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STOCKS – CRM, GM, SNOW
MACRO – SPY, EWY, UUP
- RTM: Market Internals Are Getting Weaker
- RTM Video: Every Market Sees Its But The US Stock Market
- Volatility May Be About To Pick Up
- RTM – The Mother Of All Divergences?
- RTM- Is The Equity Market Simply Wrong?
- RTM Short Term Bearish Idea- Ford Further Downside
- Fed Tapering May Fuel The Dollar’s Rise, Trigger A Risk-Off Event
- RTM – A Shift In Risk Sentiment Is Approaching
- RTM- Tapering Is Probably Coming Very Soon
Stocks finished the day lower ahead of Jay Powell’s Jackson Hole speech tomorrow morning, dropping by almost 60 bps. What comes from tomorrow will be anyone’s guess; it seems like most of the global markets are looking for news that the Fed is prepared to taper its asset purchases; the one outlier here is the US equity markets. The markets in Asia have been fragile of late, and I talked about this in this week’s tactical update that is most likely is tied to the strengthening dollar.
Korea (EWY)
The MSCI iShares Korea ETF (EWY) has fallen 10.5% just since the end of June. When you overlay the inverse of the dollar index on the chart of EWY, it becomes easy to see the relationship the two have with one another. So why does the Korean ETF fall? Because the stronger dollar brings inflationary force to that economy, and every economy likes it and slows economic growth.
Dollar
The dollar gets stronger because less printing by the fed means less bond buying, which can help to lift yields some and widen spreads with other countries interest rates. So yes, rising yields, a strengthening dollar, and weaker global equity markets tell us that someone, somewhere, seems to think that the dollar will continue to strengthen.
S&P 500 (SPY)
So why does the US equity market continued to rise? It is a good question and one that doesn’t really make any sense. But if there is any indication tomorrow that a tapering process is likely to come in September or November, it will be terrible news for growth stocks. The only sector that is likely to benefit from this are financials, as rates would rise some, not much, just some, and the dollar would continue to push higher, killing materials and energy names as well.
GM (GM)
GM looks like it is breaking support at 49.00, with the next level look for coming around $45.25.
Salesforce (CRM)
Salesforce jumped higher today and barely managed to get and stay above resistance at that $268 region; now that gap at $260 needs to get filled.
Snow (SNOW)
Snow had a solid day, rising nearly 7.5%. It is still working off that inverse head and shoulders pattern. It even has a shot of getting back to $322.
Night
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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