Author: Consultant

Dow slumps 600 points as traders worry about larger rate hikes, JPMorgan falls after earnings

https://www.cnbc.com/2022/07/13/stock-futures-slip-after-wednesdays-session-as-wall-street-awaits-bank-earnings.html

Morgan Stanley misses analysts’ estimates on worse-than-expected investment banking revenue

• Morgan Stanley reported second-quarter earnings and revenue that were below analysts’ expectations.
• The bank’s results were hurt by a steep 55% decline in investment banking revenue.
• The results confirm what some analysts had feared for Morgan Stanley, which runs one of the larger equity capital markets operations on Wall Street.

https://www.cnbc.com/2022/07/14/morgan-stanley-ms-2q-2022-earnings-.html

EU hikes inflation forecast to 8.3% for 2022 as Russia-Ukraine war drives soaring prices

• In May, the European Commission expected inflation in the euro area to hit 6.1% in 2022, before falling to 2.7% in 2023. Now, both forecasts have been revised up to 7.6% and 4%, respectively.
• For Europe as a whole, the inflation forecasts have been revised up from 6.8% in 2022 and 3.2% in 2023, to 8.3% and 4.6% respectively.
• Many economists are pricing in a recession for the euro zone either later this year or in 2023, but — for now at least — European officials are refusing to talk about the possibility of a recession.

https://www.cnbc.com/2022/07/14/eu-hikes-inflation-forecast-to-7point6percent-as-russia-ukraine-war-fuels-price-increases.html

World’s largest chipmaker TSMC posts record profit allaying fears over semiconductor headwinds

• TSMC, the worlds biggest chipmaker, posted record net profit in the second quarter.
• However, TSMC CEO CC Wei said that some of the company’s capital expenditure would be “pushed out into 2023.”
• The strong results and outlook, but caution on spending, highlights the careful path chipmakers are walking at a time of concern about rising prices and the impact on consumer demand.

https://www.cnbc.com/2022/07/14/tsmc-q2-2022-chipmaker-posts-record-profit-and-strong-guidance.html

Coachers Corner – June 2022

Earnings Season

RTMA July 11

JPMorgan Chase says second-quarter profit fell 28% after building reserves for bad loans

• Here are the numbers: Earnings of $2.76 a share vs the $2.88 per share estimate of analysts surveyed by Refinitiv.
• Revenue of $31.63 billion vs. $31.95 billion estimate

https://www.cnbc.com/2022/07/14/jpmorgan-jpm-2q-2022-earnings.html

JULY 14 Dow futures fall more than 300 points as traders weigh potential for big rate hikes

Stock futures fell Thursday as traders assess the possibility of even tighter U.S. monetary policy on the back of a hot inflation report. Traders also looked ahead to earnings from major U.S. banks.

Dow Jones Industrial Average futures shed 335 points, or 1.1%. S&P 500 futures were 1.1% lower, and Nasdaq 100 futures were down 1%.

The consumer price index rose 9.1% on the year in June, higher than a Dow Jones estimate for an 8.8% year-over-year increase. Core CPI, which excludes volatile prices of food and energy, was 5.9%, also ahead of a 5.7% estimate.

In addition, the Beige Book, released Wednesday by the Fed showed worries of an upcoming recession amid high inflation.

The CPI report also impacted treasuries, sending the 2-year Treasury yield up nine basis points to about 3.138% while the yield on the 10-year Treasury fell about 4 basis points to 2.919. An inversion of the two is a popular signal of a recession.

The report also opened the door for a big Federal Reserve rate increase later this month, with the fed funds futures market now pricing in a hike of as much as 1% — or 100 basis points.

“The takeaway for investors is that Fed policy remains data-dependent and the central bank will continue on an aggressive tightening path until inflationary pressures peak decisively,” strategists at BCA Research wrote in a note. “Persistent price pressures call for another jumbo hike at the July 26-27 FOMC, but there is still room for the data to improve before the September meeting, 8 weeks later.”

Earnings season continues Thursday with JPMorgan Chase and Morgan Stanley scheduled to report before the bell on Thursday.

Weekly jobless claims and the June producer price index report, which measures prices paid to producers of goods and services, will also be released Thursday. Both reports will give further insight into the economy.

Bullish on Atco Ltd.

Atco ACO-X-T +0.80%increase (Friday’s close $44.09) had a major decline in early-2020 (A-B), followed by a recovery rally and a two-part base formation. The first part consisted of a horizontal trading range mostly between $36 and $43 (dashed lines) and after a minor rise above this range (C) it settled into a very bullish “descending triangle formation” (dotted lines). The recent breakout (D) signalled a change from a base-building pattern to the start of a rising trend. The current correction should provide a good entry level. A rise above $45 would suggest the resumption of the uptrend.

There is good support near $41-42; only a sustained decline below this level would be negative.

Point & Figure measurements provide targets of $52 and $55. Higher targets are also visible.