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The Morning Call--QE Is All That You Need To Know

|Includes: C.H. Robinson Worldwide, Inc. (CHRW)

The Morning Call

2/7/20

The Market

Technical

And the beat goes on. The Averages (29379, 3345) continued their powerful rally, ending above their former all-time highs (29373/3337). A close above that level today will reset their very short term uptrends. Money flows remain very strong. And, of course, there is the indices’ underlying long term technical strength.

The only bothersome thing is the pin action in the VIX. While it did finish slightly below its 200 DMA (now support; if it remains there through the close next Tuesday, it will revert to resistance), it remains elevated in what has been an explosive Market (suggesting that investors are more risk averse than is obvious in stock prices).

Nonetheless, equity prices are indicating that the ‘improving economic growth rate’ scenario appears squarely back on the table. However, GLD and TLT are lending only weak support to that notion. The dollar has been strengthening lately. Indeed, it ended above its 200 DMA for a second day (now resistance; if it remains there through the close on Monday, it will revert to support). If this challenge is successful, then the technical position of UUP will improve as well as the message of an improving economy.

Thursday in the charts.

Traders Buy Everything On Hopes That Virus "Contained" - Stocks, Bonds, Gold, & USD Jump

This week in review.

Traders Are Calling Central Bankers' Bluffs... Again

A new round of bubble talk.

Record High For S&P 500 Spawns New Round Of Bubble Talk

The divergence of stocks and bonds.

Stock And Bond Investors Are Looking At Identical Virus Headlines And Both Concluding: "Great Reason To Buy"

Fundamental

Headlines

Yesterday’s stats were mixed. Weekly jobless claims fell more than estimated, but Q4 nonfarm productivity fell short of forecasts.

Overseas, December German factory orders fell more than anticipated but its January construction PMI was above consensus.

Bottom line. If you ignore ( 1) the news flow on the coronavirus, (2) the Market ignoring the news flow on the coronavirus, (3) economic stats which are OK but are by no means pointing at economic ‘lift off’ and just focus on the continuing robust/irresponsible global fiscal and monetary policies, then you have been paid handsomely. Be joyful. That will continue until it doesn’t. But consider owning some cash.

Measuring the changes in US/China trade, pre-coronavirus.

Political Calculations: Visualizing U.S.-China Tariff War Carnage

The latest from Ed Yardini.

Fed on Hold as Inflation Remains Stubbornly Below Fed's 2.0% Target

Update on valuation.

Is the Stock Market Cheap?

The Q Ratio and Market Valuation: January Update

The State of the Market.

The 2020 'State Of The Markets' - From Fundamentals To Fantasy

JP Morgan adjusts portfolio weightings.

"We Tactically Trim Risk": JPMorgan Lists Four Reasons Why It Is Selling Stocks Here

News on Stocks in Our Portfolios

C.H. Robinson Worldwide (NASDAQ:CHRW) declares $0.51/share quarterly dividend, in line with previous.

Economics

This Week’s Data

US

Weekly jobless claims fell 14,000 versus estimates of a decline 1,000.

Q4 nonfarm productivity rose 1.4% versus forecasts of up 1.6%; unit labor costs increased 1.4%, in line.

January nonfarm payrolls increased by 78,000 jobs versus projections of +27,000 jobs.

January Payrolls Soar By 225K, Smashing Expectations As Hourly Earnings Coming In Hot

International

December Japanese YoY household spending fell 4.8% versus expectations of -1.7%; cash earnings were 0% versus +0.5%.

The December German trade balance was +E15.2 billion versus consensus of E14 billion; December industrial production fell 3.5% versus -0.2%.

Other

Iraq on the brink of an energy crisis.

Iraq Is on the Brink of an Energy Crisis | naked capitalism

How Japan has coped with Japanification.

https://ftalphaville.ft.com/2020/02/05/1580924404000/How-Japan-has-coped-with-Japanification/

What I am reading today

Why so many people claim social security at age 62.

Why do so many people claim Social Security at 62?

Another example of your tax money at work.

Update: "Hockey stick" spending hikes make even less sense now | American Enterprise Institute - AEI

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Disclosure: I am/we are long CHRW.