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Connection lost = Confidence lost

Updated: Aug 5, 2022

Well folks, last week was quite the enigma with the S&P 500 bouncing 3% by Friday close despite many material risk-off catalysts revealing themselves to markets; Regardless, on the Canadian front, it was a nationwide network outage on the part of Rogers telecom that stole the show and is the focus of today’s Coachman’s Report - keep reading for your daily dose of market inspiration!


“Glory crowns the deeds of those who expose themselves to toils and dangers.”

— Alexander the Great


Market Talk

After trading sideways during Friday’s trading session, the S&P, NASDAQ & Dow were all up or down by a marginal 10bps by the close with healthcare and financials leading the way. Major indices are set for a measured decline today, as futures are trading down between 65 and 100 bps heading into today’s session.


Short: Rogers Communication, Inc (RCI-NYSE) | Timeline: 4 days

Rogers Communication Inc is one of the main telecom providers within Canada, they provide a full suite of offerings including phone service, TV, internet and more for individuals alongside businesses. As you know by now they suffered a catastrophic nationwide outage on Friday, which we’ll be discussing in more detail later in the report, and as such, we believe that the company is set for a tough week ahead. Aside from the fact that they’ve lost the confidence of customers from coast to coast, this outage puts some of the company's future goals in jeopardy, and will likely leave a scar in the years to come. The technicals also support a bearish thesis, as the 50-day MA also just crossed the 200 on the downward, signalling a coming downturn for the company.


Special Report: The Rogers Fiasco

On Friday morning Rogers customers were affected by a nationwide outage, which lasted throughout the day. This outage was allegedly caused by a software issue after the launch of a system update, however, some are claiming a cyber attack was the true cause. Causality aside, this outage impacted far more than just phone and wireless service. Many retailers were left in turmoil as their payment terminals went offline, some bank transactions were affected, and some were left without the ability to pay with their debit cards even when the terminals were online.

The lasting effects of this issue are not known, however, it has shaken the confidence of many Canadians. It has also thrust the monopoly of the Canadian telecom market into the spotlight, exactly where the company doesn’t want it. In short, this outage was catastrophic for the company on every level, heads are likely to roll close to the top of the company and the path forward will be filled with uncertainty.


Long: PepsiCo, Inc (PEP-NASDAQ) | Timeline: 2-3 days

As we all know by now, PepsiCo, which manufactures, markets, distributes and sells various beverages and convenient foods worldwide is set to report earnings tomorrow and expectations are high around the report. The company announced in a previous report that demand has spiked over the last quarter, and is now targeting sales growth of around 8%. Despite inflation risks, investors and analysts are confident in PepsiCo’s performance, making for a great trade opportunity through Q2 earnings. Taking a look at the chart, bulls are clearly in control, and as the stock battles to reach all-time highs, the price has continued to oscillate through an ascending triangle - a widely used continuation pattern as the price will typically break out in the same direction as the trend that was in place just prior to the triangle forming. Moreover, the MACD has blown through zero with very little selling pressure pictured by short wicks and very few red candles - a combination that likely scares most bears away.


Chart of the Day - The Federal Reserve’s “stock market valuation model”

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