3/3/25
The Market
Technical
The S&P ended what was a lousy week on an up
note. However, in the process it (1) reset its 50 DMA from support to resistance,
(2) negated its very short term uptrend and (3) is currently challenging its
100 DMA [now support; if it remains at present levels through the close on Tuesday,
it will revert to resistance]. If it can’t regain the 100 DMA, then the next
support level is the 200 DMA (~5720). So:
Watch the 100 DMA.
https://investorplace.com/2025/02/the-sp-is-about-to-breakoutor-break-down/
Warning signs.
Stocks at an inflection point.
More from Goldman.
The latest from Goldman’s flows guru.
Bounce or break.
https://www.zerohedge.com/the-market-ear/now-or-never-bounce-or-break
Everyone waiting for the flush.
https://www.zerohedge.com/markets/everyone-waiting-flush-heres-problem-according-jpmorgan
Bond volatility explodes.
https://www.zerohedge.com/the-market-ear/bond-volatility-explodes-few-notice
TLT continued its dramatic reversal (1) negating its
very short term downtrend and resetting its 100 DMA from resistance to support.
Clearly, the long bond has found at least a temporary bottom; and while this
move has all the makings of a major change in momentum, it remains below its
200 DMA and in short and intermediate term downtrends. So it still has work to
do before assuming a major bottom has been made.
As I noted last week, GLD had been getting a bit
stretched technically speaking; and last week’s pin action did something to
correct that usually strong upward momentum. That said, there is nothing in the
chart to suggest any kind of reversal. It remains well within a very short term
uptrend and in uptrends across all other time frames as well as above all DMAs.
The gold miners (GDX) and silver (SLV) continue to lag dramatically, and I continue
to look for a reentry point in one or both.
The dollar bounced off its 200 DMA and edged above
the downtrend off its December 19th high. Let’s see if it can close
that massive gap down open overhead.
Friday in the charts.
Bitcoin sentiment.
https://www.zerohedge.com/crypto/key-insight-hedge-funds-bitcoin-sentiment
Fundamental
Headlines
The Economy
The stats last week were overwhelmingly negative (second
week in a row); and the primary indicators weighed to the downside (one
positive, two neutral, three down). This is now four straight weeks of poor economic
data.
Another sign that the economy is slowing.
CFNAI Index Suggests Economy Is Slowing - RIA
Adding (contributing) to this concerning
performance are a couple of Trump’s pet policies that point potentially at a slowdown/recession---(1)
federal employee layoffs and (2) tariffs---which while positive/necessary in
the long run will have a negative impact on economic growth short term.
Overseas, the numbers were a wash, keeping the week
from being a total disaster.
But not enough to halt the rising risk that my ‘muddle
through’ economy forecast turns into something worse---like recession. I am
still not going to change the forecast, but the warning light is fading from
yellow to red.
There were two inflation numbers---one neutral and
one negative. So that part of my outlook (inflation as good as it is going to
get) remains solid.
Overshadowing all of this is the Trump revolution
which keeps the level of uncertainty extremely high---adding to my lack of my
confidence in my forecast.
https://www.capitalspectator.com/economic-slowdown-concerns-top-inflation-worries-for-bonds/
US
International
The February German manufacturing PMI was 46.5
versus forecasts of 46.1; the February EU manufacturing PMI was 37.6 versus
47.3; the February UK manufacturing PMI was 46.9 versus 46.4.
The February EU flash CPI was up 0.5%, in line.
Other
Latest Q1 nowcasts.
https://www.calculatedriskblog.com/2025/02/q1-gdp-tracking-wide-range-gdpnow-goes.html
But Atlanta Fed begs to differ.
https://www.zerohedge.com/economics/atlanta-fed-model-signals-us-recession-stagflation-takes-hold
Friday in the economic charts.
https://dailyshotbrief.com/the-daily-shot-brief-february-28th-2025/
The trend in real disposable income per
capita.
Sub prime auto delinquencies hit high.
https://mishtalk.com/economics/subprime-auto-loan-delinquencies-hit-record-high-6-56-percent/
Overnight News
Inflation
The
onus of lowering inflation rests on both Trump and congress.
https://reason.com/2025/02/27/trump-promised-to-lower-prices-will-congress-help-him-deliver/
Tariffs
The
irony of the egg shortage.
https://www.cato.org/blog/trump-administrations-eggstremely-interesting-fix-high-prices
When
it comes to tariffs, Trump can’t have it both ways.
https://www.nytimes.com/2025/02/28/business/economy/trump-tariff-goals-contradictions.html#
Investing
Is the bull market ending?
https://talkmarkets.com/content/us-markets/buckle-up-this-bull-market-might-be-ending?post=484702
A different valuation metric but the same
result.
CAPE-5: A Different Measure Of Valuation - RIA
More on valuations.
Q4 earning season wrap up.
The latest from Richard
Bernstein.
The latest from BofA.
https://www.zerohedge.com/markets/hartnett-trump-put-strike-price-and-most-important-price-watch
Dividends are an important component of total
return.
https://talkmarkets.com/content/stocks--equities/dont-sleep-on-dividends?post=484701
News on Stocks in Our Portfolios
What I am reading today
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