The Morning Call
6/30/20
The
Market
Technical
The Averages (25595, 3053) recouped a lot of Friday’s trashing,
though volume was weak and breadth mixed.
(1) the S&P voided Friday’s break which put it again out of sync
with the Dow; meaning stocks aren’t going to trend in either direction until
this condition is corrected, however, (2) both indices are in very short term
downtrends and (3) they still have those ‘island tops’ weighing on them.
The short term the
technical picture remains shaky; and the indices are stuck in a narrow trading
range marked by the upper boundary of their very short term downtrend (on the
upside) and their DMA’s (on the downside).
Nonetheless, I am sticking with my assumption that the Market’s bias is
to the upside---at least until/unless the Averages revert their DMA’s to
resistance.
How
stocks predict presidential elections.
Gold was up
fractionally, maintaining its upward momentum.
The long bond was down slightly but that did not negate its reset to the
upside. The dollar was up one cent. It was still unable to make a second higher
high. Higher gold and bond prices and a
lower dollar suggest a weakening economy.
Monday in the
charts.
Fundamental
Headlines
The
economy
Yesterday’s two
data releases were upbeat. May pending
home sales and the June Dallas Fed manufacturing index were well above
estimates.
Overseas, it was
just the opposite. May UK consumer credit,
June EU economic sentiment, industrial sentiment, services sentiment and June
German inflation were disappointing.
June EU consumer confidence was in line.
The
coronavirus
Data update
(deaths are down).
Fearmongering
in Houston.
The
Swedish experience. To be fair, this
post should also include decline in employment, decline in GDP, increased
deaths from untreated ailments and
increased drug, alcohol use and related deaths.
China
US/China trade relations get nasty.
Another flu virus
appears in China.
Xi signs national
security law for Hong Kong.
Forget ‘cooling
off’, India and China are building their military presence in disputed area.
The Fed
Powell testifies
before the house today. His prepared
remarks have been released. There is
nothing new; but if you want to read them, go for it.
Bottom line. You can’t keep a Fed liquidity fueled Market
down.
No revenues, no
profits, no problem.
Mean reversion is
a powerful force.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
Month to date
retail chain store sales declined less than in the prior week.
May pending home
sales rose 44.3% versus consensus of up 18.9%.
The June Dallas
Fed manufacturing index came in at -6.1 versus estimates of -26.0.
International
May
Japanese unemployment came in at 2.9% versus forecasts of 2.8%; industrial
production fell 8.4% versus down 5.6%; YoY housing starts were off 12.3% versus
-15.0%; construction orders were down 6.1% versus -12.3%.
The
June Chinese manufacturing PMI was reported at 50.9 versus expectations of
50.4; the nonmanufacturing PMI was 54.4 versus 52.1.
Final
Q1 UK GDP growth was -2.2% versus projections of -2.0%; business investment was
-0.3% versus 0.0%.
Other
Why
Modern Monetary Theory does not work.
The
declining role of the Council of Economic Advisors.
Six
high frequency indicators on the recovery.
What
I am reading today
A
brief look at the life of Wyatt Earp.
Trust the experts.
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