Friday, November 4, 2022

❄️How the US Economy Will Be Chilled by Europe’s Freezing Markets

Trading Tips Newsletter
Good morning. Export orders have been contracting for months. That's caused the US trade deficit...
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. Export orders have been contracting for months. That's caused the US trade deficit to explode. The one bright spot? Energy exports, particularly liquefied natural gas, to Europe. But it won't be enough to meet the expected shortfall there, which has already impacted energy prices significantly.

As the Eurozone slows, demand for goods from the US outside of energy will continue to decline. That can add to the pressure already on corporate earnings, particularly for multinational stocks. It's clear that with winter about to unfold, Europe could see a significant economic freeze. And that will cause a chill in the US too. That's a good reason to stay cautious in today's markets.

Now here's the rest of the news:

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MARKETS
DOW 32,001.25 -0.46%
S&P 3,719.89 -1.06%
NASDAQ 10,342.94 -1.73%
*As of market close
Stocks dropped on Thursday, as traders digested Wednesday's Fed meeting.
Oil dropped 2.1 percent, closing at $88.12 per barrel.
Gold dipped 1.0 percent, last going for about $1,634 per ounce.
Cryptocurrencies generally traded lower, with Bitcoin at $20,257 at the stock market close.

Today's TOP TIPS
Follow the Fundamentals, Not the Estimates
Earnings season can be a tricky time. A company can report great earnings. But if they warn on guidance, shares may sell off big time. Or, if a company has poor earnings, shares may move higher as things weren't as bad as the market expected.

In today's market, most news is likely to lead to a discount in shares, whether good or bad. But that may be creating a solid long-term setup for investors.

» FULL STORY

Insider Trading Report: Farmers National Bank (FMNB)
Anne Crawford, a director at Farmers National Bank (FMNB), recently picked up 1,500 shares. The buy increased her holdings by 1.7 percent, and came to a total cost of just under $21,000.

This is the first insider buy since August. Company directors have been active buyers all year, mostly for trades in the $20-25,000 range. Company executives were also buyers earlier in the year. There have only been a handful of insider sales over the past three years.

» FULL STORY

Unusual Options Activity: Advanced Micro Devices (AMD)
Shares of semiconductor company Advanced Micro Devices (AMD) have lost more than half their value in the past year. One trader sees a rebound in the months ahead.

That's based on the March 2023 $55 calls. With 133 days until expiration, 20,093 contracts traded compared to a prior open interest of 541, for a 37-fold rise in volume on the trade. The buyer of the calls paid $10.63 to make the trade.

» FULL STORY

IN OTHER NEWS
Labor Costs Rise at Slower Rate

Labor costs in the US rose at a 3.5 percent rate for the third quarter of the year. That was slightly less than expectations for a 4 percent rise. Labor costs rose as unemployment levels held steady, and as the trade deficit rose, signs that the labor market remains fairly strong.
First Time Homebuyers Hit Record Low

26 percent of homebuyers were first-time buyers, according to the NAR. That's a drop from 34 percent last year, and the lowest level in the survey's 41-year history. The rate hit a peak of 50 percent in 2009, and has generally been between 30 and 40 percent over the past decade.
Bank of England Raises Rates 0.75 Percent

The Bank of England raised its interest rates by 0.75 percent. That's the largest increase for the BoE in 33 years. The move comes as the bank is looking to calm markets following turmoil in the bond market that saw yields spike last month before the bank had to intervene to keep yields lower.
401(k) Plans Now Offering Crypto Exposure

A number of plans have been made available for 401(k) users that give them exposure to cryptocurrency. The move was approved earlier this year, and momentum to have the new asset class available in retirement accounts has been under way for some time.
Stripe Cuts 14 Percent of Workforce

Fintech company Stripe is looking to lay off about 1,120 employees. That's about 14 percent of the company workforce. That's a reversal of the company's rapid growth during the pandemic, when the company underwent a major hiring spree.

S&P 500 MOVERS
TOP
ETSY  15.016%
APD  8.149%
RCL 7.974%
APA 7.731%
BALL 7.586%
BOTTOM
LNC 32.399%
FIS 27.973%
LUMN 16.667%
CTSH 13.508%
FTNT 13.451%

Quote of the Day
The tone of Fed Chair Jay Powell's comments was quite hawkish, which means the Fed still has a way to go to fight inflation, and the level of interest rates will be higher than previously expected. There were no hints of dovishness to indicate the Fed may be poised to pause.
- Jack McIntyre, portfolio manager at Brandywine Global, on the Fed's statement on Wednesday, and why investors should continue to expect the stock market to remain volatile, and potentially even move lower in the months ahead.

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These two stocks are a MUST in every income trader's portfolio.

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