- Morning Briefing w/ KevinD
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- Tuesday March 14 @ 9:00am
Tuesday March 14 @ 9:00am
Matthew
March 14, 2023
"The tape tells all, and our job is to learn how to listen properly.”
📈 The Markets Overnight
🌏 Asia: Down
🌍 Europe: Up strongly
🌎 US Index Futures: Up strongly
🛢 Crude Oil: Down
💵 Dollar: Up slightly
🧐 Yields: Down
🔮 Crypto: Up strongly
🌏 Major Global Catalysts
Banks recover.
Inflation reports inline.
💵 Economic Reports and Events Today
Consensus forecasts shown
8:30am CPI m/m 0.4%, 0.4% reported. Change in the price of goods and services purchased by consumers.
8:30am CPI y/y 6.0%, 6.0% reported. Change in the price of goods and services purchased by consumers.
8:30am Core CPI m/m 0.4%, 0.5% reported. Change in the price of goods and services purchased by consumers, excluding food and energy.
8:30am Core CPI y/y 5.5%, 5.5% reported. Change in the price of goods and services purchased by consumers, excluding food and energy.
📰 Selected Earnings Releases
Consensus Estimates shown
After Hours Today:
STNE StoneCo EPS 0.120 Rev 521.30M
LEN Lennar EPS 1.550 EPS 5.92B
Pre-Market Tomorrow:
None
🔮 Selected Analyst Ratings Changes
CRWD CrowdStrike Holdings Morgan Stanley Maintains Overweight Raises to 163.00
GTLB GitLab Goldman Sachs Maintains Buy Lowers to 65.00
GTLB GitLab Piper Sandler Maintains Overweight Lowers to 50.00
📉 Stocks In Play
FRC First Republic Bank Up 59% on aggressive regional bank recovery trading.
PACW PacWest Banc Up 42% Up 59% on aggressive regional bank recovery trading.
WAL Western Alliance Up 37% Up 59% on aggressive regional bank recovery trading.
GTLB GitLab Down 32% on poor earnings, guidance, and lower analyst targets.
💬 Commentary
Yesterday's markets experienced high volatility with a significant gap down open, but by the end of the day, they had recovered some of their early losses. The Nasdaq represented by QQQ, and especially the FAANG stocks, showed relative strength, while the Russell Small Caps IWM was weak due to its heavy weighting in regional banks. However, even the banks staged a strong intraday rally, offering excellent opportunities for nimble traders. Names like FRC, PACw, and WAL were particularly strong performers. In early pre-market trading, the regional banking ETF KRE is up over 8%. A recovery is underway but caution is still warranted as there will no doubt be more surprises from the banking space but for now traders are more confident buying these names and we may very well have seen capitulation in the banks and overall market.
While banks are still a focus, today we also have to digest the Consumer Price Index (CPI) inflation reports. Prior to the release, indices were up strongly, and CPI was mostly in line with expectations. Immediately before the report, markets were pricing in a 75% probability of a 25bps rate hike, which increased to 88% shortly after the report's release. Traders initially sold the report, and trading is still volatile, but it appears that we'll hold the gap up open.
Markets will continue to digest this new information before looking ahead to tomorrow's PPI and Retail Sales reports and Friday's Quad Witching options expiration. In conclusion, it's important to be careful out there, stay informed, and be prepared for potential market volatility.
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