The Morning Call
3/24/21
The
Market
Technical
Tuesday in the
charts.
https://www.zerohedge.com/markets/russell-routed-crude-crashed-bonds-bid-bull-market-turns-one
Morgan Stanley
identifies source of massive US Treasury sales.
https://www.zerohedge.com/markets/morgan-stanley-identifies-source-massive-treasury-selling
Plus, there is the
end of quarter portfolio rebalancing.
https://www.zerohedge.com/markets/2021s-bond-bloodbath-worst-decades
The outlook for
the dollar.
https://www.zerohedge.com/markets/dollar-long-short
Fundamental
Headlines
The
Economy
US
Weekly mortgage applications
fell 2.5% while purchase applications were up 2.6%.
Month to date
retail chain store sales continued to fall at the same rate as the prior week.
February new home
sales declined 18.2% versus consensus of -6.5%.
https://www.calculatedriskblog.com/2021/03/new-home-sales-decrease-to-775000.html
(New home prices)
https://www.calculatedriskblog.com/2021/03/new-home-prices.html
February durable
goods orders declined 1.1% versus
predictions of +0.8%; ex transportation, they were down 0.9% versus +0.6%.
The March Richmond
Fed manufacturing index came in at 17 versus 14 recorded in February.
International
January UK
unemployment was 5.0% versus projections of 5.2%; February CPI was +0.1% versus
+0.5%; February PPI was +0.6% versus +0.7%; the March flash manufacturing PMI
was 57.9 versus 55.0; the flash service PMI was 56.8 versus 51.0; the flash
composite was 56.6 versus51.1.
The March Japanese
flash manufacturing PMI was 52.0 versus estimates of 52.0; the flash services
PMI was 46.5 versus 45.8 reported in February; the flash composite PMI was 48.3
versus 48.2 in February.
The March German
flash manufacturing PMI was 66.6 versus expectations of 60.8; the flash services
PMI was 50.8 versus 46.2; the flash composite PMI was 56.8 versus 51.6.
The March EU flash
manufacturing PMI was 62.4 versus forecasts of 57.7; the flash services PMI was
48.8 versus 46.0; the flash composite PMI was 52.5 versus 49.1.
Other
The
Fed
In testimony
before the senate yesterday, Powell stuck to his thesis: economy is improving
but not fast enough. The Fed will do ‘whatever is necessary’ to insure a
recovery. Inflation is not a problem. Yeh,
right.
Fiscal
Policy
The many faces of government default.
https://lawliberty.org/the-many-faces-of-government-default/
Inflation
Rent: from headwind to tailwind.
http://blog.yardeni.com/2021/03/rent-from-headwind-tailwind-for.html
Get ready for some serious sticker shock.
The reliability of core versus headline
inflation in projecting the trend.
http://www.capitalspectator.com/core-inflation-is-probably-a-better-measure-of-the-trend/
The
coronavirus
Death and lockdowns.
https://www.city-journal.org/death-and-lockdowns
Bottom
line. As long as investors believe that the Fed will
bail them out (QE and yield curve control), the assumption has to be that the
Market will have an upward bias. What
likely ends this affair is some event (or series of events) that causes
investors to lose faith in the Fed. My
belief is that that will almost surely occur.
Until then with valuations in the nosebleed section, I am happy to miss
what upside remains.
News on Stocks in Our Portfolios
General Mills (NYSE:GIS): FQ3 Non-GAAP EPS of $0.82 misses by $0.02; GAAP EPS of
$0.96 beats by $0.12.
Revenue
of $4.52B (+8.1% Y/Y) beats by $60M.
What
I am reading today
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