The Morning Call and Buyer Alert

 

The Morning Call

 

1/26/22

 

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/deja-vu-all-over-again-stocks-dumpnpump-ahead-fed

 

            From correction to carnage.

            https://www.zerohedge.com/markets/correction-carnage-fed-walking-tightrope

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications declined 7.1% while purchase applications were down 1.8%.

 

Month to date retail chain store sales grew at approximately the same rate as in the prior week.

 

January consumer confidence came in at 113.8 versus predictions of 111.8.

https://www.advisorperspectives.com/dshort/updates/2022/01/25/consumer-confidence-fell-in-january

 

The January Richmond Fed manufacturing index was reported at 8 versus estimates of 17.

                          https://www.advisorperspectives.com/dshort/updates/2022/01/25/richmond-fed-manufacturing-activity-softened-in-january

 

                        International

 

The final reading on November Japanese leading economic indicators was 103.2 versus consensus of 103.0.

 

                        Other

 

                          Latest nowcasts for Q4 and Q1.

                          https://www.capitalspectator.com/us-gdp-growth-set-to-pop-in-q4-report-but-q1-outlook-is-sliding/

 

            The Fed

 

              The Fed seems determined to make a policy error.

              https://ryanavent.substack.com/p/the-fed-looks-increasingly-determined

 

              BofA agrees.

              https://www.zerohedge.com/markets/sum-all-fed-fears-bofa-warns-fomc-isnt-doing-enough-stop-inflation-torpedoing-markets

 

            Fiscal Policy

 

              Runaway government spending.

              https://townhall.com/columnists/stephenmoore/2022/01/25/the-most-dangerous-virus-today-is-runaway-government-spending-n2602290

 

            Geopolitics

 

              A two front war?

              https://www.linkedin.com/in/edward-yardeni/detail/recent-activity/

 

      Bottom line.

 

            Fear makes a comeback.

            https://alhambrapartners.com/2022/01/23/weekly-market-pulse-fear-makes-a-comeback/

 

            Some strategists believe that there is still more downside.

            https://www.bloomberg.com/news/articles/2022-01-25/-head-fake-and-fed-put-potential-what-strategists-are-saying?srnd=premium&sref=loFkkPMQ

 

            Have a plan---have a stop loss price before you buy.

            https://allstarcharts.com/you-are-not-alone/

 

            Cognitive problems investors face during a high stress Market selloff.

            https://ritholtz.com/2022/01/market-rorschach-test/

 

     Buyer Alert

 

            Our portfolios continue to take advantage of this slide in equity prices. Yesterday, the High Yield Portfolio bought a one half position in American Tower Corp (AMT-$247).

 

    News on Stocks in Our Portfolios

 

AT&T press release (NYSE:T): Q4 Non-GAAP EPS of $0.78 beats by $0.03.

Revenue of $41B (-10.3% Y/Y) beats by $550M.

 

Canadian National Railway press release (NYSE:CNI): Q4 Non-GAAP EPS of C$1.71 beats by C$0.18.

Revenue of C$3.75B (+2.5% Y/Y) beats by C$90M.

 

Canadian National Railway (NYSE:CNI) declares CAD 0.7325/share quarterly dividend, 19.1% increase from prior dividend of CAD 0.6150.

Becton, Dickinson (NYSE:BDX) declares $0.87/share quarterly dividend, in line with previous.

 

 

What I am reading today

 

            Black holes.

            https://www.syfy.com/syfy-wire/bad-astronomy-black-holes-quintillions

 

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

 

 

 

The Morning Call and Buyer Alert

 

The Morning Call

 

1/25/22

 

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/ppt-rescues-sp-worst-ever-start-year-rate-hike-odds-tumble

 

            Is this the ‘bounce’?

            https://www.zerohedge.com/the-market-ear/bloodstreet

 

            Maybe….

            https://www.zerohedge.com/markets/jpmorgan-prime-asks-are-we-there-yet-and-answers

 

            The correction to continue.

            https://www.zerohedge.com/the-market-ear/ciy-lhbb14

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

The November Case Shiller home price index was reported up 1.1% versus forecasts of +0.8%.

 

The January flash manufacturing PMI came in at 55.0 versus estimates of 56.7; the flash services PMI was 50.9 versus 55.0; the composite PMI was 50.8 versus 56.7.

 

                        International

 

The January German business climate index was 95.7 versus expectations of 94.7; the January current conditions index was 96.1 versus 96.3.

 

The Q1 UK business optimism index was -9 versus consensus of +5; Q1 industrial trends index was 24 versus 22.

 

                        Other

 

              Gasoline sales down 8.9% YoY.

              https://www.advisorperspectives.com/dshort/updates/2022/01/21/gasoline-volume-sales-down-8-9-yoy

 

              Six high frequency indicators for the economy.

              https://www.calculatedriskblog.com/2022/01/six-high-frequency-indicators-for_24.html

 

The Fed

 

  The Fed’s dilemma.

  https://www.reuters.com/business/fed-tries-match-economic-risks-against-markets-rush-tighten-2022-01-24/

 

  Is the Fed put dead?

  https://seekingalpha.com/article/4481002-the-fed-put-is-dead

 

  Why the Fed won’t raise rates as much as expected.

  https://www.zerohedge.com/markets/why-fed-wont-hike-rates-nearly-much-expected

 

Geopolitics

 

  What is next for Ukraine?

  https://www.powerlineblog.com/archives/2022/01/whats-next-for-ukraine.php

 

              The latest on US/Russia negotiations.

  https://www.nakedcapitalism.com/2022/01/john-helmer-content-analysis-of-secretary-blinken-at-geneva-reveals-psychopathological-incapacity-to-negotiate-with-russia.html

                                       

 

  US considering military deployments near Ukraine.

  https://www.nbcnews.com/politics/national-security/defense-secretary-presents-biden-options-us-response-russia-rcna13240

 

China

 

  China’s debt problem.

  https://www.zerohedge.com/geopolitical/china-builds-27-empty-new-york-cities

 

 Beijing’s dilemmas.

  https://www.advisorperspectives.com/commentaries/2022/01/21/beijings-dilemmas

 

            The coronavirus

 

              The covid narrative is crumbling.

              https://www.nakedcapitalism.com/2022/01/covid-the-narrative-is-crumbling.html

 

     Bottom line.

 

            Have a strategy---this investor is using buy limit orders.

            https://thereformedbroker.com/2022/01/24/indiscriminate-selling/

 

            Risk comes from not knowing what you are doing.

            https://traderfeed.blogspot.com/2022/01/why-am-i-losing-money-in-market.html

 

Reframing volatility.

https://theirrelevantinvestor.com/2022/01/24/reframing-volatility/

 

            The end of FOMO.

            https://howardlindzon.com/the-end-of-fomo-fear-of-missing-out/

 

            A poisoned chalice.

            https://investoramnesia.com/2022/01/23/a-poisoned-chalice/

 

     Buyer Alert

 

As the Market continues to push lower, additional equities in our Universe are falling into their Buy Value zone. Yesterday,

 

The Aggressive Growth Portfolio initiated a one half position in Logitech Int’l (LOGI-$74).

 

The High Yield Portfolio initiated a one half position in Petmed Express Inc (PETS-$23)

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

            Funding (education/social) services.

            https://www.adamsmith.org/blog/funding-services

 

            The Tonga volcano blast ‘the biggest thing that we have ever seen.’

            https://www.npr.org/2022/01/21/1074438703/nuclear-test-monitor-calls-tonga-volcano-blast-biggest-thing-that-weve-ever-seen

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

 

 

 

Monday Morning Chartology

The Morning Call

 

1/24/22

 

 

 

The Market

         

    Technical

           

            Not a pretty picture. Last week, the S&P reset its short term trend to a trading range, reset its 100 DMA to resistance and began a challenge of its 200 DMA (now support; if it remains there through the close on Wednesday, it will revert to resistance). Clearly, the assumption that the bias is to the upside is under attack. As you know, I have believed (for too long) that stocks in general were too generously valued and that a reversion to the mean was the likely outcome. That may be occurring now. Or it may just be another one of those hair raising ‘buy the dip’ moments. Whatever, the good news is that (1) I have plenty of cash from selling a portion of my positions in stocks that traded into their Sell Half zone and (2) some stocks are already entering the Buy Value zone---which I alerted you to late last week. The best course in trying moments like the present is to stick with your strategy and not panic. All that said, the Market is oversold, so some sort of bounce is likely.

https://www.zerohedge.com/markets/when-wild-bull-stumbles-hibernating-bear

 

The current risk profile of the S&P.

https://www.capitalspectator.com/sp-500-risk-profile-21-january-2022/

 

But doom and gloom from BofA.

https://www.zerohedge.com/markets/bank-america-if-nasdaq-closes-below-14000-all-hell-breaks-loose

 

Liquidity---never there when you need it.

https://www.zerohedge.com/the-market-ear/c9rfl7go0

 

The Buffett indicator.

https://www.zerohedge.com/the-market-ear/cn3i24ayuz

 

 

This is not the chart that I would expect to see at a time when stocks are plunging over fear of a tightening monetary policy. To be sure, TLT is off its recent high and has traded down through both MA’s. But I don’t see the same panic in this pin action as in equities. So, while bond investors may be concerned about a more hawkish Fed, they may also be factoring some geopolitical risk (Ukraine) and/or worried about my own thesis that ‘Powell waited too late to get hawkish and now the Fed will be tightening into a weaker economy---thereby making it even weaker.’

             

              Ed Yardini on the Fed and the bond market.

              https://www.linkedin.com/in/edward-yardeni/detail/recent-activity/

 

 

            GLD had another up week but like the long bond didn’t show much sign on anxiety. It remained within the narrowing pennant formation [two straight red lines]---the technical assumption being that until it breaks out of that formation, it will be directionless and, hence, nothing fundamental.

            https://www.zerohedge.com/the-market-ear/oldsafe

 

 

 

 

The dollar had good week. Technically, it bounced off both the lower boundary of its short term uptrend and its 100 DMA---leaving both in positive trends. I continue to believe that investors are buying the dollar on the thesis that whatever happens---inflation, recession, military conflict---the dollar will be the safe haven.

https://www.zerohedge.com/the-market-ear/cj4f679cyx

 

            Friday in the charts.

            https://www.zerohedge.com/markets/market-screams-panic-powell-tech-wrecks-worst-over-30-years

 

            What the Markets are currently discounting.

            https://www.zerohedge.com/markets/how-much-market-stress-enough

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        Review of last Week

 

The economic stats were evenly divided last week as were the primary indicators---nothing to suggest a reversal in the current negative trend. Overseas, the numbers were slightly upbeat, sustaining a now three week trend in positive data. Another week or so of similar stats and I will have to consider a change in trend---which would clearly be a plus for the US.

 

In the meantime, my outlook remains unchanged---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) a more severe than anticipated retreat in economic activity.

                       

 

                        US

 

                          The December leading economic indicators were reported at +0.8, in line.

                          https://www.advisorperspectives.com/dshort/updates/2022/01/21/cb-lei-rising-trajectory-continues-in-december

 

The December Chicago Fed national activity index came in at -.15 versus projections of +.49.

 

                        International

 

The January Japanese flash manufacturing PMI was 54.6 versus estimates of 54.0; the flash services PMI was 46.6 versus 52.0; the flash composite PMI was 48.8 versus 52.1.

 

The January German flash manufacturing PMI was 60.0 versus predictions of 57.0; the flash services PMI was 42.2 versus 48.0; the flash composite PMI was 54.3 versus 49.2.

 

The January EU flash manufacturing PMI was 59.0 versus forecasts of 57.5; the flash services PMI was 51.2 versus 52.2;  the flash composite PMI was 52.4 versus 52.6.

 

The January UK flash manufacturing PMI was 56.9 versus consensus of 57.9; the flash services PMI was 53.3 versus 54.8; the flash composite PMI was 53.4 versus 55.0.

                         

                        Other

 

                          Current Q4 GDP forecasts.

                          https://www.calculatedriskblog.com/2022/01/q4-gdp-forecasts-5-to-6.html

 

            The Fed

 

              The Fed and bitcoin (must read).

              https://www.zerohedge.com/markets/revolution

 

            Geopolitics

 

While I am not a huge fan of the French, Macron’s suggestion that the EU should be included in the US/Russia negotiations over Ukraine does not seem out of line. After all, if a hot war breaks out, the EU is a lot closer to the action than the US. In addition, the EU needs to be taking more responsibility for its own defense---both financial as well as boots on the ground.

https://www.nakedcapitalism.com/2022/01/macron-suggests-eu-russia-talks-meltdown-among-eu-us-apparatchiks-follows.html

 

     Bottom line.

 

            Jack Bogles’ rules for investing.

            https://ritholtz.com/2022/01/jack-bogles-rules-for-investing/

                         

    News on Stocks in Our Portfolios

                 

 

What I am reading today

 

            Death by paperwork.

            https://www.kiteandkeymedia.com/videos/why-a-complex-and-overly-bureaucratic-government-is-an-ineffective-and-expensive/

 

            Is old music killing new music?

            https://tedgioia.substack.com/p/is-old-music-killing-new-music?

 

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.