The Morning Call
7/31/20
The
Market
Technical
The Averages (26313, 3246) yo yoed back down yesterday but
the friction between them remains. While
they are not out of sync with respect to a major trend, (1) the S&P is
above its June high, the Dow is not, (2) the Dow unsuccessfully challenged its
200 DMA [now support] intraday, the S&P is not even close and (3) while
both are making higher lows, the S&P is making higher highs; the Dow is
not. Further, the VIX unsuccessfully
challenged its 200 DMA (now resistance) intraday. In short, the Market continues
to back and fill. I am sticking with my
assumption that the Market’s bias is to the upside.
Gold was off after
nine straight up days but remains a short hair away from the upper boundary of
its long term uptrend (185.85). The long
bond rebounded, maintaining its strong upward trend. The dollar was down, finishing below the
lower boundary of its short term downtrend.
Thursday in the
charts.
Fundamental
Headlines
The
Economy
US
June personal income fell 1.1% versus
estimates of -0.5%; personal rose 5.6% versus up 5.5%; the PCE price index
was up 0.2%, in line.
International
June Japanese unemployment
was 2.8% versus expectations of 3.1%; industrial
production rose 2.7% versus +1.2%; YoY housing starts fell 12.8% versus -13.7%;
YoY construction orders declined 13.4% versus -10.0%; July consumer confidence
came in at 29.5 versus 26.0.
The July Chinese manufacturing
PMI was reported at 51.1 versus forecasts of 50.7; the nonmanufacturing index
was 54.2 versus 54.1.
June German retail
sales dropped 1.6% versus consensus of -3.3%.
Q2 EU GDP growth
came in down 12.1% versus projections of down 12.0%; July CPI was -0.3% versus
-0.5%.
Other
July hotel occupancy declines 38%.
https://www.calculatedriskblog.com/2020/07/hotels-occupancy-rate-declined-38-year_30.html
While I don’t
agree with much of what this author says, he does make two points worth considering
(1) the need to at least review the rationale for the difference in taxation
between tangible and intangible assets and (2) however, we got there, the
income/wealth distribution in the US is out of whack and needs to be corrected.
https://www.nakedcapitalism.com/2020/07/the-consequences-of-inequality-can-be-fatal.html
The lasting damage
of the pandemic.
http://econbrowser.com/archives/2020/07/guest-contribution-lasting-damage-of-the-pandemic
Will the demand side shock keep inflation in
check?
http://www.capitalspectator.com/will-a-demand-side-shockwave-keep-inflation-muted/
The
coronavirus
Misinformation on hydroxychloroquine.
The vaccine swindle.
https://www.zerohedge.com/political/biggest-fraud-ever-part-2-vaccine-swindle
Domestic violence almost doubled during lockdown.
https://www.zerohedge.com/political/domestic-violence-more-doubled-under-lockdowns-new-study-finds
The
Fed
The road to inflation.
https://blogs.tslombard.com/road-to-inflation
The enabling Fed.
China
China matters more than ever.
https://www.advisorperspectives.com/commentaries/2020/07/30/china-matters-more-than-ever
Bottom
line. It is only a question of when.
News on Stocks in Our Portfolios
Genuine Parts (NYSE:GPC): Q2
Non-GAAP EPS of $1.32 beats by $0.40; GAAP EPS of -$2.52 misses
by $3.48.
Revenue of $3.82B (-14.3% Y/Y) misses by $510M.
Mastercard (NYSE:MA): Q2
Non-GAAP EPS of $1.36 beats by $0.18; GAAP EPS of $1.41 beats
by $0.25.
Revenue of $3.3B (-19.5% Y/Y) beats by $40M.
Apple (NASDAQ:AAPL): Q3 GAAP EPS of $2.58 beats by $0.51.
Revenue of $59.69B (+10.9% Y/Y) beats by $7.13B.
Apple's (NASDAQ:AAPL) board of
directors approves a 4-for-1 stock split, effective August 31. Shares are up 4.4% AH, pushing the stock above $400 for the first time.
V.F. Corp (NYSE:VFC): Q1
Non-GAAP EPS of -$0.57 beats by $0.11; GAAP EPS of -$0.71 misses
by $0.07.
Revenue of $1.08B (-47.3% Y/Y) beats by $104.51M.
V.F. Corp (NYSE:VFC) declares
$0.48/share quarterly dividend, in line with previous.
What
I am reading today
Four crucial expenses to
consider in retirement.
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