The Morning Call
9/2/20
The
Market
Technical
The Averages (28646, 3526) rebounded nicely yesterday, maintaining
their upward momentum. As you know, my
assumption is that the Market’s bias is to the upside long term. However, shorter term, a number of factors
are at work that could lead to some price weakness: (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 [yesterday, it was down only fractionally
on what was strong Market day], (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.
https://sentimentrader.com/blog/massive-surge-in-speculative-trading-again/
Art Cashin on the
short term effects of stock splits.
https://thereformedbroker.com/2020/08/31/art-cashin-on-the-short-term-effects-of-stock-splits/
Robinhood traders are
not having that much impact on stock prices.
https://ofdollarsanddata.com/robinhood-trader/
Gold continued to
move up, maintaining the uptrend off its March/June lows. TLT rallied another 1 1/8%; but it was still
not enough to undo the damage done in last week’s selloff. Short term, its chart remains negative. The dollar rose, but its chart remains the ugliest
of those indicators that I follow.
Tuesday in the
charts.
Fundamental
Headlines
The
Economy
US
Weekly mortgage
applications declined 2% while purchase applications were off 0.2%.
Month to date retail chain store sales grew
faster than in the prior week.
July construction spending rose 0.1% versus
estimates of +1.0%.
https://www.calculatedriskblog.com/2020/09/construction-spending-increased.html
The August manufacturing PMI was 53.1 versus consensus
of 53.6.
https://www.advisorperspectives.com/dshort/updates/2020/09/01/markit-manufacturing-up-in-july
The August ISM manufacturing
index was 56.0 versus expectations of 54.5.
https://www.advisorperspectives.com/dshort/updates/2020/09/01/ism-manufacturing-index-up-1-8-in-july
August light
vehicle sales came in at 15.1 million versus forecasts of 14.5
million.
The August
ADP private payroll report showed job increases of 425,000 versus projections
of 950,000.
International
July German retail sales fell 0.9% versus
projections of +0.5%.
July EU PPI was +0.6% versus estimates of
+0.5%.
Other
July update on median household income.
Framing lumber prices continue to
soar.
https://www.calculatedriskblog.com/2020/09/update-framing-lumber-prices-up-150.html
The
Fed
The true costs of zombie companies and easy
money.
https://www.zerohedge.com/markets/true-costs-zombie-companies-and-easy-money
The
coronavirus
How deep is your coronavirus religion?
Millions of Americans have had their savings
wiped out.
China
US increases support for Taiwan.
US/China decoupling is hard to do---this
article seems a bit too optimistic.
https://www.zerohedge.com/markets/us-china-decoupling-hard-do
Bottom
line When the irrational becomes rationalized.
https://www.zerohedge.com/markets/2020-when-irrational-became-rationalized
The latest from Mohamed El Erian.
News on Stocks in Our Portfolios
Brown-Forman (NYSE:BF.B): Q1
GAAP EPS of $0.67 beats by $0.37.
Revenue
of $753M (-1.7% Y/Y) beats by $61.72M.
What
I am reading today
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