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Michael Kramer and the clients of Mott Capital own Apple, Microsoft, Tesla
The Fed turned more dovish., shocker. It would seem to me the tightening cycle is over. Here was your essential line from the FOMC statement in my opinion:
The Fed would seem to now be focused on inflation, and as long as that stay low, then rates are finished rising. With oil and most major commodities down it seems unlikely that inflation will increase substantially anytime soon. With that, I think the Fed is likely finished raising rates for some time.
Confirmation
The bond and FX market would seem to agree with my assessment. 10-year rates fell sharply after the news, as did 2-year rates.
The dollar fell sharply too, as it should.
S&P 500 (SPX)
Stocks rose sharply as a result of the more dovish Fed with the S&P jumping 1.6%. For now, resistance on the S&P is at 2,690 and investors tried to break that resistance level, but failed on the first attempt. I expect that it will be broken, and that will likely result in a rally to 2,800.
Tesla (TSLA)
Tesla reported results tonight, and they look pretty good, better than the disaster that some would have had you think after the company laid off workers. Nothing stands out to me except the company had cash flow of $750 million and has enough cash on hand to deal with the March debt payment. The chart is unchanged from yesterday, so I think $330 is still in play.
Facebook (FB)
Facebook is surging after they beat estimates, but the most impressive number is that ARPU in the US & Canada at almost $35! That is a massive increase from last year! There was even a big jump in Europe.
(Facebook)
Resistance for the stock is around $173.
Microsoft (MSFT)
Microsoft looks fine with earnings beating by $0.01 and revenue missing by a hair at $32.47 billion vs. estimates of $32.53 billion. The stock is down a bit, I’m not sure what I am missing here, but I don’t see a reason to be concerned. The company is guiding revenue to a range of 29.4 to 30.1 billion, or $29.75 billion, versus estimates of $29.83 billion.
Support for the stock is around $102. The stock is lifting after the market got the guidance.
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[youtube-feed feed=7]Apple (AAPL)
Apple had a big day after the strong results, with shares rising above resistance at $164. The big move opens the door for the stock to increase to around $182.
AMD
AMD had a monster day with the stock rising 21% to $23.21. The stock continues to face resistance at $24.
Alibaba (BABA)
Alibaba had a big day with shares rising above resistance $166 which could result in a rise to $179.
More tomorrow
-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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