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August 15 – 21, 2022 FEAR NOT Brave Investors Where have we been and where are we going? Join our weekly market thread on Traders Community… Image: Ro
[See the full post at: Traders Market Weekly: Robots, Dribbler Enthusiasm and Short Squeezes]Thank you for all your hard work, this has to be the most detailed report out there covering all the markets. Much appreciated.
Big box earnings reports:
The retail sector is in the spotlight next week with big reports due in from Walmart (WMT) and Target (TGT). Walmart (WMT) will spill numbers on August 16 with analysts forecasting revenue of just under $150B and EPS of $1.60 Ahead of the report, JPMorgan said recent data showed that the retail giant may be benefiting a from a consumer trade-down effect as value shopping increases.
Target (TGT) is scheduled to follow its rival with its report on August 17. Despite an early warning from the retailer in June on margins for the quarter, analysts are still skittish over what may be the next shoe to drop. Morgan Stanley thinks it is possible Target cuts its full-year EBIT margin from the current implied ~5% level to ~4%, while Evercore ISI issued a negative trading call on the stock due to the expectation that the outlook for EPS and margins will rattle investors. Target (TGT) is seen facing more incremental pressure than Walmart (WMT) because it is more heavily levered to discretionary categories and the stock is not snapped up as much as a defensive play. If there is a surprise to the upside for the Minneapolis-based company, it could be based off a positive read on how the back-to-school shopping season has started and the impact of receding gas prices.
FuboTV (FUBO) will conduct its first-ever Investor Day event.
FuboTV Co-founder and CEO David Gandler and CFO John Janedis, will discuss the company’s strategic initiatives and three year plan, as well as issue a 2025 profitability target. M&A speculation picked up on FuboTV (FUBO) recently with MGM Resorts (MGM)-Entain (OTCPK:GMVHF)’s BetMGM property and FanDuel (OTCPK:PDYPY) both seen as potential acquirers. Another part of the bull case on FuboTV (FUBO) hinges on the streaming upstart seeing strong subscriber growth and close the valuation multiple gap with peers like Netflix (NFLX), Roku (ROKU), The Trade Desk (TTD), and ROKU, NFLX.
Single-stock ETFs:
The universe of single-stock ETFs continues to grow with the GraniteShares 1.25x Long TSLA Daily ETF (TSL), GraniteShares 1x Short TSLA Daily ETF (NASDAQ:TSLI), GraniteShares 1.75x Long AAPL Daily ETF (AAPB) and the GraniteShares 1.5x Long COIN Daily ETF (CONL) all launching to track underlying shares of Tesla (TSLA), Apple (AAPL), and Coinbase Global (COIN).
The ETFs are aimed at providing investors short or leveraged exposure to the daily price moves of the underlying stocks by using financial instruments such as swap agreements.
Last month, AXS Investments launched eight single-stock ETFs. Stocks that have or will have soon have single-stock ETFs tracking them include Nike (NKE), Pfizer (PFE), Microsoft (MSFT), Netflix (NFLX), Boeing (BA), Wells Fargo (WFC), Salesforce (CRM), ConocoPhillips (COP), Paypal (PYPL) and NVIDIA (NVDA).
SEC Commissioner Caroline Crenshaw has warned investment advisors against recommending the ETFs to retail investors.
Looking ahead, analysts think the single-stock ETFs could add even more volatility around earnings and corporate events.
Deutsche Bank 2022 Transportation Conference from August 16-17 with appearances by senior executives from public and private companies encompassing Trucking, Rails, Logistics and Airfreight/Parcel. Presentations are expected from Union Pacific (NYSE:UNP), Landstar System (LSTR), J.B. Hunt Transport Service(JBHT), and CSX Corporation (CSX) to name a few.
Other conferences of note include the Needham Med Tech & Diagnostics 1×1 Conference, Citi Midstream and Energy Infrastructure Conference, H.C. Wainwright 2nd Annual Ophthalmology Conference, and the Sidoti August Micro-Cap Virtual Conference.
Barron’s mentions:
The hunt for attractive renewable energy stocks is the focus of the cover story this week after the climate bill approved by Congress is set to unlock $370B for clean energy incentives and consumer benefits. Renewables are forecast to account for 60% of power generation in Western Europe by 2030 up from 35% today.
The percentage of renewable energy is seen climbing to 38% in both the U.S. and China over the same eight-year time period. Looking even further out, annual clean energy investment globally will have to hit $4T by 2030 to meet the widely held commitment of net-zero carbon emissions by 2050, according to a forecast from the International Energy Agency.
Even if those optimistic projections fall short, the rush of investments into clean energy is expected to boost share prices across the sector as the industry scales up.
For investors looking to get a jump – AES (AES), Bloom Energy (BE), Freeport-McMoRan (FCX), LG Energy Solution (OTCPK:LGCLF), Plug Power (PLUG) and Sunrun (RUN) are the six stocks called out as having the potential to surge with the new focus on renewables.
The $430B Inflation Reduction Act passed by Congress includes new rules governing the electric vehicle industry. The most dramatic is that the current $7,500 EV tax credit will be replaced by incentives designed to bring more battery and EV manufacturing into the U.S..
Crucially, electric vehicles assembled outside North America will not qualify for the EV tax credit.
Audi (OTC:AUDVF), Kia Motors (OTCPK:KIMTF) and Porsche (OTCPK:POAHY) have already stated that buyers of their electric vehicles will not qualify for the tax credit, while Volkswagen (OTCPK:VLKAF) said it will have to work out how to make the ID.4 eligible next year.
Higher-priced EVs from Tesla (NASDAQ:TSLA), Fisker (FSR), and Lucid Group (LCID) also will not qualify for the EV tax credit. The cap to qualify is $55K for sedans and $80K for SUVs and trucks.
Looking at the flip side of the EV industry reset, the potential winners from the new EV tax rules could include Tesla (TSLA) and General Motors (GM) without a total vehicle cap in place and with their domestic supply chains much more advanced. However, the auto giants still have to derive 40% of battery minerals from North America or nations with which the U.S. has free trade agreements to make those advantages work out.
The upside may be more clear for commercial electric truck makers with the proposed incentives of up to $40,000 per vehicle providing strong motivation for fleets to look at Daimler’s (OTCPK:DTRUY) Freightline Cascasia, Lion Electric’s (LEV) Class 8 trucks, the Tesla Semi, Workhorse Group’s (WKHS) medium-duty trucks, and others as fleet options. The tax credit for commercial fuel cell vehicles is set at 30% of the price or $40,000, whichever is lower.
Expect to see some auto suppliers viewed more favorably as their place in the domestic EV supply chain is analyzed more closely.
On Friday, stocks with big gains included Allego (ALLG), Foresight Autonomous (FRSX), Luminar Technogies (LAZR), Modine Manufacturing (MOD), and QuantumScape (QS).
Notable earnings after Monday’s close
Aug. 14, 2022 5:35 PM ETADES, ALBO, API, AREC, ASTS, ASYS, AXDX, BIOR, BLND, BMTX, CALA, CETX, CIDM, CIG, COMP, CURI, CWBR, CYRN, DNA, EGLX, ELTP, FLNC, FN, FUV, GAN, GLBE, IONQ, TTOO, XSPA, PLNHF, TMEBy: Deepa Sarvaiya, SA News Editor1 Comment
Major earnings expected after the bell on Monday include:Tencent Music Entertainment Group (TME)
Planet 13 Holding (OTCQX:PLNHF)
XpresSpa Group (XSPA)
T2 Biosystems (TTOO)
IonQ(IONQ)Other earnings slated for release after Monday’s Close include:
ADES, ALBO, API, AREC, ASTS, ASYS, AXDX, BIOR, BLND, BMTX, CALA, CETX, CIDM, CIG, COMP, CURI, CWBR, CYRN, DNA, EGLX, OTCQB:ELTP, FLNC, FN, FUV, GAN, GLBE
BTC/USD has surged back up and over US$25,000. First time its been this high since early June.
PBOC rate cut a catalyst for the jump in price appears
China data all brutal out today – Chi has more than Taiwan to worry about … or is it a necessary distraction?
China’s jobless rate for 16 to 24 year olds has hit its highest ever recorded
China is reporting the unemployment rate amongst 16 to 24 year olds at 19.9%, its highest ever.
China July new house prices down 0.9% y/y (down 0.5% prior)
For new homes there were price falls m/m in 40 of 70 major cities (following drops in 38 of them in June),
Existing home prices fell in 51 cities m/m (48 in June).
China July Industrial Production 3.8% y/y (vs. expected 4.6%)
prior was 3.9%
Fixed Assets (excluding rural) YTD 5.7% y/y MISS
expected 6.2%, prior was 6.1%
Retail Sales 2.7% y/y MISS
expected 5.0%, prior was 3.1%
Rate cuts from the PBOC: 1-Year MLF loans rate to 2.75% from 2.85%, repo rate cut also
The PBOC has cut the rate it charges on its one-year medium-term lending facility to 2.75% from 2.85% previously
PBOC sells 400bn yuan 1-year MLF AT A LOWER RATE
The Bank also cut the rate on 7-day reverse repos to 2%, from 2.1% previously
China’s economy is struggling with:
Ongoing fresh COVID flare-ups & associated restrictions and lockdowns
Job security worries
Deepening property crisis making borrowers wary of more debtEquity indices in the Asia-Pacific region began the week on a mixed note while markets in South Korea and India were closed for holidays.
—Equity Markets—
Japan’s Nikkei: +1.1%
Hong Kong’s Hang Seng: -0.7%
China’s Shanghai Composite: UNCH
India’s Sensex: CLOSED
South Korea’s Kospi: CLOSED
Australia’s ASX All Ordinaries: +0.5%
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