Well folks, here we are again with another fateful inflation day upon us. Markets traded sideways to lower yesterday as they awaited this morning’s inflation figure - as a result, the S&P clocked just a 33bp loss by the close. Anyways, inflation was just reported at 0.6% for the month of September…1bp higher than the 0.5% forecasted by economists. Read on for your daily dose of market inspiration in this increasingly inflated environment!
Markets in Review
As a result of our miss on inflation, even after our most recent 75bp interest rate increase as well as another three slated on the horizon, market futures reversed their 1% gain to an increasingly red bloodbath as the Dow, S&P and Nasdaq are trading 146, 186 and 274 bps down in the premarket. As of yesterday, the market’s sentiment was already approaching its 52 week bearish high, with 55.9% of investors in this camp; after this event, the S&P is likely to break support and slip a bit more.
Long: Winmark Corporation (WINA-NASDAQ) | Timeline: 2 days
Winmark Corporation (WINA), a company that operates as a franchisor of retail store concepts that buy, sell, trade and consign used merchandise in North America announced promising third-quarter results along with a quarterly cash dividend of $0.70 per share. The company reported an EPS of $2.93 compared to $2.67 per share, representing a 9.74% increase year-over-year, as their "third-quarter results reflect strong performance during the back-to-school season," says Brett D. Heffes, CEO. Referring to the chart, WINA has had a mostly sideways year so far, however, buyers have been able to sustain an upwards movement from the beginning of June. That said, the stock has retraced and entered oversold levels signaled by a low MACD, and with positive news, buyers are likely to re-enter the market.
Zooming out...
What Happens When the Bank Stops Buying… The British financial markets are set for more turmoil after an announcement made by the Bank of England Governor Andrew Bailey. Bailey told the collective pension industry “ you’ve got three days left, now. You’ve got to get this done” in advance of their emergency bond-buying plan’s end Friday. Internationally, the debate has raged regarding the validity of the mini-budget which sparked the need for the emergency buying plan. What can’t be disputed, however, is the impact that a collapsing pension fund would have. For recipients, their income could be threatened in a time where even heating your home is becoming unaffordable, while the markets could suffer from a firesale worth billions. Germany Cheerleads China Recently while speaking at a business conference in Berlin, German Chancellor Olaf Scholz clarified his beliefs on how Western nations should position themselves with China. To the dismay of those who’ve followed the country’s series of human rights abuses, pollution volumes and dystopic digital surveillance programs, he believes that “decoupling is the wrong answer”.
These remarks come as the German government begins working on new trade agreements with China, as they hope to lower their reliance on China’s electronic, and raw material exports. In any case, let’s just hope the Germans have learned a thing or two from their current reliance on Russian gas when drafting these agreements.
Making headlines...
UK Officials Are Working on a U-Turn for Truss Tax-Cut Plan
UK officials are discussing how to back down from Prime Minister Liz Truss’s massive package of unfunded tax cuts, amid pressure from financial markets and members of the ruling Conservative Party to restore economic credibility. (Full Story)
Core US Inflation Rises to 40-Year High, Securing Big Fed Hike
A key gauge of US consumer prices advanced to a 40-year high in September, underscoring persistent, elevated inflation that’s squeezing households and pushing the Federal Reserve toward another steep interest-rate hike. (Full Story)
Canadian Oil Prices Collapse Even Amid Pipeline Abundance
Heavy Western Canadian Select’s discount to West Texas Intermediate widened $1.50 to $32.50 a barrel at Hardisty, Alberta, on Wednesday, the widest since November 2018, data compiled by Bloomberg show. That was just before massive pipeline bottlenecks prompted Alberta’s government to impose production caps on local oil companies. (Full Story)
Chart of the Day: Bye Bye Refi…
“If people are doubting how far you can go, go so far that you can’t hear them anymore.” — Michele Ruiz
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