By Jeffrey Cohen, Investment Advisor Representative
US Advanced Computing Infrastructure Inc.
May 30, 2022
Weekend Point: $SPY moved to a slightly positive return for the year, excluding dividends.
With US markets closed, there was market movement driven outside the US. These were bets against the US Dollar, against US Treasury securities, and the US Equity Futures were trading in a tight range.
This morning in pre-market.
The sense I had in this market today was that it was different.
We saw AMC very active in pre-market, almost like a whole day of trading was going on pre market, starting at 4am ET.
Bitcoin was down 1.5%, and not really moving this morning.
US Gasoline RBOB, or 42,000 gallons of feedstock available for delivery (wholesale price before additives, transportation, taxes and retail margin) is above $4 at $4.0156. This is high, and could lead to $6 gasoline in Chicago.
US WTI oil was up 3.5%, or +$4.04. to 117.21. It strengthened today to $117.21.
In Finviz, we saw a positive development for stocks and trading. The number of new highs is rising, and the number of new lows is falling. Pre-market it showed 153 New Highs, and 27 New Lows. While the market is open, this has moderated to 172 New Highs and 55 New Lows. This a positive indicator on breadth of the market.
We did have significant news this morning. European (EuroZone) inflation approached levels in the US. Eurozone inflation hit a record 8.1% in May driven by energy and food prices. Previous record was set in March and April 2022 at 7.4%. This means inflation is rising in both Europe and the US at consistent rates.
Inflation in the eurozone is now at its highest level since recordkeeping for the euro began in 1997.
We saw mixed messages in the market industry sectors we follow pre market.
Money managers were mostly lower
Specialty retail was down
Current efficient portfolios were up
Crypto related stocks are up, especially $COIN and $MARA.
We found four stocks ‘in play’ or highly active in pre market US stock market hours.
SIGA SIGA Technologies Inc. was down significantly
AMC AMC Entertainment Holdings Inc.
This stock was very, very active in pre-market with large price swings and significant volume. During the day, it has traded 73 million shares already. This swung about 10% pre-market, then came back down, and is now up $0.51 or about 3.5% on the day. The current position shields the volatility and activity of this stock during the day.
We really have to dig deeper into AMC. This stock has a very low intrinsic value and still has BK risk. However, good movies this summer and investor attention is rising this stock.
$COIN or Coinbase Global, Inc. was up pre-market. It had fallen back, and is rising again today. It is up 7.5% today to $81.
$MARA was up premarket and has fluctuated during today’s trading. It is up 3% today on average volume.
Premarket speciality retailers targeted for clothing and young adults was down today. AEO, ANF, GPS are all down. Other retailers also down, included PRTY BGFV and CONN.
We noticed that 30-year US Treasury Bond prices are down to 138.91 pre-market. This is a significant decline, but not even close to support levels around 134. There is more room for long bond yields to rise in the coming days. During the day the price rose to 139.19 during the trading day.
10-year US Treasury Bills are in the range at 119.38.
This are declining price levels, but not yet approaching support levels.
The EuroDollar Euro/Dollar rate is at 1.0731 during the trading day. It was at 106.90 this morning, so the dollar fell slightly today.
100 JPY/USD is 0.7779, up slightly from 0.7777 this morning pre-market.
n terms of global markets, we saw the Europe was uniformly weaker (or down) this morning before US Markets opened. Asian markets excluding China mainland & Hong Kong were lower last night, while China was higher.
The VIX was 27.75 this morning pre-market. This is an elevated level, and was up slightly in pre-market. However, this is overall lower from the worst of the readings recently when it was over 30. We see the 30 level as important, at least psychologically.
We see a few stocks highly active and engaged while the market is open.
BKKT Bakkt Holdings Inc. is up 16% today. This is a $2 to $3 stock that has made a move higher today on moderate volume.
GME GameStop Corp. did not trade much pre market. While the market is open it is down $10.00 per share or 7.3%. This is a surprising move given the inactivity pre-market.
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