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January 3, 2020
Stocks: TSLA, FCX, WDC
Macro: SPY, XLE, Oil, ISM Report, GDPNOW
Well, that wasn’t so bad? The way it was being portrayed at 8:30 AM, you would have thought the market would have been down a lot. “The Dow futures are pointing to a 300 pointing decline at the opening.” So you mean about 1%? My favorite, “Oil prices are soaring today.” You mean Oil went up 3%, big deal.
But even better, the energy sector couldn’t catch a bid; it was down on the day. Yeah, the XLE was down. Wow. Do you know what that should tell you? Investors hate the energy sector so much, even what should have been viewed as a bullish news event couldn’t get the group higher. That isn’t very good.
S&P 500 (SPY)
The S&P 500 fell a stunning 70 basis points today, that’s less than 1%. 😉 As I have been saying, the S&P 500 has been in an overbought condition for some time, and at this point, any negative headline will be reason enough for some investors to exit. Premium content – Stock Pointing To Lower Open- Morning Commentary
Preferably I would like to see the S&P 500 fall to around 3,150. But that’s me.
ISM
Let move on to the ISM report, which was weaker than expected, at 47.2, lower than estimates of 49.1, “the worst reading since 2009”. Let’s pull in the drama again. And your point is? The ISM report still suggests a fourth quarter GDP growth rate of 1.3%. Meanwhile, the Atlanta Fed GDPNow is pointing to a fourth quarter growth rate of 2.3%. Is 2.3% a remarkable growth rate? No. I’d like to a three handle. But it in no way suggests the economy is anything close to the scenario of 2008 or 2009.
Just too much drama today, honestly.
Tesla (TSLA)
Tesla had a good day, with the stock “SOARING” to a new all-time high at $442. The company reported better than expected fourth quarter deliveries. I’m still confused; I remember reading in May about how demand for the cars was plunging and how the absence of the Federal Tax credit would kill the company. No? Oh well, I guess that didn’t work out so well for the bears. Could the stock go to $475, maybe?
The one part of my writing I haven’t mastered yet, is how to insert witty sarcasm? Are you suppose to use italics? If anyone knows to feel free to email me.
Hey, I have come a long way. For those of you that have read me long enough, you probably remember when nearly everything I wrote made no sense. Now, only half of what I write doesn’t make any sense ;P
Freeport (FCX)
Freeport didn’t have a good day, but look the stock did what it had to do; it held support at $12.70. For now, that’s good enough; it means it gets to fight another day.
Western Digital (WDC)
I mentioned today in a free article that Western Digital is closing in a big break out that could send the stock higher towards $76. Also, the bullish option bets are another reason.
Anyway, that’s enough for a Friday. Even with the market closed on Wednesday, this felt like a long week. Well, today felt like two days. Maybe it’s because I have been getting up at 4:30 AM over the last few days, which I can’t figure out why. Anyway, back tomorrow.
-Mike
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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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