The Morning Call--The Higher The Rise, The Bigger The Fall
Value, Growth At A Reasonable Price, Dividend Investing
Seeking Alpha Analyst Since 2010
The Morning Call
1/6/21
The Market
Technical
Wednesday in the charts.
Big-Tech & Bonds Battered But Bitcoin Bid On 'Blue Wave', Gold Pumped'n'Dumped
Will the dollar weakness continue?
Is A Weak US Dollar A Key Macro Theme For 2021?
The dollar’s technical picture may be changing.
Shhh the dollar is up...and shorts are at decade extremes
Global economy braces for $13 trillion in debt maturities.
World's Top Economies Brace For $13 Trillion Debt Maturity Vortex
Fundamental
Headlines
The Economy
US
Weekly jobless claims rose 787,000 versus expectations of 800,000.
Jobless Claims Improved Last Week Thanks To 'Odd' Plunge In Illinois
November factory orders rose 1.0% versus projections of +0.7%.
The December final services PMI was reported at 54.8 versus estimates of 55.3; the composite PMI was 55.3 versus 55.7.
December light vehicle sales came in at 16.3 million versus November’s figure of 15.5 million.
December Vehicles Sales increased to 16.27 Million SAAR; Annual Sales off 14.7%
International
November German factory orders rose 2.3% versus consensus of -1.2%.
November EU retail sales fell 6.1% versus predictions of -3.4%.
December EU consumer confidence was reported at 45.5 versus 45.6 in November; German consumer confidence was 47.1 versus 45.6; UK consumer confidence was 54.6 versus 55.0.
Saxo Chart Of The Week : OECD Private Sector Confidence
December EU economic sentiment was 90.4 versus forecasts of 90.0; industrial sentiment was -7.2 versus -8.1; services sentiment was -17.4 versus -15.0.
The December EU construction PMI was 45.5 versus 45.6 in November; the German construction PMI was 47.1 versus 45.6; the UK construction PMI was 54.5 versus 55.0.
Other
For the economic optimists.
Better Times Ahead: What to Expect of the Economy in 2021 - Worth
Saudi Arabia cuts oil production to allow Russia to increase its own.
Saudi Arabia Will Cut Its Oil Production, Allowing Russia's to Grow
Heavy truck sales down 5% YoY.
U.S. Heavy Truck Sales down 5% Year-over-year in December
The Fed
The Fed released the minutes of its latest FOMC meeting yesterday. The tone was more upbeat on the economy than its predecessors, though the Fed left rates and QE unchanged, and, indeed, suggested that neither would change until well into 2021 or even 2022. So, QEInfinity will continue.
FOMC Minutes Show Fed Discussing 2013-Like Taper To Bond-Purchases
Here is some additional commentary.
Morgan Stanley: The FOMC Has Begun To Envision How It Will Taper QE
Bottom line. We are in a delicate balancing act right now. Valuations continue to push into the stratosphere. On the other hand, the Fed continues to pump liquidity into the markets. Plus, fiscal policy appears to be headed into a more expansionary phase. As this author points out, it is impossible to know when investor sentiment will begin to factor in price; so, equities can reach even higher valuations But that will only increase the magnitude of the ensuing mean reversion in price. At the moment, I am 50% invested; most of my holdings are in low P/E, high yielding stocks, along with some gold. Caution.
Counterpoint.
One of The Great Bubbles of Financial History - The Irrelevant Investor
Update on valuations.
Is the Market Still Overvalued?
‘Cash on the sidelines’ is hogwash.
Contrarian tilts for your portfolio.
Contrarian Tilts for Your Portfolio
The case against value stocks.
The Case Against Value Stocks - Part II - Validea's Guru Investor Blog
News on Stocks in Our Portfolios
MSC Industrial Direct (NYSE:MSM): Q1 Non-GAAP EPS of $1.10 beats by $0.01; GAAP EPS of $0.69 misses by $0.36.
Revenue of $771.9M (-6.3% Y/Y) in-line.
CVS Health (NYSE:CVS) declares $0.50/share quarterly dividend, in line with previous.
What I am reading today
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Analyst's Disclosure: I am/we are long cvs, MSM.
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