Wednesday, July 22, 2020

The Morning Call---Stocks versus the rest of the Markets

The Morning Call


The Market

The Averages  (27005, 3276) were up again on the day.  The S&P continued its advance above its June high, establishing a very short term uptrend and indicating a likely challenge of its February all time high (3393).  The Dow was finally able to fill its ‘island top’ on a closing basis, a big technical plus.  Volume was up, breadth was mixed, as was the VIX (its 200 DMA reverted to resistance but it remains unable to push through its June low.  I am sticking with my assumption that the Market’s bias is to the upside.

Bad breadth.


The top five have set a new record.

Gold was up another 1 ½% on big volume, making another new nine year high.  The long bond was also up, keeping its upward momentum going.  The dollar declined, ending below the lower boundary of its short term trading range for a third day thereby resetting to a downtrend.  All this suggests a weak economy.
Bond yields likely to stay low.

Deutschebank top credit analyst admits that he is a gold bug.

Insider selling is picking up.

Wednesday in the charts.



              The Economy


                          June existing home sales rose 20.7% versus forecasts of +24.5%.



                          Architecture billings are beginning to stabilize.

                          Gun sales skyrocketing, banks hoarding cash.

                          The difference between de-dollarization and being de-dollarized.

                          This is for the optimists.  His analysis might be more spot on if he included                        versus GDP by economic sector.

            The coronavirus

              Four months of egregious government malfeasance.

              How long does a typical coronavirus infection last?


              Chinese debt fuels debt crisis in Africa.

            Bottom line. however stock investors may be interpreting the economic, political, social (unrest) news flow, the big boys in the bond, dollar and gold markets are betting their money on a weak economy and political/social uncertainty.  That makes me feel all warm and fuzzy about my cash and GDX positions and confident in any sales of stocks that reach their Sell Half Price.

    News on Stocks in Our Portfolios
Canadian National Railway (NYSE:CNI): Q2 Non-GAAP EPS of C$1.28 beats by C$0.02; GAAP EPS of C$0.77 misses by C$0.48.
Revenue of C$3.21B (-18.9% Y/Y) misses by C$50M.

Canadian National Railway (NYSE:CNI) declares CAD 0.575/share quarterly dividend, in line with previous.

Sherwin-Williams (NYSE:SHW) declares $1.34/share quarterly dividend, in line with previous.

What I am reading today


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