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August 2, 2021
STOCKS – AMZN, F, BAC
MACRO – SPY, IEF, RSP
Mike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL
- RTM Video – Exploring ISRG And SYK
- RTM- ISM Report Is Pushing Yields And Spreads Lower
- RTM Tactical Update – The Equity Market Appears To Be On A Path Similar To 2018
- RTM- Earnings Trends Have Not Improved Despite Big Beats
- RTM -Amazon May Be An On Going Concern
- RTM – Getting Ready For Amazon
- RTM – Fed: Dovish Now, More Hawkish Later
- RTM – Earnings And China Create Market Risks
Stocks finished the day lower, with the S&P 500 falling by roughly 20 basis points. The index started higher, rising all the way to 4,420 and finishing lower around 4,385, an intraday decline of about 85 basis points. The index managed to fill the gap from Friday’s drop at the open and reversed lower once the gap was filled. The weakness came following the ISM manufacturing report, which was worse than expected and suggests that growth may be slowing faster than the consensus viewpoint. This sent yields and spread sharply lower. (Member content with the first two weeks free to try – RTM- ISM Report Is Pushing Yields And Spreads Lower)
We still have a lower sloping RSI, MACD, and advance/decline line. Additionally, the index appears to want to move lower towards that trend line around 4,330.
Rates
Yields moved sharply lower today following the weaker than expected ISM reading. The yield curve continues to flatten, and while many speculate on the reason, the only that matters is that the flatter curve is telling bonds are worried about future growth rates. Based on the 10-year, it would seem that rates still have further to fall and have not bottomed yet. We could see 1.12% relatively soon.
S&P 500 EW (RSP)
This isn’t good for the reflation trade, and today the RSP started sharply higher up by nearly 1% but managed to finish the day down 15 bps. The RSP is starting to look like a failed breakout attempt, but it is still too early to say for sure.
Bank of America (BAC)
Bank of America looks weak, and it should, given the falling rate and contracting spread environment. However, $37 looks like one place it could stop falling.
Ford (F)
Ford has given back all of its post-earnings gains, with a clear downtrend and support somewhere around $12.75.
Amazon (AMZN)
Amazon had a fairly weak response today to Friday’s big sell-off, with the stock finishing the day flat. It probably doesn’t speak very well of what is to come. Given the weaker growth outlook, it seems lower prices are likely to come, with the next level of support at 3,160.
Have a good day
Mike
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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