The Morning Call
11/9/20
The
Market
Technical
***Given the overnight news on
Pfizer’s coronavirus vaccine (see below) and the Markets’ reactions, none of
the technical comments written after close Friday have much meaning. So, I will do the Monday Morning Chartology
on Tuesday.
Fundamental
Headlines
The
Economy
Review of last week
The economic
data last week was roughly neutral but the primary indicators were negative
(one positive, one neutral, two negative).
So, the stats continue to discount any notion of a ‘V’ shaped
recovery. And if the election results
end up as they now stand (Biden/GOP senate), then the odds are that we get less
fiscal stimulus than if either part had won both the presidency and the senate---meaning
a slower rate of recovery than what otherwise might have been.
https://www.zerohedge.com/markets/risks-double-dip-soaring-pandemic-rages
By the way, I
don’t think that is necessarily all bad.
As you know, one of my principal concerns regarding the long term secular
growth rate of the economy is that (the cost of servicing) too much government
debt stifles growth.
The economy
is healing but not fast enough.
https://www.nytimes.com/2020/11/06/upshot/jobs-report-economy-damage.html
Will the
coronavirus derail the recovery?
http://www.capitalspectator.com/will-rising-coronavirus-risk-derail-the-us-economic-recovery/
Overseas, the
indicators very positive. That said, (1)
the trend to date has been quite sketchy; so we can’t read too much into one
week’s stats and (2) with renewed lockdowns occurring across Europe, I am not
sure there will be much follow through to these upbeat numbers. Not helpful to our own recovery.
Whatever the
shape or magnitude of the near term bounce back, I am not altering my belief
that long term the economy will grow at a historically subpar secular rate due
to the twin burdens of egregiously irresponsible fiscal and monetary
policies---which, by the way, are becoming even more egregiously irresponsible
as a result of measures being taken by the government and the Fed in dealing
with the current crisis.
US
International
The preliminary September
Japanese reading of its leading economic indicators was 82.9 versus projections
of 88.6.
The September
German trade balance was E20.8 billion versus forecasts of E19.9 billion.
Other
Update on rail traffic.
https://www.calculatedriskblog.com/2020/11/aar-october-rail-carloads-down-66-yoy.html
The
coronavirus
***overnight, Pfizer says coronavirus vaccine 90%
effective,
https://www.zerohedge.com/markets/pfizer-biontech-trials-show-covid-19-vaccine-more-90-effective
How to mislead humanity into accepting
lockdowns (must read).
Bottom
line. Where would the Market be without QE?
https://www.zerohedge.com/markets/socgen-calculates-sp-would-be-1800-lower-without-qe
Update on the Buffett valuation indicator.
Don’t bulls**t
yourself.
https://theirrelevantinvestor.com/2020/11/05/i-dont-bllshit-myself/
The Markets and the economy do not care about
your politics.
https://www.pragcap.com/the-markets-and-the-economy-dont-care-about-your-politics/
News on Stocks in Our Portfolios
McDonald's (NYSE:MCD): Q3
Non-GAAP EPS of $2.22 beats by $0.32; GAAP EPS of $2.35 beats
by $0.44.
Revenue
of $5.42B (-1.5% Y/Y) beats by $50M.
What
I am reading today
The election and the Supreme Court.
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for Survival’s website (http://investingforsurvival.com/home)
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