Markets sell off into CPI print

Author

Swaggy Stocks
June 09, 2022

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Today we'll be going into some market news and a macro look of where we're currently at.

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Shoutout to today's sponsor, FranShares, and their platform that enables investing in franchises.

Today's Letter

  • Market Update

  • Macro Outlook

  • Trending Cryptos

  • Top Meme Stocks

Market Update

Markets sold off today ahead of the CPI print tomorrow (0.5% forecast vs 0.6% previous). Another culprit of today's move down was the ECB's intention to raise rates by 25 BPS come July. This would be the first rate hike in 11 years, according to this tweet.

Following the decision in today's monetary policy meeting we saw euro-bonds crash and now events started by the euro-poors are creeping into U.S markets. What a day.

Don't forget we have another FOMC meeting next Wednesday to look forward to.

Tech is broken

YTD sector performance has been one of the worst starts of the year for tech... in history. So far in June it hasn't been much different. Here's a look at 5-day sector performance (BarChart) in the S&P 500.

Energy in positive territory while literally everything else is negative. Tech, real-estate, and consumer-discretionary coming in dead last with a steep drop. Unless you've been living under a rock over the last week this isn't much news to you. The signs are everywhere for a slowdown in growth: spiking energy costs, layoffs across the board, supply chain issues, commodity Cold War... The consumer has less discretionary income and the proof is about to be in the pudding.

This Week's Earnings

Most of the popular companies have already reported earnings for this earnings season. What was left for today's reports were Docusign (DOCU) and StitchFix (SFIX). Similarly to how the rest of earnings season has gone, these two companies didn't exceed expectations.

Here are the results:

DOCU

  • Revenue $589m vs $581m est. Beat

  • EPS: $0.38 vs $0.46 est. Miss

SFIX

  • Revenue $492.9m vs $493.3m est. Miss

  • EPS: ($0.72) vs ($0.55) est. Miss

  • Adjusted guidance to the lower range.

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Macro Outlook

Unlike inflation, macro hasn't been looking too hot. Let's leave it to our good friend Genevieve to show us the U.S credit card debt chart (hint: we're at all-time-highs).

Below is another chart that describes credit card balances and other revolving credit. Notice a pattern? Consumers are either too wealthy to even care and not worried at all about racking up short-term debt on their credit cards... OR... the surge in energy prices *cough* oil *cough* and goods is starting to be passed along to the consumer.

It's official, we're all broke and will need to start making coffee at home. This tweet by Kate Rogers on Starbucks CEO describes the current state of the economy well.

Trending Cryptos

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Top Meme Stocks

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