The Morning Call
10/6/20
The
Market
Technical
The Averages (28148, 3408) pushed higher yesterday, maintaining
the trend of new higher highs. But that
left the two gap up opens down below---which, as you know, I believe will have
to be filled. Plus, the VIX was once
again up on a Market up day---a sign of elevated investor uncertainty. Nonetheless, I still believe that the Market’s
long term bias is to the upside and will remain so as long as investors buy
into QEInfinity/Forever.
https://thereformedbroker.com/2020/10/05/asymmetry/
Gold was up ½%,
extending its bounce off its 100 DMA, though it is still within a short term
trend of lower highs. TLT got hammered
(down 2%), making a huge gap down open joining the one created last Wednesday
and finished very close to its 200 DMA (now support). The dollar was also down big (1/2%), ending
right on the developing trend of higher lows.
Judging by the
dramatic moves in these indicators, it would appear the investor sentiment has
shifted toward a stronger economy scenario.
Of course, this is just one day’s pin action, so follow through is needed
before coming to a conclusion. Still the
media narrative of day focused (1) on fiscal stimulus before the election, (2)
and after, doing a 180 on a Biden election [a massive spending programs] from being
a negative to a positive.
https://www.zerohedge.com/markets/wall-street-agrees-democratic-sweep-great-stocks
Yields
surge amid repricing on post-election reflation trade.
The end of the
dollar’s exorbitant privilege (must read).
Monday in the charts.
https://www.zerohedge.com/markets/stocks-gold-jump-bonds-dollar-dump-election-fears-fade
Fundamental
Headlines
The
Economy
US
Month to date
retail chain store sales were flat with the prior week---which was an improvement.
The August trade
balance was -$67.1 billion versus estimates of -$66.1 billion.
The final
September services PMI was reported at 54.6, in line; the composite PMI was 54.3 versus 54.4.
The September ISM
nonmanufacturing index came in at 57.8 versus consensus of 56.9.
International
August German
factory orders rose 4.5% versus expectations of up 2.6%; its September construction
PMI was 45.5 versus 50.0.
The September UK construction PMI was 56.3 versus
forecasts of 54.0.
Other
Update on economic charts.
http://scottgrannis.blogspot.com/2020/10/top-charts.html
The depression may be over, but the recession
has just begun.
https://www.nytimes.com/2020/10/03/upshot/pandemic-economy-recession.html
Service sector weighs on EU economy.
https://www.markiteconomics.com/Public/Home/PressRelease/559ad4d179154ed181fba2569d738e6d
House plan to breakup big tech leaks.
https://www.zerohedge.com/technology/house-democrats-game-plan-breaking-big-tech-leaks
Saudi Arabia sees oil at $50/barrel till 2023.
https://www.zerohedge.com/commodities/saudi-arabia-sees-oil-50-until-2023
The
Fed
How the Fed made the top 10% richer than
ever.
https://www.zerohedge.com/personal-finance/fed-study-how-we-made-top-10-richer-ever
Fiscal
Policy
Both Biden and Trump ignore mounting federal
debt.
The
coronavirus
The elusive ‘Covid party’ myth.
https://www.aier.org/article/the-elusive-covid-party-myth/
The coronavirus whistleblower’s mother
purportedly arrested in China.
https://www.zerohedge.com/geopolitical/covid-whistleblowers-mother-reportedly-arrested-china
Bottom
line. Nothing matters but intervention.
Here comes the ‘rate’ scare.
https://www.zerohedge.com/markets/morgan-stanley-here-comes-rate-scare
September dividends by the numbers.
News on Stocks in Our Portfolios
Exxon
and the future of fossil fuels.
What
I am reading today
Pointers from Portugal on
addiction and the drug war.
https://www.nytimes.com/2020/10/05/upshot/portugal-drug-legalization-treatment.html
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