September 30, 2020
STOCKS – MU, WDC, XOM, DIS
Macro – SPY,
- More Negative Signs For Micron Ahead Of Results
- Stocks Still Held Below Critical Resistance
- 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.
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 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 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 continues to slide, and it is looking more and more likely that Exxon is heading back to those March lows.
Good luck today!
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