June 19 – Stock Mentions: SPY, AAPL, NVDA, AMZN, TSLA, ROKU

Michael Kramer and the clients of Mott Capital own AAPL and TSLA

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Fed Hints At Rate Cut

Well as expected the Fed did nothing today but took a big step towards signaling as many as TWO rate cuts. The good news from this meeting is that the Fed may be leaning on a weak inflation outlook for the future cuts and not slowing GDP growth. Had a slower economy been the reason the equity market may have taken the view differently.

In the chart below, we can see what that GDP outlook looks stable and unchanged.

But you can see the drop in PCE Inflation for this year and next.  Those are pretty big reductions.

As a result, the 10-year yield fell to its recent lows of around 2%.

The dollar weakened too.

S&P 500 (SPY)

Equities price increased on the S&P 500. To this point, everything seemed to work out as it should.

Don’t Get Complacent

It leaves the S&P 500 near its all-time, and it would seem as if the market is locked and loaded on hitting those all-time highs. Could something derail the rally? As we have learned in previous weeks, all it takes is one tweet. Does the risk for a surprise tweet rise as we approach all-time highs? Yes, I believe it does. Remember the last time we reached all-time highs in May? Trump pulled the tariff car on China.  Is something else looming? Well, the President already said he isn’t happy with the Euro, and it has an unfair advantage, wink-wink, nod-nod! Of course, I have no clue.

That being said…

I think the S&P 500 continues its advance to a new record high. There is confirmation of G20 China/US meeting; the Fed has confirmed it is on an easing path, earning seasons doesn’t start for a few weeks, and even the economic calendar is quiet. It could be the perfect setup.  At least for two weeks or so.

Apple (AAPL)

AAPL is breaking out; it is trading right at resistance around $198. I had noted this yesterday in a premium article. Apple Is Breaking Out, May Rise Further – a real creative title, I know.

Nvidia (NVDA)

NVDA rose above resistance at $149 and may be on its way to $160.

Tesla (TSLA)

Tesla has been consolidating nicely at $225 and is at another one of those do or die moments. There is a bullish rising triangle pattern that has formed, suggesting that the stock rises. However, there is a massive downtrend standing in the way at $237. That downtrend has been a severe source of resistance since December.

I think TSLA does break out in a significant way, this time around. The RSI has already broken its downtrend that also started in December, and I think it foretells of a big breakout for Tesla and push to $250 and potentially higher.

Amazon (AMZN)

AMZN is getting ready to break out and rise to $1966.

Roku (ROKU)

Roku continues to grind higher, but I hope you can see the pattern that is forming in the chart. To me, it appears to be a rising wedge, a bearish reversal. It is taking longer to happen than I thought, but it seems ROKU is heading for a pullback.

-Mike

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