The Morning Call
8/27/20
The
Market
Technical
The Averages (28331, 3478) resumed their advance with the S&P’s
100 DMA crossing above its 200 DMA---a positive technical signal. But there remain a number of negatives (1)
volume was down again, (2) on Monday, both of the indices made a gap up open,
joining those two gap up opens made three weeks ago, (3) the VIX continues to
reflect investor concern [it was actually up yesterday on a stock price up day]
(4) the indices’ breadth remains in overbought territory while the rest of the
Market weakens. So, there are good reasons to expect a selloff. Nonetheless, I am sticking with my assumption
that the Market’s bias remains to the upside long term.
Changes in the
Dow.
https://www.washingtonpost.com/business/2020/08/25/dow-jones-industrial-average-index-change/
Gold spiked 1 1/8%,
remaining in the uptrend off its June low.
TLT dropped again. The bad news
is that it ended below its 100 DMA (now resistance); the good news is that on
Tuesday, it created a huge gap down open that needs to be filled. The dollar continued to sell off, having just
made a lower high.
Wednesday in the
charts.
https://www.zerohedge.com/markets/global-stocks-hit-record-high-gold-spikes-ahead-powell-speech
Fundamental
Headlines
The
Economy
US
The second
estimate of Q2 GDP growth was -31.7% versus estimates of -32.5%; corporate
profits declined 11.8% versus -26.0%; the PCE price index was -1.8% versus
-1.9%; the core PCE price index was -1.0% versus -1.1%.
Weekly jobless claims rose 1,006,000 versus
expectations of 1,000,000.
https://www.zerohedge.com/personal-finance/initial-jobless-claims-above-1-million-again-last-week
International
Other
Jobs are a cost not a benefit.
https://www.adamsmith.org/blog/jobs-are-a-cost-not-a-benefit-1
The inflation cocktail is being mixed.
https://www.advisorperspectives.com/commentaries/2020/08/25/the-inflation-cocktail-is-being-mixed
The
coronavirus
***overnight update.
Unintended consequences of the lockdown.
A nationwide study of hydroxychloroquine
therapy and its results.
https://www.sciencedirect.com/science/article/pii/S0924857920303423?via%3Dihub
Chinese coronavirus test kits yielding false
positive results.
China
The decoupling of the US/Chinese economies is
still a long way away.
On the other hand, the saber rattling
continues.
Counterpoint.
https://www.zerohedge.com/geopolitical/us-china-relations-believing-pigs-can-fly
The
Fed
Score another one for a clueless Fed.
https://www.zerohedge.com/markets/earth-fed-inflation-mandate-has-been-met
Part 2: Convincing the public that even higher
inflation is good for it.
Bottom
line. The damage to the economy is permanent.
https://www.zerohedge.com/markets/gold-perfect-hedge-dimartino-booth-warns-damage-economy-permanent
The decline in consumer confidence makes the
S&P all-time high hard to justify.
News on Stocks in Our Portfolios
What
I am reading today
Five investment decisions
that matter.
https://www.servowealth.com/blog/the-five-investment-decisions-that-really-matter
Social
security misconceptions that can lower your benefits.
I
love this. Fact checking one set of
lairs and not the other.
Leading
explanation for interstellar object is aliens.
Visit Investing
for Survival’s website (http://investingforsurvival.com/home)
to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.
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