Happy hump day folks! Today marks the kickoff of the last FOMC meeting of the year, with investors everywhere expecting a 50 bp rate hike following yesterday’s better-than-expected inflation print. As such, remember the last few weeks of the year can often bear large swings for equity markets. In fact, back in 2019 the S&P fell over 15% during December alone so remember to stay diligent and manage risk accordingly if you're acting on any of our trade ideas! Read on for your daily dose of market inspiration in this 174th Coachman’s Report!
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Markets in Review
After beating inflation forecasts, the market gapped up at the open and then proceeded to trade down through the session - regardless, the S&P still advanced 73 bps compared to Monday's close. Today is posturing to be somewhat red with premarket futures on the Dow, S&P and Nasdaq down about 10 bps across the board at the time of writing. With catalysts for real profit in the near term showing promise within equity markets, the only thing holding the S&P from adding a few more percentage points to the board these last couple weeks of 2022 will be the FOMC’s announcement tomorrow on the Fed Funds rate; a hike higher than 50 bps or a reversion to a more hawkish tone will send NA equities spiralling and this is the one thing keeping fund managers everywhere from flowing more materially into the asset class.
Should the market’s expectation for a continued slowing in rate increases run true, a golden cross confirming a strong bullish trend by the end of the year is not unlikely with the next market catalyst on the agenda being the Friday jobs report on January 6th, 2023.
Short: Weber Inc. (WEBR-NYSE) | Timeline: 2 days
Weber Inc. (WEBR), an outdoor cooking company that manufactures and distributes outdoor cooking products, accessories, consumables, and services internationally, reported earnings earlier this morning. The company fell short of earnings and revenue estimates by 170.14% and 10.31%, respectively, driven by slower retail traffic, both in-store and online in all key markets, due to macroeconomic factors including falling consumer confidence levels and inflation. (Full Story) Referring to the chart, WEBR has been oscillating within a pretty undefined price channel through the latter half of 2022, with a couple of fakeouts around their previous earnings season. That said, as the stock reaches the upper level of this channel, traders should expect a rejection signalled by a bearish facing, and extremely overbought Stochastic RSI.
Zooming out...
Fusion Breakthrough On Tuesday the US Department of Energy announced one of the most significant human achievements since the moon landing, a successful energy-positive nuclear fusion test. For context, since the 1940’s we’ve been able to harness the power of the atom for civilian and military use by utilizing fission, or the splitting of atoms. Fission is inefficient and is responsible for nuclear energy’s biggest pitfall, the resulting radioactive waste once fuel rods are spent. Fusion on the other hand is the combining of atoms through an intense heat provided by high-intensity lasers. For years fusion’s problem was that the necessary equipment spent more energy than the combination generated, however, yesterday’s announcement revealed a test where 2 megajoules of power were provided to the lasers, while 3mj were extracted from the machine. Due to the fuel for fusion consisting of hydrogen and lithium, the process emits no harmful gasses (only helium) and doesn’t leave behind any waste. Fusion power systems provide nearly limitless possibilities for clean and cheap energy, and will likely play an instrumental role in future global decarbonization efforts. Maple Leaf Margin Ban Following the events of the FTX collapse, Canadian authorities have stepped in to try and limit further digital asset disasters from occurring within the country. The Canadian Securities Administrators (CSA) proposal states that any exchange operating within Canada will have to prohibit margin and leveraged crypto trading for Canadian citizens. Additionally, exchanges will have to hold the assets of Canadians separately from their main operations.
Making headlines...
US Plays Down Idea of CPI Leak Following Pre-Report Trading
US government officials said they weren’t aware of any early leaks of closely watched inflation data Tuesday, following a surge of Treasuries buying that took place seconds before the report was released. (Full Story)
Applications to Buy US Homes Rise as Mortgage Rates Hold Steady
Applications to buy US homes resumed an upward trend last week as borrowing costs steadied near an almost three-month low. (Full Story)
Homes, Resources Drive Sharpest Drop in Canadian Net Worth Since 2008
The value of Canada’s assets fell at the fastest pace since the 2008 financial crisis amid declining prices for real estate and natural resources. (Full Story)
Where did the money go in FTX crypto collapse?
The collapse of FTX, a cryptocurrency exchange once valued at $32 billion — and founder Sam Bankman-Fried's arrest Monday on a number of charges alleging he defrauded his investors — have prompted many to ask simply – where did the money go? (Full Story)
Chart of the Day: Miner Acquisitions vs Cash Flows…
“Passion will make you crazy, but is there any other way to live?”
- Howard Hughes
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