6/3/24
The Market
Technical
The S&P was down on the week. But the good news
is that it flirted with a challenge of both its 50 DMA and the lower boundary
of a very short term uptrend and bounced hard. It remains above all DMA’s and
in uptrends across all time frames. Adding to the good news is that there is
little visible resistance save the upper boundaries of its intermediate term
uptrend (~6800) and long term uptrend (~7100). That said, the S&P is
undergoing a bit of consolidation which may not be over. But that is no reason
to sell.
The latest from Goldman’s trading desk.
https://www.zerohedge.com/markets/goldman-flows-guru-bullish-technical-supply-eases-today-close
Tech goes
turbulent.
https://www.zerohedge.com/the-market-ear/teflon-tech-goes-turbulent
The momentum chase
is on. What’s next?
Momentum Chase Is On. What Happens Next? -
RIA (realinvestmentadvice.com)
After bouncing off the very short term downtrend
and the 200 DMA, the long bond faded badly. It is trying to recover above its
50 DMA with ‘trying’ being the operative word. Given that TLT remains (1) also below
its 100 and 200 DMAs and (2) in downtrends across all timeframes, it will
likely take a lot of work or a major exogenous surprise to fulfill investor
hopes for lower rates (higher prices).
Bonds are stuck in a downtrend.
https://allstarcharts.com/the-bond-market-knives-come-out/
GLD stabilized last week and appears to be
consolidating slightly above its 50 DMA. Given (1) it remains above all its
DMAs and in uptrends across all timeframes except for the very short term and
(2) my concern about the current irresponsible fiscal and monetary policies, I
think that GLD will maintain its near in support and continue to make new
highs. I still hold my GDX (gold miners ETF) trading position.
The dollar was flat on the week, breaking slightly
below the lower boundary of its very short term uptrend but holding just under
it at its 50 DMA. I’ll give it the
benefit of the doubt and count that action as a plus. However, I still think
that the fundamentals suggest a lower dollar.
Currency stress on the horizon.
https://www.ft.com/content/8d475551-2f2f-45d0-a917-4a2fb8a52056
Friday in the charts.
Fundamental
Headlines
The Economy
Week
in review
Last week’s stats were mixed, the primary indictors
as well (two negative, two neutral, two positive). So, the numbers continue to
reflect a ‘muddle through’ economy.
https://www.capitalspectator.com/us-q1-gdp-revised-down-but-q2-nowcasts-suggest-growth-will-pick-up/
The inflation data was largely expected though the
core PCE was slightly lower than anticipated. Nonetheless, I still believe that
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.
https://www.nytimes.com/2024/05/31/business/eurozone-inflation-may.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, I don’t think that the Fed has any choice but to
continue monetizing the government IOUs.
https://www.cato.org/blog/will-economic-growth-be-short-lived-fiscal-challenges-abound
(2) the economy seems
to be returning to its pre-covid sluggish growth path---the result primarily of
the ‘crowding out’ effects of irresponsible government spending/financing.
US
International
The May German manufacturing PMI was 45.4, in line;
the May EU manufacturing PMI was 473 versus 47.4; the May UK manufacturing PMI
was 51.2 versus 51.3.
Other
The Fed
What the Fed says. The problem with this analysis
is that the Fed manages to often seemingly find a way not to do what it said it
was going to do.
https://www.apolloacademy.com/quantifying-fed-sentiment/
Fiscal Policy
First,
agree on the facts.
Recession
Recession
Alert: weekly leading economic index.
Big
four recession indictors.
Geopolitics
Hell
bent on provoking Russia.
https://www.zerohedge.com/geopolitical/escobar-west-hell-bent-provoking-russia-hot-war
Bottom line
The latest from BofA.
https://www.zerohedge.com/markets/hartnett-where-we-are-seeing-signs-impending-debt-crunch
News on Stocks in Our Portfolios
What I am reading today
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