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2/3/2022
STOCKS – AMZN,
MACRO – SPY, TIP
- LIVE Q&A SESSION FRIDAY 2/4/22 AT NOON ET
- RTM- Yields Surge As ECB May Now Be In Play For 2022
- RTM: PayPal Does Not Bode Well For Amazon Tonight
- RTM: From Oversold To Overbought In A Week
- RTM: Thematic Growth Portfolio 4Q Letter
- RTM: Real Yields Fall, Resulting In Market Rally
Stocks were hit hard today, with the NASDAQ Qs falling by more than 4% and the S&P 500 dropping by almost 2.5%. The markets are gaining some after-hours following Amazon’s result, but I think there is a lot of miscommunication there that is likely to get unwound as more investors dig past the headlines.
S&P 500 (SPY)
The S&P 500 fell to 4,480 today and back within the downtrend. Tomorrow is likely to be tricky with the Jobs numbers in the morning, which are likely to be confusing, and could provide a jolt to the stock market. Tomorrow and Monday are the best chances for that gap to fill; otherwise, it might be some time before that happens. The most significant risk here is a retest of the lows.
RATES (TIP)
Apart from the Facebook massacre, the ECB and rates drove part of the sell-off. It seems that 2022 is no longer a lock for no rate hikes from the ECB. So that sent yields soaring, and more importantly, real yields. The TIP ETF fell sharply today and looks like it is breaking free of that bear flag and heading lower to $124.30.
Amazon (AMZN)
Amazon fell around 8% today and then regained all those losses and is now up an additional 8% after hours, and back to approximately $3,200. The company missed on revenue and gave weaker than expected revenue guidance for the 1Q. Additionally, operating income guidance for the company missed estimates at the mid-point of the range. The company also noted that operating cash flow on a trailing twelve-month basis fell to $46.3 billion from $54.7 billion last quarter. Still, the company mentioned they would raise Prime membership’s costs, which was rumored the previous two days. How this stock is trading higher is beyond me. The only positive was the big EPS beat which was driven by an $11.8 billion gain in its Rivian investment, which is non-operating income. So outside of that, I would think this was pretty bad. Maybe expectations were for worse? But if these gains are all given back, don’t be surprised.
That’s all for tonight.
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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