March 11, 2019

Michael Kramer and the clients of Mott Capital own Apple, Netflix, Tesla

US Markets

• S&P 500 +6 Points
• US 10-Year Yield: + 2.65%
• VIX: 16.30
• Oil: $56.60
• Dollar Index: 97.33

International Markets

• Japan Nikkei: +0.47%
• China Shanghai: +1.92%
• Hong Kong HSI: +0.97%
• South Korea KOSPI: +0.03%
• Singapore STI:  -0.14%
• Australia ASX: -0.38%
• German DAX: +0.25%
• UK FTSE: 0.75%

Global Growth Proxies:

• Copper: +0.30%
• Silver: -0.16%
• Platinum: -0.33%

Global Trading

China

Global markets are mostly trading higher this morning, with Shanghai rebounding by about 2% after Friday’s steep decline.  The move higher for the index seems like nothing more than just a bounce at this point. Resistance for the index will now come around 3,065.

Hong Kong

The Hong Kong HSI also bounced some today, but again there is a giant gap to fill in this index as well.

So let’s not get too excited yet after today’s gains overseas. The trends over the next few days still seem lower.

US Trading

S&P 500 (SPY)

The S&P 500 is pointing to a slight increase today by about 25 basis points. But a quick look at the S&P 500 SPDR (SPY) would suggest that the ETF is butting up against resistance this morning. The chart shows that the ETF is struggling to rise above $275.50.

The index itself will find a healthy level of resistance at around 2,750.

Boeing (BA)

The broader stock indexes may find it difficult to rise today, especially with Boeing trading lower by nearly 10%, following the second crash of its 737 Max 8 in the past five months.  The stock could find itself falling to around $371. That would allow the shares to refill that giant gap at $371 from its post-earnings jump.

Nvidia (NVDA)

Nvidia announced it would buy Mellanox (MLNX) for $7 billion. The move comes after Nvidia’s recent string of quarterly misses. I think this may be a sign that Nvidia’s problems aren’t over and the company is now trying to buy growth. It seems to be a diversification play and may be a sign that the company is still struggling in its gaming and GPU business.  I still think Nvidia falls to $139, before a potential further decline.

Mellanox will only add about $1.3 billion in sales to Nvidia’s revenue. That a pretty significant premium Nvidia is paying for that revenue stream.

Apple (AAPL)

Apple was upgraded to buy from Neutral at BofA with a $210 price target.  But not much has changed here with resistance at $182 and support at $165. Which one does it hit first? Good question. I’m passing on a direction today.

Facebook (FB)

Facebook was upgraded to buy from neutral at Nomura with a price target of $215.  The stock is once again approaching resistance at $173.  I have been looking for a gap fill down to $148. At this point, it seems like I am going to find out very soon how badly I may be wrong or right.

Tesla (TSLA)

Cut prices, raise prices. I don’t know what Tesla is doing, except confusing everyone. I wish some days the sideshows could stop so investors can focus only on the company’s growth. Have you ever noticed when the headlines stop the stock starts to quite rise.

Comcast (CMCSA)

NBC News plans to introduce a streaming service — who cares! The barrier to entry for streaming services seems pretty low these days. It is building that scale that Netflix has which is impossible. That is what makes Netflix so unique.

Oracle (ORCL)

Oracle was downgraded to reduce from buy, whatever reduce means? Is that like underweight?

The chart looks lousy with a drop below support at $51.80 potentially sending shares down to $48.61

Have a great one!

-Mike

Photo From Flickr

Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.  March 11