The Morning Call--It is only a question of when.

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.

            https://www.zerohedge.com/markets/any-uptick-volatility-could-kick-start-massive-and-painful-domino-liquidation-event

 

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.

            https://www.zerohedge.com/markets/dollar-bond-yields-tumble-after-americas-greatest-economic-collapse-ever

 

    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.

              https://www.zerohedge.com/political/yale-epidemiologist-accuses-fauci-misinformation-campaign-against-hydroxychloroquine-fda

 

              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.

              https://www.zerohedge.com/markets/seth-klarman-slams-enabling-fed-infantilizing-investors-surreal-market

 

            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.

            https://politicalcalculations.blogspot.com/2020/07/order-disorder-disruptive-events-and.html#.XyL0HChKiM8

 

    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.

            https://www.usatoday.com/story/money/2020/07/29/making-retirement-plans-4-crucial-expenses-to-consider/112417398/

 

            Six steps to the best BBQ ribs.

            https://www.nytimes.com/2020/07/24/dining/bbq-ribs-recipe.html

 

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