Wednesday, September 16, 2020

The Morning Call---Everything is priced in

 

The Morning Call

 

9/16/20

 

The Market

         

    Technical

 

The Averages  (27995, 3401) basically marched in place yesterday (Dow down slightly; S&P up fractionally).  Short term, they (1) remain in a trend of lower highs within a trading range, (2) must still fill two gap up opens lower down and (3) have to overcome September’s negative seasonal predisposition.  But lots of support exists at their 100 DMA’s (26208/3159), their 200 DMA’s (26208/3097) and the lower boundary of their short term trading ranges (18213/2991).

 

Longer term their charts are positive.  Indeed, the Dow’s 100 DMA is about to cross above its 200 DMA.  My current operating assumption remains that the Market’s bias is to the upside long term---until QEInfinity/Forever either comes to an end or investors conclude that it has been, is and will be an economic disaster. 

            https://www.marketwatch.com/story/stock-markets-7-pullback-get-ready-for-more-as-a-2009-style-stair-step-rally-continues-says-wall-street-bull-11600114308?mod=home-page

 

            Long tech becomes the most crowded trade of all time.

            https://www.zerohedge.com/markets/wall-street-turns-paranoid-long-tech-becomes-most-crowded-trade-all-time

 

            The liquidity boom fueled record stimulus has ended.

            https://www.zerohedge.com/economics/liquidity-boom-fueled-record-stimulus-has-ended-equity-market-vulnerable

 

Gold reversed again to the downside, continuing its recent see saw trading pattern between a series of lower highs and the July/August minor support level.  In other words, consolidating.  TLT was down one cent; it too seems to be consolidating. The dollar was up, failing to break the current short term trend of lower highs. 

 

In short, all these indices are in some sort of consolidation phase---which is not surprising given the economic and political cross currents investors are now facing.

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/exxon-wto-iwtf-snowflake-spacs-zombies

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

Weekly mortgage applications fell 2.5% while purchase applications were down 0.5%.

 

Month to date retail chain store sales declined more rapidly than in the prior week.

 

August industrial production was up 0.4% versus consensus of +1.0%; capacity utilization was 71.4 in line.

                          https://www.advisorperspectives.com/dshort/updates/2020/09/15/the-big-four-economic-indicators-industrial-production-up-in-august

 

August retail sales were up 0.6% versus estimates of +1.0%; ex autos, they were up 0.7% versus +0.9%.

                          https://www.zerohedge.com/personal-finance/us-retail-sales-disappoint-online-spending-growth-hits-wall-government-handouts

 

                        International

 

The July EU trade balance was E27.9 billion versus forecasts of E25.1 billion.

 

The August Japanese trade balance was Y248.3 billion versus projections of -Y37.5 billion.

 

The August UK CPI was -0.4% versus expectations of-0.6%; core CPI was -0.6% versus -0.9%; PPI was -0.4% versus -0.3%; core PPI was +0.1%, in line.

 

                        Other

 

                          Growth but no ‘V’ shaped recovery.

                          https://global-macro-monitor.com/2020/09/13/q3-gdp-growth-set-for-30-but-no-v-shaped-recovery/

 

                          Europe’s zombie firms.

                          https://www.zerohedge.com/markets/europes-zombie-firms-are-multiplying-never

 

            The Fed

 

              The Fed and future inflation.

              https://lawliberty.org/the-fed-and-the-future-of-americas-debt/?fbclid=IwAR0Kpr-f_0vyhFtg8uez6h94j0Wtpps81LdKUTraqRJt7t660vWXdhabbxs

 

              So far, the Treasury market has yawned at the Fed’s new inflation policy.

              http://www.capitalspectator.com/treasury-market-yawns-at-feds-new-inflation-policy/

 

 The money printing end game.

              https://www.zerohedge.com/markets/one-bank-spots-demographic-trigger-launched-money-printing-endgame

 

 

            Fiscal Policy

 

              Government spending and inflation.

              https://thehill.com/opinion/finance/516345-sound-the-alarm-bells-on-inflation

           

 Stimulus compromise bill goes down to defeat.

              https://www.zerohedge.com/political/house-moderates-hammer-out-152-trillion-bipartisan-compromise-pandemic-relief

 

              Biden’s budget plan.

              https://www.zerohedge.com/political/bidens-multi-trillion-dollar-budget-biggest-increase-decades

 

            The coronavirus

 

              Overnight update.

              https://www.zerohedge.com/geopolitical/india-tops-5-million-covid-19-cases-virus-has-killed-121-american-youths-cdc-reveals

 

              Global GDP loss from coronavirus tops $11 trillion.

              https://politicalcalculations.blogspot.com/2020/09/cumulative-world-gdp-loss-from.html#.X2FExGhKiM8

 

Bottom line.  Everything is priced in.

            https://www.zerohedge.com/markets/everything-priced

 

  Growth versus value---take a blind taste test (must read).

  https://www.zerohedge.com/markets/growth-or-value-take-blind-taste-test

 

              Institutional investors are tracking what the amateurs are doing.

              https://www.msn.com/en-us/money/companies/big-investors-crave-insights-into-what-market-dabblers-are-doing/ar-BB193CSM

 

                          The nine best income producing assets to grow your portfolio.

              https://ofdollarsanddata.com/income-producing-assets/

 

    News on Stocks in Our Portfolios

 

Microsoft (NASDAQ:MSFT) declares %0.56/share quarterly dividend, 9.8% increase from prior dividend of $0.51.

 

 

What I am reading today

 

           

 

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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