The Morning Call
1/22/20
The
Market
Technical
While the Averages
(29196, 3320) took a breather yesterday, they still closed above both MA’s and
in uptrends across all timeframes. Volume
rose; breadth remained strong though it is in overbought territory. Remember that there are still multiple gap up
opens down below that ultimately need to be filled.
Counterpoint.
The VIX was up 6 ¼%,
but that did little to improve the chart/suggest that investor sentiment could
be changing to the negative.
The long bond rose
1%, but momentum remains to the downside.
That is not surprising given the current positive investor sentiment regarding
an improving economy. The only potential
technical challenge is that TLT is nearing its 100 DMA (now resistance). A move above that MA could call into question
the current upbeat economic scenario.
The dollar continued
to decline (down two cents). Of the
group of indices that I follow, it has by far the ugliest chart. So, it appears that there is more
downside. That said, there is a huge gap
down open dating back to 12/23 that will at some point begin to exert a powerful
magnetic pull to the upside on UUP.
Gold was up 1/8%,
closing within very short term and short term uptrends and above both MA’s.
The charts of TLT
and the S&P are clearly pointing at a stronger economy. Those of GLD and UUP not so much.
Tuesday in the
charts.
Fundamental
Headlines
No US stats
reported yesterday. Overseas, the
numbers continued their positive trend. October UK payrolls, November German
PPI and January EU and German economic sentiment were better than
anticipated. However, November Japanese industrial
production was below estimates.
Bottom line: impeachment sucked a lot of air
out of the Market yesterday; though Boeing’s latest announcement on the delay
of the recertification of the 737 Max had an impact.
Lurking in the background is the
potential negative developments if the SARS like virus in China were to begin
spreading. Too soon to know if this will
become a problem.
More discussion on valuations:
The latest from
David Rosenberg (must read).
Counterpoint from
Ed Yardini.
The latest from
Paul Tudor Jones.
https://www.zerohedge.com/markets/reminds-me-1999-paul-tudor-jones-warns-craziest-policy-mix-history
Cash on the sidelines.
News on Stocks in Our Portfolios
Johnson &
Johnson (NYSE:JNJ): Q4 Non-GAAP EPS of $1.88 beats by $0.01; GAAP EPS
of $1.50 beats by $0.03.
Revenue of $20.75B (+1.8% Y/Y) misses by $80M.
Economics
This Week’s Data
US
Weekly
mortgage applications fell 1.2% while purchase applications were down 2.0%.
Month
to date retail chain store sales growth was flat with the prior week but an improvement
from the negative growth of the week before.
The
November housing index came in at 0.2, in line.
The
December Chicago Fed national activity index was reported at -0.35 versus
consensus of -0.3.
International
January
German economic sentiment was reported at 26.7 versus forecasts of 15.0.
Q1
UK business optimism came in at 23 versus expectations of -28.
Other
Price
Waterhouse global survey shows CEO’s negative on economic growth in 2020.
A
history of interest rates since 1311.
A mildly positive
take on the US/China trade deal (surprisingly) from the NY Times.
Truck tonnage
update.
What
I am reading today
Stop getting conned out
of your money.
Quote of the day.
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