Tuesday, May 24, 2022

The Morning Call--China's oil demand must remain weak or we are in for a rough summer

 

The Morning Call

 

5/24/22

 

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/dimon-hands-lift-stocks-bonds-dollar-dumped

 

Note: despite yesterday’s explosive pin action, the S&P still did not recover enough to challenge even the shortest term downtrend---which means there is nothing to argue that the short term trend has changed. Let’s see if we get some follow through to the upside today.

 

            Another contrary indicator

            https://twitter.com/jasongoepfert/status/1528720908537430017/

 

            S&P snapshot: correction territory, cusp of bear

            https://www.advisorperspectives.com/dshort/updates/2022/05/20/s-p-500-snapshot-correction-territory-cusp-of-bear

 

            The worst years ever in the stock market.

            https://awealthofcommonsense.com/2022/05/the-worst-years-ever-in-the-stock-market/

 

            It is probably not over.

            https://www.zerohedge.com/markets/tchir-its-too-early-fed-change-their-messaging

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                        International

 

The May Japanese flash manufacturing PMI was 53.2 versus estimates of 53.0; the flash services PMI was 51.7 versus 50.2; the flash composite PMI was 51.4 versus 50.5.

 

 The May German flash manufacturing PMI was 54.7 versus predictions of 54.0; the flash services PMI was 56.3 versus 57.2; the flash composite PMI was 54.6 versus 54.0.

 

The May EU flash manufacturing PMI was 54.4 versus consensus of 54.9; the flash services PMI was 56.3 versus 57.5; the flash composite PMI was 54.9 versus 55.3.

 

The May UK flash manufacturing PMI was 54.6 versus forecasts of 55.0; the flash services PMI was 51.8 versus 57.0; the flash composite PMI was 51.8 versus 56.5.

 

                        Other

 

              Housing inventory update.

              https://www.calculatedriskblog.com/2022/05/housing-inventory-may-23rd-update.html

 

              Update on four high frequency economic indicators.

              https://www.calculatedriskblog.com/2022/05/four-high-frequency-indicators-for_23.html

 

              US announces major Asian economic deal.

              https://www.cnbc.com/2022/05/23/us-announces-major-asia-economic-deal-in-effort-to-boost-profile-counter-china.html

 

Inflation

 

  Cross country core CPI trends.

  https://econbrowser.com/archives/2022/05/cross-country-core-cpi-trends

 

  China’s oil demand must remain weak or we are in for a tough summer.

  https://www.cnbc.com/2022/05/23/china-oil-demand-must-remain-weak-or-we-will-have-tough-summer-iea.html

 

  Inflation concerns are soaring around the world.

  https://www.zerohedge.com/personal-finance/inflation-concerns-are-soaring-around-world

 

            Fiscal Policy

 

              Analysis of the magnitude of US aid to Ukraine.

              https://www.nytimes.com/interactive/2022/05/20/upshot/ukraine-us-aid-size.html

 

     Bottom line

 

This is a bit of a sales piece; but it contains enough investment logic that I include it.

https://evergreengavekal.com/inflation-infatuation/

 

            More on valuation.

            https://politicalcalculations.blogspot.com/2022/05/what-should-value-of-s-500-be.html#.YouhBnbMKUk

 

            Morgan Stanly sees the S&P at 3400.

            https://www.zerohedge.com/markets/too-early-get-bullish-mike-wilson-sees-sp-tumbling-3400-less-three-months

 

            Credit market warnings are piling up.

            https://www.zerohedge.com/markets/credit-market-warnings-are-piling

 

    News on Stocks in Our Portfolios

 

Hormel Foods (NYSE:HRL) declares $0.26/share quarterly dividend, in line with previous.

What I am reading today

 

            Why Turkey doesn’t want Sweden and Finland to join NATO.

            https://www.cnbc.com/2022/05/23/why-turkey-doesnt-want-sweden-finland-to-join-nato.html

 

            I try to avoid politics in these notes. But this story is too important to ignore.

            https://www.zerohedge.com/political/what-it-means-hillary-clinton-did-it

 

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