A shift in Sentiment after the FED meeting and economic data?
Update, May 5th 2024
My weekly take on the markets and portfolios.
The Nasdaq closed the week in positive territory and is back above its 10-week moving average (or 50 days SMA).
A few interesting things under the surface:
“dovish” comments post FED meeting
data from the job market is slightly deteriorating which is seen as deflationary
right now inflation nowcast for May is pointing slightly down
the price of oil fell almost 6% over the last week
All of the above is reflected by the 10-year treasury yield that moved down by more than 3% last week.
If you ask me, this is a favorable setup for stocks.
We are walking on a thin line where small changes in data can move the direction of the markets.
If the 10-year treasury yield starts trending down again, I expect a “UP” period. That is my base case. Let’s see how it develops.
To be noted: almost 80% of companies that already reported earnings beat expectations. In line with an improving economy.
The whole picture might change quickly if bad inflation indicators start flashing red again.
SECTORS
Looking at equal-weighted indexes, Utilities are at the top of the list. I’m not sure why. I guess that money that is nervous about fixed income coming down over the next months is looking for dividend stocks with high yields. Industrials keep being a strong sector which speaks to the in-shoring, CAPEX cycle, and government spending in infrastructure: a sector that should stay strong for many months to come. Materials are doing well also because of the Gold and Precious metals bullish trend of late.
INDUSTRIES
Chinese stocks had another strong week. Cannabis stocks, Semiconductors and, to be noted, Biotech had strong performances last week.
PORTFOLIOS
10X LARGE CAP MOMENTUM
My order for PDD 0.00%↑ was triggered. This week:
I updated my Stop Loss levels
I am creating a STOP BUY order for 20 shares of First Solar FSLR 0.00%↑ if it touches 192.5 USD during the coming week. First stop loss at 159.9 USD
I am creating a STOP BUY order for 48 shares of Alibaba BABA 0.00%↑ if it touches 81.35 USD during the coming week. First stop loss at 71 USD. This is my way of playing the “Chinese trade” after entering Pinduoduo.
10X SMALL CAP MOMENTUM PORTFOLIO
My VVX 0.00%↑ order was triggered. My portfolio now looks like this:
I am creating a STOP BUY order for 140 shares of TG Therapeutics, Inc. TGTX 0.00%↑ if it touches 16.3 USD during the coming week. First stop loss at 12.9 USD
This is my way of playing the Biotech theme that looks promising right now.
Here are some names for my watchlist: ARLO BABA BPMC MTZ QCOM VSEC VTSI WLDN LNTH UTHR
That’s all for the week!
PS: Please let me know in the comments or via a DM message what would you like me to cover or change to make this weekly letter more useful, interesting, practical, clear, etc. Thanks!
-
Important: This is not investment advice. Consult a licensed financial advisor before making any investment decision.