The Morning Call
10/15/19
The
Market
Technical
The Averages (26787,
2966) sold off modestly yesterday. However,
it was not enough to push either index back below the upper boundary of a
developing very short term downtrend thereby negating it in its infancy (a plus
for stocks). Due to the holiday, there
was not much volume. Breadth
weakened. The VIX was down 6 ½%, a surprisingly large
decline on such a ho hum trading day (another positive for equities). For the time being, I am sticking with my
assumption that the trend is up.
Gold and the dollar
were up. Gold remained above the lower boundary
of its pennant formation as well as both MA’s and is in very short term and
short term uptrends. The dollar’s
technical position continues strong.
The bond market
was closed yesterday.
Monday in the
charts.
Morgan Stanley
thinks Friday was a top.
More liquidity
problems (must read).
Fundamental
Headlines
No US economic
releases yesterday. Overseas, August
EU industrial production, the September China trade surplus and September
German PPI were better than anticipated while September Chinese vehicle sales were
disappointing.
As I am sure you
know, investors spent the weekend and yesterday trying to analyze the terms and
effects of the US/China trade truce.
Added to the mix was a new request by the Chinese to meet again for more
discussion on the deal which only adds more confusion.
***overnight, the
Chinese begin the walk back from the deal.
Thoughts on the
trade truce from:
The
Money Illusion
The American Institute
of Economic Research.
Bloomberg.
Alliance
Bernstein.
Bottom line: stay focused on the long term. Right now, stock prices are a short hair off their
all-time highs. So, in my opinion, least
some portion of a trade deal is priced in.
Regrettably, consensus seems to be growing that, assuming an agreement
is actually signed, the economic impact on the US/globe will be marginal. Clearly, if subsequent ‘phases’ produce a
meaningful change in China’s industrial policy and IP theft, that would be a
major positive. But I think that it
makes little sense to start marking up valuations based on what we know so far.
More on valuations
(must read).
Dividends can lie.
News on Stocks in Our Portfolios
Johnson & Johnson (NYSE:JNJ): Q3 Non-GAAP EPS of
$2.12 beats by $0.11; GAAP EPS of $1.81 beats
by $0.23.
Revenue of $20.73B (+1.9% Y/Y) beats by $590M.
Revenue of $3.69B (+3.1% Y/Y) in-line.
Economics
This Week’s Data
US
Month to date retail chain store sales continued to decline versus the
prior week.
International
September
Chinese CPI came in at +0.9% versus forecasts of +0.7%; loan growth was up
12.5% versus +12.3%.
August
Japanese industrial production fell 1.2%, in line while capacity utilization
declined 2.9% versus -0.2%,
July
UK employment fell 56,000 versus estimates of +23,000; August average earnings
rose 3.8% versus +4.0%.
October
EU economic sentiment was reported at -23.5 versus consensus of -33.0; German
economic sentiment was -22.5 versus -27.0.
Other
What
I am reading today
The 2020 Social Security
COLA has been announced.
A fish that breathes air on land.
Your higher education dollars at
work.
Visit Investing
for Survival’s website (http://investingforsurvival.com/home)
to learn more about our Investment Strategy, Prices Disciplines and Subscriber
Service.
No comments:
Post a Comment