5-1 Pod - Sell in May and Go Away? $SMCI $AMZN and $AMD earnings - Plus what I expect from $AAPL
Yesterday was not very good for my portfolio or my recent buys, but everything was good - what happened?
I’m typing this from 30k feet above your heads! Which reminds me of a great Seinfeld scene.
Market overview - it’s May so should we sell and go away?
The overall market experienced a sell off yesterday - why? - BOND RATES! And this was mainly in the afternoon session. This affected the whole market and yesterday’s newsletter included an article where Goldman Sachs identified stocks that are sensitive to higher rates - SMCI was a top affected stock.
I also have been saying the consumer is getting squeezed and I believe SBUX earnings last night were a sign to come. I think higher for longer will squeeze consumers. Starbucks said the most loyal customers are looking for discounts. In the US, same store traffic was down 6% and same store sales were down 4%. Internationally same store sales were down 6% where the street expected them to be up 1.4%. It wasn’t just China which was bad as well.
Overall I would say things remain uncertain until Powell speaks. He can push an agenda that June is off the table based on the data which should push the markets down or he can keep saying “we will abide by the data” which may provide some support until the data comes in on Thursday and Friday.
I’m staying with the market and trying more to position for long term as I think things remain strong. The consumer and businesses are still spending in areas of this economy so it’s important to find those places. I think stock picking now is more important than before. That’s why I like Seeking Alpha Premium and Alpha Picks for the Quant choices and analysis.
Yesterday’s earnings
SMCI - the quarter was stellar and everything you wanted from the stock. But the guidance was slightly lower so traders took profits. I expect the stock to recover, but with the current lack of catalysts for the stock, it will take those sellers coming back. I think the earnings were good news for NVDA overall as demand seems to be still very high.
AMZN - again - a stellar quarter. The entire market was taken down and had bond rates not weighed on the market, this stock would be up closer to $200/share. Everything in this earnings period were positive with a fantastic outlook. You should have exposure to this stock.
AMD - they increased their forecast, but that wasn’t enough. The run up in these shares prior to earnings and then the pullback was a profit taking opportunity, but long term I believe this will be a great buying opportunity.
POWL - this is an Alpha Pick and killed it - the pullback was an opportunity to buy in.
PINS - killed it
There’s a new Alpha Pick today too - I think this one was a buy much earlier, but I do believe it will run after reading the analysis.
Apple Earnings
My expectations for AAPL are very low. With yesterday’s Skyworks (SKWS) earnings missing by a lot I don’t expect AAPL to have anything except below what may even be expected. I’m remaining optimistic, but not blind to the fact the iPhone sales are down, China’s retaliation against US sanctions may have Apple as the target and a lackluster new product cycle may pose some issues to future revenues and may require a multiple reset.
Earnings today and tomorrow to watch out for
Today there’s QCOM, DASH and CVNA that should provide some trading opportunities.
Scans - very few today and probably best to wait for the Powell press conference to see the direction he chooses to take.
KOLD - yesterday BOIL had a cross up - commodities are tough to trade especially when they are triple leveraged.
HUYA
GD
Leveraged ETFS - both are short and bearish
SDOW
FAZ
My apologies
I apologize for no charts, but while I’m able to look at them on the iPad Pro, Substack is a little difficult to edit with the photos. I expect tomorrow to have a little more extensive newsletter so thank you for your patience. If you’d like to look at any of these charts with my 4 hour algorithm, feel free to go to linktr.ee/dailystockpick and sign up for Trendspider. I’ll email you all of my tools so you’ll never miss a day.
Thanks,
Gary