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July 26, 2021
STOCKS – AAPL, MSFT, AMD
MACRO – SPY
Mike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL
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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN MSFT, AAPL
Stocks fell today, for whatever reason. Maybe it was China; maybe it was the news about masks or the combination of both. It could have even been some last-minute jitters over the Fed. I’m not sure what the Fed will say tomorrow; I expect the Fed to announce the policy change on tapering at Jackson Hole and the first tapper in September or November. Maybe Powell says that they have begun planning the process of tapering asset purchases or thinking about how they want to go about tapering. Whatever the case, it matters not, the Fed will start to taper at some point over the next 6 months; the only question is when it starts and how much. To this point, the equity market has brushed off everything the Fed has said, which is surprising because the bond and currency markets have not. We will see.
S&P 500 (SPY)
The S&P 500 fell by just 50 bps, which was enough at one point during the day to give back Friday’s gains and fill the gap. The good news is that there is now a gap up at 4,420 that will need to be filled at some point, if not tomorrow morning ahead of the Fed.
The daily chart now confirms three downtrends in the S&P 500. The RSI, MACD, and the Advance/Decline. I can’t recall the last time that has happened; then again, I may not have been paying attention either. Regardless, beneath the surface, things are not healthy.
Earnings
That leaves us with the mega-cap names, which have done all the heavy lifting the last few weeks. There are only two left that still need to report results, Amazon and Facebook. Based on the data I see in the options markets regarding Amazon’s I think the stock is likely to drop following results, but we can save that for another day; things can change.
Apple (AAPL)
Apple reported blowout results, beating everything everywhere. But as of right now, they haven’t given any guidance, and the market hates when Apple does not give guidance. No soup for you! That leaves the stock sitting on support at $145 after hours, and if that breaks, which I think it will, the stock will probably be heading lower, below $140. 
Microsoft (MSFT)
Microsoft reported great numbers too, and while Azure grew by 51% in the quarter, that wasn’t good enough; why? Because in constant currency, it grew by 45%, yep. Anyway, it’s trading below support at $279, with the next level to watch for coming around $271.
AMD (AMD)
AMD is trading flat after it reported blowout results too. Unfortunately, it may not be good enough because the revenue of $3.85 billion, although beating the mean, was basically in line with the street-high estimates of $3.828 billion. Additionally, the guidance of $4.1 billion, which was better than the consensus, was in line with a street high estimate of $4.1 billion. So these results, although better than expected, may not be good enough. It is probably why the stock is struggling to push through $94 in the after-hours, watch for $87 though.
Anyway, that’s all for today.
Mike
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.
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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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