Wednesday, January 24, 2024

The Morning Call--The S&P resets its intermediate term trend from a trading range to an uptrend

 

The Morning Call

 

1/24/24

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/crypto-carnage-continues-dollar-spikes-yield-curve-steepens-soft-data-slumps

           

Note: the S&P successfully completed its challenge of the upper boundary of its intermediate term trading range (and its all time high), resetting it to an uptrend. For traders, it is time to buy some participation (IWN, IWM, VYM, SPRX).

           

            The biggest risk to the Market is higher stock prices.

            https://www.zerohedge.com/markets/largest-downside-risk-stocks-nomura-fears-animal-spirits-will-force-dovish-trifecta-course

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications were up 3.7% while purchase applications were up 8.0%.

 

Month to date retail chain store sales grew slightly faster than in the prior week.

 

January Richmond Fed manufacturing index came in at -15 versus forecasts of -11.

 

                        International

 

The January flash EU consumer confidence index was -16.1 versus projections of -14.3; the January flash manufacturing PMI was 46.6 versus 44.8; the January flash services PMI was 48.4 versus 49.0; the January flash composite PMI was 47.9 versus 48.0.

 

The December Japanese trade balance was Y62.1 billion versus consensus of Y-122.1 billion; the January flash manufacturing PMI was 48.0 versus consensus of 48.2; the January flash services PMI was 52.7 versus 51.0; the January flash composite PMI was 51.1 versus 49.5.

 

The January German flash manufacturing PMI was 45.4 versus estimates of 43.7; the January flash services PMI was 47.6 versus 49.5; the January flash composite PMI was 47.1 versus 47.8.

 

The January UK flash manufacturing PMI was 47.3 versus 46.7; the January flash services PMI was 53.8 versus 53.2; the January flash composite PMI was 52.5 versus 52.2; the Q1 business optimism index was -3 versus -2.

 

                        Other

 

The Fed

 

  The ECB lacks the same flexibility in cutting rates as the Fed.

  https://www.zerohedge.com/markets/inflation-risks-upending-trader-bets-ecb-matching-fed-cuts

 

Fiscal Policy

 

  Do the rich move because of taxes?

  https://www.adamsmith.org/blog/it-isnt-true-that-the-rich-wont-move-over-tax-rates

 

Recession

 

  Is the recession finally here?

  https://alhambrapartners.com/2024/01/22/weekly-market-pulse-is-the-recession-finally-here/

 

              The missing link in the failed recession models?

              https://www.capitalspectator.com/__01-23-2024/

 

            China

 

              China eyes stock market rescue package.

              https://www.bloomberg.com/news/articles/2024-01-23/china-mulls-stock-market-rescue-package-backed-by-278-billion?srnd=premium&sref=loFkkPMQ

 

              It also cut the bank reserve ratio.

              https://www.zerohedge.com/markets/china-unexpectedly-cuts-required-reserve-ratio-desperate-bid-contain-market-collapse

 

    Bottom line

 

            Stocks hit new highs as disappointing data persists.

            All-Time Highs For Stocks As Bitter Economic Headlines Persist - RIA (realinvestmentadvice.com)

 

            Outperforming equal-weighted and cap-weighted portfolios.

            https://alphaarchitect.com/2024/01/equally-weighted-portfolios/

 

            2024 predictions from Goldman’s rates guru.

            https://www.zerohedge.com/markets/goldmans-rates-guru-sees-4-fed-cuts-2024-great-year-china-dollar-weakness

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            Quote of the day.

            https://cafehayek.com/2024/01/quotation-of-the-day-4521.html

 

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