4/4/22
The
Market
Technical
The
S&P didn’t have a great week, though it managed to reset both its 200 and
100 DMAs to support. It also attempted to re-challenge the 100 DMA to the
downside but was unsuccessful. That is all good news and opens the door for a
test of its all-time high. However, it needs to get through that small double
top at the 4594 level before I get jiggy with it.
Heading into earnings season, earnings sentiment in
dropping.
https://www.zerohedge.com/the-market-ear/c6mx8oi8gj
The long Treasury staged
a comeback last week after a terrible month long plunge. However, it has a lot
of work to do to gain any semblance of upside momentum. On the other hand,
there are some pluses: (1) there are still two gap down opens that need to be
filled, (2) it has decent support at the lower boundaries of its short term
downtrend and intermediate term uptrend and (3) the universe is predicting
lower prices. As you know, our Portfolios nibbled at some bond ETFs last week.
Gold had another
down week, making a second lower high. Still with everyone screaming about
higher short term rates, its performance could have been a lot worse. The good
news is that it is in uptrends across all timeframes and above both DMAs. So,
until something breaks, the assumption is that the trend remains to the upside.
What’s
that about sounding like a broken record? The dollar’s chart continues to be the
healthiest of the lot. My assumption remains that irrespective of what happens,
investors continue to believe that the dollar is a safe place to be.
Friday in the
charts.
https://www.zerohedge.com/markets/banks-battered-trannies-trounced-amid-yield-curve-commodity-carnage
Moving averages.
https://www.advisorperspectives.com/dshort/updates/2022/03/31/moving-averages-s-p-up-3-58-in-march
Technically
speaking.
https://realinvestmentadvice.com/window-dressing-keeps-the-bulls-alive/?utm_medium=email&utm_campaign=Real%20Investment%20Report%20Window%20Dressing%20Keeps%20The%20Bulls%20Alive&utm_content=Real%20Investment%20Report%20Window%20Dressing%20Keeps%20The%20Bulls%20Alive+CID_2b73445781ea98393b5672c3dbd53aae&utm_source=RIA%20Email%20Marketing%20Software&utm_term=READ%20MORE
Fundamental
Headlines
The
Economy
Review of last Week
Last week the
economic data were balanced; but for the second week in a row, the primary
indicators were solidly negative (one positive, one neutral, five negative). Overseas
stats were downbeat.
My outlook remains: the economy is struggling to grow, hampered
by irresponsible monetary and fiscal policies, getting no support from the
global economy and threatened by (1) seemingly mounting inflationary forces and
(2) continued supply chain disruptions because of the conflict in Ukraine.
Given the
increasing chatter about recession, I want to emphasize a point----that is that
my forecast is not for a recession. At least not yet. It calls for sluggish
grow. I am sticking with that because I think that the Fed will chicken out and
not follow through with its new tight money policy. The primary reason for that
assumption is that our beloved ruling class has accumulated so much debt in the interest of buying votes
that it can’t pay that debt off. Austerity is an unknown concept in DC. So, it has to inflate its way out of a
massive debt load---which I believe means that the Fed will (be forced to)
blink before it reaches the natural consequences of normalized monetary policy.
Mark Spiegel
agrees.
https://www.zerohedge.com/markets/biggest-asset-bubble-us-history-mark-spiegel-eviscerates-fed-policy-and-tesla
US
International
The February
German trade balance was +E11.4 billion versus estimates of +E7.1 billion.
Other
As you know, one
of my pet peeves (income inequality) is corporate bosses having their companies
borrow cheap money (thanks to the Fed) to fund stock buybacks that lead to
higher stock prices that in turn goose those executives’ compensation (stock
options). Here is one analyst’s proposed solution to the problem.
https://thehill.com/opinion/finance/592524-theres-a-better-path-than-regulation-to-fix-stock-buybacks/?rl=1#bottom-story-socials
Inflation
Eurodollars and inflation.
https://www.realclearmarkets.com/articles/2022/04/01/there_are_no_petrodollars_plus_the_focus_misses_the_point_824889.html
The Fed and inflation.
https://www.themoneyillusion.com/100-of-excessive-inflation-is-due-to-bad-monetary-policy/
Eurozone inflation hits new high,
https://www.cnbc.com/2022/04/01/euro-zone-inflation-march-2022-ecb-policy.html
You can print money but not oil or wheat.
https://www.zerohedge.com/news/2022-04-01/you-can-print-money-not-oil-heat-or-wheat-eat0
Recession
China’s factory sector contracts at fastest
rate in two years.
https://www.reuters.com/world/china/chinas-march-factory-activity-contracts-sharpest-rate-2-years-caixin-pmi-2022-04-01/
Geopolitics
Gazprom shuts down gas pipeline to Europe.
https://www.zerohedge.com/energy/gazprom-halts-gas-shipments-europe-critical-pipeline
An excellent bit
of research into utilizing the magnitude of a yield curve inversion to judge
the probability of a recession (must
read).
https://www.zerohedge.com/markets/inversions-and-recessions
Bottom line.
Investment
lessons.
https://www.evidenceinvestor.com/investment-how-the-professionals-do-it/
News on Stocks in Our Portfolios
What
I am reading today
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