Market Wrap – Coin and Bitcoin Add to Dirty Dribbler Stock Earnings Wreckage Continues May 10, 2022

Selling picked up early in the markets but did reverse from the new lows after a better than expected 3-year treasury auction. However, the recovery bounce had a tepid response. The major US indices ended the day mixed. The Dow industrial average closed down; S&P index virtually unchanged while the NASDAQ rose nearly 1%. Natural Gas crashed further to HH 6.50 area to reverse with a vicious almost $1 bounce. Oil for its part traded under $100 WTI.

Rising interest rates, Russia’s war in Ukraine, and China’s COVID-related lockdowns all remain. Today’s earnings wreckage included more DDD holdings all wrecked. $COIN (-19%) $U (-38%) $GRWG (-19%) fell further on more disappointing news. Today’s reported stocks followed yesterday’s DDD Upstart and Palantir destruction, both proud members of the Dribbler Dirty Dozen and symbolic of the overvalued tech market.

We look at the indices, $AAPL $U $UPST $PLTR $UPST $COIN $GRWG $TSLA Gold, Copper, BTC, ETH, Natgas and oil in the podcast. We talk through to today’s action and where to now …

We talk through to today’s action and where to now …

Enjoy live commentary from Our Trading Room at YouTube as the day wraps up – feel free to like and share

Live on YouTube

In today’s post market wrap live from the trading room traders discuss the patterns through the options and futures markets that have played out perfectly from last week to today. We discuss trading psychology, risk management and trader development in today’s markets. Listen to our technical and market psychology read on the day. Join the Traders Community Podcast crew @traderscom @knovawave @Mahdavi4 @MetaJohnny1 plot out 2022.

Around the table today was packed with the Fed, geopolitics, domestic political influence and distortions, reading sentiment, patterns and order flow. After hours earnings and chart pattern review. This is a high-risk market.


Market Closes

Energy

  • Crude Oil Futures settled lower settled lower by $3.41 (-3.3%) to $100.02/barrel. 
  • WTI off the high price of $129.44. The highest in 2008 was $147.27.
  • Brent Crude Futures 102.13 -0.33 -0.32
  • Gold Futures 1837.40 -21.20 -1.14
  • Natural Gas Futures 7.391 0.285 4.01
  • Unleaded Gasoline Futures 3.5104 -0.1315 -3.61
  • Rystad Energy said the war-induced uncertainty is likely to continue to impact gas prices.
  • “The gas market remains highly volatile, and news driven,” said Rystad analyst Fabian Rønningen. This week, in particular, “the market remains anxious for clarity on rules governing ruble payments for Russian gas supplies.”
  • BNEF data showed gas flows to U.S. export terminals Tuesday rose by +10.7% w/w to 12.8 bcf.   In March gas flows to U.S. export terminals rose to a record 13.77 bcf.

Commodities and FX

  • The U.S. Dollar Index was little changed at 103.70.
  • Gold futures settled $15.60 lower (-0.9%) to $1,841.00/oz, pressured in part by a rise in the USD.
  • Silver Futures 21.235 -0.585 -2.68
  • Copper Futures 4.1605 -0.0330 -0.79
  • Corn Futures 775.75 3.75 0.49
  • Wheat Futures 1095.50 2.75 0.25
  • Bloomberg Commodity Index 124.62 -0.14 -0.11
  • Bitcoin USD 31004 44 0.14
  • Ethereum USD 2327.87 5.95 0.26

Stocks

US Indices & S&P 500 sector watch:

  • Dow industrial average down -84.986 points or -0.26% at 32160.75
  • S&P index up 9.82 points or 0.25% at 4001.05
  • NASDAQ index up 114.43 points or 0.98% at 11737.68
  • Russell 2000 down -0.29 points or -0.02% at 1761.78
  • NYSE Composite 15025.74 -32.13 -0.21
  • CBOE Volatility 32.99 -1.76 -5.06
  • NYSE Adv 1361 Dec 13 Vol 1.2 bln
  • Nasdaq Adv 1642 Dec 2570 Vol 6.2 bln
  • Of the S&P 500 sectors the S&P 500 information technology (+1.6%) and communication services (+0.8%) sectors were top of the standings, joined by the energy sector (+0.9%).
  • Real estate (-2.3%), utilities (-1.2%), and financials (-0.8%) sectors were the worst performers.

Key After Hours


  • Allbirds (BIRD) misses by $0.03, beats on revs; guides Q2 revs below consensus; guides FY22 revs below consensus… BIRD down 13.7%
  • Callaway Golf (ELY) beats by $0.12, beats on revs; guides Q2 revs above consensus; raises FY22 revs above consensus… ELY up 8.5%
  • Celsius (CELH) beats by $0.06, beats on revs… CELH up 8.4%
  • Coinbase Global (COIN) misses by $2.82, misses on revs, MTUs down 44% sequentially; believes retail MTU and total Trading Volume will be lower in 2Q22 compared to 1Q22; reiterates FY22 outlook; files mixed securities shelf offering… COIN down 14.7%
  • DoubleVerify (DV) misses by $0.04, beats on revs; guides Q2 revs above consensus; guides FY22 revs above consensus… DV up 0.1%
  • Electronic Arts (EA) beats by $0.17, reports revs in-line; guides Q1 EPS above consensus, revs below consensus; guides FY23 EPS below consensus, revs in-line… EA up 3.1%
  • GlobalFoundries (GFS) beats by $0.18, beats on revs; guides Q2 EPS above consensus, revs above consensus… GFS up 3.7%
  • H & R Block (HRB) beats by $0.30, beats on revs; raises FY22 revs above consensus… HRB up 4.5%
  • PLBY Group (PLBY) beats by $0.19, beats on revs… PLBY up 12.0%
  • Purple Innovation (PRPL) beats by $0.11, beats on revs; lowers FY22 revenue guidance… PRPL up 7.1%
  • Roblox (RBLX) reports Q1 (Mar) results, misses on bookings… RBLX down 3.8%
  • Wynn Resorts (WYNN) misses by $0.06, misses on revs… WYNN up 0.1%
  • The Trade Desk (TTD) beats by $0.07, beats on revs; guides Q2 revs in-line… TTD down 5.9%
  • Unity Software (U) reports EPS in-line, revs in-line; guides Q2 revs below consensus; guides FY22 revs below consensus… U down 27.6%

US Markets YTD

  • Dow Jones Industrial Average -11.5% YTD
  • S&P 500 -16.1% YTD
  • Russell 2000 -21.5% YTD
  • Nasdaq Composite -25.0% YTD

Cboe Daily Market Ratios:

Cboe Daily Market Statistics

Europe

Index – Last – Chg – % Chg

European stock indexes closed near the lows of the day in relentless selling that accelerated after the US open.

  • UK: FTSE 100 7243.22 26.64 0.37
  • Germany: DAX 13534.74 154.07 1.15
  • France: CAC 40 6116.91 30.89 0.51
  • Italy: FTSE MIB 23069.78 237.22 1.04
  • Spain: IBEX 35 8139.20 0.00 0.00
  • Stoxx Europe 600 420.29 2.83 0.68
  • Switzerland: Swiss Market 11541.72 97.54 0.85

Asia

  • Hong Kong: Hang Seng 19633.69 -368.27 -1.84
  • Japan: Nikkei 225 26167.10 -152.24 -0.58
  • China: Shanghai Composite 3035.84 31.70 1.06
  • India: S&P BSE Sensex 54364.85 -105.82 -0.19
  • Australia: S&P/ASX 7051.2 -69.5 -0.98
  • S. Korea: KOSPI 2596.56 -14.25 -0.55

Recall in January: JP Morgan quant maestro Marko Kolanovic was out with a comment near lows that didn’t go unnoticed.

“Near term we recommend buying the dip on US indices given oversold conditions… though medium term we favor EM/China/Europe on a regional basis on improving activity and easing headwinds, and the UK on valuation.”

Marko Kolanovic Jan 10 2022
  • We stay positive on equities and expect omicron will ultimately prove a positive for risk assets, as this milder but more transmissible variant speeds the transition from pandemic to endemic with a lower human toll,
  • As this wave fades, it will likely mark the end of the pandemic
  • omicron’s lower severity and high transmissibility crowds out more severe variants and leads to broad natural immunity
  • signs of supply constraints potentially passing their worst point

Recall back in October he said to buy the dip because fears of higher yields were overdone adding the market could absorb higher yields. “We don’t expect a broad market selloff unless yields were to rise above 250-300 bps (US 10y), which we don’t foresee in the near term,” From there the S&P 500 rose 11.5%.

Perhaps this time it’s’ different but nevertheless the algorithms liked it that day but from then ……… not so much

Bonds

U.S. Treasuries finished Tuesday mostly on a higher note with longer tenors leading the advance. Shorter tenors eventually turned negative even though today’s $45 bln 3-yr note auction met strong demand ahead of tomorrow’s $36 bln 10-yr note sale.

  • 2-yr: +2 bps to 2.63%
  • 3-yr: UNCH at 2.83%
  • 5-yr: -7 bps to 2.92%
  • 10-yr: -9 bps to 2.99%
  • 30-yr: -8 bps to 3.13%

What You Need Know About Quantitative Tightening QT Bifurcations Explained – TRADERS COMMUNITY

Most of us are familiar with QE but what is QT? When the Fed reduces its balance sheet it is known as quantitative tightening, the flipside of quantitative easing. The US Federal Reserve at its December FOMC put the world on notice that tighter financial conditions are ahead. What does it mean? The possible Bifurcations would make Mandelbrot wince.

Where did it all start?

The Federal Reserve System Chairman Jerome Powell took a decidedly hawkish tone today at last month’s FOMC and the release of Minutes which sent US stock markets sharply lower. That day in the Treasury market the 2-yr yield, which tracks expectations for the fed funds rate, rose seven basis points to 0.83%. The 10-yr yield settled the session four basis points higher at 1.71%, with growing expectations for a run-up to 2.00%.

News Highlights

USA

Market Notables

  • Uber (UBER 23.05, -3.02, -11.6%) fell nearly 12.0% after CNBC reported that the company was planning to cut costs, exacerbating the underlying growth concerns in the market.
  • Palantir (PLTR 7.46, -2.02, -21.3%) dropped 21% on disappointing revenue guidance
  • Rivian (RIVN 22.78, -6.01, -20.9%) also dropped 21% amid news that Ford Motor (F 13.37, -0.84, -5.9%) and a large unknown seller were planning to unload millions of shares, according to CNBC.

Europe

  • British Foreign Secretary is planning changes to the Northern Ireland protocol that will likely draw opposition from the EU.
  • British gas supplier Centrica said that earnings for the year are on track to be near the high end of expectations.
  • Eurozone’s May ZEW Economic Sentiment fell to 29.5 from 43.0 (expected -42.0).
  • Germany’s May ZEW Economic Sentiment rose to -34.3 from -41.0 (expected -42.0) and ZEW Current Conditions fell to -36.5 from -30.8 (expected -35.0).
  • Italy’s March Industrial Production was unchanged m/m (expected -1.9%; last 4.0%) but increased 3.0% yr/yr (expected 1.3%; last 3.4%).

Asia

  • Japan’s March Household Spending rose 4.1% m/m (expected 2.6%; last -2.8%) but was down 2.3% yr/yr (expected -2.8%; last 1.1%).
  • Australia’s Q1 Retail Sales rose 1.2% qtr/qtr (expected 1.0%; last 7.9%). April NAB Business Confidence fell to 10 from 16 and NAB Business Survey rose to 20 from 15.

Looking ahead:

The Day Ahead:

  • Monday: March Wholesale Inventories (Briefing.com consensus 2.3%; Prior 2.5%)
  • Tuesday: April NFIB Small Business Optimism Index (Prior 93.2)
  • Wednesday: MBA Mortgage Applications Index (Prior +2.5%); April CPI (Briefing.com consensus 0.2%; Prior 1.2%) and Core CPI (Briefing.com consensus 0.4%; Prior 0.3%); April Treasury Budget (Prior -$192.7B)
  • Thursday: Weekly Initial Claims (Briefing.com consensus 191K; Prior 200K) and Continuing Claims (Prior 1384K); April PPI (Briefing.com consensus 0.5%; Prior 1.4%) and Core PPI (Briefing.com consensus 0.6%; Prior 1.0%)
  • Friday: April Import Price Index (Prior 2.6%) and Import Price Index, Ex-Fuel (Prior 1.2%); April Export Price Index (Prior 4.5%) and Export Price Index, Ex-Ag (Prior 4.5%); May Preliminary Univ. Of Michigan Index of Consumer Sentiment (Briefing.com consensus 63.5; Prior 65.2)

Earnings:

Monday (May 9)
Pre-Market: ACM AZUL BNTX CLVT COTY DUK ELAN ENR HSKA DINO HGV HEP JLL RIDE MAC MSGE PLTR RCM RDNT TGNA TWKS THS TSN VTRS WOW
After-Hours: DDD AMC AMWL ANGI AZTA BLI BLNK BHF BWXT CARG DHT DNB EQH ESE EVBG FGEN GDRX GRPN HLIO HRTX HI HIMS HBM ICUI IAC IFF JRVR FROG LPSN MGY MAXR MESA MCHP MRC NCMI NHI NVAX OPK OPRT PLUG PRAA PRIM PRA PUBM RNG RBA ROVR SWAV SPG SDC SU SUPN TASK TDUP TREX UNVR UPST VVV VECO VRM XPO YMAB ZNGA

Tuesday (May 10)
Pre-Market: MASS ACRS AHCO ALGM AMRS ARMK AVYA AZEK BHC BSY BCO BLDR CRNC CEVA CHH CRON XRAY DM DBD DSEY EBIX EPC ENOV EVRI FOXA HAE HL H IAA IIVI IGT ITCI KNBE LCII LI MBUU MIDD EYE NXST NCLH NOVT PTON PLNT RETA REYN STER STVN SYY TTGT TPG TDG VERX WMG
During Market Hours: ENTA
After-Hours: EGHT AKA ABCL BIRD ARLO ARRY AXON BOOT ELY CELH COIN COLL CRCT CUTR DAR MSP DV DOUG EA EOLS EXEL FNF FLYW GFS GMED GOCO GO GRWG HALO HCAT ICHR INO IPAR JXN JAMF KGC LNW MTTR MODN NSTG OXY OLO OSUR PLBY PRPL RXT RPAY RBLX RKT SCSC SOFI SWCH SKIN REAL TTD U VUZI WELL WES WYNN YELL ZETA ZD

Wednesday (May 11)
Pre-Market: ATC FVRR KRNT DNUT LTH NOMD OLPX PFGC PRGO SLVM WEN WWW YETI
After-Hours: DIBS ACVA DOX APP ATCO BYND BMBL CPA CPNG BROS FLNC MFC MQ PAAS RIVN SMRT SONO STE SLF COOK DIS ZIP

Thursday (May 12)
Pre-Market: CAMT CYBR CYXT DAVA GENI HIMX HLLY IS KELYA NABL NICE NVMI PGTI PRMW SHCR SIX DTC SQSP TPR TNK USFD UTZ
After-Hours: AFRM AQN BLND BRLT COMP LAW DUOL FIGS HRT INDI LZ MLNK MSI NVTS NEWR PAYO POSH TBLA TOST VZIO VTEX UP

Friday (May 13)
Pre-Market: PLXP
After-Hours: None

Trust you all had a great day, sleep well and get your trading plan sorted.

Any questions please feel free to ask them below. Trade Smart!