Thursday, July 30, 2020

The Morning Call--QEInfinityForever Forever

The Morning Call




The Market




The Averages  (26539, 3258) recovered a bit yesterday but failed to resolve the friction between them.  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 is near challenging its 200 DMA [now support], the S&P is not and (3) while both are making higher lows, the S&P is making higher highs; the Dow is not.  All this as (1) breadth remains strong; though it has been treading water and (2) the VIX is caught between its 200 DMA and its June low.  In short, a Market that seems to be backing and filling.  However, I am sticking with my assumption that the Market’s bias is to the upside.



Gold (185.15) scored yet another new nine year high on heavy volume and is now a short hair away from the upper boundary of its long term uptrend (185.85).  The long bond was down but there was no break in its upward trend.  The dollar was down ½%, finishing right on the lower boundary of its short term downtrend.


            Beware the hype in gold.





            Wednesday in the charts.







              The Economy




                          Weekly jobless claims rose 1,434,000 versus expectations of up 1,450,000.


                          June pending home sales were up 16.6% versus estimates of up 15.0%.




Q2 GDP fell 32.9% versus consensus of down 34.1%; core PCE was down 1.1% versus +1.0%.




                          June Japanese retail sales was up 13.1% versus forecasts of down 3.0%.


June German unemployment came in at 6.4% versus projections of 6.5%; July CPI was -0.5% versus -0.2%; Q2 GDP fell 10.1% versus -11.3%.


July EU unemployment was 7.8% versus predictions of 7.7%; consumer confidence was -15, in line; economic sentiment was 82.3 versus 81.0; industrial sentiment was -16.2 versus -17.0; services sentiment was -26.2 versus -25.0.




                          Thanks Intel.



Household Pulse Survey shows that 26.5% of Americans will miss their rent or mortgage payment this month.



            The coronavirus


              ***overnight update.



              Arizona’s coronavirus crest in the rear view mirror.



              Coronavirus fatalities per million.



              The biggest fraud ever.



            The Fed


The FOMC wrapped up its July meeting yesterday and with that released its latest policy statement---which basically read the same as the previous one.  The economy continues to have problems.  Therefore, rates unchanged.  QEInfinityForever unchanged.  The full statement:


In Powell’s press conference following the meeting, he made a Draghi-like promise   to do ‘whatever it takes for as long as it takes’ (Seinfeld also made a similar statement to Neuman).



            Bottom line.  The value of investing in value.



    News on Stocks in Our Portfolios


W.W. Grainger (NYSE:GWW) declares $1.53/share quarterly dividend 6.3% increase from prior dividend of $1.44.


Exxon Mobil (NYSE:XOM) declares $0.87/share quarterly dividend, in line with previous.


Procter & Gamble (NYSE:PG): Q4 Non-GAAP EPS of $1.16 beats by $0.15; GAAP EPS of $1.07 beats by $0.02.

Revenue of $17.7B (+3.5% Y/Y) beats by $730M.


United Parcel Service (NYSE:UPS): Q2 Non-GAAP EPS of $2.13 beats by $1.05; GAAP EPS of $2.03 beats by $0.97.

Revenue of $20.46B (+13.4% Y/Y) beats by $3.04B.


What I am reading today


            The death rattle of a revolution.



            The growing retirement crisis.



            The earth’s asteroid impact rate increased about 290 million years ago.



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