The Morning Call--Enjoy the ride but please be careful

 

The Morning Call

 

2/5/21

 

The Market

         

    Technical

 

Thursday in the charts.

https://www.zerohedge.com/markets/redditors-abandon-squeezes-panic-buy-penny-stocks-usd-hits-2-mo-highs

 

Surging dollar could spell problems for equities.

https://www.zerohedge.com/markets/surging-dollar-could-be-bull-stock-rallys-china-shop

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          December factory orders rose 1.1% versus estimates of +0.7%.

 

The December trade deficit was $66.6 billion versus projections of $65.9 billion.

 

January nonfarm payrolls increased 49,000 versus expectations of 50,000; however, private payrolls were up 6,000 versus 50,000; the unemployment rate was 6.3% versus 6.7%.

                          https://www.zerohedge.com/markets/january-payrolls-miss-only-49k-jobs-added-unemployment-rate-tumbles-63

 

                        International

 

December Japanese  household spending rose 0.9% versus forecasts of -1.9%; December leading economic indicators came in at 94.9 versus 96.1 in November.

 

December German factory orders fell 1.9% versus consensus of -1.0%.

 

                        Other

 

                          December vehicle sales per capita.

                          https://www.advisorperspectives.com/dshort/updates/2021/02/04/vehicle-sales-per-capita-as-of-december-2020

 

                          Hotel occupancy down 29.6% YoY.

                          https://www.calculatedriskblog.com/2021/02/hotels-occupancy-rate-declined-296-year.html

 

                                  JP Morgan’s consumer data shows consumer spending slipping.

                          https://www.zerohedge.com/markets/jpms-nationwide-consumer-data-slips-covid-dark-winter-trounces-recovery

 

                          Keep on borrowing and buying.

                          http://scottgrannis.blogspot.com/2021/02/keep-on-borrowing-and-buying.html

 

Fiscal Policy

 

  Senate passes Biden’s $1.9 trillion relief package.

  https://www.zerohedge.com/political/senate-dems-push-through-19tn-stimulus-harris-casts-first-tiebreaker

 

                Short Squeeze

 

              The truth about naked short selling.

              https://www.zerohedge.com/markets/naked-short-selling-truth-much-worse-you-have-been-told

 

                Bottom line.  It looks like we will get the full $1.9 trillion stimulus package which is chocked full of unnecessary/unproductive spending.  This will keep the budget deficit and national debt on track the achieve ever more glorious highs.  And with the Fed out there pumping, what more could investors ask for?  It may not be good for the long term secular growth of the economy but apparently not enough of us care to make a difference.  Enjoy the ride but exercise some caution and take profits/build cash when a holding reaches full valuation.

 

              More on valuations.

              https://www.advisorperspectives.com/dshort/updates/2021/02/04/market-cap-to-gdp-an-updated-look-at-the-buffett-valuation-indicator

 

                          What game are you playing?

              https://alephblog.com/2021/02/03/what-game-are-you-playing/

 

              Part 2.

              https://www.nytimes.com/2021/02/04/upshot/stock-market-winning-strategy.html

 

    News on Stocks in Our Portfolios

 

Cummins (NYSE:CMI): Q4 GAAP EPS of $3.36 beats by $0.54.

Revenue of $5.83B (+4.5% Y/Y) beats by $650M.

 

Qualcomm (NASDAQ:QCOM): FQ1 Non-GAAP EPS of $2.17 beats by $0.07; GAAP EPS of $2.12 beats by $0.30.

Revenue of $8.24B (+62.2% Y/Y) misses by $20M.

 

Illinois Tool Works (NYSE:ITW): Q4 GAAP EPS of $2.02 beats by $0.24.

Revenue of $3.5B (+0.9% Y/Y) beats by $190M.

 

C.H. Robinson Worldwide (NASDAQ:CHRW) declares $0.51/share quarterly dividend, in line with previous.

 

What I am reading today

 

            Reasons for optimism about artificial intelligence.

            https://www.adamsmith.org/blog/reasons-for-optimism-artificial-intelligence

 

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