The Morning Call
4/23/20
The
Market
Technical
The Averages (23475, 2799) bounced hard yesterday, though
on low volume. Still the S&P ended
below the lower boundary of its very short term uptrend for a second day,
voiding that trend. The very short term technical
question at the moment is, will the indices recoup last Friday’s highs and
regain their upward momentum or will they fall short and make a low lower than
Tuesday’s.
GLD had a strong
upward move yesterday; the dollar
continued its breakout to the upside from a pennant formation; while the long
bond slipped slightly, its upward momentum remains intact. Safety trades.
Wednesday in the
charts.
Fundamental
Headlines
Wednesday was another
slow day for data. What we got was
mixed. The February housing price
index rose more than anticipated; weekly mortgage applications declined while
purchase applications rose.
Overseas,
March UK PPI and core CPI were lower than expected, CPI was in line while core
PPI was hotter than forecasts.
The
coronavirus
Mnuchin says that
we will all be back to work by September 1st.
The latest US stats
on the coronavirus.
An equally important set
of stats.
A silver lining
for the homeless.
The
Fed
This is an
interesting article. There is logic in
the author’s argument (QE is not responsible for higher stock prices). The problem is, events of the last decade say
that he is wrong.
And so does this
guy.
ECB
follows Fed’s lead in accepting junk bonds as collateral.
Oil
The worst is yet
to come for oil.
Pricing oil in
Cushing.
Kyle Bass on Saudi
oil imports.
Why 2/3rds of the
oil and gas companies may not be around in a year.
Bottom line: as you know, I have a list of stocks that have
suffered severe whackage since the February high and bought positions in some
of them late in the March decline. I am
not inclined to resume any buying until stocks make a solid test of the March
low. (must read)
The only thing
working now.
An important investing
lesson.
News on Stocks in Our Portfolios
W.W. Grainger (NYSE:GWW): Q1 Non-GAAP EPS of
$4.24 misses by $0.23; GAAP EPS of $3.19 misses
by $1.25.
Revenue of $3B (+7.1% Y/Y) beats by $130M.
Economics
This Week’s Data
US
The
February housing price index rose 0.7% versus expectations of up 0.4%.
Weekly
jobless claims rose 4,427,000 versus projections of 4,200,000.
International
Hello, coronavirus.
The April Japanese flash
manufacturing PMI was 37.8 versus estimates of 42; the services PMI was 22.8
versus 31; the composite PMI was 27.8 versus 35.0. The February leading economic indicators were
91.7 versus 92.1.
The April German flash
manufacturing PMI was 34.4 versus forecasts of 39; the services PMI was 15.9
versus 28.5; the composite PMI was 17.1 versus 31.0.
The April EU flash manufacturing
PMI was 33.6 versus consensus of 39.2; the services PMI was 11.7 versus 23.8;
the composite PMI was 13.5 versus 25.7.
The April UK flash manufacturing
PMI was 32.9 versus expectations of 42; the services PMI was 12.3 versus 29;
the composite PMI was 12.9 versus 31.4.
The Q2 business optimism index was -87 versus -60.
Other
The
good news is that the banks are more soundly capitalized than in 2008.
What
I am reading today
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