Monday, January 23, 2023

😖Markets May Slump If This Big Assumption Fails to Stay True

Good morning. Following the one-day, 23 percent crash in stocks in October 1987, traders have...
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. Following the one-day, 23 percent crash in stocks in October 1987, traders have followed the idea of the "Fed put." Essentially, the central bank stands ready to protect financial markets on a steep enough meltdown. The Fed's actions following the 2000 crash, 2008 crash, and 2020 Covid crisis have borne that out.

It's a big assumption protecting investors from significant downside. But with the big jump in interest rates last year, it's an assumption worth questioning. If the Fed is trying to get markets to act as though there isn't big downside protection ahead, they may continue to keep interest rates higher for longer this year.

That's another possibility for traders to consider, and why trades betting against the market and overpriced stocks may continue to be profitable this year.

Now here's the rest of the news:

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MARKETS
DOW 33,375.49 +1.00%
S&P 3,972.61 +1.89%
NASDAQ 11,140.43 +2.66%
*As of market close
Markets jumped higher on Friday, with tech leading the way.
Oil rose 1.3 percent, closing at $81.40 per barrel.
Gold traded flat, going for $1,930 per ounce.
Cryptocurrencies trended higher, with Bitcoin at $22,215 at the market close.

Today's TOP TIPS
Use Market Downturns to Buy Quality Consumer Goods Companies
Some stocks tend to hold up well in any market. One area is consumer goods companies. These firms may make humdrum products like prepackaged food, soap, shampoo or toilet paper, but those products never fall out of demand.

When markets turn lower, these companies may sag as well. And that can provide patient, long-term investors with a decent entry point that they otherwise might not have made. Such opportunities are appearing today…

» FULL STORY

Insider Trading Report: Zymeworks (ZYME)
Ecor1 Capital, a major holder at Zymeworks (ZYME), recently bought 985,100 shares. The buy increased the fund's holdings by 11 percent, and came to a total cost just under $9.7 million.

The buy comes a few days after the company bought 1,026,300 shares, paying about $7.8 million for that stake. Another major holder at the company bought shares back in October. Otherwise, company insiders have largely been sellers of modest amounts of shares.

» FULL STORY

Unusual Options Activity: Intel (INTC)
Shares of chipmaker Intel (INTC) are down 44 percent over the past year, about three times worse than the slide in the S&P 500. One trader sees the stock continuing lower over the next two years.

That's based on the January 2025 $13.00 put. With 725 days until expiration, 10,004 contracts traded compared to a prior open interest of 312, for a 32-fold jump in volume on the trade. The buyer of the puts paid $0.60 to make the bearish bet.

» FULL STORY

IN OTHER NEWS
Fed Vice Chair Sees Inflation Easing

Lael Brainard, Vice Chair at the Federal Reserve, sees inflation easing. She also sees restrictive monetary policy continuing for some time, as the central bank remains committed to a target of 2 percent annual inflation. Brainard noted such data points as a declining producer price index and the recent decline in retail sales.
Existing Home Sales Dropped In 2022

Home sales dropped 17.8 percent in 2022, reversing years of rising sales. Total home sales dropped to their lowest level since 2014, with 5.03 million homes sold. The decline occurred thanks to a doubling of mortgage rates off of historic lows, which made borrowing costs too expensive for buyers.
Summers Warns on Finishing the Job to Beat Inflation

Former US Treasury Secretary Larry Summers is warning central banks to stay the course on tightening monetary policy. Easing too soon could cause another surge of inflation, rather than keep it down for good. The warning comes as year-over-year inflation numbers have come down and investors have turned more optimistic about the economy.
Alphabet Announces 12,000 Layoffs

Alphabet (GOOG), the parent company of search engine company Google, is laying off about 6 percent of its workforce. That will impact roughly 12,000 workers. That follows a downsizing pattern many other big tech companies have engaged in recent months, even as job data indicates a tight market for workers overall.
Genesis Files for Bankruptcy

Cryptocurrency brokerage Genesis has filed for Chapter 11 bankruptcy, joining other such firms over the past few months. The firm owes its top 50 creditors about $3.4 billion. That includes a $53 million commitment to VanEck for a crypto fund for accredited investors.

S&P 500 MOVERS
TOP
SIVB  15.426%
NFLX  7.797%
SYF 7.7%
SBNY 7.266%
COF 6.115%
BOTTOM
RE 2.363%
GS 2.118%
ACGL 1.814%
WMB 1.629%
LLY 1.571%

Quote of the Day
Despite all the big-tech post-pandemic layoffs, the jobs market remains hot. The labor market needs to break to allow the Fed to comfortably keep rates on hold.
- Ed Moya, senior market analyst at Oanda, on why interest rates will likely continue to rise as the job market remains strong, even with some big-name companies announcing layoffs in recent months.

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IRA/401(k) ALERT: Secret IRS Loophole May Change Your Life
The savings of regular working class Americans could be in serious trouble.

But there IS something you could do…

If you're concerned (and you should be) don't wait around for something to happen — you can do something NOW.

Request a copy of this FREE GUIDE that explains exactly why THOUSANDS have used this IRS Loophole to possibly save their IRA/401(k).

Act now! It only takes seconds.

The next step is yours, and it could mean a future of wealth… or poverty. It's up to you.

All you have to do is request the free guide now.

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