October 28, 2022
Good morning,
Yesterday’s big earnings day has come and gone, and the equity market has come through it relatively unscathed. That’s not to say there hasn’t been sheer destruction in some individual names. Amazon was down -20% (not a typo, twenty percent!) in after market trading within minutes of sharing terrible forward revenue guidance on its earnings call. Amazon was the third largest company in the U.S. by market cap. – it lost over $400 Billion in mkt cap in minutes – breathtaking. Fortunately, the biggest company in the U.S. by market cap reported 30 minutes later and nailed it, as Apple is prone to do. Net net, and 12hrs later in pre-market this morning, AMZN is off -13% from yesterday’s close (still an ouch!), AAPL is up half a percent and Futures are trading -0.5% lower. There does seem to be a collective sense of relief on trading desks this morning.
Markets don’t care about yesterdays; they live in the present with a focus on the future. Next week’s Fed press conference following the FOMC meeting Wednesday has the market’s full attention now. Expectations have grown that Powell will hint at a +50bps move in December during said press conference and will likely re-emphasize their data dependence. That may make next Friday’s Payroll numbers especially important.
On to next week – have a good weekend.
Be well,
Mike