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July 1, 2021
STOCKS – MU
MACRO – SPY, DJT
Mike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL
- RTM- Market Poised For Sharp Move Lower
- RTM Short-Term Bullish Trade Idea- GE (GE)
- RTM Video- As Growth Rates Slow, Earnings Trends Will Come Into Focus
- RTM Morning – Slow Start To Busy Week
- RTM Tactical Update- Earnings Growth Will Decelerate In The 2H’21
- RTM Morning Note- S&P 500 Is Now Range-Bound
- RTM Short-Term Bullish Trade Idea- CISCO (CSCO)
- RTM – Expecting A Pullback
Stocks finished the day mixed with the S&P 500 grinding higher and the NASDAQ 100 finishing flat. It was another one of those extraordinary rotate-around days. But it was also the first day of the quarter and the month, which means it was an inflow day. I’m not sure how much of that had to do with today’s rally or not, but tomorrow will be a fairly important day with the BLS jobs report.
Today’s ISM report suggests that the payroll report may not be as strong as some think; given the employment, the index fell into contraction in June. But the BLS job report has been nearly impossible to get right since the pandemic began, so it’s anyone’s guess how the results will turn out. Estimates are for 700,000 jobs created in June and an unemployment rate of 5.7%.
The ISM report also showed that prices paid reached their highest levels in around 40 years. Yet, yields hardly even reacted, with the 10-year holding around 1.46%. I still believe that inflation will be transitory as the dollar pushes higher, pressuring commodity prices lower and likely slowing global growth. It is why the 10-year rates have been stubbornly moving lower and are likely to continue to move lower.
Meanwhile, the dollar continues to push higher and is getting very close to a big resistance level at 93.19. If that level falls, it could have a rather big move up from here, potentially to around 95.
Despite that, the reflation trade showed some life today, but I can’t imagine it will last. Because lower interest rates and a stronger dollar are exactly the opposite of what is good for the reflation trade, in fact, it should put more downward pressure on these sectors.
Micron fell sharply today, nearly 6%, after reporting results yesterday. They didn’t look bad, but clearly, the expectations were big given the stock move higher. There is no surprise the stock fell; now it would be even better if it fell more, because after all, I was looking for lower prices, and I still am; nothing changes in my book. But it is good to know I can still read the options market.
Anyway, there is a good chance you will not hear from me for the next 2-week or so. I am taking some time off next week and getting surgery for my severely herniated disc the following week. Unfortunately, everything I have tried isn’t resolving the issues, and in fact, the latest MRI shows it has gotten worse. I may be able to slip something over the weekend of July 12 or Monday, July 13. If not, know that I appreciate everyone reading through the years, and I will be back.
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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