The Morning Call---Powell remains dovish

 

The Morning Call

 

7/14/21

 

The Market

         

    Technical

 

            Tuesday in the charts.

             https://www.zerohedge.com/markets/raging-inflation-sparks-bond-bloodbath-slams-stocks-dollar-spikes

 

            Technically speaking.

https://realinvestmentadvice.com/technically-speaking-bubbles-are-evident-after-they-pop/?utm_medium=email&utm_campaign=Technically%20Speaking%20Bubbles%20Are%20Evident%20After%20They%20Pop&utm_content=Technically%20Speaking%20Bubbles%20Are%20Evident%20After%20They%20Pop+CID_2ca6f7656822ed0131de168b640282ef&utm_source=RIA%20Email%20Marketing%20Software&utm_term=READ%20MORE

 

            Market seasonality.

            https://www.zerohedge.com/the-market-ear/cx7ujnjaae

 

            Some options traders are hedging against a sharp pullback.

            https://www.reuters.com/business/wall-street-charges-ahead-some-option-traders-hedge-against-sharp-pullback-2021-07-13/

 

            Goldman has sold a quarter of its equity portfolio since December.

            https://www.zerohedge.com/markets/goldman-has-aggressively-and-quietly-liquidated-quarter-its-equity-investments

 

            Gold---a cheap way to play the TIPS.

            https://www.zerohedge.com/the-market-ear/cx3ljpktil

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications were up 16% while purchase applications were up 8.3%.

 

Month to date retail chain store sales grew less rapidly than in the prior week.

 

The June small business optimism index was reported at 102.9 versus 99.6 recorded in May.

https://www.advisorperspectives.com/dshort/updates/2021/07/13/nfib-small-business-survey-labor-shortage-remains-a-challenge-for-small-businesses-as-inflation-increases

 

June PPI rose 1.0% versus consensus of +0.6%; core PPI was up 1.0% versus +0.5%.

                                  https://www.zerohedge.com/economics/us-producer-prices-soar-record-pace-june

 

                        International

 

May Japanese industrial production fell 6.5% versus April’s reading of +2.9%.

 

May EU industrial production fell 1.0% versus expectations of -0.2%.

 

June UK CPI came in at +0.5% versus estimates of +0.2%; core CPI was +0.5% versus +0.2%.

 

                        Other

 

                          No recession but no big recovery.

                          https://alhambrapartners.com/2021/07/11/weekly-market-pulse-is-it-time-to-panic-yet/

               

                                  The transatlantic macroeconomic divergence.

                          https://www.project-syndicate.org/commentary/eurozone-us-monetary-fiscal-policy-divergences-trade-tensions-by-daniel-gros-2021-07

                       

            The Fed

 

The Fed released the prepared remarks Powell will make today before the House Financial Services Committee---they are quite dovish.

https://www.zerohedge.com/markets/futures-treasurys-jump-after-powell-says-economic-recovery-hasnt-progressed-enough-begin

 

                       

                        Fiscal Policy

 

              Governments worldwide gorge on debt.

              https://www.wsj.com/articles/governments-world-wide-gorge-onrecord-debt-testing-new-limits-11626106592

 

                  Democrats strike deal on $3.5 trillion ‘human infrastructure’ bill.

              https://www.zerohedge.com/political/democrats-strike-deal-35-trillion-human-infrastructure-package

 

            Inflation

 

              Could inflation fall back below target?

              https://www.zerohedge.com/the-market-ear/ctdvbdng8m

 

              CPI: fact versus fiction.

              https://www.zerohedge.com/markets/consumer-price-inflation-facts-vs-fiction

 

              2022 inflation expectations.

              https://www.zerohedge.com/markets/one-bank-asks-very-uncomfortable-question-2022-inflation-expectations-surge

 

     Bottom line.

 

            Update on valuations.

            https://www.advisorperspectives.com/dshort/updates/2021/07/12/market-cap-to-gdp-june-buffett-valuation-indicator

 

            Investing trends.

            https://thereformedbroker.com/2021/07/12/community/

 

            BofA’s July investor survey.

            https://www.ft.com/content/a848d661-3970-4f9d-97c4-693e2427b7e8

 

    News on Stocks in Our Portfolios

 

BlackRock (NYSE:BLK): Q2 Non-GAAP EPS of $10.03 beats by $0.63; GAAP EPS of $8.92 misses by $0.38.

 

Cummins (NYSE:CMI) declares $1.45/share quarterly dividend, 7.4% increase from prior dividend of $1.35.

 

What I am reading today

 

            Destroying the military from within.

            https://townhall.com/columnists/olivernorth/2021/07/13/destroying-our-military-from-within-n2592407

 

            Quote of the day.

            https://cafehayek.com/2021/07/quotation-of-the-day-3585.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+CafeHayek+%28Cafe+Hayek%29

 

 

                        The new ‘great game’ gets back to basics.

            https://www.zerohedge.com/geopolitical/escobar-new-great-game-gets-back-basics

 

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