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August 1 – Stock mentions: SPY, SQ, ACAD, BABA, JD, MU
Michael Kramer and the clients of Mott Capital own ACAD
Here We Go Again
It appeared that the drama from the Fed had passed and cooler heads were prevailing. Then just like that, another round of tariffs on China comes out. Notice a pattern here? Market near an all-time high, Fed meeting concluded, tariff hike. Isn’t that what happened in May, oh yeah it was. Does it mean we are likely to see a repeat of May? Hard to say, probably not.
I’m sure everyone is going to start freaking about the trade war, blah, blah, blah. I’m sorry investors have had a year to figure this stuff out. If it hasn’t been priced into the market at this point, I don’t know what to say. I’m not focusing on this every day anymore.
Inversion
Moving on then…An exciting thing happened today. The 10-year treasury yield and The S&P 500 yield are nearly the same. Yes, it’s true — the S&P yield, using the SPY as a proxy, is at 1.84%, versus the 10-year yield at 1.88%.
The scenario doesn’t happen very often, and you can see by the chart above; it has happened just three times since 1994. Each time this event occurred, it proved over the long-term to be a pretty good time to be in stocks. You can see in the chart below.
10-Year
Rates fell dramatically today, even before the trade headlines. The 10 Year had dropped below 2% this morning and was near 1.95% by around lunchtime. The tariff headlines pushed rates even lower.
The move lower in rates this morning was a reflection of the Fed actions yesterday. After a period of digestion, the market caught on.
S&P 500 (SPY)
The S&P 500 had a great day, until the tweet. The S&P was testing resistance at 3014. But then the tweet and stocks fell sharply lower. Support continues to be around 2940.
At this point, it seems reasonable to think that 2940 will be tested, and perhaps a very good chance there is a push down to 2890. I know it can feel uncomfortable because we have gotten used to the market rising every day. But remember the S&P 500 was up nearly 10% from June 3 through July 30. A 3-5% decline seems reasonable. We are already 2.5% off the July highs, so it likely to be more like a 5% decline.
Square (SQ)
Can Square be any more predictable? SQ does the same thing every quarter, beat, and then guide lower. I wrote an article yesterday about some bearish option bets and the companies history of beat and guiding lower. It looks like the options guys did pretty well for themselves. Hey, I got it right too, at least for now. It’s free to read, enjoy.Â
BTW, if $75 doesn’t hold then $69.
Acadia (ACAD)
Acadia, can you believe this stock went up? ACAD did happen to report the best quarter I have seen from this company ever; they even raised guidance. I want to say ACAD has broken out, but every time I do, I get proven wrong. Let’s go for it, yes, $31 seems possible.
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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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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.
2
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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.
1
YouTube Video VVVNT0lJcjFvb1JzU3VrUEw3cktOcjBWSFEuNkNMN0xjWklMUzA
Alibaba (BABA)
Well, with the trade war tension back, BABA isn’t a stock that is likely to go higher anytime soon. It is more likely to go down to around $151
JD (JD)
Jd.com isn’t likely to do well either, and $26 seems possible.
Micron (MU)
Not sure MU will do well here either, at least that is what history tells us. Support is $42.
Ok, more tomorrow. Hopefully, I don’t oversleep this time. If you liked the audio file, let me know.
-Mike
Mott Capital Management, LLCÂ is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.
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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.
Rates Surge Stocks Drop Following Hot Job Report, CPI Next Week
Mott Capital's Market Chronicles January 10, 2025 12:02 PM