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September 30, 2020
STOCKS – MU, WDC, XOM, DIS
Macro – SPY,
Mike’s Reading The Markets (RTM) Premium Content – NOW WITH A 2 WEEK FREE TRIAL
- More Negative Signs For Micron Ahead Of Results
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- The Bears Need To Take Back Control
- Don’t Fight The ECB – Morning
- 7 Themes For The Week Of September 28
- RTM Live Webcast 9.24.20 – Replay
- Risk Aversion Rising – Midday
- More Derisking Taking Place
S&P 500 (SPY)
Stocks are down a little, coming back as the morning has pushed forward. The S&P 500 SPY is indicated down 20 bps. It had been worse with the futures falling nearly 2% from their peak immediately following the completion of the Presidental debate.
Dollar
The sell-off was simultaneous with a dollar index that shot up to 94.20. With the S&P 500 futures recovering as the dollar index has backed off.
Typically, one can quickly tell who won a debate based on the market’s reaction. In 2016, it was the Mexican peso. This year, I’m not sure what that is, and I’m not sure who won the debate from the market’s reaction. It may be the overall S&P 500 that is the yardstick, with Biden wanting to push corporate tax rates back to 28%. If that is the case, if Biden were to win, then S&P 500 earnings estimates will need to fall dramatically, probably by that 20% or so that we got following the corporate tax cut in 2017.
Micron (MU)
Micron is falling today and what I expected following the results last night, and what I thought was a gloomy outlook. I still think this one is heading to $45.50.
Western Digital (WDC)
Meanwhile, Western Digital is falling as well in sympathy with Micron and seems likely to drop to around $36.50.
Disney (DIS)
Disney is falling today after permanently letting go of 28,000 furloughed employees. I’m surprised this stock has held up even this well. No company has been hurt by COVID more, in my opinion. The stock is sitting on an uptrend, and a break of that uptrend is likely to send it back to $114 and probably lower. Honestly, I don’t understand why the stock isn’t at lower levels already; it is beyond me.
Exxon (XOM)
Exxon continues to slide, and it is looking more and more likely that Exxon is heading back to those March lows.
Good luck today!
-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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