Welcome to this week’s Market News Roundup 🗞️ — here’s the agenda for today’s quick stock market news review:

1. 🖼️ big picture: this week’s overall market sentiment

2. 📊 interesting set-ups: a few stocks worth watching

3. 🔭 Market Mood™ outlook for the week(s) ahead

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I. Overall News Sentiment 🖼️

• Overall news: -6% sentiment, slightly bearish🔴

• S&P 500 (large cap) news: +4% sentiment, slightly bullish 🟢Russell 2000 (small cap) news: -67% sentiment, bearish🔴

🔥 Markets rebound, ending the week on a hot streak

• The major US stock indexes climbed back strong from last week’s declines, driven for the most part by Thursday’s monster rally — the largest single-day gain on the markets since the spring of 2020.

• On the whole, the NASDAQ posted the top weekly result with a gain of more than +8%, followed by the S&P 500 with a gain of +6%, and the Dow and Russell 2000 with gains of +4%, respectively.1

🛌 Inflation relief: CPI report comes out lower than expected

• Although US inflation remains near its highest levels since the early 80’s, this week’s release of the monthly Consumer Price Index (CPI) report provided some room for relative optimism. The report revealed inflation rose at 7.7% YoY, a considerable step down from last month’s report of 8.2%

• Core inflation (which excludes food & fuel) was at 6.3% — down from 6.6% previously — driven in large part by exceedingly hot housing prices. Still, looking at the last 40 years of CPI reports, it appears max inflation may finally be behind us:

🏚️ Housing market conditions remain bleak as demand stalls

• Mortgage demand has now reached its lowest levels since 1997 (the year I was born) as buying conditions for houses head towards their worst level on record, according to the University of Michigan’s survey of consumers.

• A major component here is the current national average mortgage rate of 7.3% for a 30-year fixed loan. This week also marked the biggest difference on record between mortgage rates and the 10-year treasury yield (here).

📰 Other noteworthy headlines:

• FTX, world’s 3rd-largest crypto exchange, files for bankruptcy

• US strategic petroleum reserve reaches lowest level since 1984

• Used car prices fell an alarming -10% over the past 30 days

• Analysts scale back S&P 500 Q4 earnings outlook (more here)

II. Stocks to Watch 🔥🧊

Now, a quick look at two notable stocks to keep an eye on based on their sentiment detected in stock market news coverage this week:

Coinbase (COIN) 💰 bearish sentiment 🔴

this week: 🔻-81% news sentiment | 🔻-4.1% stock price | view news profile 📰

Days after the world’s third-largest cryptocurrency exchange FTX filed for bankruptcy and halted withdrawals in an unprecedented blaze of fire, the rest of the cryptosphere is still shaking in its boots. Shares of publicly-traded Coinbase dropped and the company finished the week with highly bearish news sentiment in the aftermath, as crypto trading volume on the Coinbase platform plunged 75% to end the week.

As the US’s largest crypto exchange, Coinbase garners nearly 90% of its revenues via transaction fees from its mostly newer investor base (unlike FTX, which effectively operated as a glorified Ponzi scheme, lending out its users’ deposits). The bad news for Coinbase is that its high transaction fees require a continually replenishing userbase, and onboarding new users will be hard to say the least in the coming months following FTX’s implosion. On the other hand, the silver lining here is that Coinbase’s field of competition is growing increasingly narrow. For more on the whole state of the FTX situation & the crypto space:

top Coinbase articles this week:

AstraZeneca (AZN) 💉 bullish sentiment 🟢

this week: 🔺+73% news sentiment | 🔺+2.7% stock price | view news profile 📰

Pharmaceutical & biotech giant AstraZeneca finished as one of the most bullish stocks in market news coverage this week after reporting strong third-quarter earnings on Thursday; its stock price gained nearly 7% in the wake. For Q3 2022, AstraZeneca's total revenues topped $10.98B (marking a solid 19% growth year-over-year), while its core earnings grew more than 55% to $1.67 per share — beating both top- and bottom-line analyst estimates convincingly.

Perhaps more encouraging out of the company’s earnings report was its increased guidance through the remainder of 2022, expecting continued core earnings growth in the high-20% to low-30% range behind heightened sales of its cancer and diabetes drugs in recent months. Given just how reliant AstraZeneca’s revenue numbers were on sales of its Covid vaccine last year, analysts appear optimistic to see its earnings growth driven by its other franchises. Considering the broad market is pricing in diminished Q4 earnings expectations, AZN could seriously shine by this time next quarter:

top AstraZeneca articles this week:

III. Market Mood™ Outlook 🔭

Finally, a quick think about what’s on the horizon:

🤔 OK, so inflation is at 7.7%…

Stocks surged on Thursday in their best day since 2020 after the CPI report revealed softer-than-expected inflation at 7.7% annually. Investors broke out their party hats as they interpreted the report to mean that peak inflation is already well behind us. The important note here: sure, inflation may have finally taken a considerable step downwards, but lest we forget that the road to full recovery remains long:

• Less than two weeks ago, Fed Chair Jerome Powell unambiguously said rates will remain higher for longer. Even with this week’s hopeful inflation report, futures markets still aren’t expecting the Fed Fund Rate to peak until at least March or April, with meaningful declines expected nearer to the end of 2023.2

• The Fed remains adamant that rates will remain high until we are somewhere close to its target inflation rate of 2%, and last week’s decline is only one month’s worth of data. We’ll need to see at least two more consecutive CPI report declines for things to meaningfully change — in my opinion, a December CPI report anywhere near 6% would be optimistic

• Until then, we can expect to see continually restricted prices and stifled demand across a variety of industries & markets. Housing is already showing signs of a serious drop (which is exactly what the Fed is hoping for) and used car prices are a close second. Energy prices remain inflated (especially as we reach the low end of the US strategic petroleum reserve), and so long as the Russia-Ukraine war continues, we can likely expect more of the same.

• Last note — keep in mind that 7.7% is still 7.7% folks:

🗓️ One more big week of Q3 earnings reports:

Last but not least, keep your hat on for a final round of major third-quarter corporate earnings to be released this week. The full schedule is shown below, including the likes of Target, Nvidia, Walmart, and Alibaba:

As always, the future remains to be seen — let us know if there’s anything we missed by commenting below, replying to this email, or emailing us directly at [email protected]. And if you liked this post, please support us by clicking the like button! Best of luck to all of you in the markets this week, stay safe out there, and thank you for reading. 😎

Disclaimer: This is not financial advice or recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Credit to the respective teams cited below: