This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
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August 14 – Stock mentions, SLV, SPY, AMD, CSCO, BAC, M, UBER
Michael Kramer and the clients of Mott Capital own CSCO
- S&P 500 Futures -42
- US 10-Year 1.60%
- VIX 19.24
- Oil $55.96
- US Dollar Index 97.83
- Japan Nikkei +0.98%
- Shanghai +0.42%
- HSI +0.08%
- KOSPI +0.65%
- FTSE -1.07%
- DAX -1.55%
The Yield Curve On August 14
Guys, the yield curve has been working towards inversion for how long? Should anyone be surprised that the yield curve is inverting considering that Fed has,, an effective Funds rate of around 2.1% and the German ten-year Bunds are at -0.63%. Market force and a stubborn Fed are triggering the inverted yield curve.
Anyway, I will repeat it. It isn’t one-day of inversion that determines the odds of a recession. It is about the Depth and Duration of the inversion. Let me know about 10-months from now where we are.
Don’t forget Jackson Hole is next week! Will be a whatever it takes moment?
Anyway, maybe the bank’s stocks can rally like they did yesterday, because that made sense. We can get to that in a few lines.
First, the S&P 500 futures are dropping today, I guess on the yield curve? Or perhaps it is following the European markets lower. Maybe it was the weaker than expected industrial production in China. Regardless, it playing out how I feared it might last night.
S&P 500 (SPY)
The S&P 500 e-mini futures on August 14 are hovering around support 2,890. Hopefully we can manage to hold around this level or risk declining further to around 2875 on the futures.
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For the S&P 500 that translates to support in the 2890 to 2900 region, followed by a drop to around 2872. Basically putting us back to where we were on Monday.
If history is a guide, we probably gap lower to around 2890 and use the rest of the day to work our way higher to fill the gap. In reality, the spread on the 2-year and 10 years falling to 0 from 0.01% yesterday isn’t much a game-changer is it?
Bank of America (BAC)
Anyway, the banks are not looking good on August 14 as they shouldn’t look good. Bank of America is falling this morning by over 3% and is now at risk of taking its June low around $26.50. Next stop is probably $25.75. I have been talking about this since last week. Big Bets Bank Of America’s Stock Plunges
Macy’s reported some pretty horrendous earnings today. Lowering guidance. Not good. I remember about a year ago I got an email from a “hedge fund manager,” notice the quotes, that was not happy with a negative article I wrote on Macy’s. He called me a fool, for not realizing the amount of free cash flow Macy’s generated and how the stock up nearly 100% spoke of a turnaround story. I told him it was merely a dead cat bounce. I guess I was right. The lesson, because you are “hedge fund manager” does not mean you are smart.
Anyway, Macy’s is probably heading to $15.
AMD is testing support today at $31.40 as I thought it might. A break below these levels sends us to $29.40.
Cisco reports tonight. I’m not sure why the stock has been so weak? CSCO told us last quarter they had already taken care of tariff concerns. I guess we will find out. Maybe I’m missing something. Support comes around $49.
Silver ETF (SLV)
Well, the only thing green on my screen is the SLV. I’m not usually a talker of silver, but again I have seen lots of calling buying here in recent days. Betting That Silver Continues To Rise $16.50 is the level to watch before a move higher to $17.25.
Have a great one, and have some fun today. My advice turn it off and do something that puts a smile on your face.
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