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The Morning Call--What A Weak Dollar Means

Jul. 29, 2020 8:59 AM ETADP, CHRW, CMI, GD, TROW
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The Morning Call


The Market


The Averages (26379, 3218) were off yesterday and ended somewhat out of tune with each other. While they are not out of sync with respect to a major trend, but (1) the S&P is above its June high, the Dow is not, (2) the Dow is near challenging its 200 DMA [now support], the S&P is not and (3) while both are making higher lows, the S&P is making higher highs; the Dow is not. All this as (1) breadth remains strong; though it has been treading water and (2) the VIX is caught between its 200 DMA and its June low. In short, a Market that seems to be backing and filling. However, I am sticking with my assumption that the Market’s bias is to the upside.

Looking For A Sellable Rally To Reduce Risk

Update on margin debt.

Margin Debt and the Market: Up 5.8% in June

Subdued VIX making markets uneasy.

In summer of turmoil, subdued 'fear' gauges make markets uneasy

Gold (183.75) was up another 7/8% on big volume, making another new nine year high and drawing ever closer to the upper boundary of its long term uptrend (185.85). The long bond resumed its upward trend. The dollar was up slightly, but remained near the lower boundary of its short term downtrend, doing little to close Monday’s gap down open.

Has gold reached its peak?


What gold bugs are missing.

Rabobank: Yes, Gold Is Soaring, But Here Is What The Goldbugs Are Missing

Tuesday in the charts.

Gold Gains As Stocks Strike Out On MLB "Pause", Fading Stimulus Hope



The Economy


Month to date retail chain store sales declined at a faster pace than in the prior week.

The May Case Shiller home price index rose 0.4% versus forecasts of +0.8%.

S&P/Case-Shiller Home Price Index: May Update

The June trade balance was -$70.46 billion versus projections of -$72.0 billion.

June wholesale inventories fell 2.0% versus estimates of +0.5%.

July consumer confidence came in at 92.6 versus consensus of 94.5.

Consumer Confidence Down in July

The July Richmond Fed manufacturing index was reported at 10 versus expectations of 5.


June UK consumer credit declined L-0.086 billion versus predictions of L-2.0 billion.


The coronavirus

***overnight update.

Fears Of "Third Wave" Intensify As China Suffers Biggest Jump In COVID-19 Cases Since April: Live Updates

Ten coronavirus charts.

Margolis: 10 COVID-19 Charts You Need To See

Flaring virus threatens global economic recovery.


Eviction wave is imminent unless moratorium is extended.

"Like Nothing We've Ever Seen": Imminent Eviction Wave Is Coming To These States


US and China raise military stakes in South China Sea,

US and China Are Both Raising the Military Stakes in the South China Sea | naked capitalism

Fiscal Policy

Update on stimulus bill negotiations.

With 'Liability Shield' Red-Line Looming Over Stimulus Bill, Schumer Claims Dems "Have A Lot Of Leverage & Aren't Afraid To Use It"

Bottom line. QEInfinityForever affects more than the price of the dollar and coffee beans.

What a weak dollar means to stock market leadership.

A Trillion Here, A Trillion There... And What It Means For Stock Market Leadership

What a weak dollar means for economic growth.

$1900 Gold Will Depress Growth. So Did $1,200, $500 and $36 Gold

News on Stocks in Our Portfolios

Cummins (NYSE:CMI): Q2 GAAP EPS of $1.86 beats by $0.88.

Revenue of $3.85B (-38.1% Y/Y) beats by $170M.

C.H. Robinson Worldwide (NASDAQ:CHRW): Q2 GAAP EPS of $1.06 beats by $0.47.

Revenue of $3.63B (-7.2% Y/Y) beats by $170M.

General Dynamics (NYSE:GD): Q2 GAAP EPS of $2.18 in-line.

Revenue of $9.26B (-3.1% Y/Y) beats by $230M.

Automatic Data Processing (NASDAQ:ADP): Q4 Non-GAAP EPS of $1.14 beats by $0.18; GAAP EPS of $0.96 beats by $0.01.

Revenue of $3.38B (-3.4% Y/Y) beats by $60M.

T. Rowe Price (NASDAQ:TROW): Q2 Non-GAAP EPS of $2.29 beats by $0.26; GAAP EPS of $2.55 beats by $0.29.

Revenue of $1.42B (+1.4% Y/Y) beats by $10M.

What I am reading today

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Analyst's Disclosure: I am/we are long adp, chrw, cmi, gd, trow.

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