No One is Paying Attention to THESE Earnings Reports

[] September’s producer price index (PPI) exceeded expectations. Markets remain under the critical 3,600 level heading into Thursday, the worst day of the year. [View in browser]( [View in browser]( [] [Godesburg's Haven Investment Letter]( [] [Godesburg's Haven Investment Letter]( [] No One’s Paying Attention to These Earnings Reports [Garrett Pic] Market momentum is Red. Markets chopped on Wednesday as investors attempted to break through the S&P 500 level of 3,600. However, the markets turned back around and sold off again to end the day. Tomorrow, expect a sharp reaction to September’s Consumer Price Index (CPI) data. Dear Investor, This morning, the Producer Price Index (PPI) came in hotter than expected. Although the media keeps calling the PPI “wholesale” prices, they are very mistaken. PPI is not “wholesale.” It is the prices producers receive at the front of the supply chain. Given that these prices include purchases by governments, businesses, and others - it’s impossible to predict how these prices relate to “end consumers.” That said, the numbers show that inflation remains hot - and the Fed will continue hiking interest rates even as it threatens jobs and future returns in the stock market. Today, I want to offer you a little glimpse into earnings season and what I’m watching. Earnings Reports to Watch A lot of people are hung up on the upcoming reports from banks like JPMorgan Chase (JPM), Citigroup (C), and Goldman Sachs (GS). But I’m looking for deeper clues than just what’s happening at the banks. The first company I’m watching is Invesco (IVZ), a financial institution that has exploded in its development of Exchange Traded Funds (ETFs). These funds own lots of different stocks and try to replicate the performance of a benchmark or index. Too many companies have embraced passive investing and ETFs as a way to “manage money.” But the reality is that if we start to see real weakness in the economy or a possible liquidity event, there could be dramatic levels of forced selling. Michael Burry noted last week that a primary difference between 2000 and today’s market is the sheer amount of passive investing through ETFs and other funds. This could break quickly. If forced selling starts or outflows accelerate among large investors, there will be too many people trying to sell in a very small window. Apple Inc. (AAPL) alone has 403 ETFs with exposure to the stock. One bad earnings report… and this can go sideways. Meanwhile, I’m closely monitoring TriNet Group (TNET), a cloud-based human resource benefits provider for small and medium-sized businesses. The company is still expensive, still above its 2020 highs, and can provide clues into the state of the jobs market moving forward. After Bank of America warned last week that the U.S. could start seeing 150,000 jobs start to disappear each month, TriNet would be a very good company to start with. If the company slashes forecasts or warns about job cuts at Small and Mid-sized businesses, it could help push us away from inflationary concerns to recessionary concerns in this market. Despite the warnings from JPMorgan CEO Jamie Dimon and other fund managers, we are still not fully priced in the possibility of a deep recession. Cash is a Position Momentum is negative. We head into this earnings season, and cash is a position. Yes, negative interest rates exist, but it’s better than speculating for the sake of speculation. In addition, we’re seeing a lot of money pouring into U.S. Treasury and corporate bond markets as investors dump traditional safety trades in real estate and utility sectors. The other ugly story is that the world is on the very of a global margin call. Emerging markets were already facing steep challenges to afford their dollar-based debt as the U.S. Federal Reserve as the exchange rate for their currency falls against the Greenback. In addition, many nations poured capital into U.S. Treasuries. But now, we’re seeing this problem impact G-7 nations. We have liquidity issues impacting parts of Europe. The drawdown in global reserves has been nothing short of shocking - raising the specter of further pain in the months ahead. Cash is a position… The dollar is currently king. Enjoy your day, [Garrett signature] Garrett {NAME} Chief Analyst, American Markets [] No One’s Paying Attention to These Earnings Reports [Garrett Pic] Market momentum is Red. Markets chopped on Wednesday as investors attempted to break through the S&P 500 level of 3,600. However, the markets turned back around and sold off again to end the day. Tomorrow, expect a sharp reaction to September’s Consumer Price Index (CPI) data. Dear Investor, This morning, the Producer Price Index (PPI) came in hotter than expected. Although the media keeps calling the PPI “wholesale” prices, they are very mistaken. PPI is not “wholesale.” It is the prices producers receive at the front of the supply chain. Given that these prices include purchases by governments, businesses, and others - it’s impossible to predict how these prices relate to “end consumers.” That said, the numbers show that inflation remains hot - and the Fed will continue hiking interest rates even as it threatens jobs and future returns in the stock market. Today, I want to offer you a little glimpse into earnings season and what I’m watching. Earnings Reports to Watch A lot of people are hung up on the upcoming reports from banks like JPMorgan Chase (JPM), Citigroup (C), and Goldman Sachs (GS). But I’m looking for deeper clues than just what’s happening at the banks. The first company I’m watching is Invesco (IVZ), a financial institution that has exploded in its development of Exchange Traded Funds (ETFs). These funds own lots of different stocks and try to replicate the performance of a benchmark or index. Too many companies have embraced passive investing and ETFs as a way to “manage money.” But the reality is that if we start to see real weakness in the economy or a possible liquidity event, there could be dramatic levels of forced selling. Michael Burry noted last week that a primary difference between 2000 and today’s market is the sheer amount of passive investing through ETFs and other funds. This could break quickly. If forced selling starts or outflows accelerate among large investors, there will be too many people trying to sell in a very small window. Apple Inc. (AAPL) alone has 403 ETFs with exposure to the stock. One bad earnings report… and this can go sideways. Meanwhile, I’m closely monitoring TriNet Group (TNET), a cloud-based human resource benefits provider for small and medium-sized businesses. The company is still expensive, still above its 2020 highs, and can provide clues into the state of the jobs market moving forward. After Bank of America warned last week that the U.S. could start seeing 150,000 jobs start to disappear each month, TriNet would be a very good company to start with. If the company slashes forecasts or warns about job cuts at Small and Mid-sized businesses, it could help push us away from inflationary concerns to recessionary concerns in this market. Despite the warnings from JPMorgan CEO Jamie Dimon and other fund managers, we are still not fully priced in the possibility of a deep recession. Cash is a Position Momentum is negative. We head into this earnings season, and cash is a position. Yes, negative interest rates exist, but it’s better than speculating for the sake of speculation. In addition, we’re seeing a lot of money pouring into U.S. Treasury and corporate bond markets as investors dump traditional safety trades in real estate and utility sectors. The other ugly story is that the world is on the very of a global margin call. Emerging markets were already facing steep challenges to afford their dollar-based debt as the U.S. Federal Reserve as the exchange rate for their currency falls against the Greenback. In addition, many nations poured capital into U.S. Treasuries. But now, we’re seeing this problem impact G-7 nations. We have liquidity issues impacting parts of Europe. The drawdown in global reserves has been nothing short of shocking - raising the specter of further pain in the months ahead. Cash is a position… The dollar is currently king. Enjoy your day, [Garrett signature] Garrett {NAME} Chief Analyst, American Markets [] © 2022 Godesburg Financial Publishing, Inc. 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Please be aware that the claims regarding investing or trading results of non-employees are not tracked by GFP nor can they be verified. As always, past performance is not necessarily indicative of future results. Therefore, results presented in this email should NOT be considered TYPICAL. Actual results can and will vary based on everything from experience, ability, risk mitigation practices, and market volatility... to the amount of money exposed in the investment or trade. Investing and trading are speculative and carry serious risk. You may lose some, all - or possibly more - than your original investment or trade. GODESBURG FINANCIAL PUBLISHING IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER: GFP, including its owners and employees, are NOT registered as securities broker-dealers, brokers, or any sort of registered investment advisors with the U.S. Securities and Exchange Commission, any state securities regulatory authorities, or any self-regulatory organizations. GODESBURG FINANCIAL PUBLISHING EMPLOYEES MAY HOLD SECURITIES DISCUSSED: If a writer holds any securities in a communication, it will be disclosed along with the information on the potential investment or trade. HIR, its owners or employees, have not been - or ever will be - paid by the issuer of a security mentioned in our services or communications. GFP, its owners and employees are paid entirely or in part from commissions based on sales of their services to subscribers. For more information please visit [our disclaimer page here](. [] Sent to: {EMAIL} [UNSUBSCRIBE]( [] © 2022 Godesburg Financial Publishing, Inc. DISCLAIMER: COMMUNICATIONS FROM GODESBURG FINANCIAL PUBLISHING (GFP) ARE FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY – NOT INVESTMENT ADVICE: GFP and all the services it offers are for educational and informational purposes only and should NOT be understood to be securities-related offers or solicitations. None of GFP’s communications should be considered or used as personalized investment advice. GFP recommends that you speak with a licensed professional before making any investment decision. RESULTS PRESENTED ARE NOT NECCESSARILY TYPICAL OR VERIFIED: GFP communications may include information regarding the historical trading performance of gurus in their services (all verified by a third party), as well as testimonials of non-employees depicting profitable investments and trades that are believed to be true based on the representations of the persons providing the testimonial of their own free will. Please be aware that the claims regarding investing or trading results of non-employees are not tracked by GFP nor can they be verified. As always, past performance is not necessarily indicative of future results. Therefore, results presented in this email should NOT be considered TYPICAL. Actual results can and will vary based on everything from experience, ability, risk mitigation practices, and market volatility... to the amount of money exposed in the investment or trade. Investing and trading are speculative and carry serious risk. You may lose some, all - or possibly more - than your original investment or trade. GODESBURG FINANCIAL PUBLISHING IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER: GFP, including its owners and employees, are NOT registered as securities broker-dealers, brokers, or any sort of registered investment advisors with the U.S. Securities and Exchange Commission, any state securities regulatory authorities, or any self-regulatory organizations. GODESBURG FINANCIAL PUBLISHING EMPLOYEES MAY HOLD SECURITIES DISCUSSED: If a writer holds any securities in a communication, it will be disclosed along with the information on the potential investment or trade. HIR, its owners or employees, have not been - or ever will be - paid by the issuer of a security mentioned in our services or communications. GFP, its owners and employees are paid entirely or in part from commissions based on sales of their services to subscribers. For more information please visit [our disclaimer page here](. [] Sent to: {EMAIL} [UNSUBSCRIBE](