The Morning Call
7/6/21
The
Market
Technical
As you can see,
the S&P’s rate of ascent picked up last week, perhaps ending the recent
back and forth battle with its short term uptrends lower boundary. It certainly reinforces my current short term
pin action premise: ‘I can’t see an end to this uptrend as long
as the money keeps flowing with abundance and in the absence of any major
negative exogenous event.’
Goldman is bullish
on H2.
https://www.zerohedge.com/markets/goldman-we-are-entering-best-2-week-seasonal-period-year-stocks
new
BoA not so much.
It appears that
the long bond has finally broken the downtrend (rise in yields) from last August. If there is follow through, that would suggest
that the bond boys are betting that the economy’s bounce off the coronavirus lows
is decelerating or it soon will.
GLD continued to trade
sideways last week. As you can see, it
is in an unsuccessful struggle to break above its 100 DMA. Although that huge gap down open has a
magnetic pull that will pull gold above that MA. Further, if investors are starting to factor
a slowdown in economic growth and lower bond yields that would have a positive effect
on the price of gold.
The dollar had a
good week, extending the bounce off its short term trading range and pushing
further above both DMA’s. That would put
its investors in the stock guys camp---stronger H2 growth---as opposed to bond
investors.
https://www.zerohedge.com/the-market-ear/cqvfpn78p
Friday in the
charts.
Fundamental
Headlines
The
Economy
Review of Last Week
Last week the reported
data were slightly positive (plus primary indicators outnumbered the minus two
to one), which represented something of a respite from eight weeks of downbeat
stats. While hopeful, that is not enough
to assume an improvement in trend, so my read on the economy has not changed:
the data continues to confirm that the post Covid burst of economic activity is
falling short of expectations.
The Fed and its
‘transitory’ inflation forecast remains at the center of investors’
attention. As you know, I think that the
Fed has no clue what it wants to do or its conviction to do what it wants to do
is so weak that it continues to allow the Markets to dictate policy. In sum, I think that the risk to the economy is that it continues to slow,
inflation continues to rise and the Fed fumbles the ball again.
Overseas, the numbers
flipped negative again, keeping the dataflow pattern erratic. So, we continue to get little help on the
economic growth front from the rest of globe.
Bottom line. ‘As
you know my opinion is that following an initial snapback (which may already
be over), the US economy will likely return to its former subpar secular growth
rate, stymied by an irresponsible mix of fiscal/monetary policies.’
US
International
May Japanese
household spending fell 2.1% versus estimates of -3.7%; the June services PMI was
48.0 versus 46.5 in May; the June composite PMI was 48.9 versus 48.4 in May.
The June Chinese
Caixin services PMI was 50.3 versus 55.1 in May; the Caixin composite PMI was
50.6 versus 53.8 in May.
https://www.zerohedge.com/markets/china-verge-contraction-after-sudden-plunge-services-pmi
May German factory
orders were down 3.7% versus estimate of +1.0%; the June services PMI was 57.5
versus 58.3; the June construction PMI was 47.0 versus 44.5 in May; July economic
sentiment was 63.3 versus 75.2.
June EU retail sales
rose 4.6% versus expectations of +4.4%; the June services PMI was 58.3 versus 58.0;
the June composite PMI was 59.5 versus 59.2; the June construction PMI was 47.0
versus 44.5 in May; July economic sentiment was 61.2versus 81.3 in June.
The June UK services PMI was 62.4 versus
consensus of 61.7; the June composite PMI was 62.2 versus 61.6; the June construction PMI was 66.3 versus
63.8.Jue retail sales.
Other
H1 stats to contemplate.
https://www.zerohedge.com/the-market-ear/cfxwe73xrx
The
coronavirus
In search of the truth.
The great delta
variant scare.
https://www.zerohedge.com/covid-19/great-big-delta-scariant
Subscriber Alert
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News on Stocks in Our Portfolios
What
I am reading today
China seeks nothing but
its own terms.
Quote of the day.
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