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June 4, 2020
Stocks – ACAD, PYPL, RH, WORK, SQ
Macro – SPY
MIKE’S READING THE MARKET PREMIUM CONTENT $35/MONTH OR $300/YR–
- So Far Trends Holding For The Short-Term
- The First Hole In The Bull Case?
- Tech Most Overvalued To Small Caps, Since, Well, 2000 – Midday
- Betting Micron Falls After Results
- Stocks Set To Rise, But Is The End Near? – Morning
- The Long-Term Growth Outlook For Stocks May Take A Huge Hit
- DEALERS HOLDING KEY LEVELS
- 3,100 Or Bust Is Closing In
- Drifting Higher Midday 6.1.20
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN ACAD, V, MA
Stocks had a back and forth day, but nothing that endangers the latest run higher in equity prices. Today’s jobs data was weak, with another 1.8 million filings for unemployment. More concerning was the uptick was in continuing claims to around about 21.5 million workers form 20.8 million workers. One week does not make a trend, but we most certainly do not want to see this tick higher again next week. That would not be a good sign for anyone, especially as nearly all states are returning to some normalcy. Too see the number rise again, or even remained unchanged would be concerning.
For now, we should only focus on the data tomorrow, which will be the Job report. Analysts are estimating 7.7 million more jobs lost in May, and the unemployment rate of 19.8%. The ADP results gave everyone some hope that maybe fewer jobs will be lost. I’m not sure, to be honest. I still happen to think there was something “off” with ADP’s model. Additionally, we have seen these two numbers give every different reading in the past. So we should not assume that ADP’s report will match the BLS report tomorrow.
In the meantime, the Atlanta Fed’s GDPNow is tracking a second-quarter contraction of 53.8%, down from 52.8% on June 1.
S&P 500 (SPY)
The S&P 500 finished the day around 3,112, which was down about 35 basis points. At this point, nothing has changed, but support at 3,080 is important, a crack of that level sending the index lower to 3,020.
Slack (WORK)
Slack fell sharply after hours despite posting better than expected results. The company pulled 2021 billings guidance due to the coronavirus. Investors did not seem to like that. The stock is likely to find some decent support around $30.
Restoration Hardware (RH)
Oddly, Restoration Hardware reported mixed results and pulled its guidance, and nobody seems to care. What can I say, that is just how it goes it some times. If it does fall tomorrow, $220 would be an excellent first stop.
Acadia (ACAD)
Acadia has been drifting lower lately, and now it needs to hold on to support here at $45.80. The RSI is trending lower, so it probably has some further to fall, perhaps to $43.30.
PayPal (PYPL)
I guess what I don’t understand entirely, is why PayPal is trading well above its all-time high, and yet Visa (V) and Mastercard (MA) are not even close. I find it interesting. If people transaction on PayPal, unless they keep money in the account, do they not need to use their Visa or Mastercard to transact? Strange? The RSI for PayPal is now clearly trending lower, and there is still a giant gap to fill at $125. We are waiting…
Square (SQ)
I often wonder the same thing about Square for many days too. Maybe I’m jealous. Anyway, Square failed at resistance, and its RSI is also now moving lower. Perhaps it gets back to $83.
That’s all
-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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