3/31/25
The Market
Technical
The S&P tried to push up through its 200 DMA
but failed. While it made a second higher high, it also torched a very short
term uptrend off its March 13 low. All in all, not a very encouraging week. Let’s
see how it handles that March 13 low (~5503). If it holds, then the case for
that level as a bottom strengthens somewhat. If not………. Until we know the
results, I think doing nothing is the right long term strategy.
Does this look bullish to you?
https://www.zerohedge.com/the-market-ear/does-look-bullish-you
Beginning of the end?
https://www.zerohedge.com/the-market-ear/spx-rejected-200dma-beginning-end
Despite Friday’s decent pin action, the long bond’s
weekly performance wasn’t all that great. It made a lower high followed by lower
low---clearly giving the impression of rolling over after the brief rally off
its January 14 low (lower boundary of its very short term trading range). The good
news is that it tested both its 50 and 100 DMAs to the downside and failed. Like
the S&P, I find it hard to make the call that a bottom has been made.
GLD made yet another a new higher high last week. It
remains well within a very short term uptrend and in uptrends across all other
time frames as well as above all DMAs. If you held on to it, (unlike me), congratulations.
Hang in there.
Elliott Wave analysis of gold.
The dollar closed higher for a second week in a row;
but, nonetheless, remains in a confirmed downtrend---below all DMAs and in a
very short term downtrend. That is generally supportive of higher gold prices.
Friday in the charts.
Fundamental
Headlines
The Economy
Last week’s stats were overwhelmingly upbeat as
were the primary indicators (five plus, one neutral, one negative). This is the
fourth week in a row of relatively positive data offsetting that four week run
of poor numbers. So, I am going to downgrade the flashing red light to yellow.
There were two inflation stats---one favorable, one
neutral---plus one upbeat datapoint from overseas. That keeps my inflation
forecast at risk.
Of course, overshadowing all was the latest move in
Trump’s trade war with the rest of the world, especially our closest allies. Given
his generally erratic behavior, I have no clue how much of these actions are
negotiating and how much firm policy. So it is almost impossible to figure what
the ultimate quantitative impact will be on the US or any other country’s
economy. What we do know is that he is not making any friends (not that he
cares) and someday that could come back and bite us.
https://www.nytimes.com/2025/03/27/us/politics/trump-car-tariffs-trade-strategy.html
How Trump tariffs are hitting major auto exporters.
A more positive view of Trump’s tariffs.
How uncertainty undermines business investment.
https://www.aei.org/economics/how-uncertainty-undermines-business-investment/
Bottom line, I am holding to my ‘muddle through’
economy and maintaining my conviction that inflation has seen its lows---though
I would caution that this forecast and any other that you see or hear is
tenuous at best.
US
International
February Japanese YoY housing starts were up 2.4%
versus consensus of down 1.4%; February YoY construction orders declined 3.3%
versus +15.0%.
February German retail sales rose 0.8% versus projections
of 0.0%; March preliminary CPI was +0.3% versus +0.4%.
Other
How Americans spend their money.
https://politicalcalculations.blogspot.com/2025/03/how-much-and-on-what-do-american.html
Some concern in one nowcast.
https://econbrowser.com/archives/2025/03/2024q4-gdp-gdo-gdp-and-nowcasted-consumption-crash
But
less so in another.
https://www.capitalspectator.com/us-economic-growth-remains-on-track-to-slow-in-q1/
Real income, spending, savings, and sales
continue to expand.
https://bonddad.blogspot.com/2025/03/real-income-spending-saving-and-sales.html
Q4 GDP per capita.
https://www.advisorperspectives.com/dshort/updates/2025/03/27/gdp-per-capita-q4-2024-third-estimate
Fiscal Policy
The government’s fiscal
mess.
Inflation
The case against stagflation.
Stagflation Panic: A Misdiagosed Media Spin - RIA
Investing
Trump policies lead to total
no confidence.
https://www.zerohedge.com/the-market-ear/reign-trump-tariff-terror-leads-total-non-confidence
Th case for owning international
stocks.
https://disciplinefunds.com/2025/03/26/why-is-international-investing-working-again/
Saleable rally of buy the dip?
Sellable Rally Or "Buy The Dip" - RIA
Latest from BofA.
https://www.zerohedge.com/markets/hartnett-ignore-april-2-date-will-set-markets-next-direction
Latest from Goldman’s trading desk.
https://www.zerohedge.com/markets/goldman-trading-desk-three-topics-dominated-all-conversations-week
News on Stocks in Our Portfolios
What I am reading today
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