| January 13, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Editor's Note: In observance of the Martin Luther King Jr. holiday there will be no Options Newsletter on Monday, January 16, 2023. We'll be back on Tuesday.
| | | | | | Lead Stories | | | VIX Extends Lull, Falls to Lowest in a Year
Eric Wallerstein - WSJ
Wall Street's classic "fear gauge" hasn't been this subdued since before the Federal Reserve started raising interest rates and Russia invaded Ukraine.
The Cboe Volatility Index, also know as the VIX, dropped below 18.1 on Friday. That extended its longest lull below 25 since 2021.
/jlne.ws/3CNOxwF
Why the stock market isn't impressed with the first monthly decline in consumer prices in more than 2 years
Joseph Adinolfi - MarketWatch
Inflation data may no longer be the big catalyst for stocks that it once was.
U.S. stocks bounced around to a higher close on Thursday, even though investors received some encouraging inflation news after the consumer-price index for December showed its first monthly decline since the pandemic swept across the globe in 2020.
/jlne.ws/3WazTqh
JPMorgan Chase Sees 'Mild Recession' Ahead. Earnings Still Smash Expectations.
Jack Denton and Carleton English - Barron's
America's largest bank smashed analysts' expectations for earnings in the last three months of 2022. But there's some bad newsâ JPMorgan Chase sees a recession on the horizon.
The bank reported fourth-quarter net income of $11 billion, or $3.57 a share, on revenue of 34.5 billion, edging out Wall Street analysts' expectations for revenue but smashing estimates of per-share profit of $3.08. While revenue rose from $29.3 billion a year ago, net income fell from $10.4 billionâreflecting a booming lending business amid rising interest rates, but a sharp drop-off in lucrative investment banking deals.
/jlne.ws/3CHuqQT
Stock Market Outlook: Upside Ahead As Deflation Takes Hold of CPI
Matthew Fox - Markets Insider
The release of December's CPI print this week provided investors some relief as inflation met expectations, rising 6.5% year-over-year and falling 0.1% on a month-over-month basis.
The big takeaway from that report, according to Fundstrat's Tom Lee, is that 59% of CPI components are now in deflation mode.
/jlne.ws/3H13nCG
Meme stocks start 2023 on a high note as investors re-embrace risk
Medha Singh and David Randall - Reuters
Resurgent risk appetite among some investors is fueling rallies in the shares of so-called meme stocks after a crushing year for equities.
Notable moves include a more than 70% surge since the start of January in the shares of Bed Bath & Beyond (BBBY.O). The company's shares hit a three-decade low last week when the retailer warned it could seek bankruptcy protection.
/jlne.ws/3w1rsTv
Inflation Reaching the Fed's Target? Traders Wager It Will By Next Year
Eric Wallerstein - WSJ
Wall Street traders are betting that 12 months from now, decades-high inflation will be behind us.
Derivatives tied to the consumer-price index show headline inflation reaching roughly 2% in a year's time, according to Tradeweb data. If those wagers prove correct, the Federal Reserve will have wrestled its preferred gauge of inflationâthe personal-consumption expenditures price indexâbelow the 2% target.
/jlne.ws/3W9b0LA
Goldman Sachs Details Consumer Banking Losses for First Time
Andrew Bary - Barron's
Goldman Sachs disclosed Friday that it has lost $3 billion since 2020 in its push into consumer and transaction banking, its first public revelation of the financial results in those segments.
Those two businesses lost $1.2 billion in the first nine months of 2022, including $612 million in the third quarter after a provision for loan losses of $942 million, the bank said in a securities filing.
/jlne.ws/3CLUCtu
| | | | | | Exchanges | | | Cboe Clear Europe becomes first non-UK CCP to receive permanent UK recognition; The European CCP had previously been operating under the UK's Temporary Recognition Regime following the end of the UK and the EU's transition period in 2020.
Annabel Smith - The Trade
Cboe's Amsterdam-based clearing house, Cboe Clear Europe, has become the first non-UK CCP to receive permanent recognition. The recognition was effective 10 January, and applies to cash equities and equity derivatives. Cboe Clear Europe had previously been operating under the UK's Temporary Recognition Regime following Brexit, while it awaited permanent recognition.
/jlne.ws/3GEdI6b
| | | | | | Strategy | | | Cboe Short-Dated Options in Demand as Investors Seek Refuge
Katherine Doherty - Bloomberg
Last year's market swings and uncertainty have caused investors to change betting strategies, extending last year's record demand for Cboe Global Markets Inc.'s newest options offerings.
The exchange operator's options that track the S&P 500 and expire in 7 days or less reached record volumes in 2022, executives said. The shorter-dated options are Cboe's most popular derivatives products, and trading in these options on the day of expiration â known as "zero-day to expiry" â represents its fastest-growing segment. The company expects investor demand to continue in the new year.
/jlne.ws/3GFSEfr
Goldman Sachs sees these 'prospective' total returns across assets in 2023
Christine Idzelis - MarketWatch
Goldman Sachs Group's investment strategy team expects stocks in the U.S. and Europe to beat other asset classes this year despite recession fears.
"We expect US and Eurozone equities to be the best-performing asset classes in 2023, with total returns in local currency of about 13% in our base case scenario," said Sharmin Mossavar-Rahmani, head of Goldman's investment strategy group, and Brett Nelson, head of tactical asset allocation, in an outlook report. The group forecasts the MSCI All Country World Index may gain 12%.
/jlne.ws/3XpZ1uJ
Here Are the Best Tech ETFs for 2023
Tiernan Ray - Barron's
For the first time in three years, it's dead easy to pick a basket of tech stocks for the year ahead. After giant double-digit gains from 2019 through 2021, the Nasdaq Composite Index ended 2022 down 32%. That means that tons of great tech firms are deeply discounted and makes finding bargains a whole lot easier.
/jlne.ws/3vXHduN
Heavy Trading as Volatility Drops
Cboe (Videos)
Dan Deming @djd551 with #Vol411 for Friday the 13th - covers spot $VIX at the lowest levels of the year & active trading in February expirations. $SPX
/jlne.ws/3IBxwtp
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