Wednesday, May 10, 2023

🐄Where’s the Market’s Beef?

Good morning. An old television ad for Wendy's had three old ladies looking at a competitor's...
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. An old television ad for Wendy's had three old ladies looking at a competitor's burger and asking: "Where's the beef?" Today's market also seemingly lacks some real beef behind it. Corporate earnings have been fine. But analysts lowered expectations going into those earnings. And the market indices are driven by large-cap tech stocks.

Medium and small cap stocks have been in more of a selloff mode. And somehow, despite thee of the four largest bank failures in U.S. history this year (so far), the markets have been getting calmer in recent weeks. Chances are there could be a big bump higher in market volatility, especially as debt ceiling issues come to the forefront.

Traders should continue to stay cautious… and look to invest for the long haul only in assets that have the beef.

Now here's the rest of the news:

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MARKETS
DOW 33,561.81 -0.17%
S&P 4,119.17 -0.46%
NASDAQ 12,179.55 -0.63%
*As of market close
Stocks traded lower on Tuesday, as debt ceiling debates continued in Washington.
Oil rose 0.5 percent, closing at $73.49 per barrel.
Gold rose 0.4 percent, ending the day at $2,042 per ounce.
Cryptocurrencies moved higher, with Bitcoin at $27,678 at the stock market close.

Today's TOP TIPS
Companies That Use Debt Responsibly Can Offer Growth and Stability
Years of ultra-low interest rates made it easy for companies to issue debt at a low cost. As a bonus, companies could even deduct their interest payments for tax purposes.

Today, with interest rates rising, it makes less sense for companies to take on debt. They would need a project with a high prospective return to justify the costs. So companies paying down debt rather than looking to add more or refinance at today's relatively high rates may offer solid returns.

» FULL STORY

Insider Trading Report: Akami Technologies (AKAM)
Thomson Leighton, CEO at Akami Technologies (AKAM), recently bought 642 shares. The buy increased his stake by less than 1 percent, and came to a total cost of $50,061.

The buy follows up on a 934 share buy made a few days before, at a cost of $75,122. And the CEO made 8 separate buys in April, most in the $50,000 range, with two buys in the $75,000 range.

» FULL STORY

Unusual Options Activity: Rapid7 Inc (RPD)
Cybersecurity software company Rapid7 Inc (RPD) has seen shares rally more than 50 percent off of their lows set back in November. One trader sees a further rally in the months ahead.

That's based on the August $55 calls. With 100 days until expiration, 5,327 contracts traded compared to a prior open interest of 191, for a 28-fold rise in volume on the trade. The buyer of the calls paid $5.67 to make the bullish bet.

» FULL STORY

IN OTHER NEWS
Banking Data Shows Credit Standards Tightening

As the banking sector has faced the second, third, and fourth-largest failures in U.S. history, lenders have increased their standards according to the latest survey conducted by the Federal Reserve. The changes have been attributed to economic uncertainty, higher bank funding costs, and a potential deterioration in collateral values.
Airline and Hotel Earnings Show Robust Travel Demand

Corporate earnings from the airline and hotel industries show robust demand, particularly for overseas travel. With demand outpacing supply for rooms and flights, prices are likely to stay higher for longer in this part of the economy, which appears to be normalizing following the 2022 post-pandemic boom.
Tesla Breaks Ground on Lithium Refinery

Automaker Tesla Motors (TSLA) has broken ground on a lithium refinery in Corpus Christi, Texas. The company plans to invest $375 million to build the facility. Lithium supplies and production are seen as a potential bottleneck for expanding the number of electric cars on the road.
Traditional Finance Companies Continue Crypto Push

A number of traditional finance companies such as MasterCard (MA), PayPal (PYPL) and Robinhood (HOOD) are working to expand onramps from traditional finance into cryptocurrencies. Areas of concern include the fact that gas fees and crypto wallets aren't intuitive to non-crypto users, and that traditional finance companies can fill that gap.
SEC Lists Tokens Classified as Securities

The U.S. Securities and Exchange Commission has listed more than a dozen cryptos that the regulatory agency says are illegal to sell in the country. These crypto tokens qualify as securities under securities laws. The agency has now nearly tripled the number of crypto tokens that qualify as securities since the start of 2022.

S&P 500 MOVERS
TOP
DVA  14.169%
MCK  5.998%
ALB 5.45%
TDG 5.036%
WELL 2.823%
BOTTOM
PYPL 12.524%
DISH 11.623%
WAT 7.472%
IFF 7.144%
HSIC 6.065%

Quote of the Day
The underlying picture of the economy remained largely the same, as most reports did little to change long-term trends—the services side of the economy remained resilient, the slump in manufacturing proceeded, and the employment picture continues to defy gravity.
- Brent Schutte, chief investment officer of the Northwestern Mutual Wealth Management Company, on how the economy's outlook is largely unchanged despite the latest economic data and last week's quarter-point rate hike by the Federal Reserve.

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