The Morning Call
5/25/22
The
Market
Technical
Tuesday in the
charts.
https://www.zerohedge.com/markets/stocks-dump-bonds-bullion-jump-after-dismal-data
Note: yesterday, the
S&P marked a fourth lower high off the April high. The question is now,
will it make a fourth lower low. If it does so, then the index will take out
the 38.2 % Fibonacci retracement level---and that would not be good news.
Credit spreads are
starting to point to a bottom in stocks.
Fundamental
Headlines
The
Economy
US
Weekly mortgage applications
declined 1.2% while purchase applications were up 0.2%.
Month to date
retail chain store sales grew less rapidly than in the prior week.
April new home sales fell 16.6% versus projections
of -1.0%.
April durable
goods orders rose 0.4% versus expectations of +0.6%; ex transportation, they
were up 0.3% versus +0.6%.
https://www.zerohedge.com/economics/us-durable-goods-orders-disappoint-april
The May flash
manufacturing PMI came in at 57.5, in line; the services PMI was 53.5 versus
55.2; the composite PMI was 53.8 versus 55.5.
The May Richmond
Fed manufacturing index was reported at -9 versus estimates of +12.
International
The March Japanese
leading economic indicators were 100.8 versus predictions of 101.0.
The June German
consumer confidence index was -26, in line.
Other
The
Fed
ECB signals the end of negative interest rate experiment.
https://www.wsj.com/articles/ecb-signals-end-to-negative-interest-rates-by-september-11653299391
Inflation
Are we nearing peak inflation?
https://www.tker.co/p/inventories-delivery-times-labor-shortage-change?s=r
Oil may be signaling just that.
https://www.capitalspectator.com/peak-inflation-watch-oil-edition-24-may-2022/
Counterpoint.
https://www.ft.com/content/6b164dc7-0329-4efc-b19d-efe000831792
Campbell’s tomato soup prices keep rising.
Gasoline prices continue to go up.
A season of pain.
https://www.advisorperspectives.com/commentaries/2022/05/24/a-season-of-pain
Imperfect CPI.
https://ritholtz.com/2022/05/flawed-but-useful/
Recession
Is a recession inevitable?
https://alhambrapartners.com/2022/05/22/weekly-market-pulse-inevitable/
Recessions bring opportunity.
The
coronavirus
Another study shows that Sweden had it right.
https://www.zerohedge.com/covid-19/new-who-covid-report-once-again-proves-sweden-right
Bottom line
Will this decline
just be a P/E adjustment?
https://www.linkedin.com/feed/hashtag/?keywords=valuation
This is a must read
article on company valuation. It deals with valuing young companies; but many
of the principles the author espouses apply equally to valuing mature
companies.
Buyer Alert
At the open, the
Dividend Growth will Buy a one fourth position in Ross Stores (ROST) and Add to
its position in Nike (NKE).
News on Stocks in Our Portfolios
What
I am reading today
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