The Morning Call
9/1/20
The
Market
Technical
The Averages (28430, 3500) sold off yesterday on higher
volume and weakening breadth. More downside
would not be surprising given the negatives overhanging the Market: (1) last
week, both of the indices made a gap up open, joining those two gap up opens made
four weeks ago, (2) the VIX continues to reflect investor concern, (3) the
indices’ breadth remains in overbought territory while the rest of the Market
weakens and (4) historically, September is the worst month of the year for
Market performance. Nonetheless, I am
sticking with my assumption that the Market’s bias remains to the upside long
term.
Panic buying.
https://www.zerohedge.com/markets/panic-buying
Gold bounced,
closing above the upper boundary of the pennant formation shown in yesterday’s
Monday Morning Chartology and reversing last week’s negative performance. TLT rallied but not enough to undo the damage
done in last week’s selloff. Its chart
remains negative. The dollar declined,
remaining the worst chart of those indicators that I follow.
The
dollar decline is greatly exaggerated.
https://www.zerohedge.com/markets/lacalle-us-dollar-collapse-greatly-exaggerated
The
last time this happened was the day the dot com bubble burst.
https://www.zerohedge.com/markets/last-time-happened-was-day-dot-com-bubble-burst
Monday in the charts.
https://www.zerohedge.com/markets/stocks-silver-soar-5th-straight-month-bonds-dollar-dumped
Fundamental
Headlines
The
Economy
US
The August Dallas
Fed manufacturing index came in at 8 versus forecasts of -2.
International
July Japanese
unemployment was reported at 2.9% versus estimates of 3.0%; Q2 YoY capital
spending fell 11.3% versus -7.2%.
August German
unemployment was 6.4%, in line; August manufacturing PMI was 52.2 versus 53.0.
The August UK
manufacturing PMI came in at 55.2 versus expectations of 55.3.
The August EU
manufacturing PMI was 51.7, in line; August CPI was 0.4% versus -0.2%; August
unemployment was 7.9% versus 8.0%.
Other
Update on seven high frequency indicators.
https://www.calculatedriskblog.com/2020/08/seven-high-frequency-indicators-for.html
Chinese bank profits crater.
The
Fed
Monetary policy gone wild.
The
coronavirus
Latest CDC bombshell.
https://www.zerohedge.com/medical/ron-paul-cdc-bombshell-only-6-covid-deaths-only-covid
A brief look at the potential for the new Abbott
Labs test.
https://marginalrevolution.com/marginalrevolution/2020/08/the-beginning-of-the-end.html
The state of the American restaurant.
https://www.nakedcapitalism.com/2020/08/the-state-of-the-american-restaurant-city-by-city.html
Bottom
line. That low rates justify high valuations is a
rationalization.
https://www.zerohedge.com/markets/rationalization-do-low-rates-justify-high-valuations
The new normal.
https://signalee.com/2020/08/29/new-normal-2-average-inflation/
News on Stocks in Our Portfolios
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