October 3 – Stock mentions: AMD, NVDA, V, SHOP, ROKU
Michael Kramer and the clients of Mott Capital own V
MACRO
Stocks had a bounce-back day with the S&P 500 rising 80 bps finishing at 2,911. It was an impressive rally after a steep morning sell-off following the weaker than expected ISM services reading, which came in at 52.6 versus estimates of 55.5. A softer number sure, but a number that corresponds to a GDP growth rate of about 1.4%. So, yes, the economy continues to show signs of slowing growth, but still no recession.
So why did stocks rise, most likely because the market appears to be pricing in 2 more rate cuts this year. That’s right. The odds of an October rate cut jumped to 90% following today’s news. Meanwhile, the odds of an additional rate cut jumped to 53% in December.
Fed Fund Futures
Fed Fund futures are currently pricing in a rate of about 1.4% by the time January comes around.
It will set an exciting day tomorrow, with the BLS job report in the morning. Currently, forecasts are 145,000 jobs to have been created in September, with an unemployment rate of 3.7%. Wage growth is expected to be at 3.2%. Ideally, we want a number that comes in at or slightly below these estimates. I get into why the bad news is good news in a video segment today. Stocks May Be Oversold And Due To Rebound – You get the first two weeks to try it and guess what, if you hate it, you can cancel, no worries.
If that wasn’t enough for you, you get a Jay Powell speech at 2 PM.
S&P 500 (SPY)
Anyway, the S&P 500 rose above 2903, and I think that this at least sets up a move higher in the S&P 500 to a gap fill at roughly 2940.
STOCKS
Nvidia (NVDA)
Nvidia had a fascinating day rising above $180, after flirting with support for a few days at $171. Now the question, can it go higher? I think it can, and $198 may finally be on the way.
AMD (AMD)
AMD finally got to our $27.40 target today. Now, I think the stock is due for a move higher. I was getting nervous it would not get to my target because I have been watch lots of options buying the last few days. I talk about more in this free AMD article. Anyway, the stock can probably move back to $31.40. AMD’s Recent Sell-Off May Be At Its End
Visa (V)
Visa had a bounce-back today, and it could be on its way higher too. I had noted yesterday that I saw some call buying here, but this one is not a free article. Why Visa’s Stock May Rebound Sharply
Shopify (SHOP)
Shopify also had a solid day breaking resistance around $316, and I think this one is heading higher too. This a premium article, Shopify Breaks Out
Roku (ROKU)
Hey, even Roku went up. I guess we find out if the momentum can last when it gets to that downtrend around $113.
Have a great night.
-Mike
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