Well folks, as expected, all major indices took a dive yesterday with the S&P, TSX and Nasdaq dropping around 1% by close. This came as the first leg of housing data being released this week was announced by the NAHB with their Home Builders’ Index being reported at 31 vs the median forecast of 34 - this index is a barometer of home builders’ opinions across the US and as of yesterday, has now declined every month of 2022. Nevertheless, see a deep dive on that here and check out the latest release this morning of Building Permits and Housing Starts (forecasted at 1.48M and 1.4M respectively) figures for the month of November at this link. Read on for your daily dose of market inspiration in these increasingly choppy waters within this 178th Coachman’s Report!
Markets in Review
The S&P strongly broke down below the 200-day moving average yesterday with minor price rejection of an even lower level on the day-bar chart. Settling at 3817 points by close, the next strong support level for the index is around 3750 points - almost another 2% lower from current prices. Commodities usually run opposite to markets and in our case, gold, a safe haven commodity has been trending higher over this period, as has oil, a cost-input to firms which has trended 7% higher since just over a week ago. If continuing along this trend and catalyzed by a slash in production at the next OPEC+ meeting, some of the gains in earnings expected to be had in this late Q4/early Q1 2023 period could be eaten up, creating yet another bleak reporting period. Moreover, the share of investors in the bearish camp has reached 44.6%, increasing week-over-week for just over a month now.
Long: FactSet Research Systems Inc. (FDS-NYSE) | Timeline: 2 days
FactSet Research Systems Inc. (FDS), a financial data and analytics company that provides integrated financial information and analytical applications to the investment community internationally, had their first quarter 2023 earnings call this morning. The company managed to beat earnings estimates by a whopping 10%, but slightly missed revenue by 1.12%. Nevertheless, Adjusted EBITDA increased to $200.4 million, up 38.2%, as FDS remains “committed to achieving our medium-term targets through enhanced expense management and improved productivity” (Linda Huber, CFO). (Full Story) Turning to the chart, FDS has dropped from highs of around $480 a share from the start of the year, however, it’s looking like that price is now within arms reach as the stock continues to oscillate through this ascending triangle. That said, as the stock has now edged closer to the channel’s lower support followed by an extremely oversold Stochastic RSI, it’s likely traders will see a bounce over the next couple of days.
Japan Turns Hawkish The Bank of Japan has nearly doubled the yield cap on the 10-year bond overnight. This announcement means that the 10-year yield can now float to 50bps on either side of the BOJ’s central target of 0% rather than the long-established 25bps which the market has been accustomed to. In our previous coverage on this topic, we identified the significant amount of resources required from the BOJ to maintain the 25bps yield, which concurrently applied downward pressure to Japan’s currency. After this morning’s news, the Yen has jumped roughly 3.2% against the USD at the time of publication, while the 10-year yield has jumped to roughly 42bps. In addition to the new rate regime, the central bank has also increased monthly purchases of JGBs from 7.3T Yen to 9T Yen, which at current exchange rates equates to roughly $67.8B USD.
Economists Place 70% Chance for US Recession in 2023
Economists say there is a 7-in-10 likelihood that the US economy will sink into a recession next year, slashing demand forecasts and trimming inflation projections in the wake of massive interest-rate hikes by the Federal Reserve. (Full Story)
Porter looks to attract a new customer base with countrywide route expansion
As some Canadian airlines look to cut costs and lower ticket prices, Porter Airlines is catering to a more premium economy experience. (Full Story)
Amazon to make big business changes in EU settlement
Amazon has agreed to make major changes to its business practices to settle antitrust investigations that found the ecommerce giant gave itself an unfair advantage over rival merchants, European Union regulators said Tuesday. (Full Story)
Germany Says It Won’t Be Buying Russian Oil at All in 2023
Germany rejected a claim that it plans to buy Russian oil early next year, saying that it will instead import crude oil from Kazakhstan. (Full Story)
Chart of the Day: There's more People Living Alone than Households with a Child
“The best revenge is to be unlike him who performed the injury.”
- Marcus Aurelius
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