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Tuesday Morning Chartology

|Includes: FactSet Research Systems Inc. (FDS), GPC, ITW, MDT

The Morning Call

2/19/19

The Market

Technical

The S&P resumed its strong upward momentum, closing above its 100 DMA (now support), re-starting the clock on its challenge of its 200 DMA (now resistance; if it remains there through the close on Thursday, it will revert to support) and within a very short term uptrend. Its next resistance level is its prior lower high (~2800).

The Dreaded Earnings Recession

As you might expect with the Fed and the Bank of China turning dovish, the long bond continues to rise (rates down). It finished above both moving averages and in a very short term uptrend. If global liquidity is expanding, this trend should continue as long as inflation numbers are benign.

How Bond Vigilantes Really Think - Pragmatic Capitalism

Is the Japanese bond bull market ending?

Is The "World's Biggest Widowmaker" Trade Finally Dead? JGB Buyers Stage Revolt

The dollar was off a nickel on Friday. Its chart remains strong, with UUP ending above both moving averages and in a short term uptrend. It did settle below the upper boundary of the November to present trading range, but not by much.

GLD rose ½% on volume, maintaining its strong performance. It closed within very short term and short term uptrends and above both MA’s (the 100 DMA is crossing above its 200 DMA).

In sympathy with Friday’s moonshot, the VIX was down over 7%, closing below the lower boundary of is short term uptrend (if it remains there through the close on Wednesday, it will reset to a trading range).

Fundamental

Headlines

Another round of trade talks with China begins today---a hopeful sign that progress is being made.

7th Round Of US-China Trade Talks Begins Tuesday In Washington

The latest victims of Chinese IP theft.

GE, Boeing, T-Mobile Among Latest Victims Of Chinese IP Theft

Apparently, the ECB is about to join the stampede to QE.

https://www.bloomberg.com/news/articles/2019-02-17/ecb-eyes-data-as-slowdown-proves-significant-villeroy-says?srnd=economics-vp

***overnight, a Bank of Japan governor said that the BOJ was prepared to execute extra monetary easing if required.

The latest from Morgan Stanley.

Morgan Stanley: "We Are Sceptical That The Goldilock Narrative Will Hold Together"

Will the real world please stand up?

Rabobank: China's Borrowing Was Insane: In January It Borrowed 5% Of GDP In One Month

News on Stocks in Our Portfolios

FactSet Research Systems (NYSE:FDS) declares $0.64/share quarterly dividend, in line with previous.

Illinois Tool Works (NYSE:ITW) declares $1.00/share quarterly dividend, in line with previous.

Genuine Parts (NYSE:GPC): Q4 Non-GAAP EPS of $1.35 beats by $0.04; GAAP EPS of $1.27 misses by $0.04.

Revenue of $4.6B (+9.3% Y/Y) beats by $50M.

Medtronic (NYSE:MDT): Q3 Non-GAAP EPS of $1.29 beats by $0.05; GAAP EPS of $0.94 beats by $0.03.

Revenue of $7.55B (+2.4% Y/Y) beats by $20M.

Economics

This Week’s Data

US

International

December Japanese machine orders fell 0.1% versus November’s reading of unchanged.

Other

Update on student loans.

$166 Billion In Student Debt Is Now Officially Delinquent

Why so many Americans feel cheated by the student loans.

Here's Why So Many Americans Feel Cheated By Their Student Loans

Update on mortgage debt.

https://www.calculatedriskblog.com/2019/02/the-housing-bubble-mortgage-debt-as.html

New accounting rules will add $3 trillion to corporate debt.

https://www.zerohedge.com/news/2019-02-17/3-trillion-new-liabilities-are-about-blindside-corporate-balance-sheets

Auto sales plunge in China.

https://www.zerohedge.com/news/2019-02-18/china-car-sales-plunge-most-7-years-amid-global-auto-industry-meltdown

China’s Silk Road initiative is starting to impact the Middle East.

https://www.zerohedge.com/news/2019-02-18/escobar-how-new-silk-roads-are-shaping-southwest-asia

What I am reading today

Update on cryptocurrencies.

https://www.zerohedge.com/news/2019-02-18/cryptos-are-surging-bitcoin-ethereum-hit-one-month-highs-institutions-dip-toes

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Disclosure: I am/we are long fds, gpc, itw, MDT.