Traders Market Weekly: Inflation and Bank Earnings

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    Dow 33,269.77 133.40 0.40%
    S&P 500 3,852.97 28.83 0.75%
    Nasdaq 10,458.76 71.78 0.69%
    VIX 21.96 -0.94 -4.10%
    Gold 1,862.50 16.40 0.89%
    Oil 73.23 -3.70 -4.81%

    And time to celebrate a good day in equities with 1 of all-time best – esp. song#3 🙂


    Geron (GERN) files mixed securities shelf offering; announces proposed public offering of $175 mln of shares of its common stock… GERN down 8.4%
    Inter Parfums (IPAR) raises its FY22 guidance; guides FY23 earnings and revs mostly above consensus… IPAR up 4.5%
    Johnson & Johnson’s (JNJ) consumer health unit Kenvue files IPO docs with SEC… JNJ up 0.4%
    Luminar Technologies (LAZR) announces additional production wins for multiple consumer vehicle models with leading automakers… LAZR up 3.9%
    Magnolia Oil & Gas (MGY) announces preliminary Q4 oil and gas production volumes in the range of 73-74 Mboe/day compared to midpoint of prior guidance of 78 Mboe/day; FY23 guidance remains unchanged… MGY down 1.9%
    Simulations Plus (SLP) misses by $0.06, misses on revs; guides FY23 EPS in-line, reaffirms FY23 revs guidance; co says its strategy now allows for investments and partnerships; also announces $50 mln share buyback authorization… SLP down 5.4%
    T-Mobile US (TMUS) provides preliminary key customer results for Q4 and FY22; adds 6.4 mln postpaid customers and 2.0 mln broadband customers in 2022… TMUS up 1.5%
    Transocean (RIG) announces contract awards or extensions for five of its drilling rigs totaling ~488 mln… RIG up 0.9%


    PPPPPLLLLLLLUUUNNNGGGGGEEEEEE – as some of doomers predict 2023 could be worse than 2022 (or 2008)
    DOW down -375 after strong labor report
    Where have all the traders gone — long time passing


    Equity indices in the Asia-Pacific region were mixed but China’s markets continued their comeback effort.

    —Equity Markets—

    Japan’s Nikkei: +0.4%
    Hong Kong’s Hang Seng: +1.3%
    China’s Shanghai Composite: +1.0%
    India’s Sensex: -0.5%
    South Korea’s Kospi: +0.4%
    Australia’s All Ordinaries: +0.1%


    Hong Kong’s Hang Seng jumped 1.3% and is now up 6.4% in 2023.
    China’s Shanghai Composite increased 1.0% and is up 2.1% in 2023.

    Providing some fuel for the rebound effort was a better-than-feared December Caixin Services PMI (48.0), which remained below 50.0 but improved from the prior month’s reading of 46.7, suggesting there was some moderation in the pace of contraction.
    Report featured a 12-month business outlook that hit a 17-month high. Some hope that China’s COVID infection wave is peaking also remained a source of support.
    Notably, Thursday marked the first time in five sessions that the BOJ did not conduct an unscheduled bond purchase operation. Reuters reports that the BOJ is likely to increase its forecast later this month for inflation, excluding fuel.
    China’s December Caixin Services PMI 48.0 (last 46.7)
    Japan’s Monetary Base -6.1% yr/yr (expected -3.2%; last -6.4%); December Household Confidence 30.3 (last 28.6)
    Hong Kong’s December Manufacturing PMI 49.6 (last 48.7)
    Australia’s December Services PMI 47.3 (expected 46.9; last 47.6)
    Singapore’s November Retail Sales -3.7% m/m (last +0.1%) and +6.2% yr/yr (last +10.3%)


    Major European indices are little changed so far in Thursday’s trade, cooling off a bit after a strong start to the year.

    —Equity Markets—

    STOXX Europe 600: -0.2%
    Germany’s DAX: -0.4%
    U.K.’s FTSE 100: +0.6%
    France’s CAC 40: -0.2%
    Italy’s FTSE MIB: flat
    Spain’s IBEX 35: +0.2%

    Participant (AMZN 86.94, +1.80, +2.1%): Amazon plans to eliminate just over 18,000 roles; Several teams are impacted; however, the majority of role eliminations are in its Amazon Stores and PXT organizations
    Walgreens Boots Alliance (WBA 36.65, -0.84, -2.2%): beats by $0.02, beats on revs; reaffirms FY23 EPS guidance, guides FY23 revs in-line
    NovoCure (NVCR 133.00, +62.47, +88.6%): announces LUNAR study met its primary endpoint demonstrating statistically significant and clinically meaningful improvement in overall survival over standard therapies alone
    Western Digital (WDC 34.87, +1.82, +5.5%): aiming to restart merger discussions with Kioxia Holdings Corp, according to Bloomberg
    Coinbase (COIN 35.16, -2.54, -6.7%): downgraded to Market Perform from Outperform at Cowen
    Microsoft (MSFT 229.83, +0.73, +0.3%): D.A. Davidson initiated coverage with a Buy
    Helen of Troy (HELE 115.00, +2.42, +2.2%): beats by $0.15, beats on revs; raises bottom end of FY23 guidance
    Silvergate Capital (SI 12.80, -9.15, -41.7%): was forced to sell assets at losses to cover withdrawals, according to WSJ; confirms select preliminary Q4 financial metrics and provides business update; Silvergate’s total deposits from digital asset customers declined to $3.8 billion at the end of the fourth quarter


    The obsession now is good economy bad for Fed – makes little sense


    Initial jobless claims for the week ending December 31 decreased by 19,000 to 204,000 (consensus 225,000). That is the lowest level of initial claims since September. Continuing jobless claims for the week ending December 24 decreased by 24,000 to 1.694 million.

    The key takeaway from the report is that the low level of initial claims — a leading indicator — is a telltale sign of a tight labor market that is going to keep the Fed on edge about inflation remaining elevated in spite of some other signs of weakening in the broader economy.


    The trade deficit narrowed to $61.5 billion in November ( consensus -$76.4 billion) from an upwardly revised $77.8 billion (from -$78.2 billion) in October. That is the smallest trade deficit since September 2020 and it was the result of exports being $5.1 billion les than October exports and imports being $21.5 billion less than October imports.

    The key takeaway from the report is that the weakness in exports and imports speaks to weakening global demand, yet the sharp drop in imports speaks to weakening demand in the U.S. economy following prior inventory building.

    Following the 8:30 a.m. data releases, Treasury yields and the U.S. Dollar Index shot higher. The 2-yr note yield is up seven basis points to 4.44% and the 10-yr note yield is up three basis points to 3.74%. The U.S. Dollar Index is up 0.6% to 104.85.


    Market Snapshot

    Dow 32955.14 -314.56 (-0.95%)
    Nasdaq 10346.13 -112.55 (-1.08%)
    SP 500 3815.52 -37.45 (-0.97%)
    10-yr Note -5/32 3.747

    NYSE Adv 763 Dec 2114 Vol 215 mln
    Nasdaq Adv 1301 Dec 2936 Vol 1.7 bln

    Strong: Energy
    Weak: Real Estate, Materials, Utilities, Health Care, Financials, Consumer Discretionary


    — Stronger-than-expected labor data, paired with weak trade data, stoking concerns about the Fed continuing on its rate hike path and the potential for a policy mistake

    — Weakness in the mega cap space; weakness in AMZN after announcing job cuts

    — Treasury yields climbing after this morning’s data releases, sharp rise in U.S. Dollar Index


    Dow 32,930.08 -339.69 -1.02%
    S&P 500 3,808.10 -44.87 -1.16%
    Nasdaq 10,305.24 -153.52 -1.47%
    VIX 22.51 0.50 2.27%
    Gold 1,838.40 -20.60 -1.11%
    Oil 73.85 1.01 1.39%


    This 1st song may be become our THEME song in SW VA (lol) — esp. if the great apocalypse is ahead
    And we’re actually stocked up for worst case – but hopefully USA improves
    The BEAR HISTORY live album is 1 of best all time to own as every song is great 🙂

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