Earnings Season Starts with Market Rallies

Dear Traders,

As I am writing this newsletter today, the market has gapped up and rallied on not particularly good economic news. I had a nice trading day, but overall there was some choppiness and I did do some overtrading. You can watch the recap that Brian and I posted here. Earnings season is upon us, and the full earnings calendar can be viewed in our Trading Terminal. Keep an eye out this week for some big names like Tesla and Netflix. Elon Musk is out of shape, and is having fun in Greece. His leaked photos are now subject to a series of memes.

Apple Inc. is the latest major technology company to rein in hiring and spending plans, adding to the evidence that even Silicon Valley stalwarts are worried about a recession in the coming months. This more cautious stance mimics the approach of its tech peers, including Amazon, Google, and Microsoft. IBM lowered its forecasts for free cash flow this year due to the impact of a strong dollar and the loss of business in Russia, sending their shares down and overshadowing better-than-expected sales growth. IBM is trading -8% today. As I mentioned yesterday, a strong USD is really not helpful for export surplus countries such as the USA.

To learn more, join Ardi and me today at the market Close as we together discuss these issues.

With the Federal Reserve meeting next week, investors and traders are pricing in an interest rate hike of at least 0.75%. The markets are watching to see if the Fed can control inflation and avoid tipping the economy into a recession. JPow et al. are only thinking about inflation for now. They have no interest for the time being in either growth or supporting the financial markets. As I wrote before, we all need to get ready to stay poorer for a little bit longer until inflation cools down. The message is clear from the Fed.

Tonight at BBT, for Tuesday Strategy, Ardi will be leading a discussion entitled: Introduction to Options and Day Trading. In this webinar, Ardi will review the most popular day trading strategies, and discuss how you can use Options to amplify returns and be more capital efficient. Ardi’s presentation begins at 8pm ET.

To your success,
Andrew

PS1: If you have not already, I urge you to try out our free web-based trading simulator at stocktradingsimulator.com. It’s conveniently available 24/7, whenever you have time to practice honing your trading skills.