Friday, April 23, 2021

The Morning Call--More Biden

 

The Morning Call

 

4/23/21

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/way-go-joe-bonds-bid-biden-tax-plan-tanks-stocks

 

            Does yesterday’s sell off have legs?

            https://www.zerohedge.com/the-market-ear/selloff

           

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          March existing home sales fell 3.7% versus expectations of +0.8%.

                          https://www.advisorperspectives.com/dshort/updates/2021/04/22/existing-home-sales-down-3-7-in-march

 

The March leading economic indicators rose 1.3% versus estimates of +1.0%

 

The April Kansas City Fed manufacturing index came in at 31 versus 26 reported in March.

https://www.advisorperspectives.com/dshort/updates/2021/04/22/kansas-city-fed-survey-further-expansion-in-april

 

                        International

 

The March EU flash consumer confidence index was reported at -8.1 versus consensus of -10.8; April UK consumer confidence was -15 versus -12.

 

March UK retail sales were up 5.4% versus projections of up 1.5%; ex energy they were up 4.9% versus up 1.9%; the April flash manufacturing PMI was 60.7 versus 59.0; the flash services PMI was 60.1 versus 59.0; the flash composite PMI was 60.0 versus 58.2.

 

The March Japanese CPI came in at +0.3% versus +0.2% reported in February; the April flash manufacturing PMI was 53.3 versus 52.7 in March; the flash services PMI was 48.3 versus 48,2 in March; the flash composite PMI was 50.2 versus 49.9 in March.

 

The April German flash manufacturing PMI was 66.4 versus predictions of 65.8; the flash services PMI was 50.1 versus 50.8; the flash composite PMI was 56.0 versus 56.8.

 

The April EU flash manufacturing PMI was 63.3 versus expectations of 62.0; the flash services PMI was 50.3 versus 49.1; the flash composite PMI was 53.7 versus 52.8.

 

                        Other

 

                          The mortgage delinquency rate fell sharply in March.

                          https://www.calculatedriskblog.com/2021/04/black-knight-national-mortgage.html

 

            Biden’s Plan

 

              Biden proposes doubling the capital gains tax.

              https://www.zerohedge.com/markets/stocks-puke-bidens-capital-gains-tax-reality-strikes

 

              Street reaction.

              https://www.zerohedge.com/markets/stunned-wall-street-responds-bidens-shock-proposal-double-cap-gains-tax

 

 

            The coronavirus

 

              Many potential risks from the coronavirus have not gone away.

             https://www.nakedcapitalism.com/2021/04/the-coronavirus-crisis-within-the-economy-is-far-from-over-because-reopening-creates-a-whole-new-type-of-risk.html

                       

                          The global coronavirus infection rate is rising and threatens economic recovery.

              https://www.bloomberg.com/news/articles/2021-04-21/global-virus-resurgence-threatens-vigorous-growth-momentum?sref=loFkkPMQ

 

              The failure of the initial coronavirus modeling.

              https://www.zerohedge.com/covid-19/failure-imperial-college-modeling-far-worse-we-knew

 

 

            Bottom line.  Of course, the news of the day was the capital gains tax increase proposal from Biden.  Stocks clearly did not like.  But (1) the universe already knew that Biden intended to hike taxes on the wealthy---the only question was how much, (2) this is only a proposal and it is long way to signed legislation---which almost certainly will look nothing like the current proposal. 

 

So, it is too soon to start analyzing how good or bad this would be for the economy because we simply don’t know what the ultimate spending/taxing legislation will look like.  But I will opine that neither will likely be positive.  More spending simple pushes the national debt further above the levels marked by the Rogoff/Reinhard study as a drag on economic growth. And if yesterday’s in action is any guide, higher capital gain taxes are likely to prove disruptive  to the Market. 

 

              Value investing requires patience.

              https://www.advisorperspectives.com/commentaries/2021/04/21/value-investing-requires-intelligent-patience

 

              Don’t buy what someone wants to sell you.

              https://alephblog.com/2021/04/21/the-rules-part-lxix/

 

    News on Stocks in Our Portfolios

 

Genuine Parts (NYSE:GPC): Q1 Non-GAAP EPS of $1.50 beats by $0.36; GAAP EPS of $1.50 beats by $0.32.

Revenue of $4.46B (+9.0% Y/Y) beats by $160M.

 

 

What I am reading today

 

            The politicization of everything.

            https://americanconsequences.com/pj-o-rourke-the-politicization-of-everything/

           

            In a free society there is no such thing as ‘positive rights’.

            https://www.realclearmarkets.com/articles/2021/04/22/in_a_free_society_there_are_no_such_things_as_positive_rights_773678.html

 

 

                        Quote of the day.

            https://cafehayek.com/2021/04/bonus-quotation-of-the-day-634.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+CafeHayek+%28Cafe+Hayek%29

 

 

            OOOOh, Noooo, Late frost decimates French vineyards,

            https://www.zerohedge.com/commodities/agricultural-disaster-frost-blast-decimates-french-vineyards-may-slash-total-wine

 

 

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