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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Final Look at Micron, Starbucks’ Game Over, Plus GE, Oil, and Biotech
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There remains this overall resiliency in the stock market, and I think for the most part that was has been demonstrated by the S&P 500 gapping lower at the open the past couple of day only cut those losses by days end.
Biotech
Biotech stocks had a solid day, with the XBI Biotech ETF finally breaking out. Most of the significant gains can be attributed to Sarepta which was up nearly 40 percent, to $144. I remember it was about two years ago this stock was below $10, and everyone had on the brink of disappearing. The turn around has been amazing.
Spark also broke out today, rising above $83.20. The breakout could trigger a rise to about $91.
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Micron Final Thoughts
Micron’s stock seems flat going into these results tomorrow night; I haven’t even been seeing the big options bets I am used to seeing in this stock. The chart has no upward momentum in it, the relative strength index is trending lower, and volume has been on the light side.
The company is going to have to report much better than expected results tomorrow, and I’m not sure if that is possible given that they just provided upward guidance a few weeks back. My guess, we see $54 before $61.50. You wanna hate me for it, that is fine. I’m just giving my opinion.
Starbucks
Starbucks reported tonight out of left field they are looking for a fiscal third quarter same-store comp of 1 percent. After last quarter results, I was convinced that all the growth in this story was utterly gone which was why I sold the stock. Today I’m glad I did. For them to be looking at a 1 percent comp. It likely means traffic is below zero, meaning it is declining, and ticket sales are around 2 percent, that is my guess. The China story is nice but is simply not growing fast enough to offset the losses in North America. I’m sorry. I guess I’m Mr. negativity tonight.
GE
Since we are dumping on companies tonight, we might as well throw in GE. I was afraid this day would come, and today it did, with GE is officially out of the Dow. Imagine how much higher the Dow would be if GE hadn’t been in the DJIA over the past year. There is nothing to like at this point in this stock, maybe in another quarter or two sentiments will turn, but that time is not now. Don’t try to be a hero, don’t got bottom fishing.
Dollar
The dollar broke out today, and that means a rise to 98 on the dollar index is likely on the way.
Oil
And there goes Oil, should I say it? Ok. Oil will see $61 before $70.
Yields
10-year yields closed below 2.9 percent today. Meanwhile, the 10-2 year spread is now at 35 bps. So the Fed still wants to raise two more times? Can you say inversion if they do?
That is it, folks! Night
-Mike
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.
#biotech #breakout #sarepta #ge #starbucks #micron