January 15, 2023

The Weekend Rip: January 15, 2023

Optimism reigned supreme this week, with risk assets continuing their upward climb. Or it could’ve just been excitement about the three-day weekend. Either way, we’ll take it. 👍

Let’s recap and prep you for the shortened week ahead. 📝

What Happened?

💚 Stocks and other risk assets continued their rally this week on optimism that inflation has peaked and the Fed may eventually pivot.

🤩 This week’s Stocktwits Top 25 report showed significant outperformance relative to the indexes.

😬 Even central banks struggled in 2022, with the Swiss National Bank recording its largest loss in 116 years. Meanwhile, the World Bank’s outlook for the economy continues to soften. Banks kicked off earnings season with similar concerns, raising their reserves for credit losses.

🛍️ Retail stocks at the high and low end of the income spectrum struggled to deliver in Q4.

🗑️ The “dash to trash” continued, with many struggling businesses seeing their stocks rally sharply.

🏘️ The housing market slowdown may finally be impacting homebuilders, as KB Home saw cancellations rise to 68% in Q4.

🎯 Disney is now the target of activist investor Nelson Peltz, who believes the “happiest place on earth” has lost its way.

🤪 And in news that seems too crazy to be true, Sam Bankman-Fried created a Substack newsletter to continue telling his side of the story.

🔥 Several names were on the Stocktwits trending tab for a good portion of the week, including $NUWE, $INM, $MULN, $COSM, and $HKD.

Here are the closing prices:

S&P 500	3,999	+2.67%
Nasdaq	11,079	+4.82%
Russell 2000	1,887	+5.26%
Dow Jones	34,303	+2.00%

Bullets

Bullets From The Weekend

🔺 AriZona is raising prices, but not for its iconic 99-cent can. The beverage company’s co-founder Don Vultaggio has vowed to maintain the brand’s 99-cent can but that certain concessions needed to be made elsewhere. The company is dealing with the rising costs of plastic and has been unable to find additional cost savings in its operations to offset the impact. As a result, it has raised the price of its 20-ounce bottle by 25%, from $1.00 to $1.25, in its largest market, the Northeast U.S. With that said, some consumers have also noticed the size of the 99-cent cans has shrunk from 23 to 22 ounces. Yahoo Finance has more.

💰 BlackRock acquires stake in SMB 401(k) provider. The investment giant has taken a minority stake in Human Interest, a venture-backed fintech startup. While terms of the deal were not disclosed, the company has raised $336.7 million in funding since its 2015 founding. The platform allows users to “launch a retirement plan in minutes and put it on autopilot” while eliminating all 401(k) transaction fees. The transaction will help BlackRock expand its reach in the small and mid-sized business retirement business, while its resources and investment will help Human Interest reach more people and further close the access gap. More from TechCrunch.

❌ Twitter’s laid-off workers cannot pursue a class-action lawsuit. The U.S. District Judge ruled that five former employees pursuing a proposed class action accusing the company of failing to give adequate notice must pursue their claims in private arbitration. The company continues to face scrutiny and lawsuits from former employees who claim they were not given sufficient notice; their severance packages were not as promised, among several other issues. Reuters has more.

The Brief

Need a concise summary of what’s going on this week? Look no further. Here’s an overview of important earnings and economic data for the trading week ahead.

Economic Calendar

It’s a short but busy week on the economic data front, with Wednesday’s producer prices and many planned speeches by Fed members. In addition to the above, check out this week’s complete list of economic releases.

Earnings This Week

Earnings season is beginning its quiet ramp-up, with 68 companies reporting this week. Some tickers you may recognize are $SI, $GS, $MS, $UAL, $NFLX, $PG, $TAL, $SLB, and more.