4/29/24
The Market
Technical
The S&P broke the downtrend off the March 28
high. That’s the good news; the bad news is that it did so on a gap up open. As
always when a trend appears to be broken, follow though is the key. If that has
occurred then resistance exists at the 50 DMA (~5123), the upper boundary of
its short term uptrend (~5198) and that March high (~5264). If the break is a head
fake
then support
levels are its 100 DMA (~4459), the 200 DMA (~4689) and the lower boundary of
its short term uptrend (~4450).
Sucker Rally Or The Return Of The Bulls -
RIA (realinvestmentadvice.com)
Positioning, flows and sentiment.
https://www.zerohedge.com/the-market-ear/positioning-flows-and-sentiment
Bears come out of hibernation.
https://www.bespokepremium.com/interactive/posts/think-big-blog/bears-come-out-of-hibernation
The long bond’s rough ride continued. It remains (1)
is below all DMAs (2) has made five lower highs and (3) is in downtrends across
all time frames. The only positive in the chart is those three gap down opens. Unless
you like trying to guess bottoms, this is no time to buy bonds.
Investors brace for 5% Treasury yields.
https://www.reuters.com/markets/us/investors-brace-5-treasury-yields-us-inflation-worries-mount-2024-04-26/
GLD maintained its upward momentum--just barely. It
hugged that uptrend line the entire week. I’ll take that as a victory. Plus,
there is that gap down open that needs to filled.
I continue to hold my GDX (gold miners ETF).
Gold prices: beyond inflation and real yields.
https://www.zerohedge.com/markets/gold-prices-beyond-inflation-and-real-yields
Why is gold acting like a tech stock?
https://paulsenperspectives.substack.com/p/why-is-gold-acting-like-a-tech-stock
The dollar maintained its flattish pin action. I
remain somewhat puzzled by the dollar’s strong performance viz a viz the pin
action in the long bonds and gold.
https://www.zerohedge.com/markets/hedge-fund-cio-dollar-gold-crypto-thats-not-something-you-see-too-often
On the other hand, those two huge gap up opens
suggest future weakness which would bring it more in line with the rest of the indicators.
https://www.nytimes.com/2024/04/26/business/inflation-money-dollar-value.html
Friday in the charts.
https://www.zerohedge.com/markets/micro-trumps-macro-stocks-shrug-week-higher-inflation-higher-rates-lower-growth
It’s lack of exposure.
https://allstarcharts.com/its-the-lack-of-exposure/
Fundamental
Headlines
The Economy
Week
in review
Last week’s stats were weighted to the negative
side but the primary indicators were three plus, three neutral, one
negative---so a mixed picture. Still the narrative at the end of week was one
of a weak economy (raising hope of Fed rate cuts). In my opinion, that is way
too premature. The numbers continue to point to a ‘muddle through’ economy. I
am not altering my forecast to reflect that but one more week of basically
mixed data and I will.
Recession alert weekly economic indicators.
https://www.advisorperspectives.com/dshort/updates/2024/04/26/recession-weekly-leading-economic-index
The inflation stats continue to make for unhappy
investor reading, reflecting my recently revised forecast: inflation is as good
as its going to get absent a more fiscally responsible congress and less
compliant Fed. Clearly, I don’t believe the ‘higher for longer’ storyline the
Fed is trying to sell.
The case for lower inflation.
https://scottgrannis.blogspot.com/2024/04/m2-still-points-to-lower-inflation.html
Bottom line:
(1)
as long as the government pursues its current
spend, spend policy, I don’t see us making any further progress in lowering the
inflation rate. Indeed, the Fed’s hawkish rhetoric aside, I don’t think it has
any choice but to continue monetizing the government IOUs.
But ruling class disagrees.
https://www.ft.com/content/123dd179-baf5-4f15-b979-c12b0695c33d
(2) the question of
recession [what kind of landing] remains a bit murky, but I think that the
economy has shown enough strength to warrant modifying my recession forecast
slightly to a ‘muddle through’ scenario. I am not quite there; but another week
or so of inconclusive stats and I will be.
US
International
The preliminary April German CPI was up 0.5% versus
forecasts of +0.6%.
The April EU economic sentiment index came in at
96.6 versus expectations of 96.9; the April consumer confidence index was -14.7,
in line; the April industrial sentiment index was -10.5 versus -8.5; the April
services sentiment index was 6.0 versus 5.5.
Other
The Fed
The
Bank of Japan holds rates steady.
https://www.wsj.com/economy/central-banking/bank-of-japan-holds-rates-steady-expects-inflation-to-stay-around-2-76f50174?mod=economy_lead_pos2
Fiscal Policy
Yellen
to the rescue of the bond market.
https://www.zerohedge.com/markets/how-janet-yellen-will-unleash-another-market-meltup-next-monday
Former
comptroller of US: fiscal policy is irresponsible, immoral, and unethical.
https://www.zerohedge.com/political/washingtons-fiscal-mess-irresponsible-unethical-immoral-former-us-comptroller-general
Bottom line.
What’s the point of saving or shorting?
https://www.zerohedge.com/markets/hartnett-whats-point-saving-whats-point-shorting
News on Stocks in Our Portfolios
AbbVie press release (NYSE:ABBV): Q1 Non-GAAP EPS
of $2.31 beats by $0.05.
Revenue of $12.31B (+0.7% Y/Y) beats by $370M.
T. Rowe Price press release (NASDAQ:TROW): Q1 Non-GAAP EPS
of $2.38 beats by $0.36.
Revenue of $1.75B (+13.6% Y/Y) beats by $50M.
Exxon Mobil press release (NYSE:XOM): Q1 Non-GAAP EPS
of $2.06 misses by $0.12.
Revenue of $83.08B (-4.0% Y/Y) beats by $1.57B.
Exxon Mobil (NYSE:XOM) declares $0.95/share quarterly dividend, in line with previous.
What I am reading today
Monday morning humor.
8 Handy Tricks Women Can Use To Beat Trans
Athletes | Babylon Bee
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