The Morning Call
7/15/20
The
Market
Technical
The Averages (26642, 3197) had a blockbuster day, though
volume was down and stocks are nearing overbought territory. The Dow finished above its 200 DMA (now
resistance; if it remains there through the close on Friday, it will revert to
support). Until the reversion occurs,
the indices will remain out of sync. But
clearly this is a positive development.
On the other hand, they are still out of sync with respect to those
‘island tops’ [the S&P filled that gap, the Dow has not]. As I have noted previously, stocks will be
directionless until those inconsistencies are corrected.
Option traders set
new speculative record.
Still, the short
term the technical picture is improving.
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.
With the other
indicators, yesterday was a repeat of Monday---gold was up, the long bond was
up and the dollar was down. This
collective pin action is consistent with itself and with a weak economic
outlook.
What
is the Treasury market trying to tell us?
Tuesday in the
charts.
Fundamental
Headlines
The
economy
Yesterday was a
big one for data. In the US, the stats
were mixed: month to date retail chain
store sales growth and the June small business optimism index were better than
expected while the June budget deficit and June CPI were disappointing.
Overseas,
The May UK trade
balance and manufacturing production plus the July EU economic sentiment came
in ahead of estimates; May UK industrial
production and the June German CPI were in line; May Japanese industrial
production, May UK GDP, May EU industrial production, the June Chinese trade
balance and July German economic sentiment were below expectations.
The recovery maybe
fizzling.
A surge in small
business bankruptcies.
Mohamed El Erian warns
that financial stress is far from over.
The
coronavirus
An opposing view.
Florida labs admit ‘major
error’.
China
US/China trade
data shows signs of recovery.
US says China’s
‘island building’ in the South China Sea is unlawful.
Trump
signs China sanctions bill.
Bottom
line. the beat goes on. Marginal improvement in the economy; the
media and the politicians intent on making matters worse by keeping the economy
in lockdown; Trump (correctly) poking the Chinese in the eye; and stock prices
soar. God bless the Fed; at least until
this Ponzi scheme collapses.
July BofA fund
manager survey.
Passive investing and
the mispricing of assets.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
Month
to date retail chain store sales growth fell less than in the prior week.
Weekly
mortgage applications rose 5.1% while purchase applications declined 6.1%.
The
July NY Fed manufacturing index came in at 17.2 versus consensus of 10.0.
International
The
June Japanese trade balance was +$1.278 billion versus expectations of +$1.11
billion.
June
UK CPI was up 0.1% versus estimates of 0.0%; core CPI was +0.2% versus -0.1%.
Other
Leading
index for commercial real estate declined in June.
What
I am reading today
The social
security funding crisis has arrived.
Quote
of the day.
Who is making decisions
about our lives?
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for Survival’s website (http://investingforsurvival.com/home)
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