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#STOCKS – $AMZN, $AAPL, $SHOP
#MACRO – $SPY
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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL AND SHOP
Stocks dropped today, as the S&P 500 finished down around 60 bps. The index just couldn’t find a meaningful direction most of the day, mainly trading lower as the dollar rose sharply following a wish-washy ECB press conference.
We will get the BOJ tonight, and I can’t imagine they will come off their current yield curve control policy. That likely means we will see further dollar strengthening in the following days. The yen has been stronger this week due to FX intervention by the ministry of finance. But nothing much has changed; as long as Japan doesn’t rush to intervene again and it can hold support around 146, the dollar is likely to strengthen.
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Also, tomorrow we will get the PCE report in the morning, which may help drive the dollar and yield higher. Yields did fall sharply today, but probably not as you think. The dovish rate hike from the ECB sent rates in Germany plunging, with the 2-Yr and 10-Yr dropping by 19 and 16 bps, respectively. This drop in European rates drove rates lower here. It is essential to realize this is not a signal from the bond market on the Fed, just global markets at work. The PCE report is likely to move yields tomorrow, and my belief is they will come in hotter than expected, and rates will continue to climb in the US.
S&P 500 (SPY)
At least currently, the chart of the S&P 500 futures continues to look bearish after the big run-up on air. For the moment, it appears that a Head And Shoulders pattern is breaking lower. I am still looking for a move back to 3,640 and 3,600.
Markets are trading lower tonight after Amazon gave disappointing guidance. The shares were trading sub $100 after hours. Right now there is technical support for Amazon around $94.50 to $95. If those levels break, then we are likely looking at a stock that trades around the pandemic lows.
Apple is trading higher after it reported better-than-expected results. The quarter looks like it was saved by the MAC, which delivered but then expected revenue. The company seemed to give even less guidance this time than usual. The only thing I got was that they would see 10 points of FX impacts and expect revenue growth to decelerate from the September quarter. Revenue in September grew 8%. So, I don’t know how the market gives them so much room, maybe because they deliver. Not complaining; I have owned the stock for years, just surprised. Support is at $140, so there is plenty of room here to play with at this point.
Shopify broke out today after it reported results, moving above the falling wedge. The RSI broke higher too. If the stock can push past $36, it probably has room to run to around $40. I own it, so I’d be happy to see it.
Charts used with the permission of Bloomberg Finance LP. 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. Past performance of an index is not an indication or guarantee of future results. It is not possible to invest directly in an index. Exposure to an asset class represented by an index may be available through investable instruments based on that index. 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.