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