Traders Market Weekly: Short Squeezes and Bond Markets

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    Bed Bath & Beyond up more after hours to $5.40▲ 0.16 (3.05%) after rising ▲ +1.75 (+50.14%) today

    Bloomberg report $BBBY is talking with potential lenders that would finance the company during bankruptcy proceedings


    Ares Capital (ARCC) announces public offering of 9.0 mln shares of common stock… ARCC down 2.9%
    ConocoPhillips (COP) in talks to sell Venezuelan oil in the U.S. to recover close to $10 bln it is owed, according to WSJ… COP up 0.6%
    Hanesbrands (HBI) CFO Michael Dastugue to step down; guides Q4 revs above prior guidance… HBI up 9.4%
    Purple Innovation (PRPL) rejects unsolicited acquisition proposal from Coliseum Capital Management… PRPL down 1.4%
    Semtech (SMTC) completes previously announced acquisition of Sierra Wireless (SWIR) in all-cash transaction representing a total EV of approximately $1.2 bln… SMTC up 3.2%
    VICI Properties (VICI) announces public offering of 24 mln of its common stock… VICI down 2.1%
    Virgin Galactic (SPCE) updates leadership structure; commercial spaceline operations on track for 2Q23 as previously announced… SPCE up 18.4%


    RIP – Lisa Marie @ age 54 … and now reunited with her dad


    Equity indices in the Asia-Pacific region ended the week on a mostly higher note.

    —Equity Markets—

    Japan’s Nikkei: -1.3% (+0.6% for the week)
    Hong Kong’s Hang Seng: +1.0% (+3.6% for the week)
    China’s Shanghai Composite: +1.0% (+1.2% for the week)
    India’s Sensex: +0.5% (+0.6% for the week)
    South Korea’s Kospi: +0.9% (+4.2% for the week)
    Australia’s ASX All Ordinaries: +0.7% (+3.2% for the week)


    China’s Premier Li said that growth and consumer prices will be stabilized and that incentives to boost the domestic economy will be maintained.
    The Bank of Japan conducted two unscheduled bond buying operations to counteract rising yields. The Bank of Korea raised its policy rate by 25 bps to 3.50%, as expected.
    The central bank expects that growth will be shy of what had been forecast in November.
    China’s December trade surplus $78.00 bln (expected surplus of $76.20 bln; last surplus of $69.84 bln). December Imports -7.5% yr/yr (expected -9.8%; last -10.6%) and Exports -9.9% yr/yr (expected -10.0%; last -8.7%)
    South Korea’s December Import Price Index 9.1% yr/yr (last 14.0%) and Export Price Index 3.1% yr/yr (last 8.3%)
    Australia’s November Home Loans -2.0% m/m (expected -3.0%; last -5.6%) and Investment Lending for Housing -3.6% m/m (last -2.3%)


    Major European indices trade on a mostly higher note.

    —Equity Markets—

    STOXX Europe 600: +0.2% (+1.5% week-to-date)
    Germany’s DAX: UNCH (+3.1% week-to-date)
    U.K.’s FTSE 100: +0.5% (+1.8% week-to-date)
    France’s CAC 40: +0.2% (+2.0% week-to-date)
    Italy’s FTSE MIB: UNCH (+2.3% week-to-date)
    Spain’s IBEX 35: +0.3% (+1.7% week-to-date)


    The British economy expanded slightly in November despite expectations for a contraction. Bank of England policymaker Mann said that more needs to be done on rates and there is no risk of overtightening yet.
    British Chancellor of the Exchequer Hunt said that the plan to cut inflation by half in 2023 should remain in place. European Central Bank policymaker Kazaks said that rates should be raised into restrictive territory and that he does not expect rate cuts to take place before the end of the year.
    Eurozone’s November Industrial Production 1.0% m/m (expected 0.5%; last -1.9%); 2.0% yr/yr (expected 0.5%; last 3.4%). November trade deficit EUR11.70 bln (expected deficit EUR21.10 bln; last deficit of EUR27.00 bln)
    Germany’s 2022 GDP 1.9% (expected 1.8%; last 2.6%)
    U.K.’s November GDP 0.1% m/m (expected -0.3%; last 0.5%); 0.2% yr/yr (expected 0.3%; last 1.5%). November Industrial Production -0.2% m/m (expected -0.3%; last -0.1%); -5.1% yr/yr (expected -3.0%; last -4.7%). November Manufacturing Production -0.5% m/m (expected -0.2%; last 0.7%); -5.9% yr/yr (expected -4.8%; last -5.7%). November Construction Output 0.0% m/m (expected -0.3%; last 0.4%); 4.0% yr/yr (expected 5.4%; last 5.9%). November trade deficit GBP15.62 bln (expected deficit GBP14.90 bln; last deficit GBP12.26 bln)
    France’s December CPI -0.1% m/m, as expected (last 0.3%); 5.9% yr/yr, as expected (last 6.2%)
    Italy’s November Industrial Production -0.3% m/m (expected 0.3%; last -1.1%); -3.7% yr/yr (last -1.6%)
    Spain’s December CPI 0.2% m/m (expected 0.3%; last -0.1%); 5.7% yr/yr (expected 5.8%; last 6.8%)


    S&P futures vs fair value: -40.30. Nasdaq futures vs fair value: -134.00.

    Equity futures have continued to deteriorate as the morning progressed.
    The S&P 500 futures are down 40 points and are trading 1.0% below fair value.
    The Nasdaq 100 futures are down 134 points and are trading 1.2% below fair value.
    The Dow Jones Industrial Average futures are down 312 points and are trading 0.9% below fair value.

    JPMorgan Chase (JPM 136.02, -3.47, -2.5%) and Bank of America (BAC 33.80, -0.67, -1.9%) are among the top laggards this morning despite reporting above-consensus Q4 earnings.

    Tesla (TSLA 116.14, -7.42, -6.0%) is another big laggard this morning after The Wall Street Journal reported that Tesla cut prices in the U.S. for some of its cars by close to 20%.

    Treasury yields and the U.S. Dollar Index are inching higher this morning.

    The U.S. Dollar Index is up 0.3% to 102.53. The 2-yr note yield is up two basis points to 4.15% and the 10-yr note yield is up two basis points to 3.47%.


    Import prices rise while export prices decline in December

    Import prices rose 4% in December following a revised 7% decline in November (from -0.6%). Import prices, excluding oil, rose 0.4% in December after a revised 0.3% decline in November (from -0.4%).

    Export prices fell 2.6% following a revised 0.4% decline in November from (-0.3%). Export prices, excluding agriculture, fell 2.7% in December after a revised 0.7% decline in November (from -1.6%).


    Market opens weak after bank earnings reports

    Dow -55.26 at 34134.64, Nasdaq -44.96 at 10956.06, S&P -17.98 at 3965.19

    The stock market opened to losses as investors react to the first slate of Q4 earnings results. There’s likely some general profit-taking activity driving today’s weakness after a big run recently. The main indices have been improving, though, from opening levels.

    Selling in broad in nature with declining issues leading advancing issues by a greater than 2-to-1 margin at the NYSE and a 3-to-2 margin at the Nasdaq.

    Ten of the 11 S&P 500 sectors trade down with energy (-1.1%), utilities (-0.9%), and information technology (-0.8%) showing the steepest losses. Health care (+0.3%) is the only sector sporting a gain.


    Preliminary University of Michigan Consumer Sentiment January reading rose to 64.6 (consensus 60.5) from the prior reading of 59.7.

    Treasury yields took a turn lower recently. The 2-yr note yield, at 4.18% a short time ago, sits at 4.14% now. The 10-yr note yield, at 3.50% a short time ago, sits at 3.44% now.


    Dow 34,302.61 112.64 0.33%
    S&P 500 3,999.09 15.92 0.40%
    Nasdaq 11,079.16 78.05 0.71%
    VIX 18.31 -0.52 -2.76%
    Gold 1,922.60 23.80 1.25%
    Oil 79.92 1.53 1.95


    January 15 – 22 2023 FEAR NOT Brave Investors Where have we been and where are we going? Join our weekly market thread on Traders Community… The Week
    [See the full post at: Traders Market Weekly: Short Squeezes and Bond Markets]

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