Happy Friday folks! Even though this week was largely risk-off for equities, it did mark a special occasion for us as today’s email is the 200th Coachman Report since inception! That said, read on for your daily dose of market inspiration with an update on the valuations of NA equities, your daily trade idea and stories on Peru’s copper shortage and the drastic measures the US is taking to appease its ‘debt ceiling’.
Markets in Review
The market is down almost 3% since the start of the week and today is looking mixed in the premarket, to say the least - while the Dow is marginally lower, the S&P and Nasdaq are up 23 and 59 bps respectively. With the SPX being down to just under 3900 points currently, its trading at a P/E ratio of 20.3x, a valuation level it traded at for the majority of 2022 following its bottoming out at 3500 points.
Additionally, the share of bearish investors in the market has dropped to just 33.1% from a high of 61% achieved in mid-September. Lastly, it's worth noting that the $VIX has been largely pacified recently, trading in and around 20 for the last quarter - is it time for a spike? We believe that's up to the FOMC in two weeks.
Short: CapStar Financial Holdings, Inc. (CSTR-NASDAQ) | Timeline: 2 days
CapStar Financial Holdings, Inc. (CSTR), which operates as the bank holding company for CapStar Bank that provides banking services to consumer and corporate customers located primarily in Tennessee, the United States, reported substandard earnings yesterday after the market closed. Although the company missed revenue estimates by a mere 0.02%, earnings were missed by 10.61%, while annualized revenue growth fell by a whopping 19.51%. (Full Story)
Turning to the chart, CSTR has had a relatively stable last few months, hovering around highs of $21, however, things have taken a turn for the worst over the last quarter, That said, as the stock has made a retracement to the upper level of this price channel, traders should expect a rejection - especially as the Stochastic RSI is signalling extreme bearish momentum.
Peruvian Pile Up
Due to civil unrest following the ousting of former President Pedro Castillo, alongside ongoing protests from local indigenous groups, mining conglomerates within Peru have brought the export of copper to a standstill. One mine, Las Bambas, which is owned by MMG- a subsidiary of Guoxin International Investment Co- accounts for 2% of the global copper supplies and has not exported any copper concentrate for the last 17 days.
As the world's second-largest copper producer, Peru supplied 17.2% of global copper output annually last year. The unrest comes at a time when copper demand is surging due to China’s reopening, and these export blocks could drive a spike in price for the commodity.
In order to stave off a default in the wake of the United States breaking past their debt ceiling, the Treasury has begun to deploy the previously announced extraordinary measures to keep the country running smoothly. The first of these measures is the adjustment of investments held by two government employee retirement funds.
The two funds, the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund invest in special Treasury securities, however, now these investments and debt issuances will be paused until the debt ceiling is raised. With that being said, individuals within the funds’ client base will be made whole following a raise.
Canadian insurer Sun Life inks $193 million deal with HK's Dah Sing
A unit of Canadian insurer Sun Life Financial Inc has partnered with Hong Kong-based Dah Sing Bank in a deal valued at nearly C$260 million ($193 million), the companies said on Friday. (Full Story)
Romanian judge grants 30-day extension of Tate detention
A judge in Romania has granted prosecutors another request to extend by 30 days the arrest of Andrew Tate, the social media personality who has been detained in the country for weeks as prosecutors investigate a case of human trafficking case and rape, an official said Friday. (Full Story)
Musk Risks Losing Tesla Fraud Trial If He Takes Lawyers’ Bait
Elon Musk needs a jury to believe him if the Tesla Inc. boss is to avoid being socked with potentially billions of dollars in damages at a securities fraud trial. (Full Story)
Google axes 12,000 jobs, layoffs spread across tech sector
Google is laying off 12,000 workers, or about 6% of its workforce, becoming the latest tech company to trim staff as the economic boom that the industry rode during the COVID-19 pandemic ebbs. (Full Story)
Chart of the Day: US Savings rate vs Credit Card Debt…
“He is a wise man who does not grieve for the things which he has not, but rejoices for those which he has.”
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