Friday, October 22, 2021

The Morning Call---Valuation Math

 

The Morning Call

 

10/22/21

 

 

The Market

         

    Technical

 

            Thursday in the charts

            https://www.zerohedge.com/markets/bitcoin-bonds-black-gold-big-caps-slide-trump-truth-spac-soars

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          September existing home sales rose 7.0% versus consensus of +3.5%.

                          https://www.advisorperspectives.com/dshort/updates/2021/10/21/existing-home-sales-up-7-in-september

 

September leading economic indicators were up 0.2% versus predictions of +0.4%.

                          https://www.advisorperspectives.com/dshort/updates/2021/10/21/cb-leading-economic-index-moderate-growth-in-september

 

                        International

 

September Japanese CPI came in at +0.4% versus -0.2% in August; the October flash manufacturing PMI was 53.0 versus expectations of 51.5; the October flash services PMI was 50.7 versus 47.8; the October flash composite PMI was 50.7 versus 47.9.

 

September UK retail sales declined 0.2% versus consensus of+0.5%; ex fuel, they were -0.6% versus +0.2%; The October flash manufacturing PMI was 57.7 versus 55.8; the October flash services PMI was 58.0 versus 54.4; the October composite PMI was 56.8 versus 54.0.

 

The October German flash manufacturing PMI was 58.2 versus estimates of 56.5; the October flash services PMI was 52.4 versus 55.0; the October flash composite PMI was 52.0 versus 54.0.

 

The October EU flash manufacturing PMI was 58.5 versus forecasts of 57.0; the October flash services PMI was 54.7 versus 55.5; the October flash composite PMI was 54.3 versus 55.2.

 

                        Other

 

                          Fair trade is a myth.

                          https://www.aier.org/article/fair-trade-is-still-a-fraud/

 

                          Our political class’s failure to admit failure.

                          https://brownstone.org/articles/the-rationing-is-already-here/

 

                          Economic progress is about destroying (some) jobs.

                          https://www.adamsmith.org/blog/rather-missing-the-point-about-economic-development

 

                          Stats on job quitters.

                          https://www.linkedin.com/in/edward-yardeni/detail/recent-activity/

 

                          LA port traffic.

                          https://www.calculatedriskblog.com/2021/10/la-area-port-traffic-solid-imports-weak.html

 

                          Median house price growth decelerating.

                          https://www.calculatedriskblog.com/2021/10/median-house-price-growth-decelerated.html

 

              The Fed

 

              Will the slowing economy delay tapering?

              https://www.capitalspectator.com/will-slowing-economic-growth-delay-feds-tapering/#more-16899

 

            Biden’s Plan

 

              Biden’s plan is a lot more expensive than $3.5 trillion.

              https://www.nytimes.com/interactive/2021/10/20/upshot/democrats-trim-reconciliation-bill.html

 

Inflation

 

  Latest stats on food prices.

              https://politicalcalculations.blogspot.com/2021/10/the-average-cost-of-food-at-home-for.html#.YXGo7BrMKUk

 

                  Nickel prices hit seven year high.

              https://www.zerohedge.com/commodities/nickel-prices-jump-seven-year-high-supply-woes-mount

 

                  Used car prices hit record high.

              https://www.zerohedge.com/markets/used-car-prices-hit-record-high-next-cpi-expected-soar

 

                  Inflationary storm forces Unilever to raise prices.

              https://www.zerohedge.com/commodities/inflationary-storm-forces-unilever-raise-prices-fastest-seven-years

 

              The case for transitory inflation.

              https://ritholtz.com/2021/10/inflation-inputs/

 

            The coronavirus

 

              Fauci lied again.

              https://www.breitbart.com/politics/2021/10/20/nih-contradicts-fauci-admits-funding-gain-of-function-research-at-wuhan-lab/

 

     Bottom line.

 

I haven’t linked to a John Hussmann Market critique lately.  But with the equities at historically high valuations, I thought a review of his valuation math would be helpful.

            https://www.advisorperspectives.com/commentaries/2021/10/21/the-wealth-is-in-the-denominator

 

            Thiel weighs in on bitcoin.

            https://www.bloomberg.com/news/articles/2021-10-21/thiel-says-he-was-underinvested-in-bitcoin-price-may-rise?sref=loFkkPMQ

 

    News on Stocks in Our Portfolios

 

Johnson & Johnson (NYSE:JNJ) declares $1.06/share quarterly dividend, in line with previous.

 

What I am reading today

 

More background on how crypto currencies work.  If you own a crypto currency, you need to read this.

            https://slate.com/technology/2021/10/tether-crypto-danger-ben-mckenzie.html

 

            More data showing the failure of our education system.

            https://www.the74million.org/article/naep-long-term-unprecedented-performance-drop-american-13-year-olds/

 

            The use and misuse of anger.

            https://www.nakedcapitalism.com/2021/10/more-on-the-use-and-misuse-of-anger.html

 

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