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Here We Go Again, Bring On The Apple iPhone Worries

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Here We Go Again, Bring On The Apple iPhone Worries

Michael Kramer and the clients of Mott Capital own shares of GOOGL and TSLA

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I talked yesterday about the importance of today’s trading action, and for the most part, the market’s decline on the day doesn’t come as a surprise. The Algo’s just weren’t ready to let the S&P 500 breakout, plus with the negative headlines out of Taiwan Semi, and the pressure it put on Apple and its suppliers, it was too much to overcome.

But the charts tell a tale of markets that retested support at 2,691 and for the most part that held, and the S&P 500 managed to close above it. The action in the market today, was nothing that terrible or anything to be too worried over.


The VIX was up just a touch to about 16, again, nothing alarming.

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Technology Stocks

The technology sector also tested support today, around $67.11, and held, and that is also a positive.


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So I guess I’m surprised by the markets reaction’s to Taiwan Semi noting soft smartphone demand. But is this new? Didn’t Broadcom tell us this back in March after reporting results, and February when they revised guidance, that they saw weakness in Wireless? Has it deteriorated that much in about four weeks? Anything is possible, but the fact that Apple iPhone demand is weak is surely not news. Apple reports on May 1, so you have a good week of the market going back and forth over this.

Don’t forget the same exact thing happened last quarter going into Apple’s reports, let’s see where this goes.

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Tesla had a nice uptick on a down day; all these emails mysteriously keep leaking out about Model 3 production rates. Coincidence? Doubtful. But it is undoubtedly worth nothing when a stock goes up on a weak trading day. Perhaps the buyers are returning.

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Alphabet is another stock that pieced together a good day of trading as well, with the stock nearing $1,100. The company reports on Monday after the close, and I would not be surprised to see if shares continue to rally going into the earnings print, Monday after the close of trading. The stock is among the fastest growing of the top 25 stock in the Select Sector SPDR Technology ETF, XLK, and it carries a one-year forward PE ratio of only 22 times 2019 earnings estimates of $48.40.

Alphabet is expected to deliver earnings and revenue growth of 15 to 16 percent in 2019 and 2020.

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But then there is Microsoft trading at 24.3 times 2019 earnings of $3.95 per share, while it is forecast to grow earnings and revenue by only 8.5 to 9 percent. By the way, how have investors not roped Microsoft into this whole social media, advertising, Facebook regulatory issue? Does Microsoft not own Bing? You know the search engine. They also own that small social media thing, you know, LinkedIn, the one that collects users professional and career data.

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General Electric

Tomorrow we get GE’s earnings, and from a market standpoint I doubt it matters. But the stock is running out of room to rise at this point, with a downtrend around 14.25 and resistance around 14.95. For now, the trend is still lower, and unless management comes out with something very positive and unexpected, the current downtrend likely remains in place.


That is it; I have a pounding headache.


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Michael Kramer and the clients of Mott Capital own shares of GOOGL and TSLA

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Tags: #stockmarket #sp500 #microsoft #alphabet $tesla $technology #apple #suppliers