Wednesday, February 3, 2021

The Morning Call--Valuations at historic highs.

 

The Morning Call

 

2/3/21

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/stocks-crypto-bond-yields-jump-wsb-game-stopped

 

            Is a larger correction coming?

            https://www.zerohedge.com/markets/larger-correction-coming

 

            Bottom line.  Market technicals remain the immediate story.  The Reddit crowd took a licking yesterday as their ‘most shorted’ targets declined substantially and their newest mark, silver, could not sustain their initially onslaught.  I said yesterday that this whole Reddit phenomena may be over and the pin action would support that judgment.  However, I think it is too early to write it off.  Stay watchful---I would not get sucked into yesterday’s Market bounce back.   

               

            Yellen gets ethics waiver to lead investigation of the Reddit phenomena.

            https://www.zerohedge.com/markets/yellen-gets-ethics-waiver-lead-regulatory-crusade-against-hft-after-taking-700k-citadel

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications were up 8.1%, purchase applications up 0.1.

                                   

The January ADP private payrolls report showed job increases of 174,000 versus predictions of 49,000.

                          https://www.zerohedge.com/personal-finance/adp-employment-rebounds-january-after-december-drop

 

                        International

 

The January Japanese services PMI came in at 46.1 versus estimates of 45.7; the Chinese Caixin services PMI was 52.0 (no forecast provided); the German services PMI was 46.7 versus 46.8; the EU services PMI was 45.4 versus 45.0; the UK services PMI was 39.5 versus 38.8.

 

The January Japanese composite PMI was 47.1 versus consensus of 56.7; the Chinese composite PMI was 52.2 (no forecast provided); the German composite PMI was 50.8, in line; the EU composite PMI was 45.4 versus 45.0; the UK composite PMI was 41.2 versus 40.6.

 

The January EU CPI was reported at 0.2% (no estimate provided); PPI was 0.8% versus 0.7%.

 

                        Other

 

              December median household income.

              https://politicalcalculations.blogspot.com/2021/02/median-household-income-in-december-2020.html#.YBmdcehKiM8

 

              Regional Fed manufacturing indices overview.

              https://www.advisorperspectives.com/dshort/updates/2021/02/01/january-regional-fed-manufacturing-overview

 

              Bankruptcies declined 29.7% in 2020.

              https://www.calculatedriskblog.com/2021/02/us-courts-bankruptcy-filings-decline.html

 

              Framing lumber prices doubled YoY.

              https://www.calculatedriskblog.com/2021/02/update-framing-lumber-prices-almost.html

 

Fiscal Policy

 

  The argument in favor of Biden’s $1.9 trillion stimulus plan.

  https://www.nytimes.com/2021/01/29/upshot/biden-economic-stimulus.html

 

  The fiscal dilemma keeps getting worse.

  https://www.zerohedge.com/political/has-joe-biden-lost-his-mind

 

Bottom line.  Valuations exceed dot.com highs.

            https://www.ft.com/content/d424625f-6cff-4cd2-bb6a-ff95ec440899

 

  An interview with Howard Marks.

  https://themarket.ch/interview/howard-marks-the-biggest-risk-is-rising-interest-rates-ld.3537

 

    News on Stocks in Our Portfolios

 

Emerson Electric (NYSE:EMR) declares $0.505/share quarterly dividend, in line with previous.

 

What I am reading today

 

            The benefits of an open society.

            https://www.adamsmith.org/blog/johan-norberg-and-open-societies

 

            The loss of organizational IQ.

            https://coyoteblog.com/coyote_blog/2021/02/every-service-organization-has-lost-20-organizational-iq-points-during-covid-banks-have-lost-40.html

 

            Quote of the day.

            Quotation of the Day... - Cafe Hayek

 

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