The Morning Call
1/31/20
The
Market
Technical
The Averages (28859,
3283) bounced yesterday, but remained below the lower boundary of their very
short term uptrends. The Dow voided that
trend on Monday and the S&P yesterday.
That resyncs the indices (voiding their very short term uptrends and closing
Monday’s huge gap down open). However, they
still ended above both MA’s and in short, intermediate and long term uptrends. So, there has hardly been a loss in long term
momentum.
On the other hand,
really significant support doesn’t exist until the Averages reach their 100 DMA
[27661/3098] and the lower boundaries of their short term uptrends
[24696/3058].
Volume was rose,
breadth improved. The VIX fell 5 ½%, but
still finished above both DMA’s (now support).
The recent reversions are reinforcing the loss of short term upside momentum
in the indices’ pin action.
The long bond was
up two cents, continuing its ongoing directional momentum change to the
upside. Although there are two gap up
opens below that need to be filled.
The dollar was
down 3/8%. Intraday, it touched its 200
DMA (now resistance) but fell back, remaining below both MA’s, in a short term
downtrend and is still the ugliest chart on the block. While it is attempting to close that big gap
down open from 12/23, my assumption remains that the dollar will continue to
weaken.
Gold was up one
cent, closing within very short term and short term uptrends and above both
MA’s.
TLT, GLD and UUP continue
to trade like the economy is not near any kind of ‘lift off’. The Averages are leaning in that direction
but are not quite there yet.
Thursday
in the charts.
Fundamental
Headlines
Yesterday’s data
was mixed. The initial Q4 GDP growth
estimate was in line though all of the price indicators were below
estimates. Weekly jobless claims fell less
than anticipated.
GDP per capita
US recession probability
track.
The stats were slightly weighed to the
upside overseas. December EU unemployment, January EU economic sentiment and
industrial sentiment were better than expected while January EU business confidence
and services sentiment were less and EU consumer confidence and January German
CPI were in line.
Other headlines:
Powell paves the way for a change in
monetary strategy.
WHO declares coronavirus ‘global pandemic’.
***overnight update
on coronavirus.
Bottom line. It would appear that ‘global pandemic’,
mediocre economic growth, falling price
pressures or any other negative headline are no match for free money. The Market may be experiencing a minor case
of the willies short term. But the
driving force behind equity prices remains NotQE.
The ETF problem.
Subscriber Alert
In my regular quarterly
review, Caterpillar failed to meet the minimum quality criteria for inclusion
in the Dividend Growth and High Yield Universes. Accordingly, at the Market open, both
Portfolios will Sell their positions in CAT.
News on Stocks in Our Portfolios
Revenue of $67.17B (+3.3% Y/Y) beats by $2.59B.
Donaldson (NYSE:DCI) declares $0.21/share quarterly dividend, in line with
previous.
Economics
This Week’s Data
US
December
personal income was up 0.2% versus estimates of up 0.3%; personal spending rose
0.3%, in line.
International
December
Japanese YOY construction orders were up 21.4% versus forecasts of 02%; housing
starts YoY were down 7.9% versus -11.5%; industrial production was up 1.3%
versus +0.7%; the unemployment rate was 2.2% versus 2.3%; retail sales were up
0.2% versus -4.5%; January CPI was +0.6% versus +0.9%.
January
UK consumer confidence was -9, in line.
The
January Chinese manufacturing PMI was 50, in line; the nonmanufacturing index
was 54.1 versus consensus of 53.3.
December
German retail sales fell 3.3% versus expectations of -0.5%.
Q4
EU flash GDP growth was +0.1% versus projections of +0.2%; YoY CPI was 1.4%, in
line; YoY core CPI was 1.1% versus 1.2%.
Other
Brexit
is here; now things really get complicated.
Bloomberg’s
consumer comfort index rises to highest level since Dot com bust.
Did
the US just concede defeat in the China tech war?
What
I am reading today
How
to load a dishwasher correctly.
Nigel
Farage bids farewell to the EU.
When it is better to
claim social security benefits early.
The single biggest cost cut you can
make to increase savings.
Sorry, but the so called ‘do gooder’
funds are not that attractive an investment.
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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