Happy Friday folks! Inflation printed right in line with expectations yesterday and markets rose on the news - find the breakdown of what drove price increases for the month of December here. Panning to the Canadian landscape, this week has been driven by deals! Early on we had the news break of a proposal on the part of Canaccord Genuity’s management to take the investment bank private and then just yesterday, the public got wind of a merger between the two largest cryptocurrency exchanges in Canada - Wonderfi and Coinsquare, more on that story below in this 195th Coachman’s Report!
Markets in Review
Focussing on the Canadian market today, the TSX60 has been trending higher since the start of the week with the index closing at just over 1200 points yesterday. As Canadian equities outperformed last year, they are even closer to establishing a strong bullish trend than their US counterparts as seen below with the 50-day MA about to cross the 200-day MA, signalling a golden cross event on a technical basis. At these levels, the Canadian equity market is just 8% off of highs, whereas the S&P is more than double that figure.
Long: UnitedHealth Group Incorporated (UNH-NYSE) | Timeline: 2 days
UnitedHealth Group Incorporated (UNH), which operates as a diversified healthcare company in the United States, reported a better-than-expected earnings report this morning. The company was able to beat earnings and revenue estimates by 3.23% and 0.37%, respectively, while both metrics also reported double-digit growth year-over-year. (Full Story)
Turning to the chart, there hasn’t been enough volume for a notable impact in price through the last year, as the stock oscillated between $500 and $550 from last February. That said, as the stock has reached the channel’s lower end, a bounce is likely - especially with a positive report on top of an oversold, yet bullish Stochastic RSI.
The (Crypto) Merger of the Century
Yesterday it was announced that WonderFi and Coinsquare are in the preliminary stages of a merger that would create a new Canadian crypto conglomerate. After an extended slew of bad news within the industry, this seems to be the first positive report in months.
Although Kevin O’Leary has been embroiled in, and financially impacted by the FTX collapse this merger remains promising as it would combine two non-fraudulent organizations that have fallen on hard times due to the general crypto markets.
This is also the first of likely many M&A deals within the industry as companies continue to trudge through the extended crypto winter. Additionally, this merger comes at the same time as Gemini and Genesis have been sued by the SEC over their crypto earn program.
The Fed’s Cooldown
In the wake of yesterday’s muted CPI report, multiple FED officials have announced that smaller rate hikes may be on the horizon.
Patrick Harker, the Philadelphia FED president stated “[h]ikes of 25 basis points will be appropriate going forward". This statement was supported by comments from Richmond FED president Tom Barkin as he stated "[w]e are in fact constraining the economy and presumably in the process constraining inflation. That means for me I can be a little more nuanced”.
As for a breakdown in the CPI, on a YoY basis, CPI, and CPI excluding food and energy fell to 6.5% and 5.7%, respectively. On a month-over-month basis, CPI and CPI ex. food and energy fell by 0.1% and rose by 0.3% respectively. These announcements came in line with forecasts and suggest that we may be moving towards a less inflationary environment.
Russia says its forces capture Soledar in east Ukraine
Russia said on Friday that its forces had taken control of the salt-mining town of Soledar in eastern Ukraine overnight after days of relentless fighting, claiming Moscow's first big battlefield gain after half a year of military setbacks. (Full Story)
Tesla ramps up pressure on rivals with U.S., Europe price cuts
Tesla has slashed prices on its electric vehicles in the United States and Europe by as much as 20%, extending an aggressive discounting strategy and challenging rivals after missing Wall Street delivery estimates for 2022. (Full Story)
Wall Street’s Lucrative Leveraged-Debt Machine Is Breaking Down
One of the most lucrative money-making machines in the world of finance is all clogged up, threatening a year of pain for Wall Street banks and private-equity barons as a decade-long deal boom goes bust. (Full Story)
Where Will Europe Get Its Diesel From in 23 Days’ Time
In just over three weeks, seaborne deliveries of diesel from the European Union’s single biggest external supplier will be all but banned. (Full Story)
Chart of the Day: Steep moves in commodity prices...
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