The Morning Call

The Morning Call

9/24/19

The Market

         

    Technical

            The Averages (26949, 2991) were mixed (Dow up, S&P down) on lower volume (again).  But breadth improved and the VIX was down 2 5/8% (a plus for stocks).  Long term, my assumption is that prices go higher.  Shorter term, the September 4^th gap up open needs to be filled.

            GLD was strong (up ½%).  The dollar advanced (1/8%).  The long bond was off three cents.  These indicators are again pointing at the need for safety.

            The dollar shortage eased but has not gone away.

            https://www.zerohedge.com/markets/dollar-shortage-eases-banks-still-signal-66-billion-funding-shortfall-fed-repo-operation

            Monday in the charts.

            https://www.zerohedge.com/markets/silver-soars-yield-curve-crashes-after-global-macro-data-plunges

    Fundamental

       Headlines

            Yesterday’s economic numbers were upbeat: the August Chicago national activity index, the September manufacturing and composite PMI’s were better than expected while the September services PMI was worse.

           

            David Rosenberg isn’t.

            https://www.zerohedge.com/economics/david-rosenberg-even-if-fed-cuts-rates-0-recession-will-hit-12-months

Overseas the September German flash manufacturing, services and composite PMI’s were below estimates as were the September EU manufacturing, services and composite PMI’s.  South Korean exports experienced their largest drop in a decade.

            Bottom line: I noted in last weekend’s Closing Bell, that economy has been moving in fits and starts for the last five or six years.  While yesterday’s strong stats on top of last week’s very positive data suggests that we are in one of those upbeat stretches, it is far too soon to be talking about a period of sustained growth.  Especially with the international data continuing to weaken, a serious trade tiff between Japan and South Korea and mediocre odds of anything hugely promising to come out of the US/China trade dispute. 

            ***overnight, China grants new tariff waivers on soybean purchases.

            https://www.zerohedge.com/political/china-awards-new-tariff-waivers-us-soybean-imports-shipments-start-next-month

Odds of a trade deal.

            https://www.zerohedge.com/markets/rabobank-there-wont-be-trade-deal-breakthrough-china-would-have-change-its-entire-economic

            With equity prices near all-time highs, it is a time to be very conservative in approaching your assets.  I believe taking some profits in big winners will prove a rewarding strategy.

            https://www.zerohedge.com/economics/billionaire-hedge-fund-manager-paul-singer-hedges-against-upcoming-market-crash

The disconnect between the economy and the Market (must read).

            https://www.zerohedge.com/markets/disconnect-between-markets-economy-has-grown

    News on Stocks in Our Portfolios

 

            Hormel Foods (NYSE:HRL) declares 0.21/share quarterly dividend, in line with previous.

Economics

   This Week’s Data

      US

            The September manufacturing PMI came in at 51.0 versus estimates of 50.3; the services PMI was 50.9 versus 51.3; the composite PMI was 51.0 versus 49.6.

     International

            July Japanese leading economic indicators came in at 93.7 versus forecasts of 93.6; the September manufacturing PMI was 48.9 versus 49.0; the services PMI was 52.8 versus 52.7; the composite PMI was 51.5 versus 51.1.

    Other

            Negative interest rates are a huge burden.

            https://www.zerohedge.com/political/mish-negative-interest-rates-are-socio-political-poison

What I am reading today

            Evidence Iran violated nuclear deal from day one.

                https://www.zerohedge.com/geopolitical/evidence-iran-violated-nuclear-deal-day-one

           

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