Thursday, November 5, 2020

The Morning Call---Powell becomes the most powerful man in Washington

The Morning Call




The Market




            The S&P (3443) made a noteworthy move up yesterday (1) closing the huge 10/28 gap down open, (2) breaking the very short term trend of lower highs and (3) continuing a bounce off its 100 DMA.  While that negates the recent downtrend, an uptrend will only be set if the S&P successfully challenges its all-time high (3588).  If I wanted to put money to work, I would wait for the results of that challenge.


            Wednesday in the charts.







              The Economy




                          Weekly jobless claims rose 751,000 versus consensus of up 732,000.


Q3 nonfarm productivity was up 4.9% versus expectations of up 5.6%; unit labor costs declined 8.9% versus -11.5%.


The October ISM nonmanufacturing index was reported at 56.6 versus estimates of 57.5.



The October final services PMI was 56.9 versus projections of 56.0; the composite PMI was 56.3 versus 55.5.



                                                  October light vehicle sales fell 0.5%.






September German factory orders were up 0.5% versus forecasts of up 2.0%.


September EU retail sales decreased 2.0% versus predictions of -1.0%.

The final October Japanese services PMI came in at 47.7 versus consensus of 46.6; the composite PMI was 48.0 versus 46.7.


The final October EU construction PMI was 44.9 versus expectations of 46.2; the German construction PMI was 45.2 versus 44.4; the UK construction PMI was 53.1 versus 55.0.




                          The outlook for growth continues to improve.



            The coronavirus


              ***overnight update.



              The latest stats.



              Midwestern states thrive with fewer virus rules.



            Bottom line.  The latest FOMC meeting wraps up today; and the Market awaits the reassurance that the Fed will remain accommodative whatever occurs on the political  front---which will be needed since the likely election outcome (Biden/GOP senate) will result in less fiscal spending and more restrictive lockdown measures.  Gridlock will keep Powell as the most powerful man in Washington.



              Overnight, the Bank of England led the way with a larger than expected increase in its bond buying program.



              More on valuation.



    News on Stocks in Our Portfolios


Becton, Dickinson (NYSE:BDX): FQ4 Non-GAAP EPS of $2.79 beats by $0.25; GAAP EPS of $0.36 misses by $1.56.

Revenue of $4.78B (+4.4% Y/Y) beats by $300M.


Qualcomm (NASDAQ:QCOM): FQ4 Non-GAAP EPS of $1.45 beats by $0.27; GAAP EPS of $2.58 beats by $0.35.

Revenue of $6.5B (+35.1% Y/Y) beats by $560M.



FactSet Research Systems (NYSE:FDS) declares $0.77/share quarterly dividend, in line with previous.


What I am reading today


            This is your brain on certainty.



            The economic divide in America.



                Apparently 2016 was no fluke.



                Winners of the Epson International Panoramic Photo Awards.




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