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Take one down, pass it around.

Well folks, we hope you enjoyed the long weekend as it was an eventful one. The big ticket news that is likely to steer market attention this week was the OPEC’s decision (the world’s largest oil cartel) to shave 100, 000 barrels of oil per day from their production targets starting next month - Russia, being a member of the extended cartel has also agreed to keep their production aligned with their updated goals. Lastly, the untimely death of Gustavo Arnal (the CFO of $BBBY) has just been ruled a suicide as of yesterday and for those who don’t know, came during allegations of stock manipulation among other financial crimes brought by the company’s shareholders. Read on for your daily dose of investing inspiration as market volatility is back in full swing!


“If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem”

- J. Paul Getty


Market Talk

The S&P 500 is trading very close to support and more recently has hovered around the 3900 point level → as volatility returns alongside negative catalysts such as soaring future oil prices it will be harder for buyers to defend this level. That said, with the index losing 2.5% by last week Friday, this week is posturing for a different story as the Dow, S&P and Nasdaq are all up 50-60bps in the pre-market and volatility has regressed slightly as well. Catalyst watch: Oil price reaction, September FOMC meeting, Q3 GDP update and Q3 earnings season.

Panning to oil, OPEC’s decision came as a result of the commodity’s 25% decline over the last two months, however in real terms only represents 0.1% of global demand. Pictured below, Brent has traded in a strong downward channel and only recently has the price started to squeeze - it’s likely that the psychological significance of this announcement will have more of an effect than the economic one given that this is the first slash in oil production since pandemic lows and will likely pave the way for more.

Lastly, it is quite a light week regarding companies reporting earnings given Q3 reporting benign right around the corner. However, we are still looking forward to $NIO, $GME and $AEO’s quarterly later in the week.


Short: Kingsoft Cloud Holdings (KC-NASDAQ) | Timeline: 2 days

Kingsoft Cloud Holdings Limited (KC), which provides cloud services to businesses and organizations, has announced earnings this morning and it's safe to say the struggle is real as the company continues to face an extremely challenging operating environment. That being said, revenues from public and enterprise cloud services decreased by 16.9% and 0.9%, respectively, mainly due to their announcement of scaling down CDN services as they try to lighten their debt load. Turning to the chart, the stock has struggled immensely from the beginning of 2021, dropping 95% from highs of $60 per share. Moreover, the MACD and RSI have both reached their equilibrium, signalling extremely overbought levels as price action continues to play out a descending triangle - a widely used bearish continuation pattern that signals traders to take a short position, accelerating a breakdown to a lower price channel.


Long: Long: ExxonMobil (XOM-NYSE) | Timeline: 3 days

Over the long weekend, OPEC+ announced they’d be cutting down by roughly 3% of daily production, or 100K barrels per day. While this isn’t a drastic move, the announcement will likely rile energy markets up, while giving Exxon the excuse it needs to slow or reverse the current downtrend of gas prices. The company has been on a tear over the past month, gaining roughly 11%, however still rests roughly 10% below its all-time high price, reached in early June of this year. In terms of the technicals, the company has managed to trade above all moving averages outside of their 10 days throughout the past 20 trading sessions, additionally, momentum is on the side of this trade, currently resting at 1.51.


Chart of the Day: German Trade Balance Declining…

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