This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
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May 20, 2019 – Stock Mentions: Semis, Micron, Broadcom, Qualcomm, Boeing, Alibaba
- S&p 500 Futures -13.75 points
- US 10-year 2.39%
- Dollar Index 97.98
- VIX 16.96
- Oil $62.86
- Shanghai Composite -0.41%
- Hong Kong HSI -0.57%
- South Korea KOSPI – FLAT
- German DAX -1.31%
- UK FTSE -0.8%
Housing Keeping: I was really bored with the old website so I decided on Sunday with nothing to do it was time for a major revamp!!!!
The Shanghai Composite was down on May 20, but the good news is that it closed off its lows and managed to hold support at 2,825.
Tencent (700 HK)
Tencent, the big technology company in Asia, has been getting struck hard. Why do we care? Remember, this was one of the stocks that were the first to bottom and begin to rise in the winter. For now, the stock MUST hold support at 333 HKD.
The Australian equity market doesn’t seem too concerned about a trade war hurting the China economy. The index just reached a record high. China happens to be Australia’s biggest trade pattern, accounting for $74 billion or 29.2% of the countries exports.
Hey look at that, the US exports about $150 billion a year to China, about Double Australia. However, the US economy is nearly $20 trillion, and Australia’s GDP is about $1.3 trillion. Who is China more Important too?
US Stock Market
S&P 500 (SPY)
Stocks are picking up from where they left off on Friday with the S&P 500 indicating to open lower on May 20. Again, 2,836 is the big level that we must continue to watch. Based on the Futures, the S&P 500 should open above that region of support. A drop below that level setups a retest of the lows from last Monday around 2,812.
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AT 2,812 the S&P 500 is about 5% off its highs, and that was the region we saw the trade talk turn more positive.
However, I hope that the trade talk gets out of the headlines and soon.
Semis Will Weigh
Semiconductor stocks will continue to fall today as many begin to comply with the request from the US Government not to supply Huawei anymore. Additionally, Alphabet (GOOGL) will no longer supply Huawei with its Andriod operating system.
Qualcomm is one of those stocks that is hanging on to support in early trading around $76.50. Should the stock fail to hold, support at this level it is likely to fall back to $70.35.
Micron is also falling this morning, and it appears to be heading to $34.10, with the potential for the losses to grow worse, and a decline to $32.50
Broadcom is also falling this morning and appears to be heading towards $273.
Alibaba is falling this morning too, and now it appears it may be heading towards $151.
Boeing is also falling as part of broader China worries. The stock now appears to be falling out of the bear flag, and I Think that means that $320 is on the way.
Don’t worry, the big guy has got your back! =)
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.