The Morning Call
9/30/21
The
Market
Technical
Wednesday in the
charts.
https://www.zerohedge.com/markets/debt-ceiling-doubts-spark-dollar-demand-bitcoin-bullion-dive
I add: (1) the S&P lifted slightly, putting a
little extra room between it and its 100 DMA,
(2) the long bond
rallied but not enough to recover the lower boundary of its very short term
trading range [negating that trend] or its 100/200 DMA’s,
(3) the dollar
continued to soar.
Is the recent rise
in yields noise or a signal?
https://www.capitalspectator.com/is-the-recent-rise-in-interest-noise-or-signal/
The dollar is
breaking out.
https://www.zerohedge.com/the-market-ear/dollar
Key levels to
watch.
https://www.zerohedge.com/the-market-ear/caycro7f1w
Fundamental
Headlines
The
Economy
US
Weekly jobless claims were 362,000 versus
projections of 335,000.
Final Q2 GDP
growth was +6.7% versus estimates of +6.6%; the GDP price index was +6.2%
versus +6.1%; corporate profits advanced 10.5% versus +4.5% in Q1; final Q2 PCE
prices were up 6.5%, in line; final Q2 core PCE prices were up 6.1%, also in
line.
August pending home sales rose 8.1% versus
forecasts of +1.4%.
https://www.advisorperspectives.com/dshort/updates/2021/09/29/pending-home-sales-recover-in-august
International
Final Q2 UK GDP growth
was 5.5% versus estimates of 4.8%; business investment was +4.5% versus -10.7%
in Q1.
August Japanese
retail sales were down 4.1% versus +1.0% in July; August YoY construction
orders were off 3.0% versus -3.4% in July; August industrial production was
-3.2% versus predictions of -0.5%; August YoY housing starts increased 7.5%
versus +9.5%.
August EU
employment was 7.5%, in line.
The September
Chinese manufacturing PMI was 49.6 versus expectations of 50.1; the September
Caixin (small business) PMI was 50.0 versus 40.5; the September
nonmanufacturing index was 55.2 versus 47.5 I August.
The September preliminary
German CPI was 0 versus estimates of +0.1%.
Other
The
Fed
Uh, oh, so maybe inflation isn’t transitory.
https://www.linkedin.com/in/edward-yardeni/detail/recent-activity/
Just ask Dollar Tree.
The risks of a policy mistake are massive.
https://www.zerohedge.com/markets/blain-risks-central-bank-policy-error-are-escalating
Warren is right, Powell is dangerous.
https://www.zerohedge.com/markets/rabobank-warren-right-powell-dangerous-so-whole-fed
Fiscal
Policy
The $3.5 trillion ‘infrastructure’ bill
increases ‘crony capitalism’.
https://thehill.com/opinion/finance/574137-the-dc-swamp-is-back-and-its-swampier-than-ever
Where are the fact
checkers when Biden says his $3.5 trillion package won’t cost anything?
It looks like
deadlock. Score one for the good
guys. Let’s hope Manchin holds his
ground.
Property rights, bureaucracy and the fall of
great societies.
China
China’s housing conundrum.
https://www.advisorperspectives.com/commentaries/2021/09/29/chinas-housing-conundrum
Bottom line
Your portfolio is
your problem.
https://allstarcharts.com/i-just-dont-care/
More advice on
what to do in an overvalued market. To
refresh your memory, my solution is the construct of a Valuation Model that
creates a ‘value envelope’ for a stock that is bordered by the historical
extremes in valuation; that envelope ‘moves’ as earnings/dividends increase. When a stock hits the upper boundary of that ‘valuation
envelope’, I sell half of my position.
This, of course, is a hedged approach, forcing me to take money off the
table at price highs but leaving me with a position if the stock continues to
advance.
https://get.ycharts.com/overvalued-markets-big-decisions-and-cherry-picking-with-nick-maggiulli/
Still more advice.
https://ritholtz.com/2021/09/one-sided-markets/
News on Stocks in Our Portfolios
What
I am reading today
Insider
trading is pervasive and no one is doing anything about it.
America’s car crash epidemic.
https://www.vox.com/22675358/us-car-deaths-year-traffic-covid-pandemic
Visit Investing
for Survival’s website (http://investingforsurvival.com/home)
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