The Morning Call--Powell Repeats His Shtick
Value, Growth At A Reasonable Price, Dividend Investing
Seeking Alpha Analyst Since 2010
The Morning Call
3/24/21
The Market
Technical
Tuesday in the charts.
Russell Routed, Crude Crashed, Bonds Bid As Bull Market Turns One
Morgan Stanley identifies source of massive US Treasury sales.
Morgan Stanley Identifies The Source Of Massive Treasury Selling
Plus, there is the end of quarter portfolio rebalancing.
2021's Bond 'Bloodbath' Is The Worst In Decades
The outlook for the dollar.
Fundamental
Headlines
The Economy
US
Weekly mortgage applications fell 2.5% while purchase applications were up 2.6%.
Month to date retail chain store sales continued to fall at the same rate as the prior week.
February new home sales declined 18.2% versus consensus of -6.5%.
New Home Sales decrease to 775,000 Annual Rate in February
(New home prices)
February durable goods orders declined 1.1% versus predictions of +0.8%; ex transportation, they were down 0.9% versus +0.6%.
The March Richmond Fed manufacturing index came in at 17 versus 14 recorded in February.
International
January UK unemployment was 5.0% versus projections of 5.2%; February CPI was +0.1% versus +0.5%; February PPI was +0.6% versus +0.7%; the March flash manufacturing PMI was 57.9 versus 55.0; the flash service PMI was 56.8 versus 51.0; the flash composite was 56.6 versus51.1.
The March Japanese flash manufacturing PMI was 52.0 versus estimates of 52.0; the flash services PMI was 46.5 versus 45.8 reported in February; the flash composite PMI was 48.3 versus 48.2 in February.
The March German flash manufacturing PMI was 66.6 versus expectations of 60.8; the flash services PMI was 50.8 versus 46.2; the flash composite PMI was 56.8 versus 51.6.
The March EU flash manufacturing PMI was 62.4 versus forecasts of 57.7; the flash services PMI was 48.8 versus 46.0; the flash composite PMI was 52.5 versus 49.1.
Other
The Fed
In testimony before the senate yesterday, Powell stuck to his thesis: economy is improving but not fast enough. The Fed will do ‘whatever is necessary’ to insure a recovery. Inflation is not a problem. Yeh, right.
Fed Chair Jerome Powell Warns Of Long Road Ahead To Recover Millions Of Lost Jobs
Fiscal Policy
The many faces of government default.
The Many Faces of Government Default - Law & Liberty
Inflation
Rent: from headwind to tailwind.
Rent: From Headwind To Tailwind
Get ready for some serious sticker shock.
"Get Ready For Some Serious Sticker Shock Very Soon: This Jump In Inflation Won't Be Transient"
The reliability of core versus headline inflation in projecting the trend.
Core Inflation Is Probably A Better Measure Of The Trend
The coronavirus
Death and lockdowns.
Death and Lockdowns | City Journal
Bottom line. As long as investors believe that the Fed will bail them out (QE and yield curve control), the assumption has to be that the Market will have an upward bias. What likely ends this affair is some event (or series of events) that causes investors to lose faith in the Fed. My belief is that that will almost surely occur. Until then with valuations in the nosebleed section, I am happy to miss what upside remains.
News on Stocks in Our Portfolios
General Mills (NYSE:GIS): FQ3 Non-GAAP EPS of $0.82 misses by $0.02; GAAP EPS of $0.96 beats by $0.12.
Revenue of $4.52B (+8.1% Y/Y) beats by $60M.
What I am reading today
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Analyst's Disclosure: I am/we are long GIS.
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