Friday, February 5, 2021

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


The Morning Call




The Market




Thursday in the charts.


Surging dollar could spell problems for equities.






              The Economy




                          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%.





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%.




                          December vehicle sales per capita.



                          Hotel occupancy down 29.6% YoY.



                                  JP Morgan’s consumer data shows consumer spending slipping.



                          Keep on borrowing and buying.



Fiscal Policy


  Senate passes Biden’s $1.9 trillion relief package.


                Short Squeeze


              The truth about naked short selling.



                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.



                          What game are you playing?



              Part 2.



    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.



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