Good Morning Investors and Traders!

Welcome to the first beta edition of the Monday Briefing for January 24 at 9:00am

“Price gets cheap. Then it gets cheaper. Then it gets really cheap. Then it gets unbelievably cheap. Then it’s get me the hell out of this.” ~ Alex Gurevich

How To Interpret This Briefing

📈 The Markets Overnight
Asia: Mixed
Europe: Down significantly
US Index Futures: Down significantly
Crude Oil: 
Yields: Down
Crypto: Crashing

🌏 Major Global Catalysts
US State Department orders families of embassy staff, and recommends all US citizens, leave Ukraine say “Military action by Russia could come at any time,”

💵 Upcoming Economic Reports and Events Consensus forecast shown
9:45am Flash Manufacturing PMI 56.9 Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry.
9:45am Flash Services PMI 54.9 Level of a diffusion index based on surveyed purchasing managers in the services industry.

CB Consumer Confidence

FOMC Statement and Jay Powell press conference

Advance GDP q/q

Core PCE Price Index m/m

📰 Selected Earnings Releases Consensus estimates shown
After Hours Today:
PETS PetMed Express EPS 0.330 Rev 68.47M
IBM IBM EPS 3.140 Rev 16.06B
LOGI Logitech International EPS 1.100 Rev 1.27B

Pre-Market Tomorrow:
VZ Verizon Communications EPS 1.290 Rev 33.94B
NEE NextEra Energy EPS 0.400 Rev 6.26B
RTX Raytheon Technologies EPS 1.020 Rev 17.26B
GE General Electric EPS 0.870 Rev 21.66B
JNJ Johnson & Johnson EPS 2.120 Rev 25.29B
AXP American Express EPS 1.860 Rev 11.48B
LMT Lockheed Martin EPS 7.150 Rev 17.66B
MMM 3M EPS 2.010 Rev 8.58B

🔮 Selected Analyst Ratings Changes
CFG Citizens Financial Group Credit Suisse Maintains Neutral Raises Target to 50.00
NFLX Netflix Jefferies Downgrades to Hold Lowers Target to 415.00
SNAP Snap Wedbush Downgrades to Neutral Targets 36.00

🍾 Interesting IPOs Today

DUOL Duolingo lockup expires

💬 Commentary
Markets fell hard last week with any strength being sold aggressively. The selling was mostly relentless and very broad based with the mega-cap tech stocks that had mostly avoided previous selling taking a hit too. All major sectors including energy, the recent outperformer, sold off. While defensive sectors were red on the week they did outperform the general market.
We’ve got a lot of macro catalysts this week but the big one is the FOMC meeting on Wednesday. No rate hike is expected but there are fears they’ll be even more hawkish and signal more than 4 rate hikes this year. I suspect given the current market situation the Fed will try to use dovish and reassuring language while at the same time confirming their commitment to tackling inflation. If they manage to come off somewhat dovish that could set up a bounce or rally.
US index futures were green last night but started to sell off on the State Department’s Ukraine announcement and are now setting up for a large gap down open.
With markets down this much we should be on watch for a frightening capitulation spike down as market mechanics take over with traders facing margin calls, forced liquidations, and program selling. During corrections and bear markets that kind of capitulation is almost always followed by a strong bounce or rally and can present short-term opportunity. I wouldn’t be surprised to see this kind of price action today or tomorrow as some traders will want to position long in anticipation of a more dovish Fed than expected.

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