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Michael Kramer and the clients of Mott Capital own Apple, Netflix, Alphabet
It was an exciting trading session today –not sure what changed following today’s Fed meeting, but the markets thinks something did. The press conference wasn’t as dovish as maybe the market would have liked. The memo that came out was very dovish talking about low inflation rates. Then Powell gets on stage and starts talking about transitory inflation, and expecting it to pick back up and that seemed to be the breaking point for stocks. Not what the market wants to hear. I should have passed along my notes. 😛 Anyway, when’s the next ECB meeting? 🙂
I wasn’t expecting the Fed to go into rate cut mode, especially given how far they have come in the past six months. But then again we know not to follow the equity market following these events, that’s for sure.
But even the treasury market was somewhat thrown off following the news, first with rates falling, and then rising. The dollar strengthened some after the announcement. Which would suggest all three markets are on the same page this time, at least for now.
It would also show that the first knee-jerk reaction was that the meeting was view as not being dovish enough. I don’t think we are facing the same scenario as we did in December though. However, it is enough to take some froth off this rally, trigger a mild pullback.
S&P 500 (SPY)
The S&P 500 fell about 75 bps, we have seen worse during the Fed press conference. The only negative I see here is that the S&P 500 fell through a long-term uptrend, which could result in a retest of support at 2,915, and perhaps 2,890.
But let’s not get confused, nothing changed after today’s meeting, in terms of the Fed, they are on hold.
Apple had a good day rising to as high as $215, following results. The key here is $209, which should now act as a support level for the stock. As long as that holds, then I continue to believe the stock may rise towards $217. I posted a video today, talking about Why Apple May Continue To See Multiple Expansion
Netflix had a good day rising to resistance at $378. It had traded well above that level most of the day but fell late the in session. I got into more detail today in a premium commentary about why Netflix May Be Breaking Out.
Square is falling today after issuing lower than expected second quarter. The stock is now trading below $70, and I continue to believe this one is heading towards $65.50.
Qualcomm is falling a bit after results, but I do think this stock will continue to rise in the coming weeks. For now, the stock needs to hold support around $82.50, to avoid a further decline to $76. I will be watching how it trades tomorrow.
Alibaba had a great day, and it seems it may have finally broken out rising above $188.
Alphabet needs to hold support at $1170.
No commentary tomorrow, you’re on your own!
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