Well folks, happy hump day! We hope you enjoyed our short recommendation on $CENTA yesterday, which returned 9% during a period when the broader market advanced more than 1% - and we’re back at it today with a long on $BBAR. Read on for stories on Chinese President Xi Jinping’s ‘Common Prosperity’ within China and the Disney leadership shakeup within this 158th edition of the Coachman’s Report!
Markets in Review
NA equities are marginally higher in the premarket and following yesterday’s green print, the S&P 500 is forming a triangle pattern on the daily chart. It is likely that the breakout will align with next week’s planned economic developments such as the OPEC meeting on Thursday and the jobs report on Friday. OPEC is still weighing the odds of a production cut and given Russia’s sanction which kept them as a key player in the global markets - but it is still up in the air as to what they will do given their agenda which favours market share over short-term profits. Moreover, as this non-zero interest rate environment has had ample time to set in and layoffs have only continued to be publicized, mainly within the tech sector this quarter, anything short of the forecasted 200K jobs to be added over the month of November will likely result in a sharp decline in broader equity indices.
Long: Banco BBVA Argentina S.A. (BBAR-NYSE) | Timeline: 2 days
Banco BBVA Argentina S.A. (BBAR), which provides various banking products and services to individuals and companies in Argentina, reported a stellar earnings report yesterday after the market closed. The company managed to beat analyst estimates by 41.43% and 148.88%, respectively, as banks across the world continue to benefit from a rising rate environment. (Full Story) Referring to the chart, BBAR has held a sideways trend above its key psychological price level of $2.75 for the better part of this year - with the exception of high selling pressure through June and July, as the company missed revenue estimates in their last quarter's earnings report. Though the stock was able to return back to previous levels, traders are now retesting but should expect a rebound due to strong earnings and an extremely oversold Stochastic RSI.
Zooming out...
Once Again, Overreach In the years since his first election, Xi Jinping has been pushing China towards a multitude of domestic, and foreign goals as we approach the end of the 2020s. One of his most publicized goals is common prosperity, a dream once envisioned by the architect of modern Chinese politics himself, Mao. While from an outsider’s point of view “common prosperity” sounds amazing, oftentimes the most prosperously named pieces of legislation, such as the PATRIOT act, have negative effects. These detrimental effects are currently being seen in the free market as the CCP directly interferes with the conditions of employee salaries and benefits. CCP overreach was displayed earlier this week as JD.com slashed salaries of 2k managers in order to direct the proceeds into a $1.4B USD employee benefits fund, while founder Richard Liu “generously” threw in $14M USD of his own money. Alibaba is also rumoured to be setting up a similar $1.395B fund for their employees to gain access to interest-free home loans (although this has not been confirmed at the time of writing).
Disney Dethroning As of this week, Disney’s most recent CEO, Bob Chapek, has been ousted from the firm in place of his predecessor Bob Iger. It’s been a tough year to be any CEO, however, Chapek’s attempted balancing act between woke Americans and traditional Middle Eastern culture was especially unenviable. Even as he attempted to take more of a centrist post relative to Iger, Chapek was seen as unfavourable by those inside and outside of the company. The company’s stock has suffered a 36% drop throughout the past 12 months, however on Monday the share price climbed by up to 7% on the news! Although this has dipped slightly as we head further into the week. In any case, with current cultural tensions heightened more than any time in the previous decade, it will be interesting to watch as Iger navigates the volatile market that is global content, streaming, and theme parks while attempting to push Disney to new heights.
Making headlines...
Fed Minutes Set to Show Breadth of Support for Higher Peak Rate
The Federal Reserve is set to show how united policymakers were at their meeting this month over a higher peak for interest rates than previously signalled as they calibrate their fight against decades-high inflation. (Full Story)
Ukraine Latest: Emergency Aid Stations Readied Amid Blackouts
Ukrainian President Volodymyr Zelenskiy said his nation was preparing a network of aid stations where citizens could go if Russian air assaults lead to more mass blackouts. (Full Story)
Shoppers may see the biggest sales in a decade this holiday season
Some retailers are dealing with bloated inventories going into the holiday season, a post-pandemic trend that industry experts say could result in more sales for shoppers. (Full Story)
U.S. weekly jobless claims increase more than expected
The number of Americans filing new claims for unemployment benefits increase more than expected last week, but that likely does not suggest a material shift in labor market conditions, which remain tight. (Full Story)
Chart of the Day: Valuations for mining stocks reaching a low
“Any excuse will serve a tyrant.”
- Aesop
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