Wednesday, August 10, 2022

🐻History Suggests the Bear Market Rally May Soon End

Good morning. Stocks have been trending up for the past few weeks. And with earnings season going...
It's the monthly jobs numbers today and they're not going to be pretty and will be possibly the tip of the iceberg as we head into May.

Good morning. Stocks have been trending up for the past few weeks. And with earnings season going fairly well, many traders may think the worst is over. Yet, with the Federal Reserve rapidly tightening monetary conditions, and with inflation still running rampant, we may yet see another leg down for the markets.

As with 2008, when the idea made the rounds that the pain in the subprime mortgage space was "contained," there are any number of potential shocks to the economy that could cause the recent rally to stall. We may already see that with the number of chipmakers this week reporting lower guidance and warning on economic conditions.

Traders shouldn't get too bullish in today's conditions, and continue to look for ways to hedge or even play another market swing lower.

Now here's the rest of the news:

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MARKETS
DOW 32,774.41 -0.18%
S&P 4,122.47 -0.42%
NASDAQ 12,493.93 -1.19%
*As of market close
Stocks dipped on Tuesday, as companies continued to warn on profitability.
Oil declined 0.2 percent, closing at $90.57per barrel.
Gold rallied 0.3 percent, last going for $1,811 per ounce.
Cryptocurrencies dropped, with Bitcoin at $23,075 at the stock market close.

Today's TOP TIPS
Pick Up Slowing Companies While Markets Are Fearful
The stock market is forward looking. The selloff this year started well before companies started to show a slowdown in earnings. Now that this slowdown is being reported, however, stocks may start moving higher once again before earnings then trend higher.

Traders aware of this trend can take advantage today by buying shares of great companies warning on earnings now, even though they may be poised for strong growth later.

» FULL STORY

Insider Trading Report: First Solar (FSLR)
Georges Antoun, Chief Commercial Officer at First Solar (FSLR), recently picked up 9,946 shares. The buy increased his holdings by 36 percent, and came to a total price just under $1 million.

He was joined by the company's Chief Quality Officer, who picked up 489 shares, paying about $50,000 to do so. And earlier in the month, the company CFO picked up nearly 2,000 shares for about $200,000. These mark the only insider buys at the company in the past three years.

» FULL STORY

Unusual Options Activity: Big Lots Inc (BIG)
Shares of discount retailer Big Lots Inc (BIG) have been trending down over the past year. One trader sees shares bucking that trend in the next month with a move higher.

That's based on the September $25 calls. With 37 days until expiration, 6,856 contracts traded compared to a prior open interest of 140, for a 49-fold rise in volume on the trade. The buyer of the calls paid $1.80 for the trade.

» FULL STORY

IN OTHER NEWS
City and State Pensions Report Worst Performance Since 2009

City and state pension funds have reported their worst start to a year since 2009. The decline in both stocks and bonds in the first half of the year has resulted in the poor performance. It will likely add pressure on government financing. On average, funds reported a 7.9 percent loss in the year ending June 30.
Chips Act Signed, But May Not Solve Shortage

The Chips Act has been signed into law by President Biden. The legislation is designed to increase domestic semiconductor production, with over $50 billion earmarked for that express purpose. However, many are warning that the size of the law relative to the size of the semiconductor market means that it will take time to play out, and won't completely solve the current chip shortage.
UK Energy Bills Set to Impoverish One Third of Brits

Energy prices look to soar in the UK this winter, with estimates that prices could soon soar to nearly $430 per month. At that price, one third of British households are expected to be in fuel poverty, or nearly 10.5 million homes. The jump in prices is occurring amid high natural gas and energy prices, as well as a jump in wholesale prices.
Ford Raising the Price on the Electric F-150

Citing rising costs, Ford Motors (F) will raise the price of its electric F-150 Lightning model by up to $8,500. The company joins other automakers increasing the prices of electric cars amid high inflation and commodity costs. Depending on features, starting prices for the vehicle will now range from $47,000 to $97,000.
Spotify Adds Live Collaboration and Auto Save Tool for Soundtrap

Soundtrap, the digital audio workstation app for musicians, is looking to add new features including auto save and live collaboration. The features are currently in beta, and artists can manually enable those new features. Soundtrap is owned by streaming platform Spotify (SPOT).

S&P 500 MOVERS
TOP
NLSN  21.092%
PFG  6.614%
NWS 5.29%
NWSA 5.153%
VTRS 3.915%
BOTTOM
NCLH 11.069%
ZM 7.809%
LRCX 7.71%
AMAT 7.326%
KLAC 7.225%

Quote of the Day
The question is if the rally is running out of breadth. There are certainly things that have improved after the past month that would justify, in our view, a move higher, which we have certainly seen. However, a lot has to go right to be able to say that the coast is clear.
- Angelo Kourkafas, investment strategist at Edward Jones, on why the stock market may not continue higher if economic data fails to improve from here.

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