The Morning Call
9/3/19
The
Market
Technical
Longer term, the
S&P maintains its upward momentum. It
is uptrends across all timeframes and above its 200 DMA. It is attempting to reset its 100 DMA to
support (if it remains there through the close today, it will do so). On the other hand, it continues in the
trading range dating back to August 5th, though it is clearly at the
upper boundary. Resetting the 100 DMA
and busting out of this short term trading range will likely add the upward
momentum. Failure just means
more back and forth until this trading range is voided.
Despite
the stock guys getting jiggy with the trade news last week, bond investors
appeared to be more circumspect. I don’t
believe that it has anything to do with the impending Fed rate cut. So, somebody is worried about something.
The
dollar smoked last week. Global
investors apparently continue to view it as a safe haven and not concerned
about the prospects for another rate cut.
GLD
did retreat a tad last week; but its chart remains strong. More evidence that at least some investors continue
to be worried.
The VIX declined---as
you might expect in a stock rally.
However, it held above both MA’s, suggesting weak support for the S&P
breaking above the upper boundary of the August 5th trading range.
Fundamental
Headlines
Last week’s
economic data was neutral as were the primary indicators. So, the rating is neutral and the score:
in the last 202 weeks, sixty-six were positive, ninety negative and forty-six
neutral. Nothing here to warrant altering
my forecast.
Overseas, the
numbers were positive with the Japanese stats quite strong. This is not the first time in the recent past
that the data suggest that the Japanese economy has showed signs of
expansion. It is not yet a trend but
bears watching.
The main headline
last week was the supposed détente in the US China trade war, which, of course,
came to naught as both the US and China imposed the tariffs that had been
threatened.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
International
The
August German manufacturing PMI was 43.5 versus expectations of 43.6; the August
EU manufacturing PMI was 47.0 versus 47.0; and the August UK manufacturing PMI
was 47.4 versus 48.4 (reminder, anything below 50 signifies contraction).
July
EY PPI was +0.2%, in line.
Other
China
issues ultimatum to Hong Kong rioters.
Argentina
imposes capital controls.
What
I am reading today
Quote
of the day.
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