Morning 8-18

 WMT   after initially rallying on earnings report stock has turned lower due to lack of Guidance for back of off year

  • “Walmart U.S. comp sales increased 9.3%, led by strength in general

merchandise and food. Walmart U.S. eCommerce sales grew 97% with strong results across all channels.   WSJ

  • Home depot  posted strong sales growth and a higher-than-expected profit in the latest fiscal quarter, emphasizing the company’s success drawing home-improvement shoppers during the Covid-19 pandemic. WSJ

BofA August fund manager survey results are out

  •46% of investors say it is a ‘bull market’, up from 40% in July

 •Long US tech, growth (59%) the most crowded trade (4 straight months now)

 •Long gold (23%) is the next most crowded trade

 •Coronavirus second wave (35%) remains biggest tail risk (5 straight months now)

 •US-China trade war (19%) and US election (14%) are next biggest risk factors

 We all know Summer is slow and August the peak of the vacation months but this is a bit ridiculous From Mizuho “ ◘ Where did everybody go? Friday saw the lowest trading volume across U.S. stock exchanges (MVOLUSE Index) since Feb. 19th. Yesterday the SPY ETF saw the lowest daily volume since Dec 27th, IWM lowest volume since Dec 26th.”  …. Election Worries, No movement on stimulus bill some of the reason for the lack of participation

  Markets:     Dollar index DXY, just broke most recent lows and trading at roughly a 2-year low. Not too many longs left to capitulate with hedge funds with net short position for first time in 2 years (BBG)…   short dollar trade turning into a momentum trade and not a long liquidation trade. Gold above 2000k again +1% Silver +2.88%,Platinum +1.9%  iron ore in the headlines as  it trades to 6 year highs in China due to increases steel demand!…Just released Housing starts beat expectations handily not that much of a surprise as the housing market has been the steady bright spot in the economic recovery .Expectations were for 1245 the high estimate was 1320 the actual number 1496  Just wow. Lumber futures open at 9:00 I imagine that market is not too surprised by this release. Treasuries sideways as are bunds the action is in currencies and hard assets again. Nat gas +4.2%

   Another fallout from the Covid virus from Mizuho “Bloomberg economists estimate as many as 18 million parents could put job seeking on hold with schools closed this fall. That calculation is based on the employment rate for the 47 million parents with children under 12, assuming at least one parent has to stay off work to provide childcare.”

News:

  • TLSA market cap closed at $342 billion, up another 11.2% fueled by anticipation of inclusion in the S&P 500.It is now the 10th largest company by market cap.  Stock +12% so far this morning  bbg
  • Senate republicans supposedly working on a stimulus bill of their own in an attempt to break grid lock. No stimulus checks in Bill and protection for business from lawsuits are some of the leaked items in bill
  • Trump says he is going to pardon someone today that no one is thinking about an attempt to take some of the spotlight away from Dems

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