The Morning Call--FOMC Minutes Reiterate Powell's Reiteration Of His Reiteration
The Morning Call
2/18/21
The Market
Technical
Wednesday in the charts.
Bitcoin Roars To Record Highs As Inflation Soars, Bond 'Rout' Stalls
Three factors that could drive stock prices lower.
Why the stock market's 'worst-case' scenario depends on these 3 ingredients
For the bulls.
Cupcakes and Pizza are Delicious - All Star Charts -
A headwind for bonds.
Rising Interest Rates Create Headwinds For Bonds In 2021
Fundamental
Headlines
The Economy
US
Weekly jobless claims came in at 861,000 versus projections of 765,000.
Initial Jobless Claims Unexpectedly Jump Due To Surge In IL, CA Claimants
Month to date retail chain store sales declined less than in the prior week.
December business inventories rose 0.6% versus expectations of +0.5%.
January industrial production increased 0.9% versus estimates of +0.5%; capacity utilization was 75.6 versus 74.8; housing starts declined 6% versus -0.1% but building permits were up 10.4% versus -0.2%. January export prices were up 3.3% versus +0.4%, import prices were up 1.3% versus +1.0%.
Rentor Nation Returns? Multi-Family Starts, Permits Soared In January
The February Philadelphia Fed manufacturing index was reported at 23.1 versus forecasts of 20.0; the February housing market index came in at 84 versus 83.
NAHB Housing Market Index: "High Demand Offsets Higher Costs - For Now"
International
Other
It is all about reflation now (must read).
Counterpoint.
Why Printing Money May Not Create Inflation
Also: Powell should stick to his guns.
The illusion of wage growth could haunt the Fed
An alternative measure of slack in the economy.
An Alternative Proxy Measure for Slack
Update on big four economic indicators.
The Big Four - Industrial Production: Up 0.9% in January
Total household debt rose in Q4 2020.
The Fed
The FOMC released the minutes of its January meeting. Bottom line is that QEInfinity is alive and well and maintains its near infinite shelf life. Given the dovish comments from Powell in two earlier and separate speeches, this is hardly a surprise. Here are the minutes along with some commentary.
Repo market on verge of a major shock.
Fiscal Policy
The risks of ‘acting big’.
Blain: Why "Acting Big" Still Won't Cure Much In The Real Economy
The coronavirus
A pandemic of ignorance.
Vaccine math.
Bottom line.
Yesterday, I confessed that I had no idea at what level interest rates would start to negatively impact stock prices. Nomura has a thought:
Nomura: 1.3% Yields Are Fine But If They Hit 1.5%, Stocks Will Be Hammered
This bull is starting to get more circumspect.
Dividend cuts at the Q1 2021 midpoint.
Political Calculations: Dividend Cuts at the Midpoint of 2021-Q1
News on Stocks in Our Portfolios
Hormel Foods (NYSE:HRL): FQ1 GAAP EPS of $0.41 in-line.
Revenue of $2.46B (+3.4% Y/Y) beats by $90M.
Sherwin Williams (NYSE:SHW) declares $1.65/share quarterly dividend, 23.1% increase from prior dividend of $1.34.
What I am reading today
Quote of the day.
Quotation of the Day... - Cafe Hayek
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Analyst's Disclosure: I am/we are long hrl, SHW.
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