Amazon Inc's large players volume is surging higher after it had its Outperform rating reaffirmed by analysts at Credit Suisse. Credit Suisse now has a $1,350 price target on the stock, up previously from $1,100.00. This represents 35.7% upside from the previous close of $995.00.
Citigroup's Buy rating was reaffirmed by Credit Suisse Group today. Credit Suisse also raised the price target on Citigroup stock to $83 from $73. Credit Suisse said they raised the price target because of Citigroup's good valuation.
Heavy buying is taking place in Credit Suisse stock. Over the last 2 weeks there have been 7 bullish pocket pivot signals and the large players volume and Twiggs Money Flow is rising too.
Credit Suisse Group is a financial services company. The Company's divisions include Swiss Universal Bank, International Wealth Management, Asia Pacific, Global Markets, Investment Banking & Capital Markets, Strategic Resolution Unit and Corporate Center. It offers a range of private banking and wealth management solutions.
The sell-off in technology is more about market reversion to the mean than it is indicative of some gloom and doom scenario where technology stocks lead the rest of the market lower.
Credit Suisse just released a report to clients where they are neutral to slightly cautious on technology stocks for the next 3 months, but remain positive longer out.
There are many bottoms-up drivers in the technology sector right now including the new iPhone, continued increase in cloud usage, greater adoption of artificial intelligence across various sectors, and autonomous driving. Technology adoption and market penetration are likely to increase over the next couple of years.
The S&P 500 is dominated by a few big tech companies. Innovations such as more automation in the grocery industry from Amazon, the iPhone 8, and Tesla’s Model 3 are catalysts for the S&P 500 to move even higher.
Reversion To The Mean
The green line is what I would calculate the mean to be at. As you can see, QQQ has overshot the mean over the last few months and so a move back towards the 10 year mean line is normal.
Fiscal policy will also be a catalyst for continued growth such as tax reform. The medical device tax, investment tax, tanning tax, Medicare Hospital Insurance surtax, the health insurance fee and tax on brand pharmaceutical manufacturers, all will likely be repealed at some point in the future.
Credit Suisse set negative expectations for consumer goods. Stocks that trade in the consumer goods sector are likely going to be stocks we should avoid. Fundamentals and valuation are likely to continue to deteriorate in clothing, department stores, grocery, and packaged food.
If Congress goes on their one-month vacation in August without coming to a deal on the United States public debt, I think the stock market goes into a downward correction. We may not even need to wait that long. Congress has about 6 weeks to come together and reach a deal to raise the debt ceiling.
United States Public Debt Scam
What Democrats did was to run up the national debt so high, that austerity would be forced on the next administration which would all but assure that person a one-term President. We know this because Democrats admit asking Yellen to keep interest rates low and to not raise them until after the election.
Credit Suisse said that they think markets may well be able to continue without too much consternation through most of July, but if it becomes apparent that Congress will head out on its August recess – which lasts the entirety of that month-having made no progress, then fears of a delayed or missed payment should start to build.
Why is Congress going on a one-month vacation before raising the debt ceiling? You don’t use the debt ceiling to enforce austerity. That’s like using Accounts Payable to control spending costs.
Pension funds in the US could be close to a collapse. There is an estimated $1.9 trillion shortfall in U.S. state and local pension funds because of low-interest rates and a sideways US stock market. Even stocks falling overseas is a problem for pension funds.
Credit Suisse published the chilling chart below on the funding gap at the largest 100 US pension funds.
Pensions count on annual investment gains of more than 7 percent to cover much of the benefits that come due as workers retire. But public plans had a median increase of 1 percent for the year ended June 30, the smallest advance since 2009, when they lost 16.2 percent, according to the Wilshire Trust Universe Comparison Service.
Now it seems like there is a run on the Dallas Police and Fire Pension as employees try to claim benefits before the system becomes insolvent.
Rhode Island plans to scale back its investments in hedge funds by more than $500 million over the next two years, and reallocate those funds to more traditional investments with lower fees.
Pension funds like Rhode Island are starting to be more defensive and are hunkering down. The problem though is that defensive US Treasury bonds mean way below 7 percent returns which means more shortfalls in funding are coming.
There’s no way pension funds can stay above water in an environment with low-interest rates and with equity markets at valuations that are sky high.
But wait, Democrats say everything is good, just look at consumer confidence that came out this week at 104.1.
There is massive offshoring of good paying US jobs, stagnant wages, soaring costs of health care and education, contraction in manufacturing, falling retail sales, and consumers pensions are dangerously close to collapse. Meanwhile, consumer confidence is hitting multi-year highs? Consumer confidence is starting to look like just another tool of public manipulation that’s out of touch with reality on the street.