3/18/24
The Market
Technical
The S&P spent another directionless week. While
almost all of its trendlines and DMAs are showing support, (1) it closed below the
lower boundary of its very short term uptrend. If it finishes there today, that
trend will be negated. But remember that very short term trends get broken easily
and can be reset quickly, (2) it still has that large gap up open below that
needs to be filled.
That said, if the S&P does successfully
challenge its very short term uptrend, I will not press my luck and sell my IWN
trading position.
Goldman runs for cover.
https://www.zerohedge.com/markets/goldman-runs-cover-tells-client-buy-vix-calls-now
This is not 2023.
https://allstarcharts.com/us-consumer-hurting-badly/
Twelve technical observations.
https://www.zerohedge.com/the-market-ear/12-tech-observations
As suggested below, the Fed regained control of the
Market narrative (i.e., it will stay tighter for longer). In the ensuing sell
off, TLT closed the prior week’s gap up open, made a third lower high and ended
below all three DMAs. Plus, it remains in downtrends across all timeframes. Until
it can establish a higher high on a very short term basis, the assumption has to
be that the trend is down (rates up).
GLD spent the week digesting the huge gains from
the prior week. It still has those two gap up opens that need to be filled; but
its current narrow consolidation range suggests that gold has seen a major
breakout. I continue to hold a small position in GDX---the gold miners ETF.
The dollar had a good week as the Fed pinky promised
to stay tighter for longer. While it bounced off its 50 DMA, it remains in a
very short term downtrend. Longer term, its chart is in decent shape; it just
has a lot to overcome short term.
Friday in the charts.
https://www.zerohedge.com/markets/bad-news-battered-bonds-big-tech-banks-week-copper-crude-rip
Fundamental
Headlines
The Economy
Week
in review
Last week’s stats in the US were negative as were the
primary indicators (one positive, three negative). Perhaps as important, a
pattern is developing in the data reporting in which prior month’s readings are
being revised down. That tends to get lost in the reporting of the current
month’s reporting (which are generally positive) but clearly a consistent
pattern of downward revisions points to a weaker economy than is generally accepted.
It also means that the economy is weaker than reflected in current month’s
stats. I am not saying that recession is a lock; but we are definitely not out
of the woods. In short, no reason to back off my recession call.
Bottom line:
(1)
the overall economic outlook remains unclear,
(2)
I am not altering my inflation forecast [i.e., inflation
in the rear view mirror] ---although the numbers keep getting worse and the Fed
keeps sending mixed signals.
https://www.aier.org/article/inflation-remains-elevated-is-money-actually-tight/
My primary concern
remains that an easing in monetary policy will only amplify the impact of a
grossly irresponsible fiscal policy which if left unresolved will ultimately
push interest rates and inflation to even higher levels, risking a tighter
monetary policy and impeding the economy’s ability to grow.
(3) the question of
recession [what kind of landing] remains a bit murky, especially with the constant
downward revisions in the data. As you know, my forecast had been for some type
of growth problem which I have considered changing. But not yet.
US
International
The January EU trade balance was +E11.4 billion
versus estimates of +E20.0 billion; February CPI was +0.6%, in line.
Other
The Fed
The
Fed sticking with its three rate cuts in 2024 agenda.
Fiscal Policy
Illegal
immigrants racked up billions in medical expenses.
https://www.zerohedge.com/markets/illegal-immigrants-leave-us-hospitals-billions-unpaid-bills
Inflation
Inflation
is not running hot.
https://scottgrannis.blogspot.com/2024/03/inflation-is-not-running-hot.html
Ex
shelter, inflation is rising less than 2% per year.
https://scottgrannis.blogspot.com/2024/03/ex-shelter-inflation-has-been-less-than.html
Recession
Small
businesses are cutting jobs.
Big
four recession indicators.
The latest Q1 nowcasts.
https://www.capitalspectator.com/us-economic-growth-still-expected-to-slow-in-q1-gdp-report/
Bottom line
Markets capitulate to Fed on rate cuts.
https://www.ft.com/content/e7513369-7537-4ce9-b2ce-5c787cb01b32
News
on Stocks in Our Portfolios
Oracle press release (NYSE:ORCL): Q3 Non-GAAP EPS of $1.41 beats by $0.03.
Revenue of $13.28B (+7.1% Y/Y) in-line; up 7% in both USD
and constant currency.
Oracle (NYSE:ORCL) declares $0.40/share quarterly
dividend, in line with
previous.
Williams-Sonoma (NYSE:WSM) declares $1.13/share quarterly
dividend, 26%
increase from prior dividend of $0.90.
Microsoft (NASDAQ:MSFT) declares $0.75/share quarterly dividend, in line with previous.
Kroger (NYSE:KR) declares $0.29/share quarterly dividend, in line with previous.
What I am reading today
Wisdom form Nvidia’s Huang.
https://www.zerohedge.com/markets/i-wish-upon-you-ample-doses-pain-and-suffering
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