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April 27, 2021
STOCKS – AMD, GOOGL, MSFT, TLT
MACRO – SPY
Mike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL
- RTM MIDDAY- RATES ARE READY TO HAVE A MASSIVE MOVE
- Facebook Earnings Preview- Need To Know Guide
- RTM MORNING NOTE- AMD MAY JUMP FOLLOWING RESULTS
- RTM MIDDAY – A LOT OF BORING
- AMD Earnings Preview- Need To Know Guide
- RTM: MORNING NOTE – PREPPING FOR TESLA
- Tesla Earnings Preview- Need To Know Guide
- The Week Ahead – Reversion To The Mean
- Live Session Tomorrow At 1 PM ET
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN GOOGL AND MSFT
It was a boring day for stocks, with the S&P 500 finishing flat at 4186. Obviously, the market has no place to go between all the earnings and the Fed meeting tomorrow. The Fed meeting is likely to be uneventful, from a policy announcement standpoint, but how markets react may be a different story.
Yields are getting ready to go, and by that, I mean higher. Every chart in Treasuries is nearly identical, all with bull flag patterns, suggesting higher yields are coming. This could be the break out that gets the 10-year finally to around 2%. (Premium Content – RTM MIDDAY- RATES ARE READY TO HAVE A MASSIVE MOVE)
iShares 20+ Year Treasury ETF (TLT)
It could also be the move that gets the TLT moving towards $130.
Again, higher rates should help compress earnings multiples and send the earnings yield in the S&P 500 higher. This will especially hurt growth stocks. It is also probably why we are starting to the IWM outperform the QQQ again and why that trend will only continue to strengthen. It doesn’t have to mean that the IWM rises and the QQQs fall. It could simply mean the IWM falls less than the Qs or vice versa. (Premium Content – The Week Ahead – Reversion To The Mean)
AMD (AMD)
AMD is rising following better than expected results and better guidance. I’m a little concerned about the gross margins, which again failed to rise. But the guidance for 2Q showed some margin improvement but was just a little ahead of guidance. Still, the stock is rising, above $88. I had seen a lot of call buying this morning that turned my view on the stock to bullish from bearish over the weekend. Anyway, there is a gap to fill around $90 that should offer its first level of resistance. (Premium content – RTM MORNING NOTE- AMD MAY JUMP FOLLOWING RESULTS)
Microsoft (MSFT)
Microsoft is falling some after-hours; the only thing wrong I could find wrong is that Azure grew by less than 50% on a constant currency basis, and that revenue didn’t beat by a wide margin. Unfortunately, when multiples are high, and companies just beat by a little bit isn’t good enough. There should be some solid support around $250. Longer-term not much really changes.
Alphabet (GOOGL)
Alphabet had a great quarter, too, especially their equity holdings. The company had a $4.8 billion gain on that equity portfolio; the traders are hard at work ;). Other income added $4.83 per share to their quarter. The results were still way better than expected regardless. Earnings came in at $26.29 per share versus an estimated $15.82, while revenue was $55.3 billion versus $51.7 billion. I’m not sure where the stock goes at this point; I have to work on that part.
-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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