Stocks Pause Despite Strong Jobs Data

11.5.20

Stocks – NVDA, GE, XOM

Macro – SPY, VIX

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S&P 500 (SPY)

Anyway, the S&P 500 was flat today, despite solid jobs data. Additionally, the unemployment rate fell, and when I looked at the data, I was expecting to see a big move in the unemployed column going to the, not in the labor force column. I was pleasantly surprised to see that number of employed workers rose dramatically, and the unemployment rate falling was real.

The futures were down about 1% before the day but managed to move higher following the jobs data. Still, the index was stuck below the trend line all day and still suggests a triangle pattern forming in the index. If that is the case, we should continue to see back-and-forth trading over the next few weeks, essentially trading sideways.

Dollar

The dollar fell again. I really can’t think of a good reason for it to fall. I read somewhere it is because of weaker growth going forward. But then yields should be falling much faster, and they are not. It could just be foreign investors selling dollars due to the uncertainty around the election.

Gold (GLD)

Gold has been rising too, which could result from the dollar falling or a move for safety. But it appears the metal is breaking out, and as long as the dollar stays weak and continues to fall, it is likely heading higher from here.

AMD (AMD)

AMD had a good week; I doubt it last. There is no reason for it last. The company will be issuing billions of dollars worth of stock to buy Xilinx, which will be dilutive to existing shareholders. Maybe the deal will create “value” and be accreditive to earnings. But it doesn’t mean the market will continue to give it lofty that earnings multiple. Good Luck.

AT&T (T)

AT&T keeps going lower and lower. The stock is kind of at that place of no return. If it drops below $26.10, it would have quite a distance to fall, basically erasing decades worth of value creation. It seems like every time Time Warner does a deal; it doesn’t work out very well. Remember AOL? Probably not.

Roku (ROKU)

Yeah, Roku has a market cap of $30 billion.

-Mike

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