The Morning Call
3/22/19
The
Market
Technical
The Averages
(DJIA 25962, S&P 2854) roared yesterday, reversing the initial sell off
following the FOMC meeting. The S&P
closed well above the 2800 as well as the 2811/2815 former resistance levels;
so, technically, at this point, I see no reason to doubt further upside in
prices.
Volume was flat
and breadth was mixed.
The VIX declined
2%, but still finished above the late February/early March double bottom.
The long bond rose
another ¼ %---remaining above the quad top for a second day; if it remains
there through the close next Monday, it will reestablish a very short term
uptrend.
And.
***overnight,
global yields falling.
The dollar was
up 5/8%, bouncing off its 100 DMA and gaining back all of Wednesday decline.
GLD fell ½ %,
but this did little to damage its chart.
Bottom line: the
S&P ended above 2800/2811/2815; so, there remains little visible resistance
between its current price and its all-time high. More important, it reversed its initial
negative reaction to the FOMC meeting, suggesting that investors are way more
happy about a dovish Fed than they are worried about a slowing economy.
The pin action
in the long bond pointed to further worries among the fixed income investors
about a slowing economy (recession?).
The dollar seemed to be supporting equity investors, reflecting the
notion that while the US economy maybe weak, it is stronger than the rest of
the world. GLD was off on a strong
dollar,
Thursday in the charts.
Fundamental
Headlines
Yesterday’s
data was upbeat: weekly jobless claims rose less than anticipated and the March
Philly Fed manufacturing index was stronger than expected.
Overseas,
February UK retail sales were much better than forecast.
The
bulk of yesterday’s dialogue centered on the more dovish stance on monetary
policy codified in the statement of the latest FOMC minutes.
The
Fed has surrendered.
What
Powell couldn’t say.
The
odds of a recession.
Bottom
line: as you know, I am skeptical about any benefits to the economy of the Fed’s
latest move. The above articles support
that position. But just so you know, I looked
for some expert to applaud it (hint, hint Paul Krugman)---couldn’t find any. I will continue to look. That said, my concerns as well as the above
analysts is how the central bank stampede to easier money plays out when either
inflation rears its ugly head or the global economy continues to stagnate in
spite of the surfeit of liquidity. But
that is six, twelve maybe eighteen months away.
In the meantime, free money = higher stock prices.
If
any of our stocks enter their Sell Half Range, I will act accordingly.
In
the meantime, some of our stocks are already in their own private bear market. If any reach their Buy Range, I will also act
accordingly.
Where
are we in the current cycle?
News on Stocks in Our Portfolios
Revenue of $9.61B (+7.0%
Y/Y) beats by $10M.
Economics
This Week’s Data
US
The
February leading economic indicators rose 0.2% versus estimates of +0.1%.
International
March
EU consumer confidence came in at -7.4 versus consensus of -10.8.
The
March EU flash composite PMI was reported at 51.3 versus expectations of 52.0;
the flash manufacturing PMI was 47.6 versus 49.5 (the German flash
manufacturing PMI was 44.7 versus 48.0); the flash services PMI was 52.7, in
line.
February
Japanese flash manufacturing PMI was 48.9 versus projections of 49.2; February
inflation was +0.4% versus estimates of +0.3%.
Other
US
home prices tumbling.
US
oil ‘weapon’ could change geopolitics.
The Brexit drama just
keeps getting worse.
More.
***overnight, EU agrees
to a two week delay.
What
I am reading today
Four important investment
factors.
Second chances
are important.
Trump advocates Israeli sovereignty
over the Golan Heights.
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for Survival’s website (http://investingforsurvival.com/home)
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