Memo - Memo for stocks PDF

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Memo for stocks...

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MEMO Date: Wednesday February 19, 2020 To:

Dr. Lawrence A. Souza

From: Cheng Li RE:

Stock Prices Forecast to Fall 4% Over the Next 3 Months

We are tracking stock prices. We forecast stock prices to fall 4% over the next 3 months based on the following factors: 1) Reduction in manufacturing from China’s recovery from Coronavirus, 2) reduction in employment rate, and 3) instability caused by 2020 presidential elections. Therefore, we recommend the following 32 trades:

ACTIONS:    

Indices (2) Buy Puts on Futures Write Calls on Futures Sell Calls Write Calls on Forwards

TRADES: TICKERS:

  

ETF (3) Sell Short Sell Calls Write Calls

8 SPX, DJI

  

9 QQQ, SPY, DJX

TOTAL: 

The euro is now worth $1.10—one of its lowest levels since about 2003, and is predicted to fall to 80 cents by 2017, causing buyers abroad to have less money to invest in U.S. companies, causing stock prices to fall in the U.S.



The U.S. Fed has started to raise interest rates, causing inflation to increase as well. This leaves less money to be spent on investing, so demand for stocks will decrease.



The European Central Bank has cut interest rates, leading to a weakened Euro, causing the dollar to gain more value. Now it costs investors using other currencies to spend more, decreasing the demand for U.S stocks.

Stocks (5) Sell Short Write Calls Sell Calls

15 MU, WDC, KLAC, LRCX, INTC 32

We are tracking stock prices. We forecast stock prices to fall 4% over the next 3 months based on the following factors: 1) Reduction in manufacturing from China’s recovery from

Coronavirus, 2) reduction in employment rate, and 3) instability caused by 2020 presidential elections. Therefore, we recommend the following 32 trades....