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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