Happy hump day folks! and as you can see, interest rates aren’t the only thing changing today - our daily Coachman’s Report has received a revamp, both stylistically and content-wise! We hope you’ll enjoy these carefully expanded Coachman’s Reports, which include all your daily market commentary plus much, much more! Read on for your daily dose of market inspiration on this fateful day where the fed funds rate is slated to hike above 3%, a level unseen since 2008!
(TWTR credit to BowTiedBull)
Markets in Review
The S&P 500 had quite the trading session yesterday, oscillating up and down before settling 1.15% lower on mixed housing updates that morning that saw housing starts surge 12% over August while building permits dropped 10% over the same period; this was generally priced in negatively as the most popular building type that buoyed the elevated housing starts figure was multi-family residential real estate, which generally increases in popularity during recessions given their affordability. Additionally, the market also traded down on a few material updates to the Ukraine-Russian conflict that saw Putin postpone his speech from yesterday to later today as multiple regional heads of Ukraine announced plans to hold a vote on joining Russia. Read more ongoing updates on the conflict here.
In the premarket ahead of this decisive final FOMC day, the $DOW, $SPY $NDAQ are trading +0.41%, +0.39%, +0.18% respectively. Last, remember to take a moment to zoom out once in a while if you find yourself hyper-focussing on one aspect of the market or economy - a different perspective and/or timeline can be key to success.
Trade of the Day - Short: Charter Communications, Inc. (CHTR-NASDAQ)
Charter Communications, Inc. (CHTR), which operates as a broadband connectivity and cable operator company in the United States had some very unfortunate news released after the market closed yesterday afternoon, as a texas judge ruled the company is now obligated to pay a murder victim’s family $1.15 billion after an 83-year-old woman was murdered by one of its off-duty cable technicians. Not only is this news exceedingly damaging to the company’s brand equity, but this lump sum represents 21% of its current income ($5.50b), putting a massive damper on its bottom line going into the latter half of an already challenging year in markets.
Turning to the chart, it is clear that there has been very high selling pressure from the beginning of the year, and things are likely to get much worse due to the company’s current situation. That being said, the share price was recently rejected by the 100-day MA and continued to feel the pressure, breaking below the previous $420 support level with no signs of stopping signalled by a decreasing MACD.
An interesting series of events took place throughout Tuesday as Vladimir Putin postponed a planned speech multiple times. Just minutes before he was supposed to start, Putin ended up pushing the speech once again to 1 AM Eastern time. The date he pushed it to is an important one, however, as it marks the 1160th anniversary of the Russian state. In the hours leading up to the speech, online speculators believed that it would mark the announcement of full mobilization, and they weren’t too far off in their predictions. This speech comes days after Indian Prime Minister Narendra Modi made comments signalling that he wants the war to wrap up. PM Modi stated, “today’s era is not an era of war”. In broad strokes terms, this speech called up 300K reservists for further action in Ukraine, while Putin also threatened that Russia would use its vast nuclear arsenal if it felt that its territory was threatened.
Germany is nearing a nationalization of gas importer Uniper in the wake of its energy crisis. The acquisition of Fortum’s 78% stake would give the government over 90% of the company. The German government is also injecting €8B into the energy producer in an effort to stabilize the gas market. This injection would bring the total stabilization investment into Uniper up to a whopping €29B.
German Power Futures + Eurozone Gas Benchmark (as of Sept 14,2022)
This move comes as German energy futures have experienced wild fluctuations throughout the past year. Germany’s maneuver may be the example other European nations follow as energy prices soar across the continent.
Last week, FedEx CEO Raj Subramaniam took an interview with Jim Cramer, where he made his predictions of an upcoming global recession known. While some have been quick to dismiss Mr. Subramaniam’s predictions as a way to deflect from FedEx’s dismal earnings, many believe that he may be far more insightful than most economists due to his ability to observe fluctuations in shipping demand firsthand. His claims revolve around worsening macroeconomic predictions, alongside the slowing demand in Asia, and more specifically China.
Protests have flared in Iran throughout the past five days after the death of a woman in the custody of the Iranian Morality Police. At least three people have been killed in the protests, however, videos shared online signal a far more dire situation. Hundreds have been arrested as mobs clash with police in cities across the country. As of the time of writing, there is no clear resolution to the solution at hand.
Ford stock suffers worst day since 2011
Ford shares fell over 12% during yesterday’s trading session as the company announced that costs related to inflation would be $1bn more than expected. (Full story)
Somebody let the beef get out of control…
Beyond Meat (BYND) has suspended its Chief Operating Officer (COO) Doug Ramsey after he was arrested this past weekend for allegedly biting a man’s nose inside an Arkansas parking garage following a University of Arkansas football game. (Full story)
EU Seeks New Powers Over Supply Chains During Emergencies
The EU has staked its clain to sweep new powers in order to regulate industries during crisis - a controversial proposal that has raised the eyebrow of business leaders, but officials remain adamant in order to stay equipped for any future economic disruptions. (Full Story)
Biden to Release 10 Million Oil Barrels Ahead of EU-Russian Ban
The Department of Energy will offer additional US reserve crude for sale ahead of plans by the European Union to ban most Russian oil in December. (Full story)
Big Ocean Shipping Lines Turn to Planes
As port congestion has forced ships to wait for weeks due to an increase in e-commerce through the pandemic, shipping companies have turned to aviation. (Full Story)
"Buy when there's blood in the streets, even if the blood is your own."
- Baron Rothschild
Chart of the Day - Interest Rates by Maturity Since 2020
A visual representation of the change in interest rates through unprecedented times in markets.