Happy hump day folks! While the market continued its decline slightly yesterday, we made use of the choppy market and added another double-digit return to our trade book with $KC’s 15%+ drop from open. It’s interest rate day in Canada so read on for a brief overview of northern equities alongside your usual daily trade recommendation!
"If you have overcome your inclination and not been overcome by it, you have reason to rejoice." - Titus Maccius Plautus.
The S&P 500 continued to straddle the edge of its price channel yesterday - it rejected retaking the support level by about 1% yesterday, resulting in the $VIX’s trending into upper the 20s. It is likely that a combination of a successful earnings season with renewed management guidance and a rate hike that is within expectations are the only catalysts that could create a strong long-term upward trend.
Panning to Canadian equities, the slump in prices oil prices has largely coincided with bringing the TSX60 index to a loss of 10% YTD. Based on the market’s 5% sell-off over the last couple of days, it is likely that a larger hike, similar to last time, is slated to take place - this would bring Canadian prime to 3.5%. Premarket trading has equities trading down slightly, 25bps across the board.
Short: Korn Ferry (KFY-NYSE) | Timeline: 2 days
Korn Ferry (KFY), which provides organizational consulting services worldwide has reported their Q1 fiscal 2023 results, and the company came up just shy of expectations, reporting an earnings and revenue miss of 0.66% and 0.16%, respectively. Moreover, the company’s outlook doesn’t provide a very auspicious narrative either, as CEO Gary D. Burnison doesn’t fail to mention that “today’s work scape has never been more complex – an imbalanced labour market, skills shortage and a major shift in how and where people work.” (Source). Turning to the chart, KFY has had a rough year so far, with no buying power to even attempt a breakout above the 100-day MA until now. That being said, the most recent retracement upwards not only put the stock in a very overbought position but also formed a rising wedge, further consolidating the sustained bearish trend as the price breaks below the pattern.
Long: CF Acquisition Corp VI (CFVI-NASDAQ) | Timeline: 3 days
We’re re-issuing our long on this highly anticipated SPAC set to merge with the burgeoning video streaming platform Rumble. Since our last coverage, this company has risen tremendously from $10.08 to $13.35 in just over a week, and we believe that there is more room to run. The market cap of this fund is still only $510M, which is an extreme discount for what Rumble brings to the table as a YouTube alternative. The vote to merge the company and SPAC is set for September 14, however, due to the general volatility in these markets, our idea would be to not hold over the weekend. On the technical front, the company is currently trading above all of its moving averages, while momentum and the MACD are supportive of continued bullish price action, as they sit at 3.29, and 0.50 respectively.
Chart of the Day: Historical Silver YTD Performance