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The Morning Call---Toot A Loo 'Transitory'

Dec. 01, 2021 9:11 AM ETMA
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Value, Growth At A Reasonable Price, Dividend Investing

Seeking Alpha Analyst Since 2010

Steve Cook received his education in investments from Harvard, where he earned an MBA, New York University, where he did post graduate work in economics and financial analysis and the CFA Institute, where he earned the Chartered Financial Analysts designation in 1973. His 46 years of investment experience includes institutional portfolio management at Scudder. Stevens and Clark and Bear Stearns, managing a risk arbitrage hedge fund and an investment banking boutique specializing in funding second stage private companies. Through his involvement with Investing for Survival and Seeking Alpha, Steve hopes that his experience can help other investors build their wealth while avoiding tough lessons that he learned the hard way.

The Morning Call


The Market


Tuesday in the charts.


More selling to come?


Two items: (1) the Dow ended below its 100 DMA for the third day, reverting to resistance and (2) the S&P finished below the lower boundary of its short term uptrend; if it remains there through the close on Thursday, it will reset to a trading range. Even if this challenge is successful, remember from late Spring to mid Fall, the S&P broke its short term uptrend several times only to quickly reset to an uptrend. The point being that it is too soon to get squirrely.

What the VIX is telling us….or not.




The Economy


Weekly mortgage applications fell 7.2% while purchase applications were up 5.1%.

Month to date retail chain store sales grew slightly faster than in the prior week.

The September Case Shiller home price index rose 0.8% versus consensus of +0.9%.


The November Chicago PMI came in at 61.8 versus expectations of 67.0.


November consumer confidence was reported at 109.5 versus predictions of 111.0


The November ADP private payroll report showed job increases of 534,000 versus estimates of 525,000.



Q3 Japanese YoY capital spending was up 1.2% versus forecasts of +4.4%; the November final manufacturing PMI was 54.5 versus 54.2.

October German retail sales declined 0.3% versus projections of +1.0%; the November final manufacturing PMI was 57.4 versus 57.6.

The November EU final manufacturing PMI came in at 58.4 versus consensus of 58.6; the November UK final manufacturing PMI was 58.1 versus 58.2.


The Fed

How many times have I said in these pages that the Fed has never, ever, ever effectively managed a transition from easy to normal monetary policy? Yesterday, in his senate testimony, Powell said that the Fed is dropping ‘transitory’ from its inflation lexicon, sounding quite hawkish after a much more moderate narrative on Monday and apparently preparing the economy/Markets for the consequences a prolonged period of inflation and a tighter than heretofore expected monetary policy. Of course, given the Fed’s ‘on the one hand, on the other hand’ communication strategy, who knows what he will say today if the Market crashes. I tol’ you.


The end of free money.


News on Stocks in Our Portfolios

Mastercard (NYSE:MA) has announced a new share repurchase program to buyback up to $8B of its Class A common stock.

What I am reading today

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