The Morning Call
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 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.
The dollar’s chart remains pretty ugly, though the dollar did manage to bounce off a minor support.
Gold had a good week, bouncing off minor support and rallying substantially. It remains above both moving averages and within a short term uptrend.
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).
Trump takes another step toward a trade war, considers imposing tariffs on steel and aluminum (medium):
Imports are not hurting the steel industry (medium):
Trundling toward a trade war (short):
The case for free trade (medium):
David Stockman on last week’s industrial production number (medium):
For the optimists (short):
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.
This Week’s Data
Yen’s rise clouds Japanese economic outlook (medium):
Goldman on US fiscal policy (medium):
What I am reading today
Dealing with decision regret (medium):
Making sense versus being right (medium):
Nominees for 2018 World Press photo contest (medium):
‘Teacher of the Year” explains school violence (medium):
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Disclosure: I am/we are long gps, hd, MDT.