The Morning Call--February Highs Now In Sight
Value, Growth At A Reasonable Price, Dividend Investing
Seeking Alpha Analyst Since 2010
The Morning Call
7/21/20
The Market
Technical
The Averages (26680, 3251) advanced yesterday. The S&P pushed above its June high, voiding that double top that was forming and leaving it open to a challenge of its February all time high (3393). However, the Dow was still been able to fill its ‘island top’ on a closing basis much less pierce its June high. Until it does so, it could act as a drag on the S&P. On the other hand, the VIX finished below its 200 DMA for a second day; a successful challenge would open the way to filling the February gap up open---support for the S&P. I am sticking with my assumption that the Market’s bias is to the upside.
Two common sentiment indicators are in complete conflict
Gold was up, making a new nine year high. The long bond was also up, keeping its upward momentum going. The dollar declined, ending below the lower boundary of its short term trading range (if it remains there through the close on Wednesday, it will reset to a downtrend). All this suggests a weak economy.
Monday in the charts.
Silver Soars As Turbocharged-Tech Sends "Greed' To Record High
Fundamental
Headlines
The Economy
US
The June Chicago national activity index came in at 4.11 versus expectations of 3.2.
Month to date retail chain store sales grew more slowly than in the prior week.
International
June Japanese CPI was 0.1%, in line.
Other
What happens if the government ceases to pay the $600/week unemployment benefit?
How to turn a recession into a depression
Update on six high frequency indicators of the economy.
Six High Frequency Indicators for the Economy
Never has so much been given to so many in so short a time.
Never Before Has So Much Stimulus Been Injected In The Economy In A Single Quarter
Commercial mortgage delinquencies near record levels.
Commercial Mortgage Delinquencies Near Record Levels
The coming rent-pocalypse and its impact on inflation.
The Four Horsemen Of Disinflation: The Coming Rent-pocalypse
The coronavirus
The race for a vaccine.
Oxford-AstraZeneca COVID-19 Vaccine Trials Show "No Adverse Effects"
Fiscal Policy
GOP draft of new stimulus bill.
GOP Stimulus Bill To Include Payroll Tax 'Deferral' And Direct Payments, Reduced Unemployment Boost
EU nears agreement on stimulus package.
Europe Nears Agreement on Stimulus Fund With €390BN In Grants
The Fed
Trump nominee for Fed Board up for senate vote this week.
Trump's Hot-Button Fed Pick Faces Senate Committee Vote This Week
Bottom line. the news from AstraZeneca (see above) is a clear plus for the economy and Americans’ health; the big question is, will a vaccine come soon enough to save the millions of businesses (and their employees) that are on the edge of bankruptcy if they are not already there. So too the EU and US preparations to throw more money at their respective economies are a positive, at least in the short term. But all those funds (1) have to be financed, which just means more QEInfinity/Forever and (2) have to be serviced [interest cost], adding to the debt/GDP ratio that is already at a level to act as a governor on economic growth.
Investors are impervious to the need to pay the piper.
Irrational exuberance.
https://blog.evergreengavekal.com/herd-impunity/?pdf=10596
Is value investing really dead?
Value Is Dead. Long Live Value Investing
News on Stocks in Our Portfolios
Johnson & Johnson (NYSE:JNJ) declares $1.01/share quarterly dividend, in line with previous.
What I am reading today
The most prosperous ancient nation that you never heard of.
The Most Prosperous Ancient Nation You've Never Heard Of | Lawrence W. Reed
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Analyst's Disclosure: I am/we are long jnj.
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