Jay Powell is back

January 12, 2022 Good morning traders! Welcome back to The Daily Setup. Markets were up yesterday thanks to Jerome Powell’s confirmation hearing. Here’s what’s on the docket today: - Jay Powell is back for round two - Pfizer is looking into a hybrid vaccine - Sequoia and Paradigm take a stake in Citadel So have a cup of joe, give us a read, and let’s make today a good one. Nick How’d the markets look? Market Outlook 👀 DOW 36,252.02 +0.51% S&P 500 4,713.07 +0.92% NASDAQ 15,153.45 +1.41% BITCOIN $42,807.38 +2.60% TSR Inc, Pfizer, Jay Powell BIGGEST MOVER TSRI Revs Up TSR Inc released fiscal Q2 earnings after the bell Monday and investors must’ve loved what they saw. The IT consulting and recruiting services company shot out of the gate Tuesday with a 49% gain before closing the day up [28.75%](. [CEO Thomas Salerno sounded upbeat]( for the coming quarters, stating, “If our current trends continue, we expect operating income to continue to grow as we leverage selling, general and administrative expenses.” The company’s year-over-year numbers for the quarter that ended November 30, 2021 were as follows: - Revenue of $23.9M was 49% higher than last year’s $16.1M. - Net income of $243K vs. a net loss of $247K. - A balance sheet with $6.3M in cash and less than $50,000 in debt. Wish my personal balance sheet looked like that. Throughout 2021, TSRI’s stock price has touched or exceeded the $13 mark six times only to fall back towards the $8 level over the next two months. Tuesday’s stock movement in TSRI seems to be continuing that narrative into the new year. The stock made a high of $13.32 on the open and stair-stepped lower from there. I will be keeping TSRI on my watchlist but will not be looking to make a trade to the long side until we get down to that key $8. Who Wants Another Shot? [Albert Bourla, Pfizer’s CEO](, said that the company is working on a hybrid vaccine that “will cover coronavirus variants including omicron, with plans to seek regulatory clearance by March if needed.” Sssooo it’s like a mix between indica and sativa? Speaking at a JPMorgan Healthcare conference Monday afternoon, Bourla stated the obvious challenges that Omicron presents, but confirmed that the company is moving forward with the goal of manufacturing between [50M-100M doses of the new vaccine](. In what has to be a first for a big pharma CEO, Bourla added that if the new vaccine is not needed, Pfizer will absorb the costs. Additional highlights from the Bourla’s speech include the following: - Pfizer (PFE) will be able to manufacture 120M Paxlovid treatments or 3.6B tablets in 2022. - In November the company released their [Paxlovid study results]( which, “showed an 89% reduction in risk of COVID-19-related hospitalization or death from any cause compared to placebo in patients treated within three days of symptom onset.” - Pfizer also announced a licensing deal with Codex DNA which will reduce the development time of future vaccines to just 60 days. Pfizer’s announcement Monday afternoon had a positive effect on the company’s stock during Tuesday’s trading session. $PFE [finished the day up 0.80%]( and is holding above November 29th’s high of $55.70, which could lead to a further move to the upside. I’m keeping PFE, as well as Moderna (MRNA) on my watchlist, as it appears the variant is going to continue being a bigger headache than when your in-laws decide to stay with you for more than a couple days... I may or may not be speaking from personal experience. Jay Powell Gets Put on the Spot If you say “transitory” three times in a row it is rumored that Jerome Powell will appear to assure you that the Fed is doing everything it can to keep inflation under control before vanishing in a puff of smoke. Such was the case yesterday in DC as [Jay took the floor]( during a confirmation hearing for his second (feels like third or fourth) term, where he disclosed his outlook for 2022 and gave a trickle of information regarding the Fed’s plans for rate hikes and achieving maximum employment. - [Prices rose 5.7%]( in the 12 months ending in November of 2021 as measured by the Personal Consumption Expenditures Price Index (PCEPI). During Tuesday’s hearing Jay reiterated that the Fed’s primary goal is maximum employment but that such dramatic inflation is a direct threat to said goal, shifting their priorities. - Jay stayed characteristically opaque about when the Fed plans on instituting rate hikes, but if the words of his underlings during [the last Fed meeting]( are anything to go by, March seems to be the safest bet. - Wall Street really liked the rhetoric espoused by Powell as many stocks erased losses and [the S&P 500 and Nasdaq climbed higher](... meanwhile bonds fluctuated. Apparently, after months of puttering around, something concrete from the Chair is enough to jolt the markets awake. It’s looking like Jay is here to stay, and even though he was seriously grilled by the hearing committee, he still has bipartisan support. Perhaps his rhetoric on Tuesday was more optimistic than usual in an effort to save his own skin, but such a staunch commitment to the policy of rate hikes and dialing back the balance sheet shows a lot of confidence. Wall Street must be pretty confident in the markets given yesterday’s performance, and that would only increase if Goldman had their way with [a fourth rate hike](. “Help me, I'm poor” - Ken Griffin Token Talk Ken Griffin’s Citadel Securities (yes that]( Securities) is receiving its first outside investment. I wonder why? VC firm Sequoia Capital and crypto investor Paradigm are ponying up [$1.15B](, which values the firm at roughly $22B. Sure, Griffin could probably do that himself, but why do that when you can build a network of forward-looking allies who are positioning for the future of Web3 and crypto. Citadel Securities is already responsible for the handling of [27% of shares]( traded on the US market every day, so why not get involved in crypto too? - While Citadel has stayed away from crypto in the past, its new partners already have a history of tinkering in the space. Paradigm is [co-founded]( by Coinbase co-founder Fred Ersham, and Matt Huan formerly managed crypto investments at Sequoia Capital. Quite the dream team they’re cooking up. - Citadel plans on using this cash to [expand operations globally]( and potentially as a precursor for an IPO, though that’s not an inherent guarantee. C’mon Ken, you know you want to do it... - It’s only a matter of time before Citadel Coin’s ICO... This is actually pretty big news for the growing adoption of crypto, especially considering that Ken Griffin is known to be highly skeptical of [investing in it]( due to regulatory concerns. If he’s now open to the idea of dipping Citadel’s toe into the space, that shows a lot of confidence in the legitimacy of crypto the world over. Crypto hasn’t been the domain of scrappy computer nerds for years now but if big boys like Citadel and Sequoia are getting involved, it’s likely here to stay. Rivian Forgets to Pack a Spare Rumor has it [Fail The Goldbergs GIF by ABC Network - Find & Share on GIPHY]( Rivian (RIVN) drove over some potholes Tuesday as news broke that the EV manufacturer missed production targets. The stock ended up turning higher as the day continued but the new year hasn’t been kind to RIVN, as it’s already down 18.66% YTD. With more and more players entering the EV space, and Amazon bailing on Rivian to buy delivery vans from [Stellantis](, Rivian needs to hit the nitrous to get ahead of the competition. - Rivian failed to hit production targets made by CEO RJ Scaridge, who claimed they would produce 1.2K units in 2021 when they only [managed to make 1,015](. Seems like the kind of problem a COO would help solve... - But COO Rod Copes was seemingly in cruise control, as he announced his retirement via LinkedIn ([seriously](). - Rivian PR claims that Copes had a “phased retirement” which [began months]( ago in order to smoothen the production ramp. The decision to not announce this change during such a critical period is strange, especially considering RIVN hasn’t announced who is replacing him. Might I suggest [Roman Roy](? While this news certainly isn’t great for Rivian, it isn’t time for me to count them out just yet... What is going to be the critical metric to judge RIVN on will be their production numbers going forward. Wall Street expects about [100k deliveries in 2023](, so if news about production hiccups become more frequent in coming months that could be indicative of failure under the hood. Link Roundup 📿 Other News Other News Link Roundup - Shake and Bake – Shake Shack Reports Strong Sales ([link]() - About Damn Time – Home Covid Tests To Be Covered by Health Insurers ([link]() - Hoodwinked Trader Gets Paid – Robinhood Settles With Retail Trader ([link]() - Oh, It’s Going Down! – HUDI Down Big on No News ([link]() - New year, new me – Planet Fitness buys Sunshine Fitness ([link]() Meme of the Day: Questions or concerns about our products? Call or text us on your mobile: 1.800.123.4567 © Copyright 2020, [RagingBull]( - [Refund Policy]( - [Privacy Policy]( - [Terms & Conditions]( DISCLAIMER: To more fully understand any Ragingbull.com, LLC ("RagingBull") subscription, website, application or other service ("Services"), please review our full disclaimer located at [(. FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. 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