Michael Kramer and the clients of Mott Capital own AAPL
Fed Narrative Remains Unchanged
Stocks managed to battle their way back from a steep morning selling-off, following the better than expected jobs report. As I told the RTM subscribers this morning, the focus for BLS reports at this point should not be the headline number, but the wage growth number. That is what matters the most at this point, not how many jobs were created or the unemployment rate.  Despite the low unemployment rate, wage growth has pretty subdued, and that is what has the Fed mystified.
I didn’t think today’s sell-off would last, and it didn’t. The narrative for the Fed hasn’t changed and isn’t likely to change by the time they meet again on July 31. (Premium content: The Fed Narrative Remains Unchanged)
The CME Group’s Fed Watch tool is now projecting a 95% chance for a 25 bps cut in July. To me, that seems the most logical. The idea that the Fed would cut rates by 50 bps in July never made sense to me. I think given the decade that has passed between now and the last rate cut, people have forgotten how significant a 50 bps cut is. The present-day economic scenario doesn’t warrant a 50 bps rate cut, 25, sure, 50, no.
Side Note
On top of the articles, videos, Q&A, spreadsheet trackers, and the week ahead content. I am now adding a mid-day update audio file for those member of the Seeking Alpha Marketplace Reading the Markets Subscription. So far the response has been good. I’m still testing how I want it to sound. I would really like replicate the old Squawk boxes that use to sit on traders desk back in the day. Anyway, here is a sample from today.
S&P 500 (SPY)
Perhaps that is why the S&P 500 gapped, lower and by days end filled the gap. As the market regained its senses.
Amazon (AMZN)
Amazon continues to grind higher slowly, and I continue to believe AMZN will head back towards $1,965.
Apple (AAPL)
Apple also appears to be on pace to continue to head towards $209.
Facebook (FB)
Facebook is getting squeezed tighter and tighter in that rising wedge. Something big is about to happen to FB. It could be a drop to $186.
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Well, that will be it for a Friday night on July 5 at 9:45 PM.
-Mike
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Charts used with the permission of Bloomberg Finance L.P. 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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