The Morning Call---Earnings season off to a slow start

 

The Morning Call

 

7/19/22

 

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/brent-bitcoin-and-bonds-bounce-rotten-apple-wrecks-tech

 

Note: yesterday, the S&P tried to push through the upper boundary of its very short term downtrend and failed. This keeps intact the pennant formation I have been referring to in our Monday Morning Chartology; it also means that the index has made yet another lower high.

 

            Watch for another volume thrust.

            https://allstarcharts.com/chart-of-the-day-thrust-hunting-season/

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Month to date retail chain store sales grew more rapidly than in the prior week.

 

June housing starts fell 2.0% versus expectations of +0.8%; June building permits declined 0.6% versus -1.0%.

 

                          The July housing index came in at 55 versus estimates of 65.

 

                        International

 

The May UK unemployment rate was 3.8% versus predictions of 3.9%; May YoY average earnings were up 6.2% versus +6.7%.

 

May EU YoY construction output was up 2.9% versus consensus of +3.2%; June CPI was +0.8%, in line.

 

                        Other

 

                          Housing inventory up 30% YoY.

                          https://www.calculatedriskblog.com/2022/07/housing-inventory-july-18th-update-up.html

 

                          Update on five high frequency economic indicators.

                          https://www.calculatedriskblog.com/2022/07/five-high-frequency-indicators-for_18.html

 

            The Fed

 

              A history of the Fed’s policy errors (must read).

              https://www.advisorperspectives.com/commentaries/2022/07/15/forgotten-lessons

 

            Inflation

 

              Inside the June inflation numbers.

              https://econbrowser.com/archives/2022/07/inflation-in-june

 

              The US is exporting inflation and Fed rate hikes will make it worse.

              https://www.bloomberg.com/news/articles/2022-07-18/strong-us-dollar-trade-gap-worse-inflation-globally?srnd=premium&sref=loFkkPMQ

 

            Recession

 

              Europe fears widespread economic fallout if Russian gas outage continues.

              https://www.wsj.com/articles/europe-fears-widespread-economic-fallout-if-russian-gas-outage-drags-on-11658136780

 

 

            Geopolitics

 

              The Ukraine war is not going well for the West.

              https://www.nakedcapitalism.com/2022/07/russias-campaign-in-ukraine-nearing-an-inflection-point.html

 

              So, the US ups the ante.

              https://www.zerohedge.com/geopolitical/us-signals-ukraine-it-can-use-himars-against-russian-targets-crimea

 

    Bottom line

 

            Are we headed for an earnings recession?

            https://www.morningstar.com/articles/1102461/markets-brief-are-we-headed-for-an-earnings-recession

 

            Goldman and Morgan Stanley believe that there is more downside in stocks.

https://www.bloomberg.com/news/articles/2022-07-18/morgan-stanley-s-wilson-sees-stock-losses-even-if-no- recession?srnd=premium#xj4y7vzkg&sref=loFkkPMQ

 

 

            Earnings season off to a slow start.

            https://www.wsj.com/articles/earnings-season-off-to-slow-start-clouding-the-outlook-for-stocks-11658050381?mod=hp_lead_pos1

 

            When to buy?

            https://ritholtz.com/2022/07/rally-multiple-compression-earnings-recession-double-bottom/

 

    News on Stocks in Our Portfolios

 

Johnson & Johnson press release (NYSE:JNJ): Q2 Non-GAAP EPS of $2.59 beats by $0.04.

Revenue of $24B (+3.0% Y/Y) beats by $180M.

 

What I am reading today

 

           

 

 

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