The Morning Call
3/26/19
The
Market
Technical
The Averages
(DJIA 25516, S&P 2798) rested (Dow up slightly, S&P down slightly) after
a big Friday. However minor its decline, the S&P still
finished below the lower boundary of its very short term uptrend (if it remains
there through the close today, that trend will be voided) and, more importantly,
below the critical 2800 level (clearly below other technicians 2811/2815
resistance quad top). This pin action was about as inconclusive as
it could possibly be. So, I am going to
wait for a bigger move, in either direction, below coming to a conclusion about
price direction.
And.
Update on margin debt.
https://www.advisorperspectives.com/dshort/updates/2019/03/24/margin-debt-and-the-market-up-2-25-mom
Volume fell and
breadth was mixed.
The VIX declined
1%, attempting for a second day in a row to challenge its 200 DMA but failing. It continues to mirror the S&P closely.
The long bond rose
on high volume, continuing to suggest more upside. But remember, it gapped open last Friday and
usually those gaps are closed. At the risk
of stating the obvious, bond investors are clearly expecting further rate declines
(a weaker economy).
And.
But
global bond markets are signaling lower rates/economic slowdown.
The dollar was
up unchanged, ending with a positive chart (above both MA’s, in a short term
uptrend and above a prior low).
GLD continued its
advance (up ¾ %) off a minor double bottom and remains above both MA’s and in a
short term uptrend.
Bottom line: the
S&P remains at an important crossroads, with Monday’s pin action providing
little guidance. To be sure, it closed below
2800; but not with enough authority to be directionally informative.
TLT, GLD and UUP
are, at the moment, pointing to lower interest rates/a weaker economy.
How
the shakeout in US markets are reverberating around the globe.
Monday
in the charts.
Fundamental
Headlines
Yesterday’s
economic stats were mixed: the February Chicago Fed national activity index
came in below expectations while the March Dallas Fed was above.
Overseas,
the data was also mixed: the January Japanese all activity index was below
estimates while the March German business climate index was above.
There was a lot of political
headlines yesterday, but the only economic development that bears mentioning
was the continuing decline in interest rates.
Bottom line: I
have beat the whole Fed policy U turn and the fall in interest rates to death
since last Wednesday. So I am not going
to be repetitious except to say that the more powerful the move down in rates,
the more likely I will have to lower my 2019/2020 economic growth forecast; and
I am below consensus, so imagine the impact on stock prices of declining
outlook for the economy and corporate earnings from the main stream pundits.
News on Stocks in Our Portfolios
Revenue of $354.9M (+5.9%
Y/Y) misses by $1.56M.
Hormel Foods (NYSE:HRL) declares $0.21/share
quarterly dividend, in line with previous.
Economics
This Week’s Data
US
The
March Dallas Fed manufacturing index was reported at 8.3 versus estimates of
7.0.
February housing starts
fell 8.7% versus forecasts of down 28.3%; building permits declined 1.6% versus
expectations of -0.6%.
International
Other
Fake goods hit a
half a trillion dollars in trade.
Brexit update.
https://www.zerohedge.com/news/2019-03-26/pound-rallies-brexiteer-leader-tentatively-backs-mays-deal
What
I am reading today
Three
reasons that your retirement shouldn’t hinge on social security.
Quote of the day.
Never confuse luck with being smart.
Visit Investing
for Survival’s website (http://investingforsurvival.com/home)
to learn more about our Investment Strategy, Prices Disciplines and Subscriber
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