The Morning Call
4/22/20
The
Market
Technical
The Averages (23018, 2736) fell further yesterday with
both ending below the lower boundaries of its very short term uptrends---the
Dow for a second day, voiding that trend.
As you know, I expected some consolidation following the steep ascent
off the March 23rd lows.
There is visible support at the 21375/2530 levels. If those hold then my assumption that the indices
will challenge of their 100/200 DMA’s will remain intact.
GLD declined
slightly while TLT and UUP were up---the latter continuing its breakout to the
upside from a pennant formation.
BofA on gold.
Tuesday in the
charts.
Fundamental
Headlines
Yesterday’s
stats---March existing home sales and month to date retail chain store sales---
were disappointing.
Overseas, February
UK average earnings were slightly below estimates while the April EU and German
economic sentiment indices were much better than anticipated.
The
coronavirus
***overnight update.
It appears that a
deal has been reached on the second leg for small business funding.
Fiscal policy
US debt to surge
past war time level.
The
Fed
The Fed is buying
$41 billion in assets daily.
And it still isn’t
enough.
Open letter to Ben
Bernanke.
Is inflation
coming back?
Oil
***overnight
update.
Yesterday in oil.
But
Trump has a plan.
Bottom line: the turmoil in the oil market is having its
impact on stock prices in general. But
oil is a commodity; and pricing problems in commodities tend to solve
themselves in short order. On the other
hand, liquidity problems are starting to reappear in the financial system. If they get worse, stocks could experience
heartburn that could push prices back to their March lows---although I don’t
think that will occur.
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.
Estimating the earnings
decline.
The latest from Morgan Stanley.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
March
existing home sales fell 8.8% versus expectations of -8.1%.
Weekly mortgage
applications declined 0.3% while purchase applications rose 2.1%.
International
March
UK CPI was 0.0%, in line; core CPI was +0.1% versus +0.2%; PPI was -0.2% versus
+0.4%; core PPI was +0.3% versus 0.0%.
Other
What
I am reading today
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