The Morning Call--Two Wall Street heavy weights weigh in

 

The Morning Call

 

10/21/21

 

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/dollar-dumps-gold-jumps-bitcoin-pumps-record-high

 

            NASDAQ not fully participating in rally.

            https://www.zerohedge.com/the-market-ear/cr0e32zndv

 

A low VIX and rising yields usually don’t’ occur at the same time.  Here is one explanation as to why.  I include this FYI not because I agree.

 

(1)   ‘U.S. earnings have been positive so far’---‘so far’  operative words.  If the US is in or near recession in Q4, earnings won’t be so positive,

(2)   I can’t argue with this,

(3)   ‘investors to boost stock allocations due to a lack of appealing alternatives’--- I thought higher bond yields always acted as ‘appealing alternatives’, 

(4)   ‘The S&P 500 was below its 50-day moving average for most of the past two weeks’---the 50 DMA is an extremely short term indicator.  Unless you are a day trader, this doesn’t mean diddley.

            https://www.bloomberg.com/news/articles/2021-10-20/stock-fear-gauge-defies-bond-turmoil-here-are-four-reasons-why?sref=loFkkPMQ

 

            Bitcoin versus gold.

            https://www.pragcap.com/did-bitcoin-kill-golds-monetary-utility/

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Weekly jobless claims came in at 290,000 versus expectation of 300,000.

 

The October Philadelphia Fed manufacturing index was reported at 23.8 versus forecasts of 25.0.

 

                        International

 

                        Other

 

              The Architecture Billings Index continued to rise in September.

              https://www.calculatedriskblog.com/2021/10/aia-demand-for-design-services.html

 

The Fed

 

  The Fed’s five measuring criteria on inflation are not holding up very well.

  https://www.cnbc.com/2021/10/19/federal-reserve-powells-5-key-inflation-criteria-arent-holding-up-well.html

 

The Fed released its latest Beige Book.  Highlights included (1) economic activity grew at a modest to moderate pace, (2) residential real estate activity unchanged to slightly down, (3) high labor turnover, (4) significantly higher prices.  The text:

  https://www.zerohedge.com/economics/beige-book-hints-us-has-passed-peak-shortage

 

            Fiscal Policy

 

              The childcare entitlement sausage inside Biden’s human infrastructure plan.

              https://johnhcochrane.blogspot.com/2021/10/build-back-sausage.html

 

            Inflation

 

              A look at the future oil supply/demand dynamics.

              https://www.zerohedge.com/markets/one-bank-crunches-numbers-oil-supplydemand-dynamics-reaches-shocking-conclusion

 

The latest from Paul Tudor Jones---if you didn’t catch him on CNBC yesterday morning.

              https://www.zerohedge.com/markets/ptj-warns-inflation-single-biggest-threat-markets-and-society-claims-powell-wrong-man-run

 

              The latest from David Einhorn.

              https://www.zerohedge.com/markets/david-einhorn-inflation-here-stay-and-powell-hasnt-lifted-finger

 

    News on Stocks in Our Portfolios

 

Sherwin Williams (NYSE:SHW) declares $0.55/share quarterly dividend, in line with previous.

 

What I am reading today

 

            Thoughts on immigration from a very conservative source.

            https://www.adamsmith.org/blog/mr-johnson-tear-down-those-borders

 

            Paul McCartney reminisces about writing Eleanor Rigby.

            https://www.newyorker.com/magazine/2021/10/25/paul-mccartney-writing-eleanor-rigby-beatles

 

 

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