Postcards: Doesn't This Feel Familiar (Republic Speak for the Week Ahead

Last year, Jim Cramer was crying on air about Meta Platforms - and everyone predicted we were on the verge of capitulation. Did we go back in time? What day is it?                                                                                                                                                                                                                                                                                                                                                                                                                 Forwarded this email? [Subscribe here]() for more [Postcards: Doesn't This Feel Familiar (Republic Speak for the Week Ahead]( Last year, Jim Cramer was crying on air about Meta Platforms - and everyone predicted we were on the verge of capitulation. Did we go back in time? What day is it? [Garrett {NAME}]( Oct 28   [READ IN APP](   Download the PDF for the week ahead, or keep reading. Postcards October 28 384KB ∙ PDF file [Download]( Dear Fellow Expat: Today is the day… At 6 p.m., my neighborhood hosts its annual Halloween Golf Cart parade. All the stops have been pulled. My daughter and wife will wear Frozen costumes… Me? It’s an excellent time to dust off the Inflatable Man (Auto Dealership Balloon Man). When someone asks me what I am… I’ll let the air out of the costume… and tell them I’m “The Stock Market.” What a brutal October for investors. But we follow [three Equity market buy/sell signals if you're new](. All three follow flows of breakout and breakdown stocks in the S&P 500, the Nasdaq 100, and the Russell 2000. Our signals have largely been [Red since August]( – albeit with a few periods during short covering and squeezes at the start of September and October. The air is flowing out slowly… and we’ve still only had two days in 2023 where the S&P 500 is +/- 2%. I draw recent oversold conditions and “Extreme Fear” readings to your attention because today’s market feels familiar. This time last year, I was sitting at the same restaurant, planning the same costume, charging the same golf cart, and eyeing the same golf cart parade… when the market followed a similar downward pattern… from August to October. I don’t know if the market will experience a similar pattern this year… or look more like the 2018 refinancing crisis that saw a choppy November into a 20% collapse in December. (July 2018 to March 2019) I’m saying two things. First, enjoy your life, and “Don’t be shocked” if the market does the opposite of what everyone expects. With the Fed meeting this week, who knows what algorithms will do? Second: Follow our signals - we’ve been largely on the sidelines since August. When the bottom forms, the signals will catch it. We’ll stop seeing 10% collapses in small-cap and S&P titans alike. And when the signals turn positive in the [Republic Risk Letter]( – invest [around those sectors](. Then, buy the [SPY]( the [QQQ]( or the [IWM](. Until then, let’s just keep doing what we do… We are sitting flush with cash… and waiting for the buying opportunities to emerge. They will… very soon. As John Tuld says at the end of Margin Call: “It's all hands on deck now, Sam, there's going to be a lot of money to be made coming out of this mess, we're going to need all the brains we can get around here.” I’d like to see a repeat of Q1 2019 if possible. Now, let’s put the week ahead… into Republic Speak. [Upgrade to paid]( Monday, October 30 Events: McDonald’s ([MCD]( Earnings, UAW strike, PwC Quits! Republic Speak: One of the tremendous economic innovations of our modern era has been the “Big Mac Index.” If you want to know the real impact of inflation on an economy, [don’t trust the official numbers](. Look at the cost of a Big Mac in that nation. In 1986, the Economist created the index to measure purchasing power parity (PPP) between nations. The sandwich is a terrific gauge of input costs ranging from bread, beef, cheese, and lettuce… to labor, electricity, rent, and franchise operations. We’ll see how inflation and consumers are trading MCD. Next, I’ve discussed in previous issues that the UAW strike continues. [Yesterday, I discussed the impact of the strike and EV mandates on a great]( iconic American company, Ford Motor Co. ([F](. The stock’s stagnation results from management’s unwillingness to stand up to politicians who continue to showcase ineptitude. Finally, something very unusual happened in the business world. I haven’t seen it happen in a while. PwC - the accounting consultancy - has declined to accept a re-appointment as the public accounting firm for Tupperware Brands ([TUP](. There hasn’t been any public discussion about why this happened – but it’s quite a statement for an accountant – especially in an economy facing a recession. Now, if PwC seeks a parallel gig that accounts for plastic containers, they can send someone over to rearrange my Tupperware cabinet - and that accountant can try to match all our plastic containers with the sea of plastic lids that don’t fit. We lose more lids to the world than socks to the washing machine. [Share]( Tuesday, October 31 Events: Denbury ([DEN]( Vote on Exxon Acquisition Republic Speak: There are plenty of earnings reports on Tuesday, but I want to see if any objections exist to Exxon’s ([XOM]( proposed $4.9 billion takeover of Denbury. This deal perplexed me because Exxon’s offer was only a 2% premium to DEN’s valuation – and oil prices have increased since that deal’s announcement. [Exxon’s making a bet]( on Denbury’s carbon capture efforts and boosting its presence in the Permian Basin with a takeover of Pioneer Resources ([PXD](. Both deals are why most analysts thought that Chevron ([CVX]( might purchase Occidental ([OXY]( which checks both boxes (carbon capture and big Permian presence.) [However, CVX went to Guyana to buy Hess (HES) instead.]( [Leave a comment]( Wednesday, November 1 Events: Fed Rate Decision Republic Speak: I don’t know if I have it in me for another one of these emotional rollercoasters. But the Fed isn’t likely to raise interest rates on Wednesday, so traders MUST keep their eyes out for [the 2:35 p.m. to 2:37 p.m](. buying pattern that has emerged after Powell speaks. If anything, this week can stop the bleeding in this market, it’s the color of Jerome Powell’s tie and a meandering speech about the resolve of the American economy. I am only half joking, as Powell has fueled sharp rebounds in [our Equity Signals]( in the past – notably his March 15, 2023, speech that sparked a fractal in S&P 500 patterns and spurred massive buying for two weeks. As I’ve noted, I would not be shocked to see a one- or two-week rebound based on the behavior we’ve seen in 2018, 2020, and 2022. [Follow our Equity Strength Signals]( and Sector Signals… and watch the [Daily MACD reading]( on SPY, IWM, and QQQ. [Upgrade to paid]( Thursday, November 2 Events: Apple ([AAPL]( Earnings… also… Carvana earnings Republic Speak: I know that everyone will be watching Apple earnings. And why not? Especially after Tim Cook announced plans to sell a massive amount of company stock. [So goes Apple… so goes the U.S. equity market](. For me, I want to see Carvana ([CVNA]( earnings. I crave to know how [this company is still in business](. It has an F score of three. It’s operating in an environment where auto loans are through the roof. Its Z score is atrocious – signaling that it could face a reckoning in a credit event. Margins are negative. It’s like a magic trick – this company sells cars in vending machines… for Pete’s sake. [How and why is this a company?]( [Share Florida Republic Capital]() Friday, November 3 Events: October Jobs Report, [CBOE]( Earnings Republic Speak: The jobs report will likely show that hiring is cooling a bit, with unemployment at 3.8% and the total number of new jobs at 168,000. Economists expect earnings to increase by 0.3% month-over-month and 4% year-over-year. That’s an inflationary reading. Next, I’m paying attention to CBOE ([CBOE]( – not because of earnings – but because of the City of Chicago. The mayor is pushing a $800 million tax on the derivatives industry. Why? [Because Chicago is going broke]( and they need more “greedy” boogie men to tax and give to favored constituents. Make no mistake about it. [If Chicago pushes too hard]( CBOE and CME will leave. CBOE will likely go to Kansas City, and CME will move to Miami. [They should, anyway](. [Chicago was my home]( for over a decade – and it stuns me what politicians continue to do to this place. They are trying to draw blood from a stone. Stay positive, Garrett {NAME} From the Archives [Welcome to the Jill Biden National Marble Run and Hiking Trail… Brought to You by Pfizer and JPMorgan Chase… (June 3, 2023)]( Florida Republic Capital is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber. [Upgrade to paid]( You're currently a free subscriber to [Florida Republic Capital](. For the full experience, [upgrade your subscription.]( [Upgrade to paid](   [Like]( [Comment]( [Restack](   © 2023 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()