Happy Friday folks! Depending on the market’s performance today, equities have had their best week in four months and if investors react positively to today's employment release which was slated to come in at 187k jobs for the month of January, we could see even more gains over the week’s final session today. Read on for further analysis of that and more within this 210th Coachman’s Report!
Markets in Review
In the premarket today equities are down across the board with the Dow, S&P and Nasdaq losing 21, 51 and 79 bps at the time of writing. This is quite interesting given the whopping 517K jobs added to the economy in January vs the 187k that was forecasted - despite this strong economic data, it is a double-edged sword; on one hand, this bodes well for the underlying US economy’s health in the face of a higher rate environment, whereas on the other, inflation could persist and there may be a path towards further rate hikes than expected.
While one non-farm payroll beat may not be enough to move the needle here, all eyes will now be on the next jobs report as well as the CPI release…however, it does look like the widely spoken about Fed pivot in the latter half of 2023 could be a bit less of a possibility. Below is a dot plot of FOMC participants’ median projections for interest rates across the next few years. There is now also a 92% probability of a 25 bp rate hike at the next FOMC meeting in March.
Short: Apple Inc. (AAPL-NASDAQ) | Timeline: 1 day
Apple Inc. (AAPL), which designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide, reported their first revenue fall in three and a half years, yesterday after the market closed. The company missed earnings and revenue estimates by 3.03% and 3.44%, respectively, as the company continues to navigate through a challenging macro environment. (Full Story)
Turning to the chart, AAPL stock has retraced from highs of $175 over the last 6 months but has recently rallied from lows around $124. That said, as buyers jumped at AAPL over the last month, it’s been overbought - and with an extremely bearish Stochastic RSI along with a negative earnings report, it's more likely a rejection will occur at this key psychological price level of $150.
Zooming Out...
Weather Balloons of War
Yesterday evening it was revealed that a Chinese high-altitude spy balloon has been floating over the North Western United States for the past few days. While American citizens remain concerned, the White House has decided not to shoot down the balloon due to fears of falling debris. Reportedly, many within the US Military have been pining for the US to take action against the surveillance station, however, it’s unclear what ramifications this would have on geopolitics, and relations between the two superpowers.
In terms of the balloon itself, it’s roughly the length of three buses and is allegedly capable of detailed surveillance. Moreover, in the hours after the initial news broke, Canadian officials located a second balloon, and are taking the same steps as the US.
Boeing’s Bomb Goes Big
In an update to a story we first covered on Wednesday, it’s now been confirmed that Ukraine will be receiving a Boeing bomb-tipped rocket within the newest aid package expected to be announced later today. The rocket can integrate with currently operational HIMARS weapon platforms and will give the Ukrainians a highly accurate tool that can reach ranges of over 130km. While it has been rigorously tested, this would mark the first sale of the rocket.
With that being said, the weapons are set to be manufactured, and as such delivery will likely take up to nine months- to bridge this gap, the US has allocated another $475M to draw down current stockpiles of essential gear, mines, ammunition, rocket launchers, and support equipment.
Making Headlines...
Toronto home prices are down 14% from a year ago, sales down 44%
Rising interest rates continue to hit the real estate market across the Greater Toronto Area as the composite benchmark price and home sales both declined year over year in January while slipping slightly from December. (Full Story)
US Clears Palm Oil Giant Sime Darby of Forced Labor Charges
The US Customs said Sime Darby Plantation Bhd., the world’s largest oil palm grower, was found to no longer be using forced labour, allowing the country to restart imports from the Malaysian company. (Full Story)
Apple stock gets nailed as CEO Tim Cook spooks investors with one phrase
CEO Tim Cook and his righthand CFO Luca Maestri channelled their inner Wall Street economist on the tech giant's earnings call late Thursday, and investors aren't liking it. (Full Story)
Cathie Wood hails her flagship ARKK ETF as 'the new Nasdaq'
Famed investor Cathie Wood hailed her flagship Ark Innovation (ARKK) fund as "the new Nasdaq" after it notched its best-ever monthly performance in January. (Full Story)
Chart of the Day: Liquidity and the S&P 500’s positive correlation…
“The pessimist sees difficulty in every opportunity. The optimist sees opportunity in every difficulty."
- Winston Churchill
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