The Morning Call---Have a great holiday and keep your powder dry

 

The Morning Call

 

12/18/20

 

I am taking off thru New Year’s.  Hope everyone has a happy and safe holiday.

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/dollar-slump-sparks-surge-small-caps-lumber-copper-crypto-gold

 

            This is a bit ‘techie’ but it still gives you an idea of what the quants think short term.

            https://www.zerohedge.com/markets/sp-call-wall-rises-3750-ahead-25-billion-quad-witch-spotgamma

 

            The dollar and inflation.

            http://econbrowser.com/archives/2020/12/debasing-the-dollar-or-inflation-looming-again

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

  The December Kansas City Fed manufacturing index came   in at 12 versus       November’s reading of 20.

                              

                        International

 

November Japanese CPI was down 0.4% after being down 0.1% in   October.

 

November German PPI rose 0.2% versus estimates of up 0.1%; the December business climate index was reported at 92.1 versus 90.0.

 

November UK retail sales declined 3.8% versus expectations of -4.2%, ex fuel, they were down 2.6% versus -3.3%; December consumer confidence was -26 versus -31.

 

                        Other

 

The coronavirus

 

  How the ‘experts’ got it all wrong (must read):

  https://www.aier.org/article/the-decimal-point-that-blew-up-the-world/

 

              And still are.

              https://www.zerohedge.com/covid-19/tom-woods-virus-your-fault

 

              And it is no wonder.

              https://www.zerohedge.com/covid-19/seriously-gunshot-deaths-counted-among-covid-19-fatalities-colorado

 

                  Still more cavalry in on the way---FDA gives thumbs up to Moderna vaccine.

              https://www.zerohedge.com/covid-19/fda-advisory-panel-confirms-modernas-covid-19-vaccine-benefits-outweigh-risks

 

 

    News on Stocks in Our Portfolios

 

EOG Resources (NYSE:EOG) declares $0.375/share quarterly dividend, in line with previous.

 

FedEx (NYSE:FDX): FQ2 Non-GAAP EPS of $4.83 beats by $0.82; GAAP EPS of $4.55 beats by $0.60.

Revenue of $20.6B (+19.1% Y/Y) beats by $1.15B.

 

What I am reading today

 

            Oldest carving in East Asia found.

            Oldest carving in East Asia found. But its maker is a mystery. (nationalgeographic.com)

 

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The Morning Call--QEInfinity but not Forever

 

The Morning Call

 

12/17/20

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/gold-crypto-jump-dollar-dumps-fed-flop-washington-slop

 

            Technicals are near the breaking point.

            https://www.zerohedge.com/markets/breaking-point

 

What a Santa Claus rally would tell you about the stock market performance in 2021.

            https://www.marketwatch.com/story/this-is-what-a-santa-claus-rally-would-tell-you-about-stock-market-performance-in-2021-11607976675?mod=home-page

 

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

                          

                           Weekly jobless claims were up 885,000 versus expectations of 800,000. 

                           https://www.zerohedge.com/personal-finance/initial-jobless-claims-surge-highest-almost-4-months

                                   

                          October business inventories rose 0.7%, in line.

 

November housing starts were up 1.2% versus consensus of unchanged; building permits were up 6.2% versus unchanged.

                          https://www.zerohedge.com/personal-finance/despite-homebuilder-sentiment-slip-permits-soar-14-year-highs-renter-nation

 

The December housing market index came in at 86 versus estimates of 88.

                          https://www.advisorperspectives.com/dshort/updates/2020/12/16/nahb-housing-market-index-second-highest-reading-despite-decline

 

The December flash manufacturing PMI was 56.5 versus predictions of 55.7; the services PMI was 55.3 versus 55.9; the composite PMI was 55.7 versus 57.0.

                          https://www.zerohedge.com/economics/us-pmis-slow-early-december-data-services-slump-prices-soar

 

The December Philadelphia Fed manufacturing index was reported at 11.1 versus forecasts of 20.0.

 

                        International

 

                          November EU CPI came in at -0.3%, in line.

 

                        Other

 

                          The Treasury yield curve continues to steepen.

                          http://www.capitalspectator.com/us-treasury-yield-curve-steepens-to-3-year-high/

                       

                          Architecture billings were down in November.

                          https://www.calculatedriskblog.com/2020/12/aia-architecture-billings-lose-ground.html

 

            The Fed

 

The FOMC wrapped up its December meeting yesterday.  In its official statement, it (1) sounded slightly more upbeat about the economy, (2) left rates unchanged, (3) left the current magnitude of QE bond purchases unchanged, (4) along with its liquidity swap and repurchase agreements with other central banks.  However, it did make one alteration in its language---adding the caveat that QE would continue until there is substantial improvement in the economy.  In other words, it is now QEInfinity but not Forever.

https://www.zerohedge.com/economics/fomc-3

 

              The Bank of England left rates and bond buying program unchanged.

              https://www.zerohedge.com/markets/bank-england-leaves-rates-asset-purchases-hold-ahead-brexit-conlcusion

 

            The coronavirus

 

              Did the coronavirus safety measures kill the flu season?

              https://www.bloomberg.com/opinion/articles/2020-12-15/what-if-covid-19-measures-killed-flu-season?sref=loFkkPMQ

 

              Pfizer closely monitoring worker after severe adverse reaction to vaccine.

              https://www.zerohedge.com/medical/pfizer-closely-monitoring-alaska-health-worker-after-serious-adverse-reaction-vaccine

 

            China

 

              China retrenches ‘belt and road’ initiative.

              https://www.nakedcapitalism.com/2020/12/china-retrenches-on-belt-and-road-initiative-as-defaults-rise.html

 

            Bottom line.  How one investor is managing the ‘bubble’.

                        https://www.upslopecapital.com/blog/moon2020

 

            There is no shame in losing money in a stock.

            https://www.safalniveshak.com/lost-money-on-stocks-have-no-shame/

 

    News on Stocks in Our Portfolios

 

General Mills (NYSE:GIS): FQ2 Non-GAAP EPS of $1.06 beats by $0.09; GAAP EPS of $1.11 beats by $0.13.

Revenue of $4.72B (+6.8% Y/Y) beats by $70M.

 

Accenture (NYSE:ACN): FQ1 Non-GAAP EPS of $2.17 beats by $0.12; GAAP EPS of $2.32 beats by $0.26.

Revenue of $11.76B (+3.5% Y/Y) beats by $400M.

Accenture (NYSE:ACN) declares $0.88/share quarterly dividend, in line with previous.

Altria (NYSE:MO) declares $0.86/share quarterly dividend, in line with previous.

MSC Industrial Direct (NYSE:MSM) declares $0.75/share quarterly dividend, in line with previous.

What I am reading today

 

           

 

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The Morning Call--Be sure that your greed is under control

The Morning Call

 

12/16/20

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/stocks-soar-stimulus-hope-smart-money-dollar-puke

 

            The latest Fund Manager Survey.

            https://www.zerohedge.com/markets/record-wall-street-euphoria-triggers-first-bofa-sell-signal-february-2020

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

                           

Weekly mortgage applications rose 1.1% while purchase applications were up 1.8%.

 

                            Month to date retail sales grew slightly faster than in the prior week.

 

November industrial production rose 0.4% versus forecasts of up 0.3%; capacity utilization was 73.3% versus 72.9%.

                            https://www.advisorperspectives.com/dshort/updates/2020/12/15/the-big-four-industrial-production-increase-in-november

                                                       

November retail sales fell 1.1% versus projections of -0.3%; ex autos, they were down 0.9% versus +0.1%.

                                     https://www.zerohedge.com/personal-finance/us-retail-sales-disappoint-tumble-most-april

 

                        International

 

The October EU trade balance was E30.0 billion versus expectations of E28.0 billion; construction output fell 1.4% versus +0.8%; the December flash manufacturing PMI was 55.5 versus 53.0; the services PMI was 47.3 versus 41.0; the composite PMI was 49.8 versus 45.8.

 

The November Japanese trade balance was Y366.8 billion versus predictions of Y529.0 billion; the December flash manufacturing PMI was 49.7 versus 50.0; the services PMI was 47.2 versus 48.5; the composite PMI was 48.0 versus 49.0.

 

November UK CPI was -0.1% versus estimates of +0.1%; PPI was 0 versus +0.4%; the December flash manufacturing PMI was 57.3 versus 55.0; the services PMI was 49.9 versus 50.5; the composite PMI was 50.7 versus 51.0.

 

The November German flash manufacturing PMI was 58.6 versus consensus of 56.4; the service PMI was 52.5 versus 50.4; the composite PMI was 52.5 versus 50.4

 

                        Other

                        

 We are richer than ever.  So says my favorite optimist.  But it is only because financial asset prices are inflated.  As proof, I offer you chart #7 in this piece.  Notice that the S&P is almost touching the upper boundary of its long term uptrend.  Notice also what historically has happened after following such an occurrence.

                           http://scottgrannis.blogspot.com/2020/12/were-richer-than-ever.html

 

                          The only fair trade is free trade.

                              https://www.adamsmith.org/blog/just-to-remind-the-only-fair-trade-is-free-trade

 

                          Spending breakdown of US households.

                          https://politicalcalculations.blogspot.com/2020/12/the-consumer-spending-of-american.html#.X9kLrNhKiM8

 

                          Global oil refining crisis will worsen this winter.

                          https://www.zerohedge.com/technology/global-oil-refinery-crisis-will-worsen-winter

 

            Central Banks

 

              The ECB’s latest mistake.

              https://www.zerohedge.com/economics/ecbs-latest-big-mistake

 

            The coronavirus

 

              This is a must read analysis of the Pfizer vaccine study.

              https://www.nakedcapitalism.com/2020/12/an-internal-medicine-doctor-and-his-peers-read-the-pfizer-vaccine-study-and-see-red-flags.html

 

            China

 

              Trade with China roars.

              https://www.nytimes.com/2020/12/14/business/economy/us-china-trade-covid.html

 

              Bank of China makes record liquidity injection.

              https://www.zerohedge.com/markets/china-injects-record-950-billion-yuan-medium-term-liquidity-after-bond-defaults

 

            Bottom line.  Be sure you have your greed under control.

                        https://theirrelevantinvestor.com/2020/12/15/the-most-powerful-motivator/

 

    News on Stocks in Our Portfolios

 

Franklin Resources (NYSE:BEN) declares $0.28/share quarterly dividend, 3.7% increase from prior dividend of $0.27.

Goldman upgrades Exxon.

Exxon upgraded at Goldman in second Buy rating this week (NYSE:XOM) | Seeking Alpha

 

What I am reading today

 

           

 

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The Morning Call--Upgrade the quality of your portfolio

The Morning Call

 

12/15/20

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/americas-v-day-sparks-safe-haven-protection-buying-stocks-sell-news

 

            Low interest rates do not justify higher stock prices.

            https://www.zerohedge.com/markets/shiller-ecy-justification-sky-high-stock-prices

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

The December NY Fed manufacturing index was reported at 4.9 versus   estimates of 5.9.

 

                        International

 

October UK average earnings rose 2.7% versus consensus of +2.2%; unemployment was 4.9% versus 5.1%.

 

November YoY Chinese fixed asset investments were up 2.6%, in line;   industrial production was up 7%, also in line; retail sales were up 5.0% versus 5.2%; November unemployment was 5.2% versus 5.5%

 

                        Other

                          

                          Update on seven high frequency indicators on the economy.

                           https://www.calculatedriskblog.com/2020/12/seven-high-frequency-indicators-for_14.html

 

                          Mass evictions expected at end of January.

                           https://www.zerohedge.com/personal-finance/expect-most-evictions-history-ban-expires

 

                          Ed Yardini on inflation prospects.

                              http://blog.yardeni.com/2020/12/inflation-was-sooo-1970s-will-it-roar.html

 

                                  More on the likelihood of inflation.

                          http://econbrowser.com/archives/2020/12/inflation-looming-phillips-curve-vs-quantity-theory

 

                                  Could stagnation be coming to an end?

                          https://marginalrevolution.com/marginalrevolution/2020/12/why-did-the-great-stagnation-end.html

 

                                  Or getting worse?

                          https://www.advisorperspectives.com/commentaries/2020/12/14/the-probability-of-stagflation-is-rising-1

 

                                  EU wobbles while France holds it hostage.

                          https://www.zerohedge.com/geopolitical/eu-continues-wobble-while-france-holds-it-ransom

 

                The Fed

 

              Two words.

              https://www.zerohedge.com/markets/convoy-investments-bull-market-our-lifetime-explained-two-words

 

                  Global negative yielding debt tops $ 18 trillion.

              https://www.zerohedge.com/markets/negative-yielding-debt-exceeds-18-trillion-global-market-cap-hits-100-trillion

 

            Bottom line.  Upgrade the quality of your portfolio.

                        https://alephblog.com/2020/12/11/yield-poison-4/

 

              What Bogle and Buffett both got right.

              https://www.marketwatch.com/story/stockpicking-legend-warren-buffett-and-index-champion-john-bogle-both-knew-the-other-was-right-about-investing-2020-12-10?mod=home-page

 

              2020 investing lessons.

              https://awealthofcommonsense.com/2020/12/my-2020-investing-lessons/

 

    News on Stocks in Our Portfolios

 

What I am reading today

 

            More wisdom from Morgan Housel.

            https://www.collaborativefund.com/blog/sure/

           

                        The story of Dave Brubeck’s ‘Take Five’.

            https://www.npr.org/2000/11/19/1114201/take-five

 

            Treasure hunter stays in jail five years rather than reveal location of loot.  The story of the incredible effort to locate and retrieve the gold in this treasure ship can be read in ‘Ship of Gold in the Deep Blue Sea’.  It is a great book.

            https://www.zerohedge.com/commodities/treasure-hunter-stays-5-years-jail-rather-reveal-location-gold-coins-worth-millions

 

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