August 9 – Stock mentions SPY, UBER, AMD, KHC, MU, SQ

Michael Kramer and the clients own Tesla

US Markets

• S&P 500 Futures -19
• VIX 18.59
• Oil $53.27
• Dollar Index 97.54
• US 10-Year 1.7%

International Markets

• Shanghai -0.71%
• HSI -0.69%
• KOSPI +0.89%
• Nikkei +0.44%
• FTSE -0.08%
• DAX -1.06%

S&P 500 (SPY)

Stocks are pointing to a lower opening on August 9, partially because the market has had a big run-up and partly because of the news that the White House is waiting on resuming sales to Huawei. 

Whatever the case, it means that we get to retest yesterday’s big move above 2915. That will be the key level to watch for throughout day, and as long as that level holds, things should be ok. If it doesn’t hold, we will have to reassess, but I expect that it will.

UBER (UBER)

Uber is trading lower today, and I’m surprised it is not trading even lower on August 8. The company reported a pretty horrible quarter. I guess I’m having a tough time with the company losing $5.1 billion in one quarter. How is that even possible? The company generated revenue of just $3.1 billion, with revenue growth of only 14%?  I thought this was growth story? That is not a stunning growth rate, considering the revenue base. Say what you want about Tesla, but even they haven’t lost this money in one quarter, and they physically build the cars, not just drive people around in them.  Forget the fact that a lot the loss was from stock-based compensation that is only shareholder dilution down the road. I’d be pissed if I bought this on the IPO. I’m sorry there is nothing here to like.

The stock should be trading at a price lower than where it was before the Lyft earnings boosted it. I still think the stock heads to $36. We’ll see.

Kraft Heinz (KHC)

Yesterday a subscriber asked me about Kraft Heinz, and I didn’t have a great answer because there is nothing to like at the moment. The chart looks horrendous.  But then last night out of curiosity, I noticed the company had a market cap of about $34.4 billion. But the problem here is that the company has assets, most notably Goodwill and Intangibles of about $83 billion, and shareholder equity of $51.6 billion? Something seems off. I have a feeling that goodwill and intangibles assets may be too high, and we will see write-offs in the futures. That is just my guess.

Micron (MU)

MU’s stock has been stable at around $42 for some time. The big question is if it can continue to hold this level. We will find out today. Should support not hold the stock could fall to around $38.70.

Square (SQ)

SQ could fall back to $62.

AMD (AMD)

AMD is failing once again at this $34.50 region, and that isn’t good. Watch for $32.30.

Have a great Friday

-Mike