This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
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Michael Kramer and the clients of Mott Capital own Apple and Acadia
March 21, 2019 – Happy First Day of Spring!
- S&P 500 Futures -5.50
- 10-Year Yield 2.52%
- Oil $59.93
- Dollar Index 96.21
- VIX 14.16
- Japan Nikkei +0.20%
- China Shanghai +0.35%
- Hong Kong HSI -0.85%
- South Korea Kospi +0.36%
- Australia ASX +0.03%
- German DAX -0.23%
- UK FTSE +0.62%
Global Growth Proxies
- Copper +1.23%
- Silver +1.61%
- Platinum +1.3%
More Fed Thoughts
I read a couple of comments today about how some seem to think the Fed knows something nobody else does. I would disagree because they were very slow to shift in this stance and it was about six-month Chairman Powell was on a stage saying we nowhere near neutral. I think this change in stance has more to do with structural issues caused by a low-interest rate environment around the world. The ECB’s move earlier this month to a more accommodative policy all but sealed the deal for the Fed.
It wasn’t just equities that the Fed unleashed with its new stance on monetary policy. Lower interest rates mean a weaker dollar and that is also bullish of commodities. Oil prices are rising and are approaching a potentially big break out should it rise above $61.70.
Copper is breaking out today and is rising back to $2.95, and is potentially on its way back to $3.01. We spoke about the potential for a break out in Copper earlier this week.
S&P 500 (SPY)
The S&P 500 is pointing to a lower open to start the day, but support for the index should be firm around the 2,810 to 2,815 level.
Biogen shares are tanking today by 26% after the company said it was planning to stop its trials for aducanumab in Alzheimer’s Disease. A big disappointment for the company. Many investors had been very hopeful for this drug at one point about a year ago. That has changed. Now the stock is falling below critical levels of support at $245 and could be at risk of falling to $206.
Acadia shares are trading lower this morning, probably because of the Biogen news related to Alzheimer’s. But make no mistake, Acadia dementia psychosis study is in no way similar to Biogen. The uptrend is still very much in place.
Apple received two upgrades on March 21. Needham upgraded the stock to a strong buy from buy and raised its price target to $225 from $180. Also, Citigroup increased its price target to $220 from $170. Apple continues to move towards resistance at $195, the next major inflection point.
Chipotle’s price target was raised today at Argus to $770 from $670. The stock is now sitting at resistance at $670. The stock may be on its way to $705.
Micron was downgraded to sell from neutral at Citigroup, and the price target was lowered to $30. The stock is still butting up against resistance t $42.10, and I would be surprised if the stock continued to hold these gains once the market opens and all big institutions start to participate.
Ok, good luck!
Mott Capital Management, LLC 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 performance. March 21