Well folks, today marks the kick-off of the second last FOMC meeting of the year and markets don’t know what to expect with the S&P’s marked decline yesterday followed by the jump in the $VIX. That said, Elizabeth Warren sent a letter from congress to the Federal Reserve pleading for a slow or a reversal of the rate hike agenda. Regardless, this is a further violation of the intended independence of the Fed by other branches of the US government and is unacceptable - continue reading on that and more below with the 143rd Coachman’s Report!
Markets in Review
Indices are unchanged too lower in the premarket this morning with the Dow, S&P and Nasdaq respectively down 21, 21, and 9 bps at the time of writing. Panning to economic updates, while first and foremost on the agenda is today’s FOMC meeting (where there is a 90.2% chance of a 75 bp hike), there are also other key announcements being made such as both the foreign trade deficit and productivity figures being released tomorrow and Friday’s decisive job’s report where unemployment is slated to clock in at 3.5%. Lastly, it is worth noting that ahead of the aforementioned, the US Treasury curve has become even further inverted with 1-Year tenors about to cross into 5% yield territory.
Short: Resideo Technologies, Inc. (REZI-NYSE) | Timeline: 2 days
Resideo Technologies, Inc. (REZI), which develops, manufactures, and sells comfort, residential thermal, and security solutions internationally, reported earnings yesterday after the market closed. The company missed earnings and revenue estimates by 29.41% and 4.45%, respectively, as the company continues to feel pressure from macroeconomic uncertainty. (Full Story) Referring to the chart, REZI hasn’t had much volatility for the majority of 2022, oscillating through a sideways price from June, onwards. That said, as the price reached the upper level of the channel, the Stochastic RSI has gone above 90, signalling extremely overbought levels - resulting in a reversal back to the stock’s previous support level.
Zooming out...
Saudi Warn of Attack
Saudi Arabia has received a piece of intelligence that warns of a looming attack on both the Kingdom and Iraq. As if they don’t already have enough problems, the intelligence points towards Iran as the aggressor. For context, the Saudis and Iranians have been engaging in a multiyear proxy conflict known as the Middle Eastern Cold War as they both vie for regional status and dominance.
Interestingly, the Kingdom has been in close contact with US defense partners in the area, who are on an elevated alert level. The news of this attack comes at an extremely tense time in US-Saudi relations, namely as OPEC+ mulls production cuts. While relations have been on the decline since the Biden administration took office, this intelligence sharing and subsequent US military presence may be just the thing needed to regain the Kingdom’s favour.
Bolsanaro’s Not Backing Down
In his first public address since the vote on Sunday, Jair Bolsonaro decried election results and refused to concede the race to his opponent. Allegations of widespread fraud from both candidates have been reported, however, the information is unverifiable at this time and should be treated as speculation only.
This refusal comes at a strenuous time in Brazilian society due to the wide difference in policies between the candidates as well as closeness in the reported presidential race that was decided by a margin of merely 1.8%. As Bolsonaro has been referred to as the Brazilian Trump, it seems almost fitting that his first term in office would begin to end in such a similar way. No matter which side can claim victory the coming days will likely be extremely significant to Brazilian history.
Making headlines...
U.S. private payrolls beat expectations in October
U.S. private payrolls increased more than expected in October, offering more evidence of labour market resilience and suggesting that the Federal Reserve could continue to aggressively raise interest rates for a while. (Full Story)
Russia Agrees to Resume Ukraine Export Deal
The Russian defense ministry confirmed it is resuming its participation in the Black Sea grain-export deal, after receiving written guarantees from Ukraine that the safe-passage corridor will only be used for grain exports. (Full Story)
Domestic share buyers step in as foreign funds flee China
As foreign funds head for the exit, Chinese stock investors are snapping up beaten-down shares of mainland firms, betting outside views of China are overly pessimistic. (Full Story)
ECB wants to put banks on schedule to meet climate goals
Eurozone banks still largely fail to meet the European Central Bank's climate disclosure and management expectations, and laggards who keep failing deadlines could be forced to hold more capital, the ECB said on Wednesday. (Full Story)
Chart of the Day: A major divergence between Apple and other FAANG stocks.
“A fool is made more of a fool, when their mouth is more open than their mind.”
― Anthony Liccione
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