Thursday, November 12, 2020

The Morning Call---The vaccine may not cure the ills of the economy but it could help the Market

The Morning Call

 

11/12/20

 

The Market

         

    Technical

 

            Could the bond market derail the stock market?

            https://awealthofcommonsense.com/2020/11/could-the-bond-market-derail-the-stock-market/

 

            Wednesday in the charts.  The important takeaways being (1) the Dow and S&P remain below their all-time highs [danger!! triple top] and (2) the bond market was closed.

            https://www.zerohedge.com/markets/bonds-away-tech-bulls-will-play

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Weekly jobless claims rose 709,000 versus estimates of 735,000.

 

October CPI came in unchanged versus predictions of +0.1%; core CPI was also flat versus +0.2%.

 

                        International

 

September EU industrial production fell 0.4% versus expectations of +0.7%.

 

September Japanese machinery orders declined 4.4% versus consensus of -0.7%; October PPI was -0.2%, in line.

 

The September UK trade balance was +L0.6 billion versus projections of -L1.0 billion; industrial production was up 0.5% versus +0.8%; manufacturing production was +0.2% versus +1.0%; GDP was -8.4%, in line.

 

Q3 UK preliminary GDP growth rate was 15.5% versus forecasts of 15.8%; business investments were up 8.8% versus +15.9%; construction output was +0.6% versus -20.0%.

 

October German CPI was unchanged, in line.

 

                        Other

 

            The Fed

 

              Vaccine news means central banks will have to disappoint.

              https://www.zerohedge.com/markets/rabo-positive-vaccine-news-means-central-banks-will-have-disappoint

 

            The coronavirus

 

              ***overnight update.

              https://www.zerohedge.com/geopolitical/world-suffers-deadliest-day-yet-modern-says-covid-19-vaccine-data-ready-live-updates

 

                            Is a lockdown coming?

              https://www.zerohedge.com/markets/biden-science-advisor-calls-4-6-week-lockdown-avoid-covid-hell

 

                  And with it, ‘distributive justice’?

             https://www.zerohedge.com/medical/biden-covid-advisor-supports-distributing-vaccine-globally-its-available-all-americans

 

I am making an economic not a political observation here---a lockdown and a longer inoculation period for the coronavirus vaccine will almost surely negatively economic growth at least for the period of the lockdown.

              

              It was a mistake to close schools.

              https://www.aier.org/article/it-was-a-mistake-to-close-schools-uk-study-concedes/

 

                Bottom line.  There is no vaccine for a terminally ill economy.

                        https://www.zerohedge.com/economics/theres-no-vaccine-terminally-ill-economy

 

While the author of the above very bearish piece makes good textbook points on the economy, we are invested in the Market not the economy.  And it has yet to be proved that QE is bad for stocks.  Until it is, this Market will retain its upward bias---though that triple top I keep mentioning would be an early warning signal.

 

    News on Stocks in Our Portfolios

 

Automatic Data Processing (NASDAQ:ADP) declares $0.93/share quarterly dividend, 2.2% increase from prior dividend of $0.91.

 

What I am reading today

 

            Save first, spend what is left.

            https://theirrelevantinvestor.com/2020/11/10/an-uneven-recovery/

 

            If everything is historic then nothing is historic.

            https://mrzepczynski.blogspot.com/2020/11/if-everything-is-historic-then-nothing.html

 

            How the income gap got so wide.

            https://www.zerohedge.com/markets/tales-cobras-windows-and-economic-promise-part-2

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

 

 

 


No comments:

Post a Comment