Thursday, February 2, 2023

💥These Two Words Suggest a Big Market Pullback Ahead

Good morning. No matter what the financial asset, there are two words that can explain what...
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. No matter what the financial asset, there are two words that can explain what happens when the price of something gets out of whack: Mean reversion. Simply put, that means that an asset that typically moves moderately will come back to that long-term trend if it's had a bit outperformance.

To some extent, that's described the stock market over the past few years. 2020 and 2021 saw a surge in stocks that brought above-average returns. The start of the monetary tightening cycle that started in 2022 led to a major below-average year. That's the trend now, and with interest rates continuing to rise, mean reversion suggests that we haven't seen the lows of the market quite yet. Trade accordingly.

Now here's the rest of the news:

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First Earnings Season of 2023 is here!

When 100's of companies release Earnings on the same day, it becomes very difficult to track notable Earnings dates for trading or investment purposes.

So I came up with three daily special reports called "Daily Notable Earnings Reports". Here they are:
  • Daily Morning Report: List of Major Stocks Reporting Earnings on the Same Trading Day (The Best for Post-Market Earnings on the Same Day)
  • Daily Midday Report: List of Major Stocks Reporting Earnings in Pre-Market on the Next Trading Day (The Best for Pre-Market Earnings on Next Day)
  • Daily Evening Report: List of Options Trading Ideas Leading Up To Earnings Announcements (The Best for Earnings Trading)
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MARKETS
DOW 34,092.96 +0.02%
S&P 4,119.21 +1.05%
NASDAQ 11,816.32 +2.00%
*As of market close
Markets closed higher on Wednesday, following a quarter-point rate hike by the Fed.
Oil dipped 2.6 percent, closing at $76.84 per barrel.
Gold jumped 1.1 percent, going for $1,966 per ounce.
Cryptocurrencies moved higher, with Bitcoin at $23,583 at the market close.

Today's TOP TIPS
It's All About Passing on Higher Costs to Customers
Wealthy investors tend to see inflation as a friend, not an enemy. Rising prices tend to benefit assets like stocks and real estate over time.

Owning companies that can pass on all, or nearly all, of inflation's higher costs can fare even better over time. When inflation subsides, higher prices remain in place, leading to better profits for investors. While there may be some headwinds now, great companies can be had for a reasonable value.

» FULL STORY

Insider Trading Report: Uber Technologies Inc (UBER)
Yasir Al-Rumayyan, a director at Uber Technologies Inc (UBER), recently bought 250,000 shares. The buy increased his holdings by 181 percent, and came to a total cost of $5.145 million.

This is the first insider buy since the company CEO bought 200,000 shares last May. Two insiders have been slight sellers of shares over the past year, but overall there has been little activity since the company went public.

» FULL STORY

Unusual Options Activity: Macy's (M)
Shares of department store chain Macy's (M) are down about in-line with the overall stock market over the last year. One trader sees a further decline ahead.

That's based on the May $19 puts. With 105 days until expiration, 20,012 contracts traded compared to a prior open interest of 346, for a 58-fold jump in volume on the trade. The buyer of the puts paid $0.77 to make the bearish bet.

» FULL STORY

IN OTHER NEWS
Thousands of Flights Cancelled Amid Texas Ice Storm

An ice storm in Texas has led to thousands of flights being cancelled, largely in and out of Texas. Dallas/Ft. Worth and Dallas Love Field have had the majority of the recent shutdowns, accounting for about 70 percent of the airport's regular schedule.
Spitznagel Warns on "Mega-Tinderbox-Timebomb"

Mark Spitznagel, fund manager at Universa, sees an eventual financial crisis following the market's 15 year run off of the housing crash. The manager sees a black swan event as having the potential to create a "mega-tinderbox-timebomb" as investors have taken on extreme risks to earn modest rewards.
Netflix Clarifies Account Sharing Policy

Streaming company Netflix (NFLX) is looking to curb account sharing this year, by asking subscribers to pay extra if they use the streaming service outside their household for extended periods of time. The company is already testing extra fees for account sharing in Chile, Costa Rica, and Peru.
PayPal to Lay Off 2,000 Employees

Payment company PayPal (PYPL) has announced that it is looking to cut about 2,000 full-time employees from its staff. That's about 7 percent of its workers. The layoffs will start in the coming weeks. PayPal adds to a growing number of big tech companies looking to cut staff following a sizeable buildup during the pandemic.
Bed Bath and Beyond to Close Stores Amid Path to Bankruptcy

Retailer Bed Bath and Beyond (BBBY) closed 150 locations last August, and is now on track to close another 87 locations. The company is also moving towards bankruptcy, following the regulatory filing last week that it's received a notice of default from its lender.

S&P 500 MOVERS
TOP
BIDU  13.361%
AMD  13.085%
ODFL 11.682%
SYK 9.684%
MPWR 8.259%
BOTTOM
WRK 13.226%
EA 9.838%
CB 5.179%
MTCH 4.823%
JNPR 4.334%

Quote of the Day
This 'Fed pause' window we believe is likely to prove bullish, with a long duration and growthy tilt. In fact, we see that expectation as playing a large role in the 2023 rally already, and it's a good reminder why being fully invested is an important component of building long-term wealth. Just remember: when the Fed pauses, it will likely be because the economy is convincingly turning over. That means the related rally is liable to be short-lived. We are fading this rally.
- Lauren Goodwin, economist at New York Life Investments, on why investors may be getting ahead of a potential Fed pause this year, and that such a pause may indicate the economy is slowing down too much.

Sponsored Content
Your Special Report: Daily Notable Earnings
First Earnings Season of 2023 is here!

When 100's of companies release Earnings on the same day, it becomes very difficult to track notable Earnings dates for trading or investment purposes.

So I came up with three daily special reports called "Daily Notable Earnings Reports". Here they are:
  • Daily Morning Report: List of Major Stocks Reporting Earnings on the Same Trading Day (The Best for Post-Market Earnings on the Same Day)
  • Daily Midday Report: List of Major Stocks Reporting Earnings in Pre-Market on the Next Trading Day (The Best for Pre-Market Earnings on Next Day)
  • Daily Evening Report: List of Options Trading Ideas Leading Up To Earnings Announcements (The Best for Earnings Trading)
I am offering these daily special reports to you for FREE. Click Here and Sign Up for Daily Reports..

By clicking the link you are subscribing to The StockEarnings Daily Newsletter. Unsubscribing is easy. Privacy Policy)


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