Market Preview Week of Jan 17-20: BOJ Decision; Long PG, Short NFLX

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The market is closed on Monday January 16 for Martin Luther King Day.

Goldman (GS) and Morgan Stanley (MS) report earnings Tuesday morning.

The big event next week may come from the Bank of Japan which I believe will make a policy decision overnight Tuesday. I wrote about what’s going on in Japan last month: “Something Is Happening In Japan” (December 21, 2022).

On Thursday Top Gun holding Procter & Gamble (PG) reports in the morning. I see no reason not to expect a solid quarter from PG. As I’ve mentioned many times in the past, they sell the kinds of stuff – like Tide laundry detergent, Crest toothpaste and Old Spice anti-perspirant – that people buy in good times or bad. While PG is expensive at nearly 26x FY23 guidance, I’m willing to pay up for one of the premier consumer staples companies.

Finally, Netflix (NFLX) reports earnings Thursday afternoon. NFLX was decimated eight months ago when they reported a shocking drop in streaming subscribers for their 1Q22 and forecast one for the following quarter as well. However in their 3Q22 subscriber growth resumed and they forecast a gain of 4.5 million for 4Q22 as well which has really got the stock going. The problem is that NFLX has now doubled off its lows and is expensive again. I’ll likely take a small short position and look to buy some puts ahead of earnings.

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