Morning folks, and welcome to the 20th week of the Coachman’s Report! This week we’ve got a plethora of news and new economic data as we look forward to hearing new economic data, the Feds outlook, and of course, more earnings this week. Read on for more market inspiration and be sure to follow us on Instagram here!
“Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.” - Ronald Reagan
Market Talk
Taking a look at Friday, indices all fell as the Dow was down 0.89%, NASDAQ down 2.01%, and S&P -1.29% as investors anticipate how the market will hold up heading into an exciting week of trading.
Early Monday morning we were hit with some drastic news from across the pond. Analysts from Citigroup are predicting that inflation in the U.K. will reach between 18 and 21% by Q1 of 2023. This estimation was spurred by the exponentially rising cost of energy. Outside of the U.K. this could spell trouble, and signal more financial woes are around the corner for the majority of Eurozone nations attempting to remove dependency on Russian energy imports. Below are a chosen few that we believe take precedent, however you can find the full reporting schedule by clicking here
Tuesday:
New Home Sales (seasonally adjusted)
Forecast: 575K
Previous: 590K
Wednesday:
Pending Home Sales Index
Forecast: -3%
Previous: -8.6%
Durable Goods Orders
Forecast: 0.6%
Previous: 2%
Thursday:
Initial jobless claims
Forecast: 254K
Previous: 250K
Real GDP Revision
Forecast: -0.5%
Previous: -0.9%
Friday:
Core PCE Price Index YoY
Forecast: 4.8%
Previous: 4.8%
Core PCE Price Index MoM
Forecast: 0.2%
Previous: 0.6%
FED Chair Jerome Powell Speaks at Jackson Hole
Short: Peloton Interactive Inc (PTON-NASDAQ) | Timeline: 4 days
After a quarter filled with troubles, layoffs, and store closures, everyone’s favourite exercise equipment maker is set to report earnings on Thursday morning before the bell. Especially as inflation continues to rise many can no longer justify spending exorbitant amounts of money on a bike with an iPad glued to it. Expected revenue is roughly $683M which is a stark decline from last quarter’s $964M result, although we believe that this estimate is still extremely bullish. Additionally, as of a new ruling on August 11th, the company must face a class action lawsuit regarding the claims that their content library was continuously expanding, casting doubts on the long-term stability of the organization. This suit was first launched in 2019 after Peloton removed roughly 50% of its on-demand classes due to copyright claims from an assortment of musicians. On the technical front, the company has managed to begin trading above its 50-day MA, however, momentum is still extremely weak, sitting at 0.56. We would also implement a stop loss at 10%, as short interest is currently higher than normal, and as a result the company could be targeted for a retail squeeze.
Short: Viomi Technology Co. (VIOMI-NASDAQ) | Timeline: 2 days
Viomi Technology Co - a company that develops and sells Internet-of-things-enabled (IoT-enabled) smart home products in the People's Republic of China has reported low-quality earnings this morning as the company continues to face COVID-19 recurrences and weak consumer spending exerting considerable pressure on sales. The company missed analysts' expectations by 133.58%, reporting earnings of -0.09 - the second consecutive quarter the company has missed estimates by more than 100%. Turning to the chart, Viomi has had a tough year so far as they’ve dropped about 40% since the beginning of January. As the world continued to edge out of COVID-19 pressure, investors and traders became optimistic through the second quarter as the price consolidated the $1.55 range, and a symmetrical triangle has formed creating a textbook short opportunity for traders.
Chart of the Day - German Year-Ahead Power Price
German electricity rushes past 700 Euros per Megawatt-Hour for the first time ever.
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