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OCTOBER 29, 2020
STOCKS – T, SHOP, BA
MACRO- SPY, GLD, EWG, UUP
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Today we will get third quarter GDP readings with estimates for it to have risen by 31% at an annualized rate. That obviously is a huge rebound but doesn’t get us all the way to back to where we were at the end of 2019, but it gets us closer.
Germany (EWG)
Stocks are attempting to rebound this morning, but so far, the attempt feels pretty weak. The S&P 500 ETF is up down about 50 bps after being up as much as 60 basis points, while the Qs are up 1%. Germany has been trying to rebound, up nearly 50 basis points at one point, but now trading flat on the day.
You can see on the chart below that the DAX is sitting on a level of support at 11,535. That is important because the next level below comes nearly 5% lower at 11,030.
S&P 500 (SPY)
The S&P 500 futures rose to around 3,300, and that is where it seemed to top out and reverse lower. It is setting up to retest the September 24 lows around 3,200. The big risk in the futures and indexes is the potential double top pattern that may be forming. Unfortunately, we will need to see the futures break 3,200 to confirm that pattern.
Dollar (UUP)
The dollar continues to strengthen, which makes sense, given what is happening with the virus and uncertainty around it. I think ultimately, the dollar continues to move up, heading towards 96.
Gold (GLD)
That will also weigh on gold, sending the metal lower, potentially back to $1790.
Shopify (SHOP)
Shopify will be one company to watch after blowing out quarter results, with earnings of $1.13 per share vs. estimates of $0.53 and revenue of $767.4 million vs. $663.4 million. Again great company; it just has a rich valuation, which makes it hard to buy up here, in my opinion. But I think how it trades today could give us a good feeling about the state of the market’s mood. A break of $975 will send it lower to around $850.
Boeing (BA)
Boeing’s price target was cut at Credit Suisse to $74 from $84. Again as noted last night, a drop below $144 results in a further decline to around $125.
AT&T (T)
So AT&T is breaking below support at $27.35, and that could lead it on a path to $23.85.
Have a great day!
-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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