Thursday, July 29, 2021

The Morning Call--The Fed confuses----again

 

The Morning Call

 

7/29/21

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/powell-pumps-stocks-dumps-dollar-dovish-doublespeak

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Weekly jobless claims totaled 400,000 versus expectations of 380,000.

 

The initial Q2 GDP growth reading was 6.5% versus forecasts of 8.5%; the price index was 6.1% versus 5.4%. 

                          https://www.zerohedge.com/markets/gdp-huge-miss-us-economy-grew-just-65-q2-far-below-85-expected

 

                        International

 

July German unemployment came in at 5.7% versus estimates of 5.8%; the preliminary July inflation rate was 0.9% versus 0.5%.

 

July EU consumer confidence was reported at -4.4, in line; economic sentiment was 119 versus 118.5; industrial sentiment was 14.6 versus 13.0; services sentiment was 19.3 versus 19.9.

 

                        Other

 

                          Regional Fed manufacturing overview.

                          https://www.advisorperspectives.com/dshort/updates/2021/07/28/july-regional-fed-manufacturing-overview

                       

            The Fed

 

As you know the Fed met this week.  Yesterday it released the official statement from that meeting.  In sum, the Fed says that the economy has made progress but there was no change in policy and no hint of when it will change.  Viva la QE!

https://www.zerohedge.com/markets/fomc

 

In the subsequent presser, Powell gave us all his very best version of the green apple two step by confusing everyone, including guys a lot smarter than me.  But in essence, viva la QE!

              https://www.zerohedge.com/markets/5-takeaways-powells-conference

 

              What happens when rates rise and QE is over?

              https://www.19fortyfive.com/2021/07/what-happens-when-the-days-of-low-interest-rates-and-strong-global-liquidity-end/

 

            Fiscal Policy

 

$550 billion infrastructure bill advances in senate.  Note: this is the kind of spending that ends up paying for itself.  In fact, almost everyone agrees that that it is necessary; forget the state of the economy.  So, I think it a positive.  Also, at least a decent part of the spending is offset by cuts elsewhere.

              https://www.zerohedge.com/political/bipartisan-coalition-reach-agreement-12-trillion-infrastructure-bill

 

            Inflation

 

              Hyperinflation tipping point.

              https://econbrowser.com/archives/2021/07/still-crazy-after-all-these-years

 

              IMF warns that inflation may not be transitory.

              https://www.cnbc.com/2021/07/27/imf-warns-that-inflation-could-prove-to-be-persistent.html

 

              How transitory is inflation?

              https://www.zerohedge.com/economics/just-how-transitory-inflation

 

            The coronavirus

 

              The CDC gets it wrong again.

              https://politicalcalculations.blogspot.com/2021/07/how-did-covid-19-change-us-life.html#.YQGdao5KiUk

 

    News on Stocks in Our Portfolios

 

Qualcomm (NASDAQ:QCOM): Q3 Non-GAAP EPS of $1.92 beats by $0.24; GAAP EPS of $1.77 beats by $0.40.

Revenue of $8.06B (+64.5% Y/Y) beats by $500M.

 

T. Rowe Price (NASDAQ:TROW): Q2 Non-GAAP EPS of $3.31 beats by $0.11; GAAP EPS of $3.46 beats by $0.23.

Revenue of $1.93B (+35.9% Y/Y) beats by $20M.

 

Exxon Mobil (NYSE:XOM) declares $0.87/share quarterly dividend, in line with previous.

 

What I am reading today

 

            What happened to patronage?

            https://www.strangeloopcanon.com/p/on-medici-and-thiel

 

            The Simone Biles moment.

            https://townhall.com/columnists/markdavis/2021/07/28/the-simone-biles-moment-reveals-our-softened-world-n2593215

 

                        New technologies and the sorting process of the Market.

            https://www.adamsmith.org/blog/new-technologies-and-the-sorting-process-of-the-market

 

            The ‘follow the science’ clown show.

            https://www.powerlineblog.com/archives/2021/07/the-follow-the-science-clown-show.php

 

 

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