Quarantine Journals - Grandpa Stock Market Report, Making Sense - Not!

---------- Forwarded message ---------
From: esmat salahat <e.salahat67@gmail.com>
Date: Mon, Jul 6, 2020 at 7:37 PM
Subject: Making Sense - Not!
To: Brandon <bjsalahat@gmail.com>, Richard Cardenas <Renuvian@gmail.com>, Tania Cardenas <taniamc@gmail.com>

In my emails & talking about the US stock markets, my opinion is clear, markets are out of touch with fundamentals, driven by high flying momentum stocks, running on technicals & hopes! Not intended to influence anyone. From these levels, it is not for long term investing.

When I dream, it doesn't end well, so I am keeping my eyes open & waiting!
They say "seeing is believing". I see it, but not a believer!

Markets have been flashing red for a while now, however, as noted "markets can remain overbought, for longer than one can stay solvent" - relevant to day trading!

Even with markets going up & up, the so called Fear Factor "$VIX" is rising too, not normal.
Semiconductor Index is setting record highs (as the nasdaq) when data implying decline in chips sales/PCs/Phones & gloomy outlook (they keep pointing to 5G launch, however, 5G delayed again).

Gold trending up (due to money supply is way up, which is leading to weaker dollar), both are signs of potential inflation (long term), While economic expectations are for contraction.
However, markets expectations are for economy expansion! & ironically with unemployment rising!

June ISM came out today strong, however, it is month on month Comparison, from an extreme market drop/collapse in May, so not a good indicator! Otherwise, gold would drop, dollar would strengthen, interest rates would trend up!

Markets are not making sense & experts are confused of recent markets action.
Today's new record high again, on Nasdaq (10,400, from a low of 6800) & Nasdaq 100, are attributed to china's stock markets up 5.8% on Monday (after China encouraged its citizens to invest in the stock market and enjoy the wealth effect of a healthy bull).
Europe's had no choice but to follow higher once US markets rose too, encouraged by US month on month ISM better than expected number!

New records setting in Covid cases in many countries didn't matter, tech feeds on bad news, when Fed's (& other countries) monetary policy responds with more money on bad news. All the sanctions & legislation by US against China & certain Chinese companies seems to be irrelevant now, when not too long ago was causing havoc on global markets.

In other words, to the stock markets now, bad news is good news & good news is great news, since the Fed's have made their position clear, interest rates lower for longer & urging for more fiscal $$$, faster & bigger

Companies Q1 earnings reports in April was deemed irrelevant, due to Covid shut down, so analysts were focused on forward looking Q2 & rest of year 2020. However, companies were not providing forward looking Q2 Or year forward guidance.

Q2 earnings report kicks in next week & analysts are already saying Q2 earnings reports are irrelevant, forward looking Q3 & Q4 (year 2020) matter more - however, most likely will not be provided by companies due to Covid-19 uncertainties!

Dividends are getting cut much faster than expected, earnings are down, yet analysts are reluctant to adjusting earnings (P/E), on the contrary, analysts keep upgrading stocks & raising forward guidance!

The FAANGM stocks today traded with a gain on the day of $305 billions/one day.
A gain of $3.2 trillions for 12 months low, driving the markets up.

Amazon crossed the $3000/share target set by an analyst about 10 days ago!

Tesla traded @ $1428/share, up $218/today (up $480/5 days) & is adding $52 up in after markets hours! Up from a low of $200/share during 12 months!
While today
GM was up $0.49/share
Toyota was up $0.59/share

Will this trend remain until elections! (I doubt it).
If so, Trump's prediction may come to fruition, market crash if not elected.
When markets are inflated & due for a correction, markets my use that as an excuse for a big sell off, if not electing Trump based on a record high stock market!

Not a sheep -

Too much fireworks last night (Sunday)


Sent from my iPad