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Micron, Microsoft, Qualcomm Vote, Job Report – The Week Of March 5th
This coming week should be exciting, with ADP on Wednesday and BLS Job report on Friday morning. Has it been a month already? It feels like the other day the market was freaking out over “the hot wage” reading. Mind you the reading was a 2.9 percent rise in wages for January. It was 2.83 percent September, but nobody cared about the wage number back then.
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It is sad that wages grew at 2.9 percent in January and that was the highest reading since May of 2009.
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What Happened To Wage Growth
This next chart will demonstrate how bad it has been now for years. Can you believe there was a time when hourly wages were rising at 9 percent a year? Look at that, true we had inflation issues in the 1970’s. But look at the growth in wages in the 1990’s. Now, look at today.
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Shifting Workforce
The next chart shows us what has been happening to our workforce through the years. In 1970 Manufacturing jobs were the most prominent part of the labor force, with roughly 18 million workers, now it is about 12 million. Meanwhile, leisure and hospitality jobs have risen from approximately 6 million to nearly 16 million today. Retail trade in 1970 7.4 million, today 15.8 million.
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Shifting Wages
The jobs that pay the highest hourly wages Construction, Professional and Business services, while Retail and Hospitality pay the lowest. Durable goods and manufacturing are the third and fourth highest. Over the years, the economy has shifted from higher paying jobs, into lower paying jobs. It seems pretty clear, as to what has happened. 
Stocks
Obviously, this coming week will be critical to hear what the latest developments on the tariff situation and we should get more clarity this following week. The news around the tariff likely takes center stage, until Friday, when the only that might matter is Job report.
But we need to see the stock market continue where it left off on Friday. We are going to want to see a strong opening on Monday, and a solid follow through during the day.
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VIX
The vix is another important to gauge; we need to watch the vix spot vs. the future contracts. The chart below shows its nicely. Notice starting from the bottom with the purple line, the VIX spot is the cheapest, followed by the orange line (APRIL), Red (MAY), Green (JUNE), Purple (July), make sense? But notice how the market goes into backwardation at the start of February and where June become the cheapest, followed by July, May, April and then the Spot. Just keep an eye on this, it could be something to watch should the stock market start going off the rails. It tells us what the market is thinking regarding the future of volatility
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Micron
Micron could be on the verge of a massive breakout should be it able to rise above $50, and could see its shares rise to levels not seen in nearly two decades, back to $58.
Roku
Roku appears to be on the verge of a major breakdown, that could send shares back into upper 20’s.
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Microsoft
Microsoft, found support at the previous downtrend, but will it hold? It also failed at resistance at $93.25, Microsoft will be an important one to watch? Does it break out or break down?
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Broadcom
It is a big week for Broadcom, with Qualcomm’s shareholder vote on Tuesday. Will Broadcom get its nominees on to Qualcomm’s board?
The stock held support at $241, now where does it go? It will likely depend on the outcome of the Qualcomm board vote this pending week. Right now the options market is not looking for a deal to get between the two companies. The long straddle options strategy is looking for a rise or fall of only 11.7 percent, putting the stocks in a trading range of $57.5 to $72.5 by expiration on April 20. The open interest for the $75 calls is relatively small at approximately 40,500 contracts, a notional value of only $2.8 million. Does Broadcom succeed at buying Qualcomm? Probably not.
That is it. Good Luck this week.
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Tags: #sp500 #micron #microsoft #roku #qualcomm #broadcom #jobsÂ
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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.
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