Well folks, yesterday was quite an occasion for financial markets - to start off, Faze Clan officially became the first esports team to go public via a spac deal on the Nasdaq that valued the company at just over $1B by end of trading. Moreover, here’s a fun fact, over the first 6 months of 2022, Blackrock has lost the single most amount of money lost by any company in history with $1.7T worth of client AUM vanishing in the market’s blood bath. Read on for today’s bit of market inspiration as the S&P 500 re-approaches 4000 points for the third time in the last 30 days…
“Face reality as it is, not as it was or as you wish it to be.”
― Jack Welch
Despite many risk-off catalysts pummeling the geopolitical & economic arenas at this time, the market seems keen to break out above key resistances and sustain its 5-day rally! With the S&P 500 advancing again yesterday, the index is only 5 points off of the key 4000-point psychological level - there has been a measured lack of flow into investment grade fixed income assets over the same period, likely having been drawn to risk-on assets such as equities; the recent 25%+ rally in $BTC also serves to substantiate the positive sentiment of this market. Markets crave certainty more than anything else and with the Federal Reserve alongside the ECB finally showing participants they’re willing to do what needs to be done in order to save our economies many may be pricing in a return to stomacheable inflation, regardless of what the discount rate might look like. Lastly, Canada’s returning of the oil turbines to Russia has allowed the Nordstream pipelines to return to capacity, thus aiding in oil’s subdued price as of recent → should crude remain below that $100/barrel price for the next 2-3 months, Q3 reporting could bear some nice earnings surprises if management guidance doesn’t adjust before this current reporting period ends.
Short: Domino’s Pizza, Inc. (DPZ-NYSE) | Timeline: 2-3 days
Domino's Pizza, which operates as a pizza company in the United States and internationally reported earnings this morning and they don’t look too appetizing... In fact, CEO Russell Weiner mentioned in a statement that the company has “continued to navigate a difficult labour market, especially for delivery drivers, in addition to inflationary pressures combined with COVID and stimulus-fueled sales comps from the prior two years in the U.S” (Source). All this added with the current market volatility is a screaming short opportunity for bears to capitalize on, as no bull would dare to step in the ring with this stock over the next few days. Turning to the chart, Domino’s has had some luck over the last quarter as bulls were able to push the price through the 50-MA, even though a true and tried downtrend was established by a death cross earlier in the year. Although there was potential for a reversal, through very indecisive price action the MACD has been exhausted to its uppermost level, especially in a bearish cycle, and a rising wedge has formed - a chart pattern that indicates a potential breakout to the downside.
Chart of the Day - The Canadian yield curve is actively inverting right now…