Thursday, November 2, 2023

The Morning Call--Mission accomplished?

 

The Morning Call

 

11/2/23

 

The Market

         

    Technical

                 

                  Wednesday in the charts.

                  https://www.zerohedge.com/markets/good-bad-data-fed-nikileaks-spark-bond-stock-rally

 

Note: the S&P continued to move higher, closing above the 23.6% Fibonacci retracement level and just short of its 200 DMA.  Successfully challenging that DMA would clearly be a plus.  That said, all we can really say at this point is that the index has bounced off the lower boundary of a very short term downtrend.  A close above the upper boundary of that downtrend would mark its end and hold hope for a change in direction and momentum.  Patience.

                  https://www.zerohedge.com/the-market-ear/spx-now-what-0

                 

                  Goldman reiterates pain trade is to the upside.

                  https://www.zerohedge.com/markets/were-8th-inning-negative-technicals-goldmans-flows-guru-reiterates-pain-trade-upside-year

 

                  JP Morgan’s trading desk turns bullish.

                  https://www.zerohedge.com/markets/jpms-giant-trading-desk-turns-bullish-says-tactial-buy-signal-triggered

 

Note: both the above are ‘tactical’ bullish calls, meaning that if you are a trader, it may be a good time to buy.  But don’t buy anything that you are not willing to sell on a short term basis.

                    

                 What could go right in November?

                  https://www.zerohedge.com/the-market-ear/11bn-daily-buyingwhat-could-go-right-november

 

    Fundamental

 

              The Economy

 

                        US

 

  Weekly initial jobless claims totaled 217,000 versus expectations of 210,000.

 

Q3 nonfarm productivity increased by 4.7% versus consensus of 4.1%; unit labor costs fell 0.8% versus +0.7%.

 

September job openings (JOLTS) totaled 9.5 million versus projections   of 9.2 million.

                        https://www.advisorperspectives.com/dshort/updates/2023/11/01/job-openings-jolts-september-2023

 

                        September construction spending was up 0.4%, in line.

                        https://www.calculatedriskblog.com/2023/11/construction-spending-increased-04-in.html

 

                        The October final manufacturing PMI was reported at 50.0, in line.

                        https://www.advisorperspectives.com/dshort/updates/2023/11/01/manufacturing-pmi-conditions-stabilize-october-2023

 

                        The October ISM manufacturing index was 46.7 versus estimates of 49.0. 

                        https://www.advisorperspectives.com/dshort/updates/2023/11/01/ism-manufacturing-index-contracts-12th-straight-month

                                                

                        International

 

The final October German manufacturing PMI was 40.8 versus consensus of 40.7; the October unemployment rate was 5.8%, in line.

 

                          The final October EU manufacturing PMI was 48.0, in line.

 

                        Other

                     

                          September median household income.

                          https://politicalcalculations.blogspot.com/2023/11/median-household-income-in-september.html

 

                      The Fed

 

The FOMC left rates unchanged and acknowledged that the bond market is doing its job for it.  In Powell’s subsequent press conference, his tone was markedly dovish.

                        https://www.zerohedge.com/markets/fed-0

 

                        Mission accomplished?

                        https://www.zerohedge.com/markets/mission-accomplished-central-banks-apart-boe

 

                      Fiscal Policy

 

                        The Treasury announced its new auction schedule.

                        https://www.zerohedge.com/markets/us-treasury-reveals-lower-expected-rate-debt-sales-quarterly-refunding-plan-yields-slide

 

                      Recession

                     

                        Atlanta Fed slashes Q4 GDP growth estimate.

                        https://www.zerohedge.com/markets/partys-over-atlanta-fed-slashes-q4-gdp-estimate-23-12

 

                        Europe at risk of going into a recession.

                        https://www.cnn.com/2023/10/31/business/europe-economy-q3-gdp-recession-risk/index.html

 

                      The Bond Market

 

                        Druckenmiller says he has ‘massive’ bet on two year Treasuries.

    https://www.bloomberg.com/news/articles/2023-10-31/druckenmiller-says-he-has-massive-bullish-bets-on-2-year-notes?embedded-checkout=true&sref=loFkkPMQ

 

     Bottom line

 

            Weak demand warnings are piling up this earnings season.

https://www.bloomberg.com/news/articles/2023-11-01/warnings-on-weak-demand-are-piling-up-this-earnings-season?srnd=premium&embedded-checkout=true&sref=loFkkPMQ

 

    News on Stocks in Our Portfolios

               

C.H. Robinson Worldwide press release (NASDAQ:CHRW): Q3 Non-GAAP EPS of $0.84 beats by $0.04.

Revenue of $4.34B (-27.9% Y/Y) misses by $20M.      

 

            Qualcomm (NASDAQ:QCOM): Q4 Non-GAAP EPS of $2.02 beats by $0.11.

Revenue of $8.67B (-23.9% Y/Y) beats by $150M.

 

Cummins press release (NYSE:CMI): Q3 Non-GAAP EPS of $4.73 beats by $0.04.

Revenue of $8.43B (+15.0% Y/Y) beats by $250M.

 

UPS (NYSE:UPS) declares $1.62/share quarterly dividend, in line with previous.

 

What I am reading today

 

           

                                 Quote of the day.

                https://cafehayek.com/2023/10/bonus-quotation-of-the-day-994.html

 

                On free speech.

                https://www.adamsmith.org/blog/are-we-being-cynical-enough

 

                EV’s aren’t working.

                https://www.businessinsider.com/auto-executives-coming-clean-evs-arent-working-2023-10

 

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