The Morning Call---Wall Street's biggest bear turns bullish

 

The Morning Call

 

7/20/22

 

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/bitcoin-brent-big-tech-bid-putin-promises-trumped-piss-poor-permits

 

Note: the S&P blew through the upper boundary of its very short term downtrend; if it closes there today, that trend will be voided. If that occurs, the next resistance levels are ~4147 (the 100 DMA) and ~4200 (the 23.6% Fibonacci retracement level).

 

            Margin debt down 9.2% in June.

            https://www.advisorperspectives.com/dshort/updates/2022/07/19/margin-debt-down-9-2-in-june

 

            Most recent 10 year Treasury ‘fair value’ estimate.

            https://www.capitalspectator.com/10-year-treasury-yield-fair-value-estimate-19-july-2022/

 

            Treasuries are pricing in a lot of confidence in the Fed.

            https://www.zerohedge.com/markets/treasuries-trapped-3-world-show-oodles-confidence-fed

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

                            

Weekly mortgage applications fell 6.3% vehicle purchase applications were down 7.3%.

 

                        International

 

                          June German PPI was up 0.6% versus consensus of +1.3%.

 

June UK CPI was up 0.4% versus expectations of up 0.5%; core CPI was up 0.4% versus up 0.5%.

 

                        Other

 

                          The global economic shift.

                          https://www.visualcapitalist.com/shifting-global-economic-power/

 

                          Slowdown in home showings.

                          https://www.calculatedriskblog.com/2022/07/slowdown-in-showings-suggests-further.html

 

            The Fed

 

               ECB on the horns of a dilemma.

  https://www.politico.eu/article/eurozone-inflation-hits-record-high-of-8-6-percent-in-june/#:~:text=FRANKFURT%20%E2%80%94%20Eurozone%20inflation%20surged%20to,flash%20Eurostat%20data%20showed%20today

.

 

            Recession

 

              Term spreads falling.

              https://econbrowser.com/archives/2022/07/term-spreads-falling

 

            Inflation

 

              One year inflation expectations.

              https://econbrowser.com/archives/2022/07/one-year-cpi-inflation-expectations-as-of-mid-july

 

                  Goldman CEO says that inflation in deeply embedded in global economy.

              https://www.cnbc.com/2022/07/18/goldman-ceo-david-solomon-says-inflation-is-deeply-entrenched-in-the-global-economy-.html

 

            Geopolitics

 

              Russia nears gas shutdown in Europe.

              https://www.cnbc.com/2022/07/19/russia-nears-gas-shutdown-in-europe-as-germany-rejects-claims-it-cant-fulfil-contracts.html

 

But to add to the confusion surrounding the Russian pipeline, we now hear that ‘reportedly’ Russia will restart the gas flow as scheduled---they are jerking our chain.

              https://www.zerohedge.com/markets/euroipean-stocks-soar-report-russia-will-restart-nord-stream-1-thursday

 

 

            China

 

              China’s debt bomb looks ready to explode.

              https://asia.nikkei.com/Opinion/China-s-debt-bomb-looks-ready-to-explode

 

              More lockdowns in China raise fears of economic woes.

              https://www.nytimes.com/2022/07/19/world/asia/china-covid-lockdowns-economy.html

 

              Faster spreading omicron variant hits China.

              https://www.zerohedge.com/covid-19/faster-spreading-omicron-variants-hit-china-sparking-lockdown-concerns

 

     Bottom line

 

            Latest BofA survey shows full investor capitulation.

https://www.bloomberg.com/news/articles/2022-07-19/bofa-survey-shows-full-investor-capitulation-amid-dire-pessimism?srnd=premium#xj4y7vzkg&sref=loFkkPMQ

 

            And its investment strategist goes from Wall Street’s biggest to a bull.

            https://www.zerohedge.com/markets/biggest-wall-street-bear-turns-bullish-after-record-pessimism-full-investor-capitulation

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

 

 

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