Big Bank Earnings. | Short $CFG

Well folks, today the games begin – this Q4 earnings season is being kicked off by all the big banks reporting earnings throughout the week, starting with Goldman Sachs and Morgan Stanley before the open today; check the results of that out in real time here!

Markets in Review

We are now just two weeks away from the first FOMC meeting of the year and traders’ conviction of a 25 bp rate hike has moved even more so towards certainty with a 92.1% probability being priced into the market. That said, the S&P’s price channel is now really feeling the squeeze with the 50 and 200-day MAs closer than they’ve ever been as the index oscillates around 4000 points. However, before that fateful Feb 1st meeting, there are a slew of economic indicators being announced such as housing data later this week as well as GDP and PCE the week after – check those all out here.
Short: Citizens Financial Group, Inc. (CFG-NYSE) | Timeline: 2 days
Citizens Financial Group, Inc. (CFG), which operates as the bank holding company for Citizens Bank, National Association that provides retail and commercial banking products and services in the United States, reported substandard earnings this morning before market open. The company missed earnings and revenue estimates by 4.29% and 1.03%, as banks continue to attempt in managing their balance sheet and interest rate position, given the macro environment. (Full Story)
Turning to the chart, CFG has had quite the last 12 months, falling from highs in the low $50s, and recently recovering from lows of around $32. That said, as the stock has oscillated upwards through the last quarter, we are now at a key resistance level of $42 – and with an extremely bearish Stochastic RSI supported by a negative earnings report, a reversal is likely in the books over the next couple of trading days.
Zooming Out…
Reopens, Reductions and Reporting Misses
Over the past week, the often hard-to-keep-up-with news coming out of China paints a picture of a rapidly shifting country, both economically and socially. After being accused of tampering with data throughout the pandemic, the nation released a startling tally of over 60,000 Covid deaths between December 8, and January 12.
Additionally, it was reported yesterday that the Chinese population fell by 850,000 people over 2022- marking the first decline in over 6 decades. Furthermore, disappointing annual growth data showed the economy only grew 2.9% on a year-over-year basis. While far better than the economies of some nations, this was far below the 5.5% target set in March.
Ontario’s Private Pivot
Amid an enormous backlog and similarly large wait times for essential surgical procedures Ontario has announced that the province will begin to expand the capabilities of for-profit medical service providers.
With that being said, the procedures still will be covered by OHIP, and financed by an additional $300M investment over 2022 and 2023 that the province has made into its “surgical recovery strategy”. Alongside the announcement, the province unveiled a three-step with further planned integrations with community clinics which will eventually permit minimally invasive surgeries, MRI and CT scanning along with knee and hip replacements.
While the endorsement of the private sector is a break from Canadian healthcare policy over the past four decades, other provinces, and nations with socialized healthcare systems may want to consider following suit as shortages of medical personnel grip much of the world.
Making Headlines…
Canada facing deeper recession as interest rates take hold: Deloitte
  • Canada will enter a deeper recession than previously expected this year as the Bank of Canada’s rapid interest rate hikes take hold and the U.S. economy enters a slowdown, according to a new report from Deloitte Canada. (Full Story)
Activists resume protests over German coal mine expansion
  • Dozens of climate activists glued themselves to a main street in Germany’s western city of Cologne and to a state government building in Duesseldorf on Tuesday to protest the destruction of a village to make way for a coal mine expansion, German news agency dpa reported. (Full Story)
Cargojet and Canada Post extend services agreement.
  • Cargojet Inc. says it has extended its master services agreement with Canada Post Corp. and Purolator Inc. until Sept. 30, 2029. (Full Story)
Failed hedge fund Three Arrows Capital is pitching a new marketplace…
  • The founders of failed crypto hedge fund Three Arrows Capital are reportedly trying to launch a new exchange – where people who lost money in the collapse of a digital asset company would be able to buy and sell bankruptcy claims. (Full Story)
Chart of the Day: Russian Crude Flows Spiking…


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