Stocks Ignore The Fed’s Gloomy Outlook – For Now

This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.

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July 29, 2020

Stocks  – MSFT, MU, GE

Macro – SPY, QQQ

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MICHAEL KRAMER AND THE CLIENTS OF MOTT OWN MSFT

Stocks rose today, despite falling yields and a weaker dollar, and a less than stellar outlook from the Fed. The equity market seemingly continues to ignore many of the concerns, but that’s ok, we are used to it. Nothing matters,  I know, until it does.

Tomorrow we get initial claims, the second-quarter GDP. It should be interesting.

Chairman Powell confirmed much of what we knew already, which was that economic recovery is already slowing. Of course, there is no way to know if this is temporary or something more. The bond market didn’t like the message with yields dropping back to 57 bps, and the dollar index dropping to 93.25.  The message bonds, and the dollar is not calling for sunshine and roses. The move higher in gold and silver is not about inflation. Powell even said today, which I have said multiple times, is that the greater risk is deflation. 

I continue to track a lot of bearish betting in the SPY and QQQ. The activity in the Qs has started to slow some, while the SPY has been picking up. Perhaps, I will be wrong, but the message I am getting from the market has been somewhat concerning. I have been wrong plenty of times and seems like over the past four months more than I have been right. But I have been doing this a long time, and sometimes that happens.  (Mike’s premium content – It All About The Fed, And Bets Are For Less Liquidity)

Dollar

The dollar is sitting on a considerable level right now. 

NASDAQ 100 

You don’t want to see the NASDAQ 100 NDX cross 10,400, that is for sure. 

Microsoft (MSFT)

Microsoft just continues to hug the uptrend for now. 

Micron (MU)

I saw more bearish betting today in Micron, which setups the potential for the stock to fall to $45.50.  (Mike’s RTM premium content – Bets Pile Up Micron Falls As Much As 10%)

GE (GE)

GE managed to finish the day just above support, and so it lives to fight another day, and the reverse head and shoulders pattern remains. 

Anyway, that’s all

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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