Well folks, happy Friday eve! We hope the week has treated you better than the markets as it’s been a tumultuous one to say the least - Today we have stories regarding an update of the Nord Stream fiasco as well as the AI War, so read on for your daily dose of market inspiration within this 214th Coachman’s Report!
Markets in Review
Following yesterday’s red day, equities are making a turnaround in the premarket with the Dow, S&P and Nasdaq trading +63, +78 and +123 bps at the time of writing. That said, the S&P is still far above its closest support level with the index still in the process of establishing a new price channel should it keep this newfound bullish momentum; furthermore, the VIX has primarily remained below 20 since the start of the year and as of yesterday, bearish sentiment is now at a 52 week low of 25% of market participants.
Lastly, the US equity market’s P/E multiple has held at around 22x this earnings season, which is still a little bit frothy on a comparative basis for global equities as the FTSE 100 index has a P/E of just 13x - closer to half that of the S&P!
Long: Federal Realty Investment Trust (FRT-NYSE) | Timeline: 1 Day
Federal Realty (FRT), which is a recognized leader in the ownership, operation and redevelopment of high-quality retail-based properties in the USA, announced a stellar earnings report yesterday after the market closed. The company beat earnings and revenue estimates by 128.04% and 1.38%, respectively, as they’ve shown remarkable resiliency in recovering from the depths of the pandemic in terms of leasing, occupancy and bottom-line earnings. (Full Story)
Turning to the chart, FRT has fallen from highs of around $140 in the last 12 months and has slowly made its way toward recovery after hitting a low of $87 back in October. That said, as the stock reaches a key psychological price level of $110, traders should expect a breakout - especially as the Stochastic RSI becomes oversold and a strong earnings report supports a bullish narrative.
Zooming Out...
Hersh’s Hot Take
Famed investigative journalist Seymour Hersh released a new story that paints America as the culprit for last year’s Nord Stream bombings. This is a startling development as Hersh’s career has been primarily built on exposing the misdeeds of the US Government- most famously through revealing the My Lai Massacre and the mistreatment of prisoners at Abu Ghraib outside of Baghdad. In terms of how it happened, Hersh believes that US divers, in cooperation with the Norwegian Navy, planted explosives on the pipelines during NATO’s BALTOPS 22 exercise, which occurred in mid-summer.
While the White House has since dubbed the report “utterly false and complete fiction”, if European allies find truth within it there’s no telling the strain that will be applied to diplomatic relations. Moreover, if the world sees things from Hersh’s perspective, it will likely deal a crippling blow to the global standing of the United States.
Broken Bard
As the newly dubbed “AI War” continues to heat up following the rapid mass adoption, and multibillion-dollar backing of ChatGPT, many silicon valley firms have been hard at work to launch their own AI bot. This is what led Google to unveil Bard, backed by the firm’s massive LaMDA language model this ChatGPT competitor was first announced on Monday.
While Google initially stated that they’d release the tool to trusted testers before a wider launch, they decided to publicly showcase the bot through ads- this is where it all went wrong. Within one ad, Bard is asked the prompt “What new discoveries from the James Webb Space Telescope [JWST] can I tell my 9-year-old about?”, from this prompt the bot provided the wrong answer. Whether this was a problem with the tool itself, or a marketing misstep, the distinction hasn’t mattered much to investors, as Google’s share price plummeted more than 7% during trading on Wednesday.
Making Headlines...
Japan, Philippines agree to sharply boost defense ties
The leaders of Japan and the Philippines agreed Thursday to sharply boost their defense ties, allowing Japanese troops greater access to Philippine territory, as tensions rise in Asia amid China’s growing influence. (Full Story)
Cannabis company Canopy Growth to lay off 800, close and consolidate some facilities
Canopy Growth Corp. will lay off 800 workers as part of a transformation plan that will see the company close its hallmark 1 Hershey facility and consolidate some of its cultivation operations. (Full Story)
Shell’s Board Sued Over Lack of Climate Ambition
Shell Plc faces a new front in climate litigation as lawyers, supported by a group of shareholders, sue the oil giant’s board in the UK. (Full Story)
FTX founder keeps talking, ignoring typical legal strategy
For federal prosecutors, Sam Bankman-Fried could be the gift that keeps on giving. (Full Story)
Chart of the Day: U.S. credit card debt reached a new high of $930 billion
"I have not failed. I've just found 10,000 ways that won't work."
- Thomas A. Edison
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