The Daily Breakdown looks at the previous championship seasons for professional Philadelphia sports teams and the stats are…not great.
Monday’s TLDR
- Earnings are still in focus
- CPI report is on watch
- META’s record win streak
Weekly Outlook
Is there a stock market curse in Philadelphia? While millions are celebrating the Eagles’ victory last night, others have pointed out an interesting coincidence for markets to underperform when the City of Brotherly Love secures a championship.
For instance, there’s the 1929 stock market crash when the Philadelphia Athletics won the World Series, along with the 2008 financial crisis when the Phillies won the World Series. Then there’s the last Eagles’ Super Bowl victory in 2018, when the S&P 500 had its worst year since 2008.
Do the championship winners have an impact on stock markets? Of course not! And it wouldn’t be advisable to make investment decisions based on sports championships. But the history sure is interesting.
As for this week, a few notable earnings stand out. They include Coca-Cola and Shopify on Tuesday, Reddit and Robinhood on Wednesday, and Coinbase on Thursday.
As for economic data, a few notable reports stand out. They include the CPI report on Wednesday and retail sales on Friday. These reports will give us the latest update on inflation and how the consumer is doing.
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The setup — McDonald’s
McDonald’s reported earnings this morning, missing on revenue expectations and reporting roughly in-line earnings results. Despite the mixed headline figures, shares are inching higher in pre-market trading.
Remember, the stock will trade based on the company’s results, as well as management’s conference call.
The recent stock action has been promising, as MCD cleared downtrend resistance (the blue line) last week. However, $300 has been a key resistance level for the stock for several years.
MCD is trading just below $300 in pre-market trading. Keep an eye on this level today and this week. If shares can clear this area, more bullish momentum could ensue.
On the flip side, if shares are unable to clear $300, then this level could remain resistance and momentum could wane.
Options
For some investors, options could be one alternative to speculate on MCD. Remember, the risk for options buyers is tied to the premium paid for the option — and losing the premium is the full risk.
Bulls can utilize calls or call spreads to speculate on further upside, while bears can use puts or put spreads to speculate on the gains fizzling out and MCD rolling over.
For those looking to learn more about options, consider visiting the eToro Academy.
What Wall Street is watching
AMZN – Shares of Amazon fell about 4% on Friday after the company reported earnings. Despite beating on earnings and revenue expectations, the firm’s cloud results were slightly below analysts’ expectations, while its outlook was slightly below estimates as well. Check out the charts for Amazon.
META – On Friday, Meta extended its winning streak to an impressive 15 consecutive sessions. Shares are up almost 17% during this stretch as the stock continues to chug higher. The last down day for Meta was on January 16th.
Disclaimer:
Please note that due to market volatility, some of the prices may have already been reached and scenarios played out.