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Michael Kramer and the clients of Mott Capital own the shares of NFLX, TSLA
Good Morning Today is Wednesday, January 2
- S&P 500 futures are pointing to a lower opening of 36 points as of 7:45 AM
- The US 10-year rate is at 2.66%
- Dollar Index is at 96.32
- WTI Crude Oil is $44.97
- VIX: 27.99
- Critical events for today: China Caixin/Markit PMI fell to 49.7 in December from 50.2 in November, Trade talks between the US and China to start again.
Recap of International Trading:
- Hong Kong Hang Seng Index down 2.77%
- China Shanghai Comp. down 1.15%
- UK FTSE down 0.50 basis points
- Dax down 0.19%
Citibank is forecasting the Hong Kong stock market to rally 20% in 2019.
According to the WSJ analysts have slashed their US earnings forecast for 2019 growth to 7.8% from 10.1% in September.
10-year yields are approaching an important level of technical support at 2.62%. Should yields fall below that level of support, they could fall to as low as 2.3%.
Markets are pointing lower today after the weaker than expected manufacturing data in China. But the declines in Europe have been steadily recovering throughout the day. The German Dax gapped lower to the start day but has managed to recoup most of those losses. But caution is needed as this looks like a fill the gap type of scenario.
S&P 500 (SPX, SPY)
The US will get its own PMI data this morning with the US manufacturing PMI with consensus for 53.9.
The S&P 500 is set to fall to start the new year, with a technical uptrend and support around 2,475. Be careful of a fill the gap scenario here in the US too, which means a gap lower followed by a slow grind higher.
Overall corporate news flow is fairly light today.
Netflix has reportedly hired the CFO away from Activision Blizzard. The stock is likely to open lower today and is now down about $6. The stock made some big head way on Monday, but the weakness today is likely to put the strength to the test. The stock crossed technical resistance at $260 on Monday, rising as high as $271. Today the stock is looking to open lower, testing what is now support around $260, this is the key level to watch in the stock and that it must hold if the stock is to continue rising.
Tesla is likely to be in focus today as investors eagerly await fourth quarter production and deliver results. Relatively speaking, compared to past quarter, rumors of production are limited, other than a report the company may have about 3,000 Model 3’s left in inventory.
For the most part, the stock has been stuck in a range between $300 and $360 since the middle of December.
Amazon has faced some tough resistance around $1520 the past few trading session, and the stock is looking to open about $25 lower this morning at around $1475, support is around $1450
Micron is pulling back some this morning as well after failing to break out on Monday and rise above technical resistance at $32.50. Support for the stock is around $29 should the stock drift lower today. Memory prices are expected to stay weak in 2019.
Western Digital (WDC)
The stock is sitting at June 2016 lows, a very important level of support.
Microsoft struggled on Monday to get over resistance around $102.75 and is now facing a pullback to support at $96.
According to data from TradeAlert, Facebook saw some bullish call buying at the March $155 strike price, with open interest rising by about 15,000. The stock looks weak stuck in a steep downtrend and resistance firmly in place around $133.
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.
s&P 500, spy, amazon, netflix, tesla, facebook, micron