As we head closer to the Fed meeting, we are still seeing some bank failure pain. First Republic Bank (FRC) slipped around 45%. Year to date, those shares are down roughly 90%. Ouch.
But we are seeing signs the market is recognizing that all banks aren't the same. Confirmation of that is found in the SPDR S&P Bank ETF (KBE) climbing about 1.7% Monday, but we continue to favor recently added Bank of America (BAC) shares.
Amazon (AMZN) is trading off, following CEO Andy Jassy sharing the company will lay off 9,000 more employees in the coming weeks, in addition to the around 18,000 it shed between November and January. This latest group will come primarily for Amazon Web Services, Advertising, and stream video service Twitch. Exiting 2021, the company's overall headcount was just shy of 800,000 and suggests the total headcount being shed is around 3.05%-3.3% of its total workforce. While those cuts aren't the largest we've heard of, they still point to a leaner, more focused and cost-conscious company, something we appreciate. While we continue to rate AMZN shares a "Three," we are watching the shares closely with an eye to revisit that rating when the time is right.
This follows another round of layoffs at Meta (META) and suggests we are likely to see further actions across the tech sector in the coming weeks as companies close their books for the current quarter.
We are also seeing our shares of United Rentals (URI) and Vulcan Materials (VMC) rebound Monday. We can attribute that to bullish comments coming out of the investment banks like KeyBanc Capital Markets following ConExpo 2023. As we touched on in last week's Roundup, ConExpo is North America's largest construction trade show representing asphalt, aggregates, concrete, earthmoving, lifting, and mining. As you know, our bullish thesis on URI and VMC shares stems from the combined stimulus of the Biden Infrastructure Law, CHIPs Act, and the Inflation Reduction Act, all of which should stimulate demand for construction equipment.
KeyBanc summed up the 2023 trade show with bullish comments citing favorable contractor optimism, with some sectors like highways and bridges seeing faster funding flow-through. Moreover, backlogs remain at record levels with few cancellations, and order activity remains solid against tough year-ago comparisons. That said, the primary constraint remains supply chain issues that in some cases could likely mean under shipping relative to demand. That could help prolong the expected upcycle and could lead to stronger revenue later as the supply chain catches up to demand.
As we see it, that supports our additions to VMC and URI shares last week.
A Clear Fade
We are also watching the shares of Clear Secure (YOU) continue to fade, despite the lack of any new developments and we'd note the shares are rather oversold as evidenced by the relative strength index and Moving Average Convergence Divergence (MACD) oscillator indicators. As we can see in the chart below, the shares have strong support close to $22, and should the near-term bring them closer to that level, it would likely be a smart place to pick up shares. We will continue to monitor the shares rather closely in the coming days.