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June 25, 2020
STOCKS – NKE, WFC, CSCO
MACRO – SPY, XLF
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Financials (XLF)
Stocks advanced in a late-day rally, I think, on hopes of better than expected stress test out of the banks. Right around 3 PM, the XLF caught a bid, helping to add on to a solid showing. But that may change tomorrow because all of the banks are trading down tonight after the Fed said no to second-quarter dividend hikes, and no to third quarter share repurchases. It also doesn’t help that the XLF failed at resistance at $23.60.
S&P 500 (SPY)
The E-minis traded right below resistance all-day at 3,050, and that bid at days end pushed it just high enough to test resistance at 3080 and for it fail on the first attempt.
The S&P 500 ETF SPY’s also managed to fail right at the downtrend we have been tracking since June 10. There is nothing conclusive I am walking away with from today’s trading, except that trends we have been watching since June 10 are still at play, and “seasonal headwinds” are also still a factor. So at this point, there is nothing from a technical standpoint worth getting too bullish over.
Moving to a few monetary measures, the creation of MZM, or the total money supply, has been flattening out in recent weeks.
Also, the Fed’s balance sheet declined due to some repo and swap line “stuff.” Still, if you are a believer that the Fed and its liquidity creation are fueling the rally, these two indicators do not support a market climbing higher.
Nike (NKE)
Anyway, Nike missed earnings and revenue estimates by a mile. I guess that is what happens when there is no guidance. The company’s revenue was $6.31 billion versus estimates of $7.25 billion. Meanwhile, the company reported a loss of $0.51 per share versus estimates of $0.04 per share. Anyway, the stock is down somewhat, not much, holding on to support at $97. That is a significant level that has to hold to avoid a drop back to $88.
Wells Fargo (WFC)
Wells Fargo traded higher today and found itself right back at support around $26, after the stress test news. Again it is a significant level that must continue to hold.
Cisco (CSCO)
Cisco has been trending lower recently and is likely continuing heading lower to $43.25.
Anyway, that is all. It is getting late, and I still have dogS to walk.
-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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