The same, but different! | Short $KBH

Well folks, today is the day! Not only is inflation printing at 8:30AM (which you can check the results of in real time here)…but we also gave our newsletter a makeover! We hope you like it, because aside from new looks, we’re also committing to putting out more special reports and sections on a daily basis – starting with an equity research piece on Fresenius Medical Care ($FMT-NYSE) by the Globetrotting Investor. Read on for that story and more within this 194th Coachman’s Report!

Markets in Review

Markets have been on a tear since the start of the year and yesterday’s session was no exception – the S&P and Nasdaq ran 1.3% and 1.7% respectively, this brought the SPX to just shy of 4,000 points. This gain, and much of the YTD returns thus far have been attributed to equities within the tech sector outpacing other names almost 2-1, despite large, material news such as Salesforce’s plan to layoff 10% of its workforce.
Especially after last year’s lackluster returns, will this speculative sector be able to outperform in a high-rate environment? Many analysts believe that widespread adoption of AI/ML will contribute greatly to real earnings and growth for technology companies – just read these 2023 market outlook perspectives published by Factset!
Fresenius Medical Care AG & Co. KGaA provides dialysis care and related dialysis care services in Germany, North America, and internationally. The company also develops, manufactures, and distributes a wide variety of healthcare products. Dialysis patients receive dialysis treatment and other associated services such as laboratory tests in Fresenius Medical Care’s 4,171 dialysis clinics worldwide. Dialysis treatment at the clinics is usually performed three times a week over a period of several hours by trained medical staff.
The company also provides advice on medical support and training for home dialysis patients in Fresenius Medical Care dialysis centers. Read the full report by The Globetrotting Investor here!
Short: KB Home (KBH-NYSE) | Timeline: 2 days
KB Home (KBH), which operates as a homebuilding company in the United States, reported earnings that missed expectations yesterday after the market closed. The company lagged on earnings and revenue estimates by 13.63% and 2.24%, respectively, as “high mortgage rates and persistent inflation, together with an uncertain economy, have made homebuyers more cautious,” says said Jeffrey Mezger, CEO. (Full Story)
Turning to the chart, KBH has had a pretty slow year so far, falling from highs of $45, but recovering from lows of $25 as the stock continued to oscillate through a volatile year. That said, as the stock has gained a ton of bullish momentum leading into this quarter’s earnings report, however, as the Stochastic RSI is now extremely overbought, traders are likely to see a reversal at this key psychological resistance level of around $35.
Zooming Out…
Return of the Layoffs
As we’ve touched on throughout multiple previous issues (here, and here) due to the ballooning of workforces throughout the pandemic- along with the general state of the macro environment both globally and domestically- layoffs were almost inevitable. With that being said, further job cuts from leading institutions; Salesforce, Coinbase, Goldman Sachs, and Blackrock have been announced in recent days.
Just how bad is it? Well, Salesforce reduced headcount by roughly 10%, or close to 8000 employees, while expecting to pay $1.4B-$2.1B in expenses related to the decision. Coinbase is set to lay off an additional 20% of their staff, or roughly 950 people even after their 1100 employee reduction in June. Goldman is cutting it’s workforce by about 6%, or 3000 individuals primarily in the global markets and investment banking divisions. While Blackrock’s cuts seem far more minute, as they are only reducing headcount by 2.5%, or 500 employees.
Swiss Miss
This week it was announced that the Swiss Central Bank lost $143B ($132B francs) or roughly 18% of the Swiss GDP throughout 2022. This marks the largest loss in the bank’s history, however, the losses are roughly flat from the $142B loss that was incurred during the first 9 months of the year. Close to $131B francs were lost within foreign currency bets, and $1B within franc-based positions.
Resultantly, the Swiss government, member states, and shareholders will not be receiving their regular payments. The foreign currency losses can likely be attributed to the bank’s US equity holdings, while the bank’s full 13F form can be found here.
Making Headlines…
ECB Says Consumer Inflation Expectations Have Fallen Back
  • Consumer expectations for inflation over the next 12 months eased for the first time since May 2022, according to a monthly survey by the European Central Bank. (Full Story)
HSBC wins appeal against $36 million Euribor cartel fine
  • HSBC has won an appeal against a decision by European antitrust regulators to fine Europe’s second-largest bank 33.6 million euros ($36 million) over its role in a cartel to manipulate benchmark Euribor interest rates in 2007. (Full Story)
Saudi and Singapore Wealth Funds Join $930 Million Pre-IPO Bet on Anime Giant
  • Kakao Entertainment Corp. has won $930 million from the sovereign wealth funds of Saudi Arabia and Singapore, securing one of the country’s largest financing rounds at a time global investors shy away from big startup bets. (Full Story)
Striking New York City nurses reach deal with hospitals
  • Two New York City hospitals have reached a tentative contract agreement with thousands of striking nurses that ends this week’s walkout that disrupted patient care, officials announced Thursday. (Full Story)
Chart of the Day: EVs require 6x more minerals than conventional cars


“Do one thing every day that scares you.”
– Eleanor Roosevelt