Happy Friday Folks! We hope you caught the market’s sweeping move to the positive yesterday as the S&P and Nasdaq gained a whopping 2.5 and 5.2% by close - with futures up in the pre-market today, all eyes will be on whether the S&P can put a bit more breathing room between itself and its 52-week lows. Read on for your daily dose of market inspiration with a deep dive into this morning’s retail sales figures as well as a zoom into what’s going on in Beijing as widespread protests have erupted within the nation.
Markets in Review
Since grappling with lows, yesterday was the strong comeback that the market needed to bring itself back into its defined price channel. The S&P rallied an impressive 2.5% by the close, a move of this size hasn’t occurred since early last quarter. While the bounce was spread healthily around multiple sectors, it was gains of mainly the large-cap equities of the tech, financial and energy sectors that lead the charge. That said, a caveat to this price movement could be that shorts of the 8:30 AM inflation release were buying to cover during yesterday’s session. Regardless, this morning retail sales (excluding auto) were announced and they also missed expectations coming in at 0%, instead of 0.2% for the month of September - likely acting as a bearish catalyst this morning in spite of futures being up 19, 16 and 3bps for the Dow, S&P and Nasdaq.
Trade of the Day - Long: Domino's Pizza, Inc. (DPZ-NYSE) | Timeline: 2 days
Domino's Pizza, Inc. (DPZ), rated a 6.8 by Dave Portnoy, successfully operates as a pizza company in the United States and internationally. DPZ announced earnings before the market opened yesterday, and it’s safe to say traders acted in their favour after reporting an increase in global retail sales of 4.7% YoY, amid inflation headwinds. (Full Story) Referring to the chart, Domino’s stock has suffered from quite a bit of bearish turmoil as the company struggled with macroeconomic headwinds for the majority of this year. That said, the MACD has been exhausted to its lower level, and with this good news, buyers are likely to enter back into this stock resulting in an oscillation towards its upper resistance level.
Retail Sales Slumping in the USA The most recent iteration of retail sales data has shown that the US is slumping as we head into the Holiday season. In terms of the data, retail sales came it at 0% compared to an expected 0.2% increase, while retail sales excluding auto came in at 0.1% versus an expected -0.1%. This data indicates that US retailers are still being faced with the bullwhip effect, while also indicating that the pocketbooks of everyday consumers are still tight. This figure will be extremely interesting to track through the end of the year as the use of the biggest inflation buffer, the SPR, becomes more limited due to supply shortages. A Rare Protest Erupts in Beijing
A man in Beijing erected multiple banners chastising the CCP’s recent Covid related brutalities. The offender was allegedly arrested after unsuccessfully attempting to burn himself alive but nevertheless, this protest may be a signal of trouble under the surface for Beijing. The protest comes after parts of China have been forced into zero Covid lockdowns for months on end. These strict measures require daily testing, continual use of an ever-changing health pass to access public services, the quarantining of entire buildings for one positive test, and more. This protest is significant as it truly shows the thoughts and feelings of some of the most repressed individuals on the planet. Moreover, this could be representative of a brewing popularity crisis for the CCP, as the way they’ve been able to maintain power in the nation for so long is by providing an increasingly better quality of life over time.
What to expect from Netflix's new subscription with ads
After months of talking about it, Netflix has finally released more details about its newest subscription tier, "Basic with Ads." The service will launch in November — but keep in mind that it won't come with all the bells and whistles Netflix's other plans offer. (Full Story)
Strikes continue in French refineries, disrupt fuel supplies
Continuing strikes at TotalEnergies group refineries in France seriously disrupted fuel supplies Friday after the left-wing CGT union rejected a deal over a pay increase that two other unions had agreed to. (Full Story)
Germany Backs Kyiv as Russia Vows to Fix Bridge
NATO allies must press ahead with support for Ukraine while taking Russia’s threats to use nuclear weapons seriously, German Defense Minister Christine Lambrecht said. The Kremlin vowed to repair a crucial bridge from the Russian mainland to Crimea by July 2023. (Full Story)
Sweeping poultry changes proposed
The U.S. Department of Agriculture on Friday proposed sweeping changes in the way chicken and turkey meat is processed that are intended to reduce illnesses from food contamination but could require meat companies to make extensive changes to their operations. (Full Story)
Chart of the Day: Ranking Toronto’s Housing Bubble..
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