Well folks, we hope you missed the Sunday scaries today as we bring our second edition of the Coachman’s Report Sunday Special. Read on for an in-depth review of what exactly happened following JPow’s Jackson Hole speech and our usual day trades to hopefully make your Monday just a bit better!
"The most contrarian thing of all is not to oppose the crowd but to think for yourself."
— Peter Thiel
On Friday morning after JPow’s Jackson Hole speech, equity indices all over NA took a 3-4% dive on confirmation of the real possibility of a 100bp+ rate hike in September. Powell even went as far as to pay homage to Paul Volcker, the chair of the Federal Reserve who slayed the inflation of the 1980s - the highest inflationary period in the US’ modern history. That said, given the unforgivingly hawkish overall nature of the speech market sentiment took a dive to a month low of 42.4% and volatility spiked 25%, bringing the $VIX to a value of 27.46. This Monday morning is not looking much better either with futures for the Dow, S&P and Nasdaq all about 1% down. All eyes will be on this week’s Friday jobs report as the economic databasing interest rate decisions are now center-stage for all market participants. Below are the most anticipated companies reporting earnings this week.
Long: CF Acquisition Corp VI (CFVI- NASDAQ) Timeline: 5 days
This ticker is a Cantor Fitzgerald-sponsored SPAC set to merge with YouTube alternative Rumble in the near future. The SPAC is currently trading at .08 above the issue price, indicating that the downside is extremely limited, while the upside potential is high, especially with the current buzz around Rumble as a free speech alternative to YouTube. Whether you like him or hate him, Andrew Tate’s recent banning from the majority of social media platforms has led to an interesting business opportunity for Rumble. As they are one of the only places that allow for the publication of Mr. Tate’s content, he has been directing his legion of fans toward the platform. On Friday, Tate held the company’s most successful live stream in history, topping 120k viewers at one time. Furthermore, the company was able to reach an average of 44M active users throughout the second quarter, representing a 76% increase from the prior quarterly report. We expect this recent influx of users, as well as investor sentiment around the merger, which is set to be voted on by shareholders on September 15, to drive the price upwards throughout the week. The SPAC’s current market cap is only $385M, and as seen below, the company’s price per monthly active user is heavily discounted compared to other social media giants. Presenting an interesting opportunity for investors to invest in the new kid on the block as far as web streaming services are concerned. Twitter: 237.8m MAU, MC $30B ($126.16 per MAU) Meta: 2.93B MAU, MC $434.79B ( $148.12 per MAU ) Rumble: 44M MAU, MC $385M ($8.75 per MAU)
Short: H World Group Limited (HTHT-NASDAQ) | Timeline: 2 days
H World Group Limited (HTHT), which develops leased and owned, manachised, and franchised hotels primarily in the People's Republic of China is set to report earnings this morning. We expect the company to report earnings that are substandard as their revenue per room has declined 33% in the last quarter, attributable to the lockdowns in China which brought about lower demand for business and leisure travel. Taking a look at the chart, HTHT has suffered immensely over the last couple of years as investors and traders have stayed far away from the hotel industry. That being said, traders have been optimistic in the last quarter as RSI enters overbought levels and a retracement upwards and over the 100-day MA has occurred, however, a rising wedge has formed - a bearish chart pattern that is believed to signal an imminent breakout to the downside.
Chart of the Day: Energy over equities
How has the Oil-to-S&P 500 ratio shaped up during this pullback?