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Saudi Switch Up | Short $HWC

Well folks, yesterday was a mild start to trading with NA equities unchanged to relatively lower by close - that said, today bears some key economic announcements for the US landscape that are sure to stir the pot, check those out here. Read on for stories on the sectors fueling the equity run, Saudi Arabia’s new monetary plan and the US’ failed efforts to sign a new nuclear deal with Iran.


Markets in Review

The market fell slightly yesterday, with the S&P losing 20 bps by close - this came after an almost 5% run since the start of the year. While gains were found across the US equity market, this run was largely attributed to flows into the technology, consumer cyclical and financial services sectors; this was likely the result of traders pricing in bets for the beginning reporting period, which you can stay up to date on here. Additionally, traders are now pricing in an even higher probability (95%) of a 25 bp interest rate hike on February 1st - the US treasury curve is also reflecting as much with shorter-term maturities currently yielding over 4.8%.


Short: Hancock Whitney Corporation (HWC-NASDAQ) | Timeline: 2 days

Hancock Whitney Corporation (HWC), which operates as the financial holding company for Hancock Whitney Bank that provides traditional and online banking services to commercial, small business, and retail customers, reported earnings yesterday after the market closed. Although the company managed to meet earnings expectations, revenue estimates were missed by 4.11%, as the company’s overall asset quality metrics currently sit near historically low levels. (Full Story)

Turning to the chart, HWC has had a relatively stable year so far, oscillating between highs of $57, and lows of roughly $43.50. That said, as the stock has approached the upper level of this descending triangle, its likely a rejection will occur - especially with an extremely bearish Stochastic RSI, supported by an average earnings report.


Zooming Out...

Saudi Switch Up

In Davos yesterday the finance minister of Saudi Arabia made a variety of statements which outlined the Kingdom’s vision for its place in the global economic ecosystem.

Shockingly, the minister revealed that the nation is willing to explore transaction settlements in currencies other than the US Dollar- including the Euro, Yuan, and Saudi riyal. Furthermore, the Kingdom sees itself as a bridge between the United States and China in an ever-polarized world. All this while still investing in “vulnerable” nations such as Egypt, Pakistan, and Turkey.

The move away from sole utilization of the US dollar marks a monumental shift in policy for Saudi Arabia, and concerningly for the United States, other OPEC nations may soon follow suit.

Nuclear Fumble

US Secretary of State Anthony Blinken revealed yesterday that Iran refused a chance to return to a nuclear deal. The framework allegedly had the support of all those who signed on in 2015, including China and Russia, however, it still was not enough for the Iranians.

In the wake, and continuation of violent responses to protests over the prior months, a new deal is no longer a priority for the Biden administration, and US officials have pledged consequences for the regime as a result. In an undeterred manner earlier this week it was reported that Iran ordered multiple Russian SU-35 fighter jets, alongside a variety of air defense weapons with the first deliveries scheduled for March.


Making Headlines...

Davos 2023: Convert offices to homes to curb housing crisis-panel

  • Empty offices globally should be converted to apartments to address a growing housing crisis in many countries, property executives told the World Economic Forum in Davos on Wednesday. (Full Story)

Coinbase halting operations in Japan, gives customers 4 weeks to pull funds

  • Coinbase, the largest U.S.-based crypto exchange, said early Wednesday it is halting its operations in Japan as part of a larger operational review that may result in shuttering its business in the country. (Full Story)

Natural Gas Slump Will Slow US Supply Growth, Fracker EQT Says

  • A plunge in natural gas prices will slow supply growth in the US this year, according to the country’s biggest producer of the fuel. (Full Story)

Markets on Edge for Potentially Epochal BOJ Policy Decision

  • Investors are bracing for Wednesday’s Bank of Japan monetary policy decision, which has the potential to send tremors across local and global markets. (Full Story)


Chart of the Day: Bank of Japan’s balance sheet assets to GDP now at record levels...


“It is hard to fail, but it is worse never to have tried to succeed.”

― Theodore Roosevelt


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