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Sam Pleads Innocent | Long $SGH

Well folks, while the market spent its first session of 2023 trading down, there’s a whole lot already kicking this year off with a bang! Starting with the US' ban of Tik Tok use by House officials as well as SBF’s innocent plea..while we’re on the edge of our seats to learn how that turns out, you can read on for more on both stories as they develop. Panning to the macro front, the slew of economic announcements presenting themselves within the US this week caps off with the all-determining unemployment update on Friday - which is sure to play a large role in dictating the Fed’s tone and agenda through Q1 24’.


Markets in Review

Stocks are trading up in the premarket today with the Dow, S&P and Nasdaq +25, 37 and 60 bps respectively. While the S&P regressed 42 bps, it’s worth noting that investor sentiment has heightened somewhat over the last week, dropping from 53% bearish to around 47%.

Moreover, the S&P has tangoed with this price level for over a week now, substantiating the importance it has as a support level. Additionally, when zooming out on the day chart, the S&P’s price channel is starting to squeeze, with another 2-3 weeks to go prior to any breakout. This could paint the February 1st FOMC meeting as a decisive catalyst for the market as it aligns with that timeline.


Long: SMART Global Holdings, Inc. (SGH-NASDAQ) | Timeline: 2 days

SMART Global Holdings, Inc. (SGH), which designs and manufactures specialty solutions for the computing, memory, and LED markets internationally, reported earnings yesterday after the market closed. The company blew analyst estimates out of the water, beating earnings and revenue predictions by 34.93% and 4.09%, respectively, reflecting the company’s “focus on higher quality revenue, combined with the hard work of dedicated employees," commented Mark Adams, CEO. (Full Story) Turning to the chart, SGH stock has also taken after the market this year, running into quite a bit of turmoil - falling from highs of just over $35. As the stock continued to oscillate through this downward channel, investor sentiment flipped bullish - resulting in a breakout of the upper level, followed by a retest. With a positive press release and a bullish-facing, yet extremely oversold Stochastic RSI, traders should expect the stock to hold at these levels, with the potential of a major reversal in the books.


Zooming out...

TikTok’s Time Trap As we predicted in our previous coverage the wave of anti-TikTok sentiment from the United States did not stop at the state level. Following the Senate’s unanimous confirmation of a similar bill just a few weeks ago, the US House has voted to ban TikTok from all devices issued by the institution. This in addition to the clause banning the app from all government devices within the $1.7T omnibus spending bill passed by the House late last year. Additionally, as part of the push to remove TikTok from government devices and networks at the state level, some universities have begun blocking the app’s use on their wifi. The U of Oklahoma and Auburn U are the first schools to make such a move, although due to regulation a further 24 campuses in Georgia must block the program. By enforcing this policy at Universities TikTok’s core, and arguably most important demographic -the 18-25 range- will be forced to limit their time on the app, and as such will be less monetizable. Sam Pleads Innocent In a move that surprised few, Sam Bankman Fried has pleaded not guilty to each of the 8 charges levied against him within the United States. In front of a judge at the US District Court in New York, he repudiated the four charges of wire fraud, and three counts of conspiracy to commit; campaign finance fraud, commodities fraud, securities fraud, along with a conspiracy to launder money charge. This is a bold move for Bankman as two of his closest confidants, FTX co-founder Gary Wang and former Alameda CEO Caroline Ellison, have both already pleaded guilty to federal criminal charges. These two are also likely to be assisting the federal investigation in exchange for a reduction in their respective sentences. As always it’s hard to see Sam’s end game with this gamble, however. this is likely the most expensive bet he’s ever made considering the 115 years behind bars that he faces if found guilty. We’ll all be able to find out later this year as his trial is set for October 2.


Making headlines...

Qualcomm launches auto chip to handle both assisted driving and entertainment

  • Mobile chip maker Qualcomm Technologies, Inc on Wednesday unveiled a processor chip for the car called Snapdragon Ride Flex SoC that handles both assisted driving and cockpit functions, including entertainment. (Full Story)

Salesforce to Cut 10% of Workers, Reduce Offices in Downturn

  • Salesforce Inc. said it would cut about 10% of its workforce after the enterprise software company hired too many people in the lead up to the economic downturn and customers became more cautious with spending. (Full Story)

Elon Musk's lawyers subpoena head of Saudi Arabia's $620 billion wealth fund

  • Elon Musk's lawyers are trying to force Saudi Arabia's top wealth manager to testify in upcoming litigation over a now-infamous tweet in which the Tesla CEO said he was considering taking the EV manufacturer private. (Full Story)

Microsoft to invest in autonomous trucking startup Gatik

  • Microsoft Corp is in advanced talks to invest in Gatik, a California-based autonomous driving startup, as part of its cloud partnership with the company, two people familiar with the discussions told Reuters. (Full Story)


Chart of the Day: Fertilizer prices leading food inflation…


“I was born to make mistakes, not to fake perfection.”

– Drake


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