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STOCKS – FCX, RBLX, XOM, SQ
MACRO – SPY, QQQ, TIP, COPPER
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Stocks rose sharply again on Friday, with the S&P 500 climbing by around 1.4%. The rally probably isn’t over yet, especially since we have seen a significant inflow of liquidity in the last two weeks, as conditions to obtain margin have eased. Until we see some financial condition tightening, markets can continue to rise. So watching liquidity measures and financial conditions is key to this market. At this point, I am looking for the S&P 500 to rally a bit further, perhaps up to 4,335 over the next couple weeks.
Additionally, it is worth noting that typically on the first few days of the month there are monthly inflows, that tend to help lift markets as well.
Nothing fundamentally has changed in the market, but stocks will not go straight down, and with yields moving lower, stocks can get a boost. I still think we will see 3,200 to 3,300 over the long term. Especially, when one of the Fed’s most dovish board members is calling for a 50 bps rate hike at the September meeting and says the Fed still has a long way to go.
It is a similar outlook for the QQQ, with room for the ETF to climb to around $340.
Another reason indexes have been rising is that real yields have been falling, and as long as the TIP continues to push up, so will equities push higher too. At this point, I could see the TIP ETF rising to around $120.
Copper prices have been moving steadily higher. Rising commodity prices will negatively affect markets because it will help push inflation expectations. But for now, it may not matter. If Copper can clear $3.60, it can probably push up to around $3.75.
Higher copper prices are good for Freeport, and with the stock nearing resistance at $31.70, there is an opportunity for shares to move higher and fill the gap around $34.10.
Exxon moved up some last week, and with a gap to fill around $100.5, the stock probably has further upside.
Block has some solid bullish momentum based on the RSI, and the next significant level of resistance comes at $83.30, so there is more room to run higher.
Roblox continues to push higher, and perhaps momentum for the stock has finally turned. The RSI is still steadily trending higher, and if resistance at $45 manages to give way, then the shares can climb higher to around $54.
Charts used with the permission of Bloomberg Finance L.P. This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice.Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.