Thursday, October 7, 2021

The Morning Call---Valuations not stories determine investment return

 

The Morning Call

 

10/7/21

 

 

The Market

         

    Technical

 

            Wednesday in the charts.

             https://www.zerohedge.com/markets/stocks-crypto-jump-bill-yields-black-gold-dump-after-vlad-mitch-save-world

 

            More detail:

 

(1)   the S&P finished above its 100 DMA, negating Monday’s challenge; however, it remained within the downtrend off its 9/2 high---leaving it with directional uncertainty,

 

(2)   the long bond was up but remained below its 200 DMA [now support] for the third day; if closes below that DMA today, it will revert to resistance,

 

(3)   the dollar continued to rally.

 

Higher interest rates and a strong dollar are a recipe for deteriorating corporate profits, adding to the directional uncertainty for the S&P.

 

            Beneath the surface.

            https://www.zerohedge.com/the-market-ear/cbsmems79r

 

            Important (inflation) charts to watch.

            https://scottgrannis.blogspot.com/2021/10/important-charts-to-watch.html

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly jobless claims were up 326,000 versus estimates of 348,000.  More importantly, seven million individuals lost unemployment benefits in the last two weeks.

                          https://www.zerohedge.com/markets/total-claims-collapse-just-42-million-down-20-million-year-ago-pandemic-benefits-end

 

                        International

 

                          Q2 UK labor productivity was up 0.1% versus +0.6% in Q1.

 

The preliminary  August Japanese leading economic indicators came in at 101.8 versus 104.1 in July.

 

August German industrial production fell 4.0% versus forecasts of -0.4%.

 

                        Other

 

                          Q3 GDP nowcasts continue to decline.

                          https://www.capitalspectator.com/us-economic-growth-estimate-for-q3-ticks-lower-again/

 

                          August median household income.

                          https://politicalcalculations.blogspot.com/2021/10/median-household-income-in-august-2021.html#.YV3i5JrMKUk

 

Energy transition will take decades not years (note: ignore the opening remarks from the blogger).

                          https://www.nakedcapitalism.com/2021/10/the-energy-transition-will-take-decades-not-years.html

 

                          Data on auto production/sales.

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

 

            The Fed

 

              ECB already preparing for next QE.

              https://www.zerohedge.com/markets/ecb-already-preparing-next-qe-address-market-turmoil-when-emergency-qe-ends-next-year

 

            Fiscal Policy

 

              McConnell offers short term fix to debt ceiling problem.

              https://www.zerohedge.com/markets/manchin-digs-wont-budge-15-trillion-top-line-reiterates-opposition-filibuster-carve-out

 

            Inflation

 

              UK index linked bonds implying 7% inflation by April 2022.

              https://www.zerohedge.com/markets/uk-inflation-hit-7-april

 

            China

 

               Overleverage and risk of default continue to worry Chinese investors.

               https://www.bloomberg.com/news/articles/2021-10-06/a-surprise-default-in-china-worsens-evergrande-contagion-fears?sref=loFkkPMQ

 

 

     Bottom line

 

            A perspective on secular bull and bear markets.

            https://www.advisorperspectives.com/dshort/updates/2021/10/06/a-perspective-on-secular-bull-and-bear-markets

 

            Valuations not stories ultimately determine investment returns.

              https://www.ft.com/content/986fffdc-4138-4e29-bb38-5fade178065f

 

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

            Being flexible in your retirement withdrawal rate.

            https://www.morningstar.com/articles/1060611/the-good-news-for-upcoming-retirees

 

            Lousy management plagues the Mob.

            https://www.wsj.com/articles/lousy-management-knucklehead-hires-plague-operations-of-real-life-sopranos-11633360973

 

            Dozens of foreign CIA agents are being captured or killed.

            https://www.zerohedge.com/geopolitical/top-secret-cia-cable-admits-dozens-agents-abroad-are-being-captured-killed

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

 

 

 

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