The Morning Call
8/26/20
The
Market
Technical
The Averages (28284, 3443) turned in a mixed day (Dow
down, S&P up), though the Dow’s performance was likely impacted by the
negative price action among those components that will be dropped in the coming
re-set. Still there remain a number of
negatives (1) volume was weak, (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 and (4) breadth remains in overbought territory. Nonetheless,
I am sticking with my assumption that the Market’s bias remains to the upside
long term.
Gold was up
slightly, remaining in the uptrend off its June low. TLT dropped ¾% on a gap down open, ending back
below its 100 DMA (now resistance) and negating the challenge starting last
Friday. The dollar was down, having just
made a lower high.
Tuesday in the
charts.
https://www.zerohedge.com/markets/nasdaq-hits-new-record-high-confidence-crashes-6-year-lows
Fundamental
Headlines
The
Economy
US
Weekly mortgage applications
fell 6.5% while purchase applications were up 0.4%.
The June Case Shiller
home price index was up 0.2% versus estimates of +0.3%.
July new home
sales soared 13.9% versus expectations of up 1.3%.
July durable goods
orders were up 11.2% versus an
anticipated increase of 4.3%; ex transportation, they were up 2.4% versus 2.0%.
https://www.zerohedge.com/economics/us-durable-goods-orders-smash-expectations-july-thanks-war
August consumer
confidence came in at 84.8 versus consensus of 93.0.
The August
Richmond Fed manufacturing index was 18 versus forecasts of 1.
International
Q2 German GDP fell
9.7% versus projections of 10.1%; the August business climate index was reported
at 92.6 versus 92.2.
June Japanese
leading economic indicators came in at 84.4 versus estimates of 85.0.
Other
Did the US recession end in July?
http://www.capitalspectator.com/did-the-us-recession-end-in-july/
A double dip in small business re-openings.
https://www.zerohedge.com/markets/chart-day-number-small-businesses-open-reverses
The
coronavirus
***overnight update.
UK scientist says lockdown was monumental
mistake.
GOP senators demand FDA explain hydroxychloroquine stance.
The
Fed
More speculation on
Powell’s message (potential policy revisions) from the upcoming Jackson Hole
conference.
Bottom
line. The highest P/E ratio in 18 years.
http://www.crossingwallstreet.com/archives/2020/08/the-highest-p-e-ratio-in-18-years.html
News on Stocks in Our Portfolios
What
I am reading today
Greenland’s melting ice
sheet is nothing to worry about.
https://issuesinsights.com/2020/08/24/greenlands-melting-ice-sheet-nothing-to-worry-about/
Is it capital income or labor
income?
https://www.adamsmith.org/blog/is-it-capital-income-or-labour-income
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for Survival’s website (http://investingforsurvival.com/home)
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