Stocks and Yields Rise As Inflation Shows It Head

1/5/21

Stocks – GE, AAPL, XOM

Macro – SPY, PPLT, OIL

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Stocks had a decent day erasing some of yesterday’s losses and rising by around 70 bps on the S&P 500. I don’t think much changed as a result of today’s price action versus yesterday, perhaps a recoil reaction. It is too early to know if the trend has really changed, but again, considering where the S&P 500 is currently, a change in trend from higher to lower would not surprise.

Yields

Bond yield did move higher after the ISM manufacturing report came in better than expected, and prices paid were high. That sent the 10-year to the upper end of the range at 96 bps. Again, I believe that rates are going higher from here, potentially to around 1.3% over the next few months.

This poses the biggest risk to the equity market – (Premium Subscriber Content – T.W.A. – Overvalued, Overbought, Diverging Stock Market)

Platinum (PPLT)

Platinum had a solid day rising by over 4%. On my 10 predictions for 2021, I noted that I thought platinum would rise to around $1520.

Oil had a strong day rising to around $50, a gain of over 5%. But it faces an incredibly strong level of resistance around $50.50.

Exxon (XOM)

Exxon had a powerful day but was unable to get through resistance at $44.50. That is the high hurdle for now.

GE (GE)

GE bounced back nicely today, and the chart still looks bullish based on the flag pattern. I still tend to think it can get up to $11.40.

Apple (AAPL)

Apple bounced back some today after falling to around $127 yesterday. I still believe this stock is likely to fall to around $124.

That’s all

-Mike

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