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Stocks Fall As Turkey Trumps Tesla With Nothing Else To Talk About
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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF NFLX, GOOGL, TSLA
I’ll admit, I am no expert when it comes what is going on in Turkey, and I’m struggling to assess just how much damage our markets suffer from such events. But, what I do know, money flows around the world are shifting. Today there was a flight to safety into US dollars and our Treasury bonds and does have ramifications on stocks.
The flight into US assets, was because the Turkish lira weakened tremendously against the dollar. The chart below is the inverse, so the rising currency signals weakening.
Dollar Break Out
Given today’s events, I think it is reasonably safe to say the dollar index broke out a big way, rising over 96. It should be interesting to see what happens over the next couple of month as the dollar continues to strength to around 100 on the index. Multi-national such as McDonald’s and Nike could see added pressure on revenue. Additionally, it is likely to wreak havoc on commodities and the miners.
Falling Yields
The 10-year fell to 2.85 percent and is sitting on the cusp of what could be a move lower to about 2.6 percent. Yeah, really. I have only been telling you for how many weeks rates are going lower on the 10-year, not higher.
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Stocks
The S&P 500 fell about 70 bps today closing at 2,833, and I don’t see that as a big deal. We have seen far worse during periods of heightened geopolitical concerns. The trend for now still remains higher, and to this point 2,800 has held as solid support.
Banks
The banks got hit the hardest down by over one percent the BKX but found a nice bounce at resistance around 108.5. Additionally, falling rates flatten the yield curve, and that is bad for banks as well. Double negative today for them.
Citigroup
Citigroup fell by over 2 percent, and that makes sense to some degree. Citigroup has a pretty big international footprint. For now, the chart holds, but I’m not sure what happens Monday, not enough clarity for me to judge.
Amazon
Believe it or not, even Amazon went today. Amazing. The chart is bullish though.
Micron
The hits keep coming for the chip stock, first the Morgan Stanely downgrade, and today the Microchip results. Ugh. All of a sudden my brilliant call for Micron breaking out doesn’t look so brilliant. Talk about terrible timing on my part. If I had just waited a day, I could have avoided the embarrassment. But, I may still prove right. Time will tell.
Tesla
Tesla has been holding $350 nicely. Next week we likely start getting some more detail on the secured funding from the infamous tweet.
Roku
Have you seen Roku? I don’t get that stock. I don’t. The numbers didn’t look super to me. Whatever. Sometimes it just easier to go with the flow than fight it. Go Roku! You are the second coming of Facebook, Amazon, Netflix, and Google combined into one stock! Yay!
Anything else we can talk about at 10 PM on a Friday night in the middle of August?
Oh here is a great question for everyone. Do you feel like Netflix is addicting, finding it hard to break away from the TV in the middle of a series, even after the episode ends.
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Night!
-Mike
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Here are some of the recent videos:
Inflation Runs Rampant Only In Fantasyland And That Is Good For Stocks
Tesla May Be Going Higher Regardless Of The Bid
Why The S&P 500 May Rise To 3,500
Netflix Is Not Broken, Plus S&P May Rise To 3,000 Sooner Than You Think
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#SP500 #AMAZON #inflation #bonds #dollar #lira #oil #banks