Welcome to March folks! With hump day now upon us and the first half of the week marking minor losses for North American equities, many traders have been split in betting on a spike of the $VIX versus a pump in the S&P to end the week. That said, today we have something special for you with another long-form equity report by The Globetrotting Investor on Altria Group ($MO-NYSE) - check that piece out here and read on for your daily dose of market inspiration within this 227th Coachman’s Report!
Markets in Review
Equity indices are unchanged to lower in the premarket today with the Dow, S&P and Nasdaq respectively trading -10, -11 and -7bps at time of writing. With the US market trading sideways since Monday, the S&P has been able to remain along its 50 day moving average, despite only experiencing minor price moves. In our opinion, the recent behavior of the market has been cause for concern given the subdued nature of its price moves. This earnings season has given negative earnings guidance for next quarter and fundamentally speaking, there’s not much there to substantiate the S&P’s current P/E of 21x - as such, we feel next week’s Friday jobs report, even if just slightly out of line with expectations, could spark large risk-off sentiment and see the S&P reprice to the tune of over 2.5%.
Moreover, with the next FOMC meeting just 21 days away and the probability of a 50 bp rate hike climbing ever so slightly as the days go on, if the US economy experiences another large employment surprise as it did for January, a 50 bp hike on the 21st will not be so outside the realm of possibilities.
Short: National Vision Holdings, Inc. (EYE-NASDAQ) | Timeline: 1 day
National Vision Holdings, Inc. (EYE), which operates as an optical retailer in the United States, reported meager earnings this morning before market open. The company missed earnings and revenue estimates by 219.83% and 0.55%, respectively, amid a “challenging macroeconomic environment that negatively impacted the optical industry and especially our core value conscious uninsured customer base” says Reade Fahs, CEO. (Full Story)
Turning to the chart, EYE has made a slow and steady recovery from a 50% drop back in early 2022, despite the economic uncertainty. However, the stock has broken below its key upwards support line leading into earnings, and traders should expect this bearish sentiment to continue especially as RSI points toward 30.
Zooming Out...
Glencore Gets Got
Yesterday the mineral trading conglomerate Glencore was ordered to pay $700M USD as a result of their guilty plea to international bribery charges. While the initial plea for the widespread, and long-lasting operation was made last May, the penalty was only issued by US courts yesterday. In addition to the fine, Glencore has also agreed to increase internal oversight. Likely due to the lower-than-expected fine, which is 15% below US guidelines, the firm’s UK-listed shares are up over 3.8% as of the time of writing. The Supreme Court’s Student Loan Showdown
Recent arguments made by members of the US Supreme Court point to the possibility that student loan forgiveness efforts launched by President Biden may be unconstitutional, and therefore out of the realm of possibility. While reports and early statements indicate that the court’s Republican majority is moving to strike down the motion, Biden has continued to claim the plan lies within proper legal authority. From our point of view, it’s an understandable retraction, however, the readdition of debt onto an already struggling economy may prove to be the straw that broke the camel’s back.
Making Headlines...
TikTok sets new default time limits for minors
TikTok said Wednesday that every account held by a user under the age of 18 will have a default 60-minute daily screen time limit in the coming weeks. The changes arrive during a period in which there are growing concerns among different governments about the app's security. (Full Story)
Germany, Italy Threaten EU Plan to Scrap Combustion Engines
Germany and Italy are threatening to block a European Union ban on new combustion-engine cars, putting its green goals at risk. (Full Story)
Car buyers rejoice: Discounts are making a comeback — but you might have to ask for them
Weary car-buyers may be in luck as some automakers bring back incentives to boost vehicle demand amid skyrocketing interest rates. (Full Story)
Palestinians living in refugee camps are being paid $350 to fight for Russia in Ukraine: report
Palestinians living in sprawling refugee camps in Lebanon have been offered $350 to fight for Russia in Ukraine, according to The Jerusalem Post, which cited a Lebanese government security source and reporting from independent news agency The Media Line. (Full Story)
Chart of the Day: American consumers are running out of covid-19 excess savings…
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- Pablo Picasso
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