Tuesday, May 12, 2020

The Morning Call--I am not chasing stocks up

The Morning Call


The Market
The Averages  (24221, 2909) had a roller coaster day with the Dow finishing down and the S&P basically unchanged.  Both of the indices closed above their 4/17 highs; and the S&P ended right on the level of its preceding 4/29 high for a second day.  It appears the standoff of the last three weeks is getting resolved to the upside---though yesterday’s pin action did little to support that notion.  So, it will take a couple more upbeat days to confirm it.

GLD and the long bond sold off while the dollar was up on heavy volume.  All their charts remain strong; but that is what is a bit confusing.  They shouldn’t be trading in unison to the upside unless investors are nervous---and equity investors appear anything but nervous.

            Monday in the charts.



            Not much economic data yesterday. April consumer inflation expectations were above estimates.  Overseas, April Chinese loan growth was higher than anticipated.

The economy
Update on big four economic indicators.

Savings ‘mirage’ won’t save the economy.

Inflation will likely not be a problem.

The economic pain will persist even after the pandemic is over.

How long could high unemployment last?

We are all government sponsored enterprises now.

The coronavirus

***overnight update.

More coronavirus aid.

            Bottom line.  much of the Market is very overvalued.  Even those stocks that had traded down into the Buy Value Ranges in the March selloff have appreciated enough that they are no longer buy candidates.  Hence, I am not a buyer of stocks at this time and would likely become a seller if any of our stocks trade into their Sell Half Range.

            The corona effect on investing.

            What happens to stocks after a big up month?

    News on Stocks in Our Portfolios


   This Week’s Data


            April consumer inflation expectations rose to 2.62% versus expectations of 2.5%.

The April small business optimism index came in at 90.9 versus estimates of 80.0.

April CPI was -0.8%, in line; core CPI was -0.4% versus -0.2%.


            The March Japanese leading economic indicators were reported ate 83.8 versus forecasts of 83.6.

            April Chinese CPI was -0.9% versus consensus of -0.5%.   


Bank of China eases monetary policy.

Chinese officials call for renegotiating terms of Phase 1 trade deal.

What I am reading today


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