Tuesday, February 20, 2018

Tuesday Morning Chartology

The Morning Call

2/20/18

The Market
         
    Technical

            The S&P had a solid week, ending above both moving averages and within uptrends across all timeframes.  However, since it remains below its former high, that leaves it in a very short term trading range.  To be able to say unequivocally that stocks are going higher, that former high needs to be overcome.



            The long Treasury continues under pressure, a small lift on Thursday and Friday notwithstanding.  It is in a solid downtrend, with the lower boundary of its long term uptrend the only remaining support.



            The dollar’s chart remains pretty ugly, though the dollar did manage to bounce off a minor support.



            Gold had a good week, bouncing off minor support and rallying substantially.  It remains above both moving averages and within a short term uptrend.



            The VIX moved lower last week as stocks rallied; but managed to bounce off of support.  It remains at an elevated level, suggesting more volatility to come. 



            Bottom line: the Averages continue to improve and are shooting at their recent highs.  Given this past week’s economic data, equity investors seem to be assuming that inflation is not a threat and that the weak stats mean that the Fed stays easy.  As much as I may disagree with that assessment, I could accept it if weren’t for the confusing pin action in the long bond (higher rates), a weak dollar and rising gold prices (lower rates).
           
    Fundamental

       Headlines

            Trump takes another step toward a trade war, considers imposing tariffs on steel and aluminum (medium):

            Imports are not hurting the steel industry (medium):
                       
                        Trundling toward a trade war (short):

            The case for free trade (medium):

            David Stockman on last week’s industrial production number (medium):

            For the optimists (short):

    News on Stocks in Our Portfolios
 
Home Depot (NYSE:HD): Q4 EPS of $1.69 beats by $0.05.
GAAP EPS of $1.52
Revenue of $23.9B (+7.6% Y/Y) beats by $240M.

Home Depot (NYSE:HD) declares $1.03/share quarterly dividend, 15.7% increase from prior dividend of $0.89.

Genuine Parts (NYSE:GPC) declares $0.72/share quarterly dividend, 6.7% increase from prior dividend of $0.675.

Medtronic (NYSE:MDT): Q3 EPS of $1.17 in-line.
Revenue of $7.37B (+1.2% Y/Y) beats by $170M.

Economics

   This Week’s Data

      US

     International

    Other

            Yen’s rise clouds Japanese economic outlook (medium):

            Goldman on US fiscal policy (medium):

What I am reading today

            Dealing with decision regret (medium):

            Making sense versus being right (medium):

            Nominees for 2018 World Press photo contest (medium):

            ‘Teacher of the Year” explains school violence (medium):

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