The Morning Call
6/4/20
The
Market
Technical
The Averages (26269, 3122) had another great day. Both of
the indices remain in very short term uptrends.
The Dow finished above its 100
DMA for a third day, reverting to support (and joining the S&P in doing
so). The one negative is those huge 5/18
gap opens that remain unfilled but which, at the moment, appear irrelevant. My assumption continues to be that equity
prices’ bias is to the upside though they are getting overbought.
GLD was off,
ending right on the upper boundary of its short term uptrend---not necessarily
a negative but a sign of the loss of upside momentum. Meanwhile, the long bond made a new lower low
and setting a new very short term downtrend.
Ditto, the dollar. It got
hammered on huge volume and set a new very short term downtrend. It appears
these investors believe the economy is recovering robustly.
Wednesday
in the chart.
Fundamental
Headlines
Yesterday’s stats
were upbeat. April factory orders, April construction spending, the May
ISM nonmanufacturing index and the May ADP private payroll report were better
than anticipated while weekly mortgage/purchase applications were mixed.
Overseas,
the May EU final manufacturing PMI, the May final EU, UK, German, Japanese and
Chinese services and composite PMI’s
plus the April EU unemployment rate were better than estimates while the April
EU PPI and the May German unemployment rate were disappointing.
The
coronavirus
***overnight
update.
Update on US
coronavirus stats.
Global update on
the coronavirus.
How we got in this
mess.
Some
facts worth knowing.
The
Fed
***overnight, the
ECB cranks up the volume.
The Fed faces a
day of reckoning.
The limits on
monetary policy.
Fed expands muni bailout
facility.
Bill Dudley steps on his
dick, again.
China
Trump imposes
restrictions on Chinese media.
Trump bars Chinese passenger plane flights to US.
UK considers offering citizenship to Hong Kong
residents.
Bottom line. the economy appears to be stronger than had
been expected; but that does not mean it will avoid a deep recession. But we
still have no idea what the lockdowns ultimate impact will be on American’s spending,
social and work habits.
And yet, investors
are tip toeing through the tulips. To me the only explanation for this total
breakdown of the relationship between price and value is QE; and I have no clue
when and how this disconnect corrects itself.
For the moment, as I said yesterday, the Market’s pin action has
similarities to a blow off top. Invest
accordingly.
More on valuations.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
Weekly
jobless claims increased 1,877,000 versus projections of 1,800,000.
Q1
nonfarm productivity came in at down 0.9% versus expectations of -2.7%; until labor
costs rose 5.1% versus 5.0%.
April
factory orders fell 13% versus estimates of -14%; ex transportation, they were
-8.5% versus -9.0%.
The
April trade balance was -$49.4 billion versus consensus of -$49.0 billion.
The
May ISM nonmanufacturing index came in at 45.5 versus forecasts of 41.8.
International
April
EU retail sales fell 11.7% versus expectations of -15.0%.
The
May EU construction PMI was 39.5 versus projections of 34.0; the UK construction
PMI was 28.9 versus 29.7
Other
What
I am reading today
Dealing with uncertainty,
Part 2.
How big it the racial wealth gap?
Why we can’t learn from history.
Organized looters.
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