Big Week Ahead. | Long $TDC

Well folks, this will be a big week for markets, starting with tomorrow’s CPI release and then being closely followed by retail sales and housing figures for the month of January – stay up to date on those figures here. Additionally, to kick things off this week, we have another long-form equity report on Alphabet, brought to you by The Globetrotting Investor. Check out that in-depth analysis here and read on for your daily dose of inspiration within this 216th Coachman’s Report!

Markets in Review

After a mild end to the week for markets on Friday, things should be heating up for more than a couple of reasons these next couple of sessions, among them, being that the VIX traded close to its 52-week low of just 18. Pictured below is the S&P 500, overlaid by the current crude oil contract – while the index is seen to have broken out of its old price channel, oil has reversed, and is starting to trade higher, pulling the bottom line from many transport-heavy industries; should this persist, it will likely affect a couple of forward-looking management commentaries through the rest of this earnings season. Furthermore, with inflation being released tomorrow and retail sales the next day, it could be a tough week for the S&P to sustain above 4,000 points – especially after last week’s risk-off sentiment. More on our thoughts regarding inflation tomorrow, as it’s released.
The following will serve as a review of the current earnings season and a preview of the most anticipated issuers reporting this week: Earnings Scorecard: For Q4 2022 (with 69% of S&P 500 companies reporting actual results), 69% of S&P 500 companies have reported a positive EPS surprise and 63% of S&P 500 companies have reported a positive revenue surprise. Earnings Growth: For Q4 2022, the blended earnings decline for the S&P 500 is -4.9%. If -4.9% is the actual decline for the quarter, it will mark the first time the index has reported a year-over-year decline in earnings since Q3 2020 (-5.7%). Earnings Revisions: On December 31, the estimated earnings decline for Q4 2022 was -3.3%. Seven sectors are reporting lower earnings today (compared to December 31) due to downward revisions to EPS estimates and negative EPS surprises. Earnings Guidance: For Q1 2023, 58 S&P 500 companies have issued negative EPS guidance and 13 S&P 500 companies have issued positive EPS guidance. Valuation: The forward 12-month P/E ratio for the S&P 500 is 18.0. This P/E ratio is below the 5-year average (18.5) but above the 10-year average (17.2).
Long: Teradata Corporation (TDC-NYSE) | Timeline: 1 day
Teradata Corporation (TDC), which provides a connected multi-cloud data platform for enterprise analytics, reported earnings this morning before market open. The company managed to beat earnings and revenue estimates by 15.59% and 3.98%, respectively, as they were able to achieve their largest quarter of cloud growth ever, resulting in meeting or beating every element of their annual outlook. (Full Story)
Turning to the chart, TDC has had a turbulent last 12 months, falling from highs in the low 50s, and beginning to recover from lows of about $29. That said, as the stock continues to recover along this upward trending support, traders should expect a bounce off its current level – supported by an oversold Stochastic RSI and a positive earnings script.
Zooming Out…
Objects Obliterated
Over the weekend a startling number of additional unidentifiable objects were shot down over North America. According to Senate Majority Leader Chuck Schumer, the first two shootdowns of the weekend were high-altitude objects floating over Alaska and the Yukon. These objects were classified as balloons, however, were much smaller in size, and were flying at lower altitudes than the first balloon downed last week. The debris from these objects has not yet been recovered, however, extensive search operations are taking place throughout the areas impacted.
On Sunday afternoon word broke of an octagon-shaped device flying over Northern Michigan at roughly 20,000 feet, which was later shot down over Lake Huron. Parts have not yet been recovered, however, reports indicate that it landed in Canadian waters. While no nation or individual has accepted responsibility for the objects, North American air defenses are on high alert.
Peril In East Palestine
In a story which may have been buried by other world events over the past week, a tragic train derailment in East Palestine, Ohio has left the surrounding area in the midst of a full-blown ecological, and health crisis. While the derailment originally occurred on February 3, a controlled burn of chemicals which spilled out from the train has caused acrid clouds to spread across the sky.
While residents were told it was safe to return, many have since experienced bouts of headaches, and nausea, while many have seen the corpses of local wildlife litter the fields, roads, and waterways of the town. The stock of Norfolk Southern Corp. ($NSC), owners of the train, has declined by 4.36% since the date of the derailment.
Chart of the Day: The Fed is playing with fire.
“The difference between what we do and what we are capable of doing would suffice to solve most of the world’s problems.”
– Mahatma Gandhi