The Morning Call--The lack of value in value

 

The Morning Call

 

9/30/20

 

The Market

         

    Technical

 

The Averages  (27452, 3335) retreated modestly yesterday, with both marking a new higher high.  Another plus is that September’s the negative seasonal influence is in the rear view mirror.  On the other hand, they both have those gap up opens down below, which, as you know, I believe will have to be filled.

           

A look at the stock market during another contested presidential election.

            https://blairbellecurve.com/what-happens-to-the-stock-market-during-a-contested-presidential-election/

 

Gold was up again, maintaining its rebound off its 100 DMA.  Still, short term, it remains in a trend of lower highs and lower lows.  TLT rose, ending right on its 100 DMA (again) and continuing its struggle to keep its trend of higher lows intact. The dollar continued its slump but remained in a developing trend of higher lows.  So, the individual indices continue to send inconclusive messages.

            https://www.zerohedge.com/markets/gold-futures-jump-back-1900-real-yields-tumble

 

                Gold, the dollar and real yields.

            https://www.zerohedge.com/commodities/gold-dollar-real-yields

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/bonds-bullion-bid-stocks-dollar-skid

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications declined 4.8% while purchase applications were off 1.9%.

 

                          September consumer confidence came in at 101.8 versus forecasts of 89.5.

                          https://www.advisorperspectives.com/dshort/updates/2020/09/29/consumer-confidence-bounces-back-in-september

 

                                                  The September ADP private payroll report showed an increase of 749,000                         versus consensus of 650,000 jobs.

                          https://www.zerohedge.com/personal-finance/adp-employment-beats-expectations

 

The final Q2 GDP growth rate was -31.4% versus projections of -31.7%; the PCE price index was -1.6% versus -1.8%; and corporate profits were down 10.7%.

https://www.zerohedge.com/markets/final-q2-gdp-revision-shows-us-economy-shrank-314

 

 

 

                        International

 

July Japanese leading economic indicators were 86.3 versus expectations of 86.9; August retail sales were up 4.6% versus +0.2%; August industrial production was up 1.7% versus +1.5%.

 

August German retail sales were up 3.1% versus predictions of +0.5%; the unemployment rate was 4.4% versus 4.6%.

 

The September Chinese manufacturing PMI was 51.5 versus estimates of 51.2; the nonmanufacturing PMI was 55.9 versus 54.9; the Caixin (small business) manufacturing PMI was 53.0 versus 53.1.

 

The final Q2 UK GDP growth rate was -31.4% versus forecasts of -31.7%; business investment was -26.5% versus -31.4%.

 

                        Other

 

                          New home market cap highest since 2006.

                          https://politicalcalculations.blogspot.com/2020/09/us-new-home-market-cap-highest-since.html#.X3N4h2hKiM8

 

                          Will housing save the economy?

                          http://www.capitalspectator.com/will-housing-save-the-us-economy/

 

                          Chemical activity barometer rises in September.

                          https://www.calculatedriskblog.com/2020/09/chemical-activity-barometer-rises-in.html

 

                          An optimist’s view (must read).

                          http://blog.yardeni.com/2020/09/the-glass-is-more-than-half-full.html

 

                          A pessimist’s view.

                          https://www.zerohedge.com/economics/weve-reached-endpoint-monetary-and-fiscal-policy-wont-help

 

            The Fed

 

              Research in a bubble.

              https://johnhcochrane.blogspot.com/2020/09/fifty-shades-of-qe-research-in-bubble.html

 

              Negative rates are a huge mistake.

              https://www.zerohedge.com/markets/fed-study-shows-ecb-made-huge-mistake-negative-rates

 

              September bond issuance smashes record (again).

              https://www.zerohedge.com/markets/bond-issuance-smashes-monthly-record-6th-time-past-7-months

 

            The coronavirus

 

              Overnight update.

              https://www.zerohedge.com/geopolitical/new-research-hints-lower-herd-immunity-threshold-eu-approves-new-rapid-covid-19-test

 

              Disease panic versus medical reality.

              https://www.aier.org/article/disease-panic-vs-medical-reality/

 

              What happened to common sense?

              https://www.zerohedge.com/medical/denmark-nears-pre-covid-normality-no-masks-or-distancing-schools-just-common-sense

 

            China

 

              China’s leaders cannot be trusted.

              https://www.project-syndicate.org/commentary/china-xi-jinping-regime-cannot-be-trusted-by-chris-patten-2020-09

 

Bottom line.  The lack of value in value.

  https://www.advisorperspectives.com/commentaries/2020/09/29/the-astonishing-lack-of-value-in-value

 

  BofA lists 29 favorite value stocks and 8 value traps.

  https://www.zerohedge.com/markets/its-time-buy-value-here-are-bank-americas-29-favorite-value-stocks

 

    News on Stocks in Our Portfolios

 

            Exxon.  It is always darkest before the dawn.

            https://seekingalpha.com/article/4376969-exxon-mobil-is-always-darkest-dawn?lift_email_rec=false&utm_medium=email&utm_source=seeking_alpha&mail_subject=exxon-mobil-it-is-always-darkest-before-dawn&utm_campaign=nl-morning-briefing&utm_content=link-0

 

            ATT.  Priced for a dividend cut that is not coming.

            https://seekingalpha.com/article/4376900-t-priced-for-dividend-cut-isnt-even-coming?utm_medium=email&utm_source=seeking_alpha&mail_subject=t-at-t-priced-for-a-dividend-cut-that-isn-t-even-coming&utm_campaign=rta-stock-article&utm_content=link-0

 

            Hormel Foods (NYSE:HRL) declares $0.2325/share quarterly dividend, in line with previous.

 

What I am reading today

 

           

 

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