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Tuesday Morning Chartology--Sorry About That

|Includes: Genuine Parts Company (GPC), HD, MDT

The Morning Call

2/20/18

The Market

    Technical

 

            The S&P had a solid week, ending above both moving averages and within uptrends across all timeframes.  However, since it remains below its former high, that leaves it in a very short term trading range.  To be able to say unequivocally that stocks are going higher, that former high needs to be overcome.

            The Great Bear Market Of 2018

 

            The long Treasury continues under pressure, a small lift on Thursday and Friday notwithstanding.  It is in a solid downtrend, with the lower boundary of its long term uptrend the only remaining support.

            Here's the 'real' reason stock-market investors are worried about bond yields

 

            The dollar’s chart remains pretty ugly, though the dollar did manage to bounce off a minor support.

            Trump Needs to Return to King Dollar | RealClearMarkets

 

            Gold had a good week, bouncing off minor support and rallying substantially.  It remains above both moving averages and within a short term uptrend.

            Why commodities and gold won't protect you from inflation's punch

 

            The VIX moved lower last week as stocks rallied; but managed to bounce off of support.  It remains at an elevated level, suggesting more volatility to come. 

 

            Bottom line: the Averages continue to improve and are shooting at their recent highs.  Given this past week’s economic data, equity investors seem to be assuming that inflation is not a threat and that the weak stats mean that the Fed stays easy.  As much as I may disagree with that assessment, I could accept it if weren’t for the confusing pin action in the long bond (higher rates), a weak dollar and rising gold prices (lower rates).

    Fundamental

 

       Headlines

 

            Trump takes another step toward a trade war, considers imposing tariffs on steel and aluminum (medium):

            China Threatens To Retaliate If US Imposes Metal Tariffs

 

            Imports are not hurting the steel industry (medium):

            Imports Are Not Shrinking Steel-Industry Jobs, Progress Is | RealClearMarkets

                       

                        Trundling toward a trade war (short):

            Trundling to Trade War

            The case for free trade (medium):

            Why Economists Are Worried About International Trade

 

            David Stockman on last week’s industrial production number (medium):

            Swan Song Of The Central Bankers, Part 5: The Flat-Line Does Not Spell Recovery

 

            For the optimists (short):

            Liquidity Legends

 

    News on Stocks in Our Portfolios

Home Depot (NYSE:HD): Q4 EPS of $1.69 beats by $0.05.

GAAP EPS of $1.52

Revenue of $23.9B (+7.6% Y/Y) beats by $240M.

Home Depot (NYSE:HD) declares $1.03/share quarterly dividend, 15.7% increase from prior dividend of $0.89.

Genuine Parts (NYSE:GPC) declares $0.72/share quarterly dividend, 6.7% increase from prior dividend of $0.675.

Medtronic (NYSE:MDT): Q3 EPS of $1.17 in-line.

Revenue of $7.37B (+1.2% Y/Y) beats by $170M.

Economics

   This Week’s Data

      US

     International

    Other

            Yen’s rise clouds Japanese economic outlook (medium):

            https://money.usnews.com/investing/news/articles/2018-02-18/japan-jan-export-growth-points-to-continued-economic-recovery

            Goldman on US fiscal policy (medium):

            US Fiscal Policy Will Lead To A Debt Catastrophe: Goldman

What I am reading today

            Dealing with decision regret (medium):

            Decision Regret

            Making sense versus being right (medium):

            Making Sense vs. Being Right

            Nominees for 2018 World Press photo contest (medium):

            Nominees in the 2018 World Press Photo Contest

            ‘Teacher of the Year” explains school violence (medium):

            Florida's 'Teacher Of The Year' Bluntly Explains Why School Violence Is Out Of Control

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Disclosure: I am/we are long gps, hd, MDT.