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May 14 – Stocks Mentioned Amazon, Netflix, Tesla, Boeing, Square
Michael Kramer and the clients of Mott Capital own Netflix, Amazon
The stock market rebounded some on May 14 rising by about 0.8% on the S&P 500. It had been up by over 1% throughout most the day but gave back some by days end. The catalyst centered around President Trump dangling some optimism around the trade war. In my opinion the less focus there is on the topic the better, out of sight out of mind. It has been my experience in the past the market has a very short-term memory on events, and the sooner it can be distracted by other topics, the better off we are.
Trade War
I continue to believe there will be a small impact on the US economy and the global economy due to these tariffs or a potential trade war. Frankly, the US doesn’t export much to China. As for the poor consumer in the US that everyone thinks will foot the bill, don’t worry China is already taking care of that part.
One needs to look no further than the rapid devaluation of the Chinese yuan to the US dollar. From May 3 to May 14 the yuan has dropped by over 2% against the dollar. It is almost as if China knew this was coming because the yuan started to devalue in the middle of April. Since the middle of April, the yuan has fallen by around 3%. If you don’t think they are playing games with the currency, I think you may be mistaken. Notice how the yuan started to devalue in April of 2018, right around the same time the tariffs began to go into effect. It continued to depreciate right through December 3, which was around the time of the G20 summit, to the tune of 11%. That was when it began to strengthen again, well until just the last few days and weeks.
Please remember that China does not have a free-floating currency. They set a mid-point price every day, and that mid-point has a 2% band for the currency to trade up or down. This is not the Euro, GBP, or the Dollar. (Premium Content: How China May Battle The Tariffs)
Cheaper currency, cheap goods, nothing to worry about. Of course, there is some sarcasm there.
I thought I should note that the Euro has also declined by about 10% since April 2018. However, you can see it has happened in a far more orderly manner, which has the marks of a market. It isn’t as if it has suddenly started to weaken. Anyway, that is my point of view, agree or disagree.Â
Stocks for May 14
S&P 500 (SPY)
The S&P 500 had some mild success today rising above resistance at 2,836 and managed to close right on that level. Not the best of signs, preferably I would have liked to see the S&P 500 close at the highs of the day, doesn’t give me a great feeling about tomorrow.
Amazon (AMZN)
Netflix didn’t have the best of days, nor did Facebook or Alphabet, despite the strong market showing. However Amazon rose by about 1% on the day, but looks can be deceiving because it too failed to rally past a resistance level at $1,850. Which is concerning, because this group was so weak today.
Netflix (NFLX)
Netflix is clinging for life at $342, and this level needs to hold for the stock. For now, it looks like $405 is off the table. I got this one wrong.
Boeing (BA)
Boeing continues to look horrible, and I don’t think the outlook is improving. A downtrend has formed in the stock, and the long-term chart shows how the uptrend is in danger of being broken, and I’m not sure what happens next? $325, $297? Maybe more.
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Charts used with the permission of Bloomberg Finance L.P. 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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Charts used with the permission of Bloomberg Finance L.P. 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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Charts used with the permission of Bloomberg Finance L.P. 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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Here is one more chart to look at and right or wrong; one might say that Boeing is still kind of expensive when compared to itself historically. Where Boeing belongs in this chart as of right now, I’m not sure. You can decide.
Tesla (TSLA)
I don’t know what to say about Tesla anymore. Maybe I have become blinded my hopes for the stock to rise. It just can’t get out of its own way. It is in a spot where it needs to find a bounce or risk falling to $190.
Square (SQ)
Square fell below support yesterday at $65.50 and tested support at $62. I do not like the way this looks one bit. I worry it falls back to $56. (Premium content: Square Is Now Breaking Down)
Just think we get to do this all over again tomorrow. Night!
-Mike
Mott Capital Management, LLCÂ 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. may 14Â Amazon
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Charts used with the permission of Bloomberg Finance L.P. 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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