John Caruso
Sr Market Strategist – Financial Services
Market Risk:
*AAPL earnings miss on top/bottom line. Suffer the worst sales decline since 2016.
*AMZN beats on top-line rev, misses on bottom-line eps. 2022 recorded the worst holiday sales for the company since 2014.
*GOOG/Alphabet missed on top/bottom line – drop in add spending/revenue on Youtube.
*ECB Simkus: A rate hike in May is possible, it could be 25bps or 50bps
*BoE Bailey: Too soon to say if this is the last rate rise.
Stocks: the earnings degradation is here, and yet the market bubble continues to thrive in early 2023. Yesterday, courtesy of Zerohedge, it pointed out that the most shorted stocks (by a percentage of the float) are amongst some of the leading performers by percentage YTD. So yeah, they’re dusting off the 2021 playbook again. That’s what you’d call “the game within the game”. All major indices burned off some of their immediate OB conditions in the after-hours following the earnings flops – which means they can rev up again over the near term. Rumor is that there were 40 million calls traded yesterday in equity options – that would make it the largest equity options volume session EVER – that’s a lot of gamma. What else was most interesting yesterday was the +4% day in VIX vs. +1.00% day in SP500.
Unemployment:
*Jobs: 517K vs. 185K exp; rate 3.4% vs. 3.6% exp; wages 4.4% yy vs. 4.3% exp
This is a very strong report – It remains my base case that there’s no pivot until labor turns over.
Gott run….back soon, Best.
| Market | Trend > 6 mo | Range Low | Range High | Momentum | OB/OS |
| SP500 | Bearish | 3946 | 4178 | Positive | 68 |
| Nasdaq 100 | Bearish | 11,823 | 12,811 | Positive | 69 |
| Russell 2000 | Bearish | 1863 | 2014 | Positive | 81 |
| 10yr Yield | Bearish | 3.29% | 3.58% | Negative | 26 |
| VIX | Bullish | 17.43 | 21.72 | Negative | 37 |
| Oil | Bearish | 73.86 | 83.37 | Positive | 30 |
| Gold | Bullish | 1883 | 1972 | Positive | 13 |
