The Morning Call
4/3/20
The
Market
Technical
Yesterday, the
Averages (21434, 2526) see sawed through
the trading session, torn between the conflicting headlines of a horrendous
weekly jobless claims number and positive developments in the oil market---the
latter carrying the day. They remained
within short term downtrends whose boundaries are ~17119/2184 on the downside
and ~22381/2642 on the upside.
The question is,
can the indices follow through to the upside, creating a higher low. As you
know, I don’t believe a Market bottom has been made---that thesis is about to
be tested.
TLT, GLD and UUP were
up nicely again, an indication that investors, yesterday’s equity pin action
notwithstanding, are still gravitating to them as safety trades.
Thursday in the
charts.
What do Market
recoveries look like?
Fundamental
Headlines
Yesterday was not
a good day for economic stats. February
factory orders, March vehicle sales and
weekly jobless claims were disappointing while the February trade deficit was slightly
better than anticipated.
CBO reveals apocalyptic
forecast.
Overseas,
there only a single datapoint. February
EU PPI was much lower than expected.
The
coronavirus
***overnight
update.
More data on
coronavirus.
And more.
This is not good---chaos
at the SBA.
Oil
***overnight
update.
A busy day in
oil land---starting with Trump saying he expects production cuts.
https://www.zerohedge.com/energy/oil-spikes-after-reports-trump-expects-proiduction-cut-15mm-barrels
The
impact on prices.
https://www.zerohedge.com/energy/unprecedented-demand-destruction-marks-return-crudes-super-contango
Trump
invites oil chiefs to White House.
Bottom line:
corporate insolvency continues to be at the top of my list of
worries. To be sure, the Fed has made it
clear that it is prepared to throw unlimited amounts of money at anything that resembles
a credit problem. That will almost certainly
mitigate some potential disasters. But
that said, the Fed has shown itself to be clueless about the how it created the
misallocation of assets. So, the
question is how clueless will it be managing the unwinding of this problem? That is the biggest risk facing the economy
and Market now, in my opinion. In other
words, solving the coronavirus problem may not remove the risk of further downside
in the Market---‘may not’ being the operative words.
If the coronavirus
hadn’t caused the crash, something else would have (must read).
S&P 1600?
Markets now a tipping point.
Update on
valuations.
March dividends by
the numbers.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
February
factory orders were unchanged from January versus estimates of +0.2%; ex transportation,
they were down 0.9% versus +0.3%.
March
vehicle sales decline to 11.4 million SAAR.
March
nonfarm payrolls declined 701,000 versus consensus of down 100,000; the unemployment
rate was 4.4% versus 3.8%.
International
February
EU retail sales rose 0.9% versus forecasts of +0.1%; the March services PMI was
26.4 versus 28.4; the composite PMI was 29.7 versus 31.4.
The
March Japanese and Chinese services and composite PMI’s were above expectations
while the German and UK services and composite PMI’s were below.
Other
Hotel
occupancy rates plunging.
The
problem with the regulatory state.
What
I am reading today
Live for today; plan of
tomorrow.
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