S&P 500 (SPY) Dives To 3635 As Initial Jobless Claims Decline

Key Insights

  • S&P 500 found itself under pressure after the release of Initial Jobless Claims report.
  • Auto stocks are losing ground as traders react to the disappointing report from CarMax. 
  • A move below the support at 3635 will open the way to the test of the next support level at 3600.

Traders Worry About Hawkish Fed

S&P 500 is down by more than 2% in today’s trading session as traders react to the better-than-expected Initial Jobless Claims report.

The report indicated that 193,000 Americans filed for unemployment benefits in a week, compared to analyst consensus of 215,000. The Fed has previously stated that job market remained too tight. The report confirmed that the job market was in good shape. This is bearish for stocks as the Fed is forced to raise rates aggressively to cool demand and fight inflation.

Auto stocks found themselves under pressure after CarMax report missed analyst estimates on both earnings and revenue. The stock is down by 23% in today’s trading session. Tesla, General Motors, and Ford are down by 5-6% as traders fear that rising loan rates have started to put pressure on demand for vehicles.

Tech stocks have also moved lower today, which is not surprising as the market prepares for higher interest rates. AMD, NVIDIA, and Apple were among the biggest losers in this market segment today.

The current sell-off is broad, and even energy stocks are under pressure despite the rebound in oil markets. The market views Fed’s actions as the biggest danger for stocks, so any news that signal that Fed will continue to raise rates aggressively lead to a sell-off.

S&P 500 Tests Support At 3635

S&P 500

S&P 500 continues its attempts to settle below the support level at 3635. RSI is close to the oversold territory, but there is enough room to gain additional downside momentum in case the right catalysts emerge.

If S&P 500 settles below 3635, it will move towards the next support level at 3600. A successful test of this level will push S&P 500 towards the support at 3580.

On the upside, the previous support at 3660 will serve as the first resistance level for S&P 500. In case S&P 500 climbs back above this level, it will head towards the next resistance at 3700. A move above 3700 will open the way to the test of the resistance at 3725.

For a look at all of today’s economic events, check out our economic calendar.

ETH Move to $1,500 Hinged the Fed as BTC Returns to $19,000

Key Insights:

  • Bitcoin (BTC) and ethereum (ETH) find modest support but remain under pressure.
  • Market uncertainty towards today’s Federal Reserve monetary policy decision and FOMC economic projections continue to test buyer sentiment.
  • Technical indicators are bearish, suggesting a possible look at 2022 lows.

On Tuesday, bitcoin (BTC) fell by 3.37% to end the day at $18,887. BTC closed out the day at sub-$19,000 for just the second time since June.

A mixed morning saw BTC rise to an early high of $19,635 before sliding to a late afternoon low of $18,754. Avoiding the First Major Support Level (S1) at $18,636 and the September low of $18,256, BTC ended the day at $18,887.

Ethereum (ETH) slid by 3.85% on Tuesday. Reversing a 3.07% gain from Monday, ETH ended the day at $1,323.

Tracking the broader market, ETH fell from an early high of $1,385 to a late low of $1,312. However, steering clear of the First Major Support Level (S1) at $1,306 and the September low of $1,279, ETH ended the day at $1,323.

Bearish sentiment toward the Fed monetary policy decision and economic outlook returned on Tuesday. A bearish NASDAQ 100 session added to the market woes as investors responded to Ford Motors (F) comments on inflation and supply chains.

Fears are that the global economy is at a tipping point and that the Fed could deliver the final blow to send emerging economies into deep and long-lasting recessions. However, bets of a percentage point later today and on November 2 have eased, providing modest price support.

This morning, the FedWatch Tool had the probability of a 75-basis point rate hike at 84% versus 16% for a percentage point move. It will come down to today’s decision and the projections. Any talk of a percentage point hike in November would likely weigh on riskier assets.

The probability of a percentage point hike in November was just 11.0%, down from 14.5% a week ago. However, beyond interest rates, there will also be plenty of market interest in the economic and inflation projections as recession fears resurface.

There are no US economic indicators between now and the Fed policy decision to shift sentiment, leaving BTC and ETH at the mercy of the market risk sentiment and the NASDAQ 100. This morning, the NASDAQ 100 Mini was up 12.5 points.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.48% to $18,977. A mixed morning saw BTC rise to an early high of $19,137 before falling to a low of $18,809.

BTC finds early support.
https://www.fxempire.com/stocks/f

Technical Indicators

BTC needs to move through the $19,092 pivot to target the First Major Resistance Level (R1) at $19,430 and the Tuesday high of $19,635. With investors looking ahead to today’s monetary policy decision, the NASDAQ 100 will continue to influence. There are no US economic indicators to consider today.

In the case of an extended rally, BTC should test the Second Major Resistance Level (R2) at $19,973 and resistance at $20,500. The Third Major Resistance Level (R3) sits at $20,854. The FOMC will need to deliver a dovish 75-basis point rate hike and project a soft economic landing to support a breakout session.

Failure to move through the pivot would leave the First Major Support Level (S1) at $18,549 in play. Barring another extended sell-off, BTC should avoid sub-$18,000. The Second Major Support Level (S2) at $18,211 should limit the damage.

The Third Major Support Level (S3) sits at $17,330.

BTC support levels in play below the pivot.
BTCUSD 210922 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 50-day EMA, currently at $19,711.

The 50-day EMA fell back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish price signals.

A move through R1 ($19,430) and the 50-day EMA ($19,711) would give the bulls a run at R2 ($19,973) and the 100-day EMA ($20,064). The 200-day EMA sits at $20,591. However, failure to move through the 50-day EMA would leave BTC under pressure.

EMAs bearish.
BTCUSD 210922 4 Hourly Chart

Ethereum (ETH) Price Action

At the time of writing, ETH was up 1.13% to $1,338. A mixed morning saw ETH rise to an early high of $1,346 before falling to a low of $1,316.

ETH finds morning support.
ETHUSD 210922 Daily Chart

Technical Indicators

ETH needs to move through the $1,340 pivot to target the First Major Resistance Level (R1) at $1,368 and the Tuesday high of $1,385. The Fed will have to deliver a dovish rate hike and crypto-friendly economic projections to support a bullish session.

In the event of an extended rally, ETH could target the Second Major Resistance Level (R2) at $1,413. The Third Major Resistance Level (R3) sits at $1,486.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,295 in play. Barring an extended afternoon sell-off, ETH should avoid sub-$1,200. The Second Major Support Level (S2) at $1,267 should limit the downside.

The Third Major Support Level (S3) sits at $1,194.

Support levels in play below the pivot.
ETHUSD 210922 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat below the 50-day EMA, currently at $1,446. The 50-day EMA slid back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.

An ETH breakout from R1 ($1,368) would give the bulls a run at R2 ($1,413) and the 50-day EMA ($1,446). However, market risk sentiment will need to improve materially to support a return to $1,400. Failure to move toward the 50-day EMA would leave ETH under pressure near-term.

EMAs bearish.
ETHUSD 210922 4 Hourly Chart

BTC Fear & Greed Index Holds Steady as Investors Await the Fed

Key Insights:

  • On Tuesday, bitcoin (BTC) fell by 3.37% to end the day at sub-$19,000 for the first time since September 6 and just the second time since June.
  • Fed fear weighed on BTC as the markets prepare for Wednesday’s policy decision and projections.
  • The Bitcoin Fear & Greed Index held steady at 23/100 despite the BTC return to sub-$19,000.

On Tuesday, bitcoin (BTC) slid by 3.37%. Reversing a 0.65% gain from Monday, BTC ended the day at $18,887. BTC fell short of $20,000 for the fifth time since July 3 and wrapped up the day at sub-$19,000 for the second time since June.

A mixed start to the day saw BTC rise to an early high of $19,635 before hitting reverse. Coming up short of the First Major Resistance Level (R1) at $20,074, BTC slid to a late afternoon low of $18,754. However, avoiding the First Major Support Level (S1) at $18,636, BTC ended the day at $18,887.

BTC tracked the NASDAQ 100 throughout the US session, with Fed fear and economic woes weighing on riskier assets. Market uncertainty on whether the Fed front loads with a percentage point rate hike sent the crypto market cap back to sub-$900 billion.

This week, comments from Ford (F) added to the bearish mood. A growing number of US-listed companies are raising the red flag over the economic outlook. On Tuesday, the NASDAQ 100 fell by 0.95%. This morning, the NASDAQ 100 Mini was up 13.75 points to deliver modest support.

It will likely be another choppy session today as investors await the Fed monetary policy decision and projections. A hawkish Fed rate hike could see BTC head towards the 2022 low of $17,601.

NASDAQ correlation.
NASDAQ – BTCUSD 210922 5 Minute Chart

Bitcoin Fear & Greed Index Holds Steady as Investors Await the Fed

Today, the Fear & Greed Index remained unchanged at 23/100. The Index showed a muted response to a BTC return to sub-$19,000. Investor uncertainty towards the Fed and the economic outlook left the Index in the Extreme Fear zone.

For investors considering the Index as a guide, the lack of a trend affirms the current uncertainty surrounding the Fed policy decision and economic outlook.

In recent weeks, avoiding sub-20/100 has been the key. The bears will be eying a fall to sub-20/100 to signal a BTC slide to sub-$18,000. By contrast, the bulls will look for an Index return to 40/100 to support a move toward $25,000.

Index remains in the Extreme Fear zone.
Fear & Greed 210922

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.28% to $18,939. A mixed start to the day saw BTC fall to an early low of $18,845 before rising to a high of $18,968.

BTC finds early support.
BTCUSD 210922 Daily Chart

Technical Indicators

BTC needs to move through the $19,092 pivot to target the First Major Resistance Level (R1) at $19,430 and the Tuesday high of $19,635. With investors looking ahead to today’s monetary policy decision, the NASDAQ 100 will continue to influence. There are no US economic indicators to consider today.

In the case of an extended rally, BTC should test the Second Major Resistance Level (R2) at $19,973 and resistance at $20,500. The Third Major Resistance Level (R3) sits at $20,854.

Failure to move through the pivot would leave the First Major Support Level (S1) at $18,549 in play. Barring another extended sell-off, BTC should avoid sub-$18,000. The Second Major Support Level (S2) at $18,211 should limit the damage.

The Third Major Support Level (S3) sits at $17,330.

BTC support levels in play below the pivot.
BTCUSD 210922 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 50-day EMA, currently at $19,769.

The 50-day EMA slipped back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish price signals.

A move through R1 ($19,430) would give the bulls a run at the 50-day EMA ($19,769) and R2 ($19,973). The 200-day EMA sits at $20,624. However, failure to move through the 50-day EMA would leave BTC under pressure.

EMAs bearish.
BTCUSD 210922 4 Hourly Chart

Trend Analysis

Looking at the trends, BTC would need a move through the August high of $25,203 and $25,500 to target the June high of $31,956. Avoiding a fall through the September low of $18,256 would support a move back towards $25,000.

However, the trend has turned bearish following Monday’s new September low. A fall through the September low of $18,256 would bring sub-$18,000 and the June low of $17,601 into play. A Fear & Greed Index return to 30/100 should support a shift in sentiment, which may hinge on the Fed.

BTC trends remain bearish.
BTCUSD 210922 Daily Chart Trends

Crypto Market Daily Highlights – XRP Bucks a Bearish Top Ten Session

Key Insights:

  • It is a mixed Tuesday session for the crypto top ten, with XRP bucking the top ten trend.
  • Investor anxiety ahead of the Fed interest rate decision and projections weighed, while XRP heads north.
  • The total crypto market cap is down by $21.5 billion to $885.6 billion.

It is a mixed Tuesday session for the crypto top ten. XRP leads the crypto top ten on investor optimism towards the outcome of the SEC v Ripple case. However, ETH leads the way down, with BTC falling short of $20,000 for a second consecutive session.

Market angst over the upcoming Fed policy decision and FOMC projections continue to weigh. Fears of a hawkish Fed sending the global economy into a recession remain the theme following last week’s warnings.

The NASDAQ 100 failed to deliver support, falling by 0.95%, with Ford (F) joining a growing list of US giants to sound the alarm bells. On Tuesday, Ford reportedly said that inflation-related supplier costs would run about $1 billion higher than expected.

Supply chain disruption also remained an issue, with the company estimating that it will have up to 45,000 vehicles in inventory, lacking parts.

On Wednesday, the Fed will be the driving force and should remove a high degree of uncertainty vis-à-vis monetary policy. The crypto market will need a dovish 75-basis point rate hike to support a bullish end to the Wednesday session. Talk of smaller rate hikes in November and December, and a soft landing, should be crypto-friendly.

NASDAQ correlation.
Total Market Cap – NASDAQ – 210922 5 Minute Chart

Crypto Market Slides Back to Sub-$900bn on Fed Fear

On Tuesday, the crypto market cap rose to an early high of $914.9 billion before sliding to an early afternoon low of $876.2 billion. A late afternoon partial recovery to $904 billion was brief, with external market forces weighing.

With 120 minutes of the Tuesday session remaining, the total crypto market cap is down $21.5 billion to $885.6 billion.

Crypto market back at sub-$900bn.
Total Market Cap 210922 Daily Chart

The Crypto Market Movers and Shakers from the Top Ten and Beyond

It is a mixed Tuesday session for the crypto top ten.

XRP leads the way with 120 minutes of the session remaining (UTC), surging 7.17%. The hope of a favorable outcome to the SEC v Ripple case delivered support.

However, it is a bearish session for the rest of the top ten, with ETH (-4.34%) leading the way down.

ADA (-3.09%), BNB (-2.28%), BTC (-3.36%), and SOL (-3.21%) are also in the deep red, while DOGE is down by just 0.68%.

From the CoinMarketCap top 100, it was a mixed session.

Helium (HNT), XRP, and Stellar (XLM) lead the way. HNT is up 8.17%, with XRP and XLM seeing gains of 7.17% and 6.24%, respectively.

However, cosmos (ATOM) and ravencoin (RVN) lead the way down, with losses of 10.67% and 9.55%, respectively. ApeCoin (APE) is also struggling, with a 4.28% fall.

24-HourCrypto Liquidations Slide Back on Bearish Session

Over 24 hours, total liquidations declined amidst rising fear towards the Fed monetary policy decision on Wednesday.

At the time of writing, 24-hour liquidations stood at $121.53 million, down from $292.44 million on Tuesday morning.

Liquidated traders over the last 24 hours also declined. At the time of writing, liquidated traders stood at 37,436 versus 71,318 on Tuesday morning. Liquidations over twelve and four hours were down, while one-hour liquidations increased.

Crypto liquidations slow ahead of the Fed.
Total Crypto Liquidations 210922

According to Coinglass, 12-hour liquidations stood at $82.23 million, down from $98.29 million on Tuesday morning, with four-hour liquidations falling from $24.44 million to $16.13 million. However, one-hour liquidations increased from $4.27 million to $11.61 million, reflecting a late Tuesday pullback. The chart below shows market conditions throughout the session.

Hourly chart aligned with liquidations.
Total Market Cap 210922 Hourly Chart

S&P 500 (SPY) Tests Support At 3850

Key Insights

  • S&P 500 is moving lower as Treasury yields are testing new highs. 
  • Traders remain nervous ahead of the Fed Interest Rate Decision. 
  • A move below the support at 3850 will push S&P 500 towards the next support level at 3825.

Ford Retreats As Traders Fear That Guidance Will Be Cut

S&P 500 declined towards the 3850 level as traders sold stocks ahead of the Fed Interest Rate Decision, which will be released tomorrow.

Ford declined by more than 10% in today’s trading session after the company revealed that it faced parts shortages. According to Ford, the company “expects to have about 40,000 to 45,000 vehicles in inventory at end of third quarter lacking certain parts presently in short supply”. Ford reaffirmed its full-year adjusted EBIT guidance of $11.5 billion – $12.5 billion. However, the market is worried that the company will be forced to cut its guidance in the upcoming months.

Gold stocks have found themselves under material pressure as gold markets moved closer to yearly lows. One of the leading gold stocks, Newmont Corporation, declined by more than 4% in today’s trading.

Energy stocks are also moving lower as WTI oil managed to get below the $84 level. Exxon Mobil, Chevron, and Schlumberger are down by more than 1%.

Leading tech stocks are mostly moving lower. However, Apple and Tesla are up by more than 1%.

From a big picture point of view, the current pullback is broad, and all market segments are under pressure. Traders reduce their risks ahead of the Fed Interest Rate Decision as they are worried that a 75 bps rate hike may be accompanied by hawkish commentary from Fed Chair Jerome Powell. Bond traders also fear that Powell will be hawkish, so Treasury yields test new highs.

Another Test Of The Key Support At 3850

S&P 500

S&P 500 continues its attempts to settle below the strong support level at 3850. If S&P 500 settles below this level, it will move towards the next support at 3825. A move below the support at 3825 will push S&P 500 towards the support at 3800. In case S&P 500 declines below 3800, it will head towards the next support level, which is located at 3780.

On the upside, S&P 500 needs to settle above the resistance at 3885 to have a chance to gain upside momentum in the near term. The next resistance level is located at 3900. A successful test of this level will open the way to the test of the next resistance at 3920.

For a look at all of today’s economic events, check out our economic calendar.

5 Things to Know in Crypto Today: BTC Returns to $22,000

Key Insights:

  • Bitcoin (BTC) and the crypto market are on target to extend the winning streak to six sessions.
  • Fed fear continues to subside, supporting riskier assets, with a pickup in crypto activity evident in the news wires.
  • NFT news delivered a solana (SOL) breakout, with Web3 and Starbucks (SBUX) supporting a polygon (MATIC) rally.

Fed Fear Subsides as Markets Look Beyond the September Fed Move

This week, the FOMC blackout period prevents FOMC members from talking until after September 22. With a 75-basis point rate hike baked in, US economic indicators will dictate the appetite for riskier assets in the runup to the September policy decision.

Following last week’s Bank of Canada and ECB rate hikes, the global financial markets appear to have accepted the need for front-loading to bring inflation to target.

The NASDAQ continues to trend upwards, supporting the crypto market, with bitcoin (BTC) returning to $22,000.

However, today’s US CPI report could test investor sentiment. Another spike in US inflation may bring some uncertainty. Before the blackout period, Fed Chair Powell and FOMC members had delivered hawkish chatter and commitment to bring inflation to target at any cost.

NASDAQ correlation.
Total Market Cap – NASDAQ – 130922 Daily Chart

Solana (SOL) Leads the Top Ten

On Monday, SOL is up 6.38% to $37.2300. A bullish session saw SOL rally to a day high of $38.4050 before easing back. A return to $40.00 for the first time since August 18 would support a run at the August high of $48.42. However, SOL sits well below the January/2022 high of $179.4975.

Leading the top ten cryptos by market cap, NFT news delivered the SOL breakout session.

Solana-based NFT activity is on the rise. According to Solana News, the most-traded NFT collections over the last 24 hours include, Yoots- Mint Toobs ($426,170), Solana Name Service ($425,491), and Psyker ($273,773).

‘Hello Moon’ also shared some Solana-based NFT numbers overnight, which were SOL price positive.

SOL enjoys a bullish session.
SOLUSD 130922 Daily Chart

Web3 Activity Picks Up as Mainstream Players Form New Partnerships

Ford Motors (F) and Starbucks (SBUX) became the latest US companies to show interest in Web3.

However, Starbucks had more impact on the crypto market, partnering with Polygon (MATIC) to launch an NFT rewards program. On Monday, Starbucks announced a new Web3 experience for its rewards members.

According to the announcement,

“As one of the first companies to integrate NFTs with an industry-leading loyalty program at scale, Starbucks will create an accessible Web3 community that will enable new ways to engage with members and partners (employees).”

In response to the new partnership, MATIC is up 4.10% to $0.9302.

MATIC responds to Starbucks announcement.
MATICUSD 130922 Daily Chart

Input Output HK Vasil Hard Fork Updates Show Progress

With the Vasil hard fork date of September 22 rapidly approaching, investor interest in the Input Output HK updates has grown.

As of September 12, updates on the ADA Hard Fork Mass Indicators are as follows:

  • Sixteen exchanges are hard fork ready, up from 15 as of September 9.
  • Twenty-eight exchanges are in progress, up by one from September 9, with Coinbase and Kraken still reporting upgrades in progress.
  • Twenty-seven exchanges have yet to start the upgrade process.

From the top 12 exchanges by liquidity:

  • Six exchanges are hard fork ready: AAX, Binance, Bittrue, BKEX, MEXC, and WhiteBit, with four in progress, including Coinbase, HitBTC, Upbit, and XT.com.
  • However, two exchanges have yet to start the upgrade process: ChangellyPro and ZB.com.

Investors will be looking for Coinbase and Kraken to complete the upgrade process to deliver ADA price support.

ADA is down 1.6% to $0.501, with ten minutes of the Monday session remaining.

ADA struggles.
ADAUSD 130922 Daily Chart

Fidelity Goes Retail with Bitcoin (BTC) Trading Platform

The Wall Street Journal reported that Fidelity Investments plans to offer BTC trading to its retail clients. Fidelity could become another headache for the likes of Coinbase, which have struggled through the crypto winter.

 

S&P 500 Drops More Than 2% As Traders Rush To Take Profits After Recent Rally

Key Insights

  • S&P 500 retreated as traders continued to take profits after the recent rally. 
  • Recession fears, strong dollar, and rising yields served as additional bearish catalysts. 
  • The tech sector was hit hard, while the energy sector managed to stay in the positive territory. 

Traders Prepare For The Jackson Hole Symposium

S&P 500 found itself under strong pressure at the start of the week and moved below the 4150 level as traders took profits ahead of the Jackson Hole Symposium, which starts on August 25.

Recession worries, strong dollar, and rising yields have also contributed to the sell-off. However, it looks that traders searched for an excuse to move out of long positions after the strong rally from June lows.

While the FedWatch Tool indicates that there is a 56.5% probability of a 75 bps rate hike, bulls are afraid that they will hear something too hawkish from Fed Chair Jerome Powell, who is scheduled to speak on Friday.

At this point, a 100 bps rate hike looks extremely unlikely, but traders often become nervous when they want to take some profits off the table.

Semiconductor Stocks Retreat As Yields Rise

Semiconductor stocks were hit hard, and Intel retreated to multi-year lows. Competitors like AMD and NVIDIA have also declined by 3 – 4% today.

While semiconductor stocks have been under pressure for months, some stocks in this market segment, like NVIDIA, remain richly valued. High valuation levels may them more sensitive to rising yields.

Meanwhile, Ford put pressure on Dow Jones as it announced that it would cut 3,000 jobs. Ford noted that it wanted to focus on electric vehicles and software.

However, the market is worried that job cuts signal that demand for cars is not as strong as previously expected. Electric vehicle makers like Tesla and Rivian have also moved lower today.

It was a hot day for the followers of meme stocks as AMC stock collapsed on worries about Cineworld bankruptcy. Bed Bath & Beyond lost more than 15% amid worries about the financial health of the company. The current market sentiment may present a problem for meme stocks, which may find themselves under more pressure in the upcoming trading sessions.

In general, there was nowhere to hide except energy today. Energy stocks received support due to strong performance of the oil and natural gas markets. Shares of Chesapeake and Range Resources moved closer to yearly highs.

For a look at all of today’s economic events, check out our economic calendar.

Compared To The USD, Auto Company Stocks Are On A Summer Vacation

Summer is here, and it’s time for a vacation. But this year, flight schedules are anything but reliable, and that new car for the road trip is probably not available at the local Toyota, Honda, Tesla, General Motors, Ford, etc dealership. Due to chip shortages and other issues, most car dealerships have little to no inventory to sell.

High inflation and rising interest rates combined with high gasoline prices are causing people to rethink or pay more attention to their monthly budget expenditures.

Furthermore, if you do decide to buy a used car, be prepared to pay top dollar. In some cases, a 3-year-old model may cost you as much as a new one. Historically autos almost always depreciate, but we are in an unusual market phenomenon where many used cars have appreciated significantly.

What about the auto company stocks themselves? Cash is looking great versus owning one of these auto brands.

Before we motor into the auto company stocks, let’s take a quick look at cash (the U.S. Dollar).

U.S. DOLLAR +18.81%

  • U.S. Dollar making a new 14-year high
  • 2020-2022 U.S. Presidential Cycle: USD appreciated +18.74% to date
  • 2016-2020 U.S. Presidential Cycle: USD depreciated – 12.80%
  • 2012-2016 U.S. Presidential Cycle: USD appreciated +37.20%

US DOLLAR INDEX • DXY • WEEKLY

US Dollar Index Weekly Chart

TOYOTA -26.93%

  • January 2022 to present
  • -$56.77 or -26.93%
  • 22 weeks or 154 days down
  • The bear market has more room to drop; if you own it consider selling on rallies and going to cash

TOYOTA MOTOR CORPORATION • TM • NYSE • WEEKLY

Toyota Motor Corporation Weekly Chart

HONDA -27.57%

  • August 2021 to present
  • -$9.19 or -27.57%
  • 47 weeks or 329 days down
  • The bear market has more room to drop; if you own it consider selling on rallies and going to cash

HONDA MOTOR COMPANY, LTD. • HMC • NYSE • WEEKLY

Hondo Motor Company Weekly Chart

TESLA -47.38%

  • November 2021 to present
  • -$582.69 or -47.38%
  • 32 weeks or 224 days down
  • The bear market has more room to drop; if you own it consider selling on rallies and going to cash

TESLA, INC. • TSLA • NASDAQ • WEEKLY

Tesla Inc Weekly Chart

GENERAL MOTORS -50.18%

  • December 2021 to present
  • -$31.91 or -50.18%
  • 27 weeks or 189 days down
  • The bear market has more room to drop; if you own it consider selling on rallies and going to cash

GENERAL MOTORS COMPANY • GM • NYSE • WEEKLY

General Motors Weekly Chart

FORD -55.71%

  • January 2022 to present
  • -$14.11 or -55.71%
  • 22 weeks or 154 days down
  • The bear market has more room to drop; if you own it consider selling on rallies and going to cash

FORD MOTOR COMPANY • F • NYSE • WEEKLY

Ford Motor Company Weekly Chart

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Best Automotive Stocks To Buy In June

Key Insights

  • Automotive stocks have started to recover after a lengthy pullback. 
  • Analyst estimates have been moving lower in recent weeks, but the pace of this decline was modest. 
  • Ford and General Motors are trading at roughly 6 forward P/E, which could attract value-oriented investors. 

Several automotive stocks have managed to find support in May and are trying to gain upside momentum as traders and investors are attracted by their cheap valuation levels.

Ford

Ford stock had a tough year as it has found itself under pressure in mid-January after touching multi-year highs. At this point, the stock is down by almost 50% from these highs.

Analyst estimates have been moving lower in recent months, but their decline was not as dramatic as the decline in Ford’s stock price. Currently, the company is expected to report earnings of $1.93 per share in 2022 and $2.16 per share in 2023, so the stock is trading at just 6 forward P/E.

While the markets are worried about the health of the economy in the second half of this year, Ford stock is trading at attractive valuation levels and could attract speculative traders who are willing to bet that concerns are overblown.

General Motors

The situation is similar in General Motors‘ case. Analyst estimates have moved lower in recent weeks, and the company is expected to report earnings of $6.73 per share in the next year.

Just like Ford, the stock is trading at roughly 6 forward P/E, so the market remains sceptical about the potential performance of legacy automakers.

However, it remains to be seen whether General Motors stock will continue to trade at such levels in case earnings estimates stabilize. In addition, traders who are worried about rising interest rates could provide additional support to low-PE stocks like General Motors.

To keep up with the latest earnings updates, visit our earnings calendar.

Best Automotive Stocks To Buy In May

Key Insights

  • Tesla will be an interesting rebound play in case the situation with coronavirus in China stabilizes. 
  • Ford is trading at just 6 forward P/E, which is attractive for value-oriented traders. 
  • The general market is trying to rebound, which could provide additional support to automotive stocks. 

S&P 500 has recently moved away from yearly lows, but many stocks remain under material pressure. The stocks in the automotive industry are not an exception as traders are worried that higher costs and potential slowdown of the world economy would hurt automakers’ profits. That said, some automotive stocks are trading at attractive valuation levels that have not been seen for quite some time.

Tesla

Tesla stock has recently found itself under significant pressure due to lockdowns in China. Musk’s desire to buy Twitter has also hurt investor sentiment, although the recent news indicated that the fate of the deal remained uncertain.

Meanwhile, analyst estimates have moved higher in recent months. Currently, Tesla is expected to report a profit of $12.32 per share in 2022 and earnings of $15.8 per share in 2023, so the stock is trading at 47 forward P/E.

Such valuation levels are not cheap for an “ordinary” stock, but Tesla is not an ordinary company. At this point, it looks that demand for the stock may increase in the upcoming weeks in case the situation with coronavirus in China stabilizes after the lockdowns.

Ford

Ford stock is extremely cheap compared to Tesla. The company is expected to report earnings of $2.18 per share in the next year, so the stock is trading at just 6 forward P/E.

However, it should be noted that shares of legacy automakers have traded at a huge discount to Tesla for years, so the relative cheapness of Ford stock cannot serve as the main catalyst for the bulls.

However, Ford is also cheap on an absolute basis. It is not easy to see a world-class company valued at just six times its future profits nowadays. Analyst estimates have been trending lower in recent months, which partly explains traders’ skepticism, but current levels should still attract value-oriented investors.

To keep up with the latest earnings updates, visit our earnings calendar.

Rivian Is Down By 15%, Here Is Why

Key Insights

  • CNBC reported that Ford decided to sell 8 million Rivian shares. 
  • The report also indicated that another investor was willing to sell 13 million – 15 million shares. 
  • Rivian’s market capitalization exceeds $20 billion despite the huge pullback from all-time highs. 

Rivian Stock Falls As Ford Is Selling 8 Million Shares

Shares of Rivian gained strong downside momentum after a CNBC report indicated that Ford  would sell 8 million Rivian shares. The shares would be sold through Goldman Sachs. In addition, the report indicated that an unknown seller would be selling 13 million – 15 million Rivian shares through JPMorgan.

Ford owns 102 million shares of Rivian, so the automaker decided to sell about 8% of its current stake in the EV company. Rivian stock had a great debut in late 2021 and touched highs near the $180 level but lost momentum and has been declining for months.

Not surprisingly, traders rushed to sell Rivian stock after the CNBC report was released. The general bearish market sentiment added to pressure, and the stock moved below the $25 level.

What’s Next For Rivian Stock?

The current market environment is bearish for stocks like Rivian. The company is not expected to become profitable anytime soon, while the market is focused on finding safe-haven plays in the rising interest rate environment. In addition, analyst estimates for Rivian have been declining in recent months.

Ford’s decision will certainly serve as a major red flag for many investors, and the stock could remain under strong pressure in the upcoming trading sessions. The CNBC report indicated that Ford was not the only company that was willing to sell shares, which will increase traders’ concerns.

It should be noted that Rivian is valued at more than $22 billion even after the huge pullback. The company has not reached mass production levels, and it remains to be seen whether the market is willing to support such enterprises in the current environment. While the pullback from $180 to $25 may look like a great opportunity to buy Rivian stock, traders must stay cautious as Rivian remains a richly valued company.

For a look at all of today’s economic events, check out our economic calendar.

Best Automotive Stocks To Buy Now

Key Insights

  • Automotive stocks haven been under pressure since the start of this year. 
  • Shares of legacy automakers have declined to attractive levels. 
  • Current problems may have been already priced in by the market. 

Automotive stocks have been moving lower in recent months. Legacy automakers, speculative EV stocks like NIO and Rivian, and even Tesla found themselves under pressure due to worries about supply chain problems and the negative impact of rising commodity prices. This pullback has pushed the stocks of legacy automakers to attractive levels.

General Motors

General Motors has recently released its first-quarter report. The company reported revenue of $35.98 billion and adjusted earnings of $2.09 per share, missing analyst estimates on revenue and beating them on earnings.

The report did not provide much support to the stock, which continued to trade near yearly lows due to general market sentiment.

Analysts expect that General Motors will report earnings of $6.89 per share in the current year and earnings of $6.88 per share in the next year, so the stock is trading at less than 6 forward P/E.

While analysts do not expect that General Motors will be able to grow its profits in the near term, current valuation levels look attractive.

Ford

Ford has also released its quarterly results this week. The market’s reaction was negative, and the stock slipped to yearly lows.

Ford is also valued at less than 6 forward P/E, so the market is somewhat skeptical about the near-term financial performance of legacy automakers.

However, there is room for multiple expansion, as higher interest rates will likely force investors to search for cheap companies with solid fundamentals.

Inflation and supply chain problems will remain the key bearish catalysts for Ford and other automotive stocks, but these problems may have been already priced in by the market.

For a look at all of today’s economic events, check out our economic calendar.

Ford Is Down By 5%, Here Is Why

Key Insights

  • Ford easily beat analyst estimates on both earnings and revenue. 
  • The decrease of the value of Ford’s share in Rivian led to a loss on a GAAP basis. 
  • After the pullback, Ford stock is trading at just 6 forward P/E. 

Ford Stock Falls Despite Strong Report

Shares of Ford  found themselves under pressure after the company released its first-quarter report. Ford reported revenue of $34.5 billion and adjusted earnings of $0.38 per share, beating analyst estimates on both earnings and revenue.

On a GAAP basis, the company recorded a net loss of $3.1 billion due to the mark-to-market loss of $5.4 billion on Ford’s stake in Rivian. Rivian stock has performed poorly after the initial hype, and it is currently trading at all-time lows.

For the full-year 2022, Ford maintained its outlook for $11.5 billion – $12.5 billion in adjusted EBIT. The company expects that semiconductor availability will improve in the second half of the year. At the same time, Ford notes that commodity costs would be up by about $4 billion year-over-year.

What’s Next For Ford Stock?

Analysts expect that Ford will report earnings of $1.93 per share in the current year and earnings of $2.23 per share in the next year, so the stock is trading at roughly 6 forward P/E. It should be noted that analyst estimates have been moving lower in recent weeks.

Ford stock lost momentum at the start of this year and is down by 45% from 2022 highs. Current valuation levels look attractive, so Ford stock may get support from speculative traders who are willing to bet that the recent sell-off is not justified.

The key risk for Ford shares is the potential slowdown of the world economy, which could reduce demand for the company’s products. The recent U.S. GDP Growth Rate report indicated that GDP declined by 1.4% in the first quarter, compared to analyst consensus which called for growth of 1.1%. In case the U.S. economy continues to slow down, Ford stock may find itself under more pressure.

For a look at all of today’s economic events, check out our economic calendar.

Ford Motor Headed for Lower Teens

Ford Motor Co. (F) is trading at a six-month low in Thursday’s pre-market after Barclays downgraded the automaker to ‘Equal Weight’ from ‘Overweight’, lowering the price target to $17. The bearish call comes in reaction to an ugly March sales report and executive decision to oppose spinning off electric vehicle production into a new tracking stock. However, EV will now comprise its own division, allowing analysts to evaluate progress and production.

Major Sales Slump

March 2022 sales fell a painful 25.2% year-over-year to just 159,328 units, sadly marking a 23.2% improvement over dismal February metrics. Chronic supply disruptions contributed to the shortfall, now compounded by soaring inflation and deteriorating consumer sentiment as a result of the Russia – Ukraine war. Ominously, the comparison was an especially easy one to achieve, with many folks dealing with strict COVID restrictions during the winter of 2020 – 21.

However, there are bright spots in the Ford catalog, raising shareholder hopes that popular sales of new and updated models will overcome falling sales of rusty old standards. As an example, F-Series booked a record 50,000 retail orders during the month, up 38,000 compared to the same quarter last year. In addition, electric vehicle sales expanded by 37.9% year-over-year, although the newly-minted EV division comprises just a small portion of total monthly revenue.

Wall Street and Technical Outlook

Wall Street consensus stands at an ‘Overweight’ rating based upon 8 ‘Buy’, 2 ‘Overweight’, 8 ‘Hold’, and 1 ‘Underweight’ recommendation. In addition, two analysts recommend that shareholders close positions and move to the sidelines. Price targets currently range from a low of $13 to a Street-high $32 while the stock is set to open Thursday’s session nearly $5 below the median $20 target. This placement looks perfectly accurate, given weak monthly sales.

Ford Motor broke out above a 22-year trendline in January 2021, entering a strong uptrend that mounted 2011 resistance at 18.97 in October. The uptick ended in January 2022 at the .618 Fibonacci retracement of the 1999 to 2008 downtrend, giving way to a rapid decline that eased into a falling channel in February. It’s now failed the October breakout and 200-day moving average support, mired in a decline that could reach the lower teens in coming months.

Catch up on the latest price action with our new ETF performance breakdown.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Top 4 Things Traders Have to Know Today

What is happening with Meta, Paypal and Spotify?

Spotify didn’t actually issue annual guidance, which seems to have exacerbated worries about potential subscriber growth potential. All three were down by double-digits in after hours trading at one point last night.

Competition is clearly much more fierce as larger players are starting to dial it in and use the latest technology to gain better traction i.e. Visa, Mastercard, etc. I also read reports this week that Apple is diving deeper into the payment and banking space and will soon be able to offer all kinds of options via the smartphone.

In simple terms, I wonder if PayPal executives could see they had a “growth” problem and that’s why they took a look at Pinterest a few months back. I heard rumors yesterday perhaps they might be looking at Robinhood.

At the moment the stock market just doesn’t seem real forgiving to those who swing and miss. On a somewhat positive note, Facebook disclosed they purchased back +$20 billion of their own stock in the last quarter.

Bulls are hoping for solid results from Amazon and Snap today to help prevent sentiment in the tech sector from creating more fallout. I’m not holding my breath!

Data to watch

Results are also due from Activision Blizzard, Biogen, Carlyle Group, Check Point, Cigna, Clorox, ConocoPhillips, Deckers Outdoors, Eli Lilly, Estee Lauder, Ford, Hanesbrands, Hershey, Honeywell, Ingredion, Merck, Pinterest, Quest Diagnostics, Royal Dutch Shell, SnapOn, Wynn Resorts, and Xylem.

On the economic data front, Factory Orders, the ISM Non-Manufacturing Index, and Productivity and Costs are due today. Productivity and Costs has become a more closely watched report as worries about climbing wages have grown. In the third quarter, productivity fell -5.2% (the most since 1960) and labor costs rose +9.6%.

Obviously, weakening productivity and rising costs is a bad combo for corporate profits so reversing this trend is a high priority. It may be tough to find much relief in the near-term with the labor market expected to remain extremely tight.

The shortage of workers has also been exacerbated by the latest Covid wave. ADP’s private payrolls report yesterday showed a decline of -301,000 jobs for January versus the estimate for a +200,000 gain, the first reported net job less since December 2020 according ADP.

Covid issue

Most analysts blame last month’s Covid surge for the decline and expect it is just temporary. The official January Employment Report on Friday is expected to show a gain of around +150,000 jobs, though the government has warned that the data won’t be reliable due to Covid-related reporting problems. Hopefully we’ll soon stop hearing that excuse as the Omicron Covid wave does seem to be burning itself out in the U.S. Case numbers across the country are about half of what they were in mid-January.

Hospitalizations have finally started to come down, too, which experts say is a more reliable measure. I hate to mention it but health officials are currently monitoring a mutated strain of Omicron known as “BA.2″… when does it end?

The standoff between Ukraine and Russia

Also still on the radar is the standoff between Russia and Ukraine. The U.S. is now readying to send more than +3,000 troops to bases in Eastern Europe as new satellite images appeared to show an even further increase in Russian troop buildup on Ukraine’s borders. Whether or not war is a realistic threat or not, the climbing tensions continue to stoke the flames in the energy markets.

Brent crude futures are trading near $90 as OPEC struggles to meet production targets and global physical supplies continue to tighten. The 19 OPEC+ countries with quotas underperformed their production targets by -832,000 b/d in December. Russia is currently the top OPEC+ producer, so any disruption to those supplies runs the risk of shooting oil prices even higher. Take note the front-end of the natural gas market is up over +50% in the first month of the new year. It’s certainly going to be a wild ride in 2022!

 

General Motors Could Rally After Earnings

General Motors Co. (GM) reports Q4 2021 results after Tuesday’s closing bell, with analysts looking for a profit of $1.15 per-share on $34.24 billion in revenue. If met, earnings-per-share (EPS) will mark a 40% profit decrease compared to the same quarter in 2020. The stock gained about 1% in October despite missing Q3 revenue expectations and has lost about 10% of its value in the last three months, despite posting an all-time high just four weeks ago.

Buyers Having Second Thoughts

Buying interest in electric vehicle production has waned so far in 2022, triggering corrections all across the automotive and auto parts sector.  High costs, battery limitations, and the lack of a nationwide charging grid are forcing many consumers to put off purchases until later this decade, when the technology is expected to mature. Supply disruptions have raised sticker prices and emptied inventories at the same time, as evidenced by a 43% decline in GM’s Q4 sales.

Deutsche Bank is still pounding the table, viewing General Motors as better long-term bet than rival Ford Motor Co. (F). Even so, analyst Emmanuel Rosner expects both companies to post solid 2022 outlooks, “reflecting unusual concurrent positive industry conditions of volume recovery and robust pricing, offsetting cost inflation.” His price targets reflect this contrasting view, with GM’s $71 equating to 10 times projected 2022 EPS while F’s $24 yields just 9 times.

Wall Street and Technical Outlook

Wall Street consensus is glued to a ‘Buy’ rating, now based upon 19 ‘Buy’, 2 ‘Overweight’, 4 ‘Hold’, 0 ‘Underweight’, and 0 ‘Sell’ recommendations. Price targets currently range from a low of $53 to a Street-high $100 while the stock is set to open Tuesday’s session right on top of the low target. Taken together with January’s slide to a 4-month low, this humble placement suggests significant upside potential if the company posts a solid quarter.

General Motors broke out above multiyear resistance in the 40s at the start of 2021 and stalled in the mid-60s in March. Four breakout attempts have failed since that time, yielding a potential topping pattern with support in the upper 40s. Accumulation has now fallen to the lowest low since September 2020, indicating aggressive profit-taking that will take time to overcome. Even so, weekly relative strength readings are deeply oversold, raising odds for a healthy bounce.

Catch up on the latest price action with our new ETF performance breakdown.

Disclosure: the author held no positions in aforementioned securities at the time of publication.

Brace Yourself For Another Wild Month In Stock Markets

For the year, the Dow is down -6%, the S&P 500 is down just over -9%, and the Nasdaq has lost -14.7%. The previous record-holder is January 2009, an ugly moment for the economy, when the stock market fell -8.6%. In addition, the VIX – aka the CBOE Volatility Index – has actually dropped back to around 31 after topping 37 earlier this week, its highest point since November 2020.

Keep in mind, the index isn’t registering anywhere close to levels reached during other periods of “extreme” volatility. For example, the index, which is measured between zero and 100, hit its highest point of almost 83 during the financial crisis in 2008. Its most extreme point during the pandemic was around 66 in March 2020. So, by comparison, this week’s volatility has been rather mild.

Federal Reserve

Some insiders equate the wild swings in stock prices to investors, particularly “big money,” trying to establish a new baseline for stock valuations minus the Fed’s easy money policies that have driven a massive amount of cash into markets since the pandemic began in 2020.

At its height, the Fed was pumping as much as +$120 billion per month into the system via its asset purchase program, ballooning its balance sheet to now nearly $9 trillion.

At the same time, the Fed has held its benchmark rate at near-zero and, before that, hadn’t even attempted to raise rates since 2018, and then only briefly. The last full-cycle of rate hikes was 2015. What’s more, investors haven’t really had to factor for inflation since the early 90s and it hasn’t been this high since the 80s.

Bottom line, whatever the new “normal” ends up looking like, it will be dramatically different from the pre-pandemic investing landscape. I’ve heard several large stock traders saying it seems to be the return of Alpha instead of the race to levered Beta. I hear others on Wall Street referencing it to a bit of league recreational youth baseball team where everybody now gets an award simply for participation, but then kids run into a rude awakening when performance really starts to matter.

It feels like we are there in the stock market; every business that was coming into the market was simply being rewarded with participation points, now people are starting to keep a real scorebook and counting the strikeouts and runs scored.

Economy still roars

The good news is that the U.S. economy continues to roar. Historically, a combination of moderate inflation and moderate interest rates has led to some of the biggest boom times for U.S. Last week, the Commerce Department said Q4 Gross Domestic Product (GDP) grew at an annualized rate of +6.9%, stronger than Q3’s +2.3% and well above Wall Street expectations of around +5.7% growth.

Consumer spending climbed at a +3.3% annual pace led by a +4.7% increase in services spending. But the real stand out was private investment which rocketed +32% higher, boosted by a surge in business inventories as companies stocked up to meet higher customer demand. Rising inventories, in fact, contributed nearly +5% to Q4 GDP growth.

On the one hand, the inventory build is positive because it indicates an easing of supply chain dislocations that should in turn help with inflation pressures. On the other hand, many economists note that the big boost from retailer and wholesaler restocking is not likely to be repeated.

Companies will also likely start to unwind at least some of that inventory in the quarters ahead, which could drag overall 2022 GDP, especially if consumer spending also drops off. And investors are more closely tracking consumer behavior as inflation continues to rise.

With consumer spending accounting for about 70% of the U.S. economy, any signs that belts are tightening or moods are getting overly pessimistic will likely set off some alarm bells.

Data to watch

Turning to next week, it will be another busy one for both key economic data as well as earnings. The main economic data highlight will be the January Employment Situation on Friday. Other key data includes ISM Manufacturing, Construction Spending, and the JOLTS report on Tuesday; ADP’s private payrolls report on Wednesday; Productivity & Costs, Factory Orders, and the ISM Non-Manufacturing Index on Thursday.

Earnings wise, results are due from NXP Semiconductor and Trane on Monday; Advanced Micro Devices, Alphabet, Amgen, Chubb, Electronic Arts, Exxon, General Motors, Gilead Sciences, Match Group, PayPal, Sirius XM, Starbucks, and UPS on Tuesday; AbbVie, Aflac, Allstate, Boston Scientific, CNH, Corteva, D.R. Horton, Ferrari, Humana, Johnson Controls, Meta (Facebook), MetLife, Novartis, Novo Nordisk, Qualcomm, Siemens, Thermo Fisher, TMobile, and Waste Management on Wednesday; Activision Blizzard, Amazon, Biogen, Carlyle Group, Check Point, Cigna, Clorox, ConocoPhillips, Deckers Outdoors, Eli Lilly, Estee Lauder, Ford, Hanesbrands, Hershey, Honeywell, Ingredion, Merck, Pinterest, Quest Diagnostics, Royal Dutch Shell, Snap, SnapOn, Wynn Resorts, and Xylem on Thursday; and BristolMyersSquibb, CBOE, Phillips 66, Regeneron, and Sanofi on Friday.

Bottom line, brace for another huge week of extreme volatility.

Wall Street Week Ahead Earnings: Alphabet, PayPal, Exxon Mobil, Meta, Qualcomm and Amazon in Focus

Investors will focus on December quarter earnings for stocks that are economically sensitive, which should show better profits than technology stocks. Increasing Treasury yields and risk aversion will hit the stock market hard next week, making the big tech earnings that much more critical. In addition, investors will closely monitor the latest news on the rapidly spread Omicron coronavirus variant to see how it impacts earnings in 2022.

Earnings Calendar For The Week Of January 31

Monday (January 31)

TICKER COMPANY EPS FORECAST
CBT Cabot $1.06
CRUS Cirrus Logic $1.91
FN Fabrinet $1.28
HLIT Harmonic $0.09
NXPI NXP Semiconductors $2.67
PCH PotlatchDeltic $0.48
RYAAY Ryanair Holdings $-0.15
SANM Sanmina $0.91
TT Trane Technologies $1.31
WWD Woodward $0.83

 

Tuesday (February 1)

IN THE SPOTLIGHT: ALPHABET (GOOGLE), PAYPAL, EXXON MOBIL

ALPHABET: The parent of Google and the world’s largest search engine that dominates internet search activity globally is expected to report its fourth-quarter earnings of $26.71 per share, which represents year-over-year growth of about 20% from $22.3 per share seen in the same period a year ago.

The Mountain View, California-based internet giant would post revenue growth of nearly 27% to $72.133 billion from $56.9 billion a year ago. It is worth noting that the company has consistently beaten consensus earnings estimates in the last two years, at least.

“Key Alphabet (GOOG) ’22 Ad Buyer Survey conclusions: i) Google Search remains highest ROI platform; ii) YouTube expected to gain ad share ’21-’23; & iii) GOOG Search & YouTube are the top platforms for ad buyers reallocating budget due to iOS changes. We est. GOOG’s share of WW Digital adv. (x-China) goes from 41% to 37% ’22-’27. We extended model to ’27, PT to$3,500 vs. prior $3,360, reiterate Outperform,” noted John Blackledge, equity analyst at Cowen.

PAYPAL: The digital payments company is expected to report its fourth-quarter earnings of $0.86 per share, which represents year-over-year growth of about 15% from $0.75 per share seen in the same period a year ago. The San Jose, California-based company would post revenue growth of over 12% to around $6.9 billion.

EXXON MOBIL: The oil company will see its earnings rise multi-fold in the fourth quarter thanks to higher energy prices and a waning pandemic that helped it bounce back after a tough period in 2020.

The Irving Texas-based company is expected to report its fourth-quarter earnings of $1.73 per share, which represents year-over-year growth of over 5,666%, up from $0.03 per share seen in the same period a year ago.

The U.S. largest publicly traded oil company is expected to report a 97.3% increase in revenue to $91.845 billion from $46.54 billion a year ago. On Dec 30, the Irving Texas-based company in its regulatory filing said that higher oil and gas prices would enable it to achieve annual profitability starting in 2021 with an operating profit increase of up to $1.9 billion.

The U.S. largest publicly traded oil company hinted that oil and gas earnings could decrease by up to $1.2 billion as a result of one-time charges for asset impairments and contractual costs. Exxon announced late last year announced that a sharply higher operating profit in oil and gas, prompting Credit Suisse, Scotiabank, and JPMorgan to raise their fourth-quarter earnings estimates.

“Improving FCF outlook and dividend sustainability. With a more constructive commodity price outlook, lower capital spending, and additional cash operating cost savings, the dividend is covered in 2021 and averages >100% over the next 5-years on our estimates. Improving dividend sustainability supports yield compression for Exxon Mobil (XOM) relative to CVX,” noted Devin McDermott, Equity Analyst and Commodities Strategist at Morgan Stanley.

“Cost cuts defend the dividend. In 2020, Exxon Mobil (XOM) reduced 2022-25 spending plans to $20-25B from $30-35B (recently extended to 2027), improving dividend sustainability while limiting further pull on the balance sheet. Additionally, Exxon Mobil (XOM) is targeting $6B in structural operating cost reductions by 2023 which should put upward pressure on consensus FCF estimates.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 1

TICKER COMPANY EPS FORECAST
AMD Advanced Micro Devices $0.69
AMCR Amcor $0.18
ASH Ashland Global Holdings $0.93
CTLT Catalent $0.79
CB Chubb $3.34
EA Electronic Arts $2.81
XOM Exxon Mobil $1.73
GM General Motors $0.84
NMR Nomura Holdings $0.2
SBUX Starbucks $0.8
UBS UBS Group $0.24
UPS United Parcel Service $3.05

 

Wednesday (February 2)

IN THE SPOTLIGHT: META PLATFORMS (FACEBOOK), QUALCOMM

META PLATFORMS (FACEBOOK): The world’s largest online social network is expected to report its fourth-quarter earnings of $3.78 per share, which represents a year-over-year decline of over 2% from $3.88 per share seen in the same period a year ago.

The Menlo Park, California-based social media conglomerate would post revenue growth of over 30% to around $33.04 billion. The social media giant has consistently beaten consensus earnings estimates in most of the quarters in the last two years, at least.

QUALCOMM: The world’s biggest mobile phone chipmaker is expected to report its fiscal first-quarter earnings of $2.77 per share, which represents a year-over-year decline of over 40% from $1.97 per share seen in the same period a year ago.

The chip manufacturer would post revenue growth of nearly 27% to $10.45 billion. It is worth noting that the company has consistently beaten consensus earnings estimates in the last two years, at least.

Qualcomm forecasts GAAP revenue in the first quarter of fiscal 2022 to be between $10 billion and $10.8 billion. On a non-GAAP basis, earnings will likely range from $2.90 to $3.10 per share, while GAAP earnings will likely range from $2.53 to $2.73 per share, according to ZACKS Research.

“After underperforming the SOXX for most of 2021 until a sharp rally late in the year, we see a strong setup for a now Apple-overhang-free Qualcomm in 2022 as investors begin to appreciate the diverse revenue drivers beyond Wireless. Expect solid print and guide, with focus on execution and growth in the connected intelligent edge and update our estimates accordingly,” noted Matthew Ramsay, equity analyst at Cowen.

“We reiterate our price target of $210 based on 17.5x our F2023 EPS estimate of $12.0 and our Outperform rating.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 2

TICKER COMPANY EPS FORECAST
EAT Brinker International $0.5
CHRW C.H. Robinson Worldwide $1.85
CPRI Capri Holdings $1.67
CTSH Cognizant Technology Solutions $1.03
RACE Ferrari $1.08
FB Meta Platforms $3.78
MET MetLife $1.63
TMUS T-Mobile $0.2

 

Thursday (February 3)

IN THE SPOTLIGHT: AMAZON

The e-commerce leader for physical and digital merchandise, Amazon, is expected to report its fourth-quarter earnings of $3.9 per share, which represents a year-over-year decline of over 70% from $14.09 per share seen in the same period a year ago.

However, the Seattle, Washington-based multinational technology giant would post revenue growth of about 10% to around $138 billion. The company has beaten earnings per share (EPS) estimates most of the time in the two years.

“We are reiterating our BUY rating and our price target to $3,900. Our price target is based on our updated discounted cash flow model, including our long-term adj. EBITDA margin forecast of 22.0% versus 13.7% in 2020,” noted Tom Forte, MD, Senior Research Analyst at D.A. DAVIDSON.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 3

TICKER COMPANY EPS FORECAST
ABB ABB $0.38
ALL Allstate $2.72
COP ConocoPhillips $2.23
LLY Eli Lilly $2.37
HON Honeywell International $2.09
PRU Prudential Financial $2.44
SU Suncor Energy $0.95
SYNA Synaptics $2.63

 

Friday (February 4)

TICKER COMPANY EPS FORECAST
APD Air Products & Chemicals $2.51
AON Aon $3.33
BMY Bristol Myers Squibb $1.85
CBOE Cboe Global Markets $1.41
ETN Eaton $1.73

 

Ford Motor Tops SP-500 Performance List

Ford Motor Co. (F) has surged to a 20-year high in the first week of 2022, joining rivals Tesla Inc. (TSLA) and General Motors Co. (GM) in the momentum wave generated by the electric vehicle revolution. It now stands atop the SP-500 performance list for the first time this century, marking the next step in restoring its diminished reputation. However, the rally seems premature, with December U.S. sales dropping 17.1% year-over-year from 2020’s depressed levels.

Industry-Leading Fourth Quarter

Admittedly, Ford was also America’s best-selling automaker in the fourth quarter, with 508,451 vehicles marking a 16.8% increase over the third quarter. Overall industry sales fell about 3% in the quarter, yielding a strongly bullish divergence that highlights growing interest in the company’s new product line. EV sales contributed to this sales burst, growing 36% faster than the broad segment in 2021 while hitting December and full-year sales records, with 121% annual growth.

The all-electric F-150 pickup is capturing consumer and Wall Street attention, with Ford announcing this week it will double production due to strong demand. The company had shut down reservations for the truck to deal with an “overwhelming response” and has now started to accept purchase orders once again. In addition, customers who already placed reservations will receive invitations to convert those requests into actual orders.

Wall Street and Technical Outlook

Wall Street consensus has deteriorated in the last 12 months, now standing at a ‘Moderate Buy’ rating based upon 11 ‘Buy’, 2 ‘Overweight’, 6 ‘Hold’, 1 ‘Underweight’, and 2 ‘Sell’ recommendations. Price targets currently range from a low of $12 to a Street-high $26 while the stock is set to open Thursday’s session less than $3 below the high target. This lofty placement suggests recent gains are unsustainable, which makes sense with industry sales still below pre-pandemic levels.

Ford topped out in the mid-teens in 2013 and entered a steep downtrend that hit an 11-year low in March 2020. The subsequent uptick reached 20-year horizontal resistance in the upper teens in November 2021 and broke out, stretching in a straight line into the mid-20s. This price level marks strong resistance at the .618 Fibonacci retracement level of the 1999 into 2008 downtrend, raising odds for a long overdue reversal and pullback that tests new support.

Catch up on the latest price action with our new ETF performance breakdown.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Ford Wants to Double the Production of its Electric F-150 Lightning Pickup

Ford Motors is looking to boost the production of its electric vehicles and compete with industry leaders like Tesla.

Ford to Boost F-150 Production

Ford Motors announced earlier today that it plans to double the annual production capacity of its upcoming electric F-150 pickup. Currently, the company manufactures less than 100,000 of the pickups but wants to boost production to 150,000 by 2023.

Kumar Galhotra, Ford president of the Americas & international markets, told CNBC earlier today that the reception of the electric F-150 vehicle has been absolutely incredible. As a result, the car manufacturer intends to boost its production and make it available to more people.

The increase in the production of the electric F-150 by Ford shows the company’s desire to boost its presence in the electric vehicle sector. Tesla remains the industry leader, but Ford wants to provide stiff competition in the growing sector.

Ford’s production plans came after the company began to take orders again for its vehicles. The company had previously halted production at multiple factories due to the Coronavirus pandemic.

Ford is also spending big on modernizing some of its auto plants. Thus, showing the desire to become one of the biggest players in the electric vehicle sector.

Ford’s Stock Price Rallies by Over 11%

The shares of Ford are up by more than 11% since the US market opened a few hours ago. At press time, F is trading at $24.15, up by 11.03% over the past 24 hours. F has outperformed numerous auto manufacturing stocks over the past few months.

In 2021, Ford’s stock value rose by more than 180%, performing better than the likes of Tesla. Bank of America’s Securities analyst John Murphy increased Ford’s price target from $22 per share to $26.

Ford joins other car manufacturers like General Motors in expanding their presence in the electric vehicle sector.