Morning Lineup - 9/26/22 - Still Falling Mon, Sep 26, 2022 You know it's bad out there when a Fed official 'thinks' that the Fed will do all it can do to avoid 'deep, deep pain'. Early on in the tightening cycle, Fed Chair Powell said that the Fed's path to higher rates could result in a 'softish landing' for the economy. A few weeks later, he noted that the policy could be accompanied by 'some pain'. Last week, the Fed chair told reporters that no one knows if this process will result in a recession. Over the weekend, it wasn't the Fed chair speaking, but Atlanta Fed President Raphael Bostic had the comments above in an interview on 'Face the Nation'. In the span of five months, Fed officials have gone from describing the impact of tighter policy on the US economy as a softish landing to short of 'deep, deep pain'. If there’s anything positive to say this morning, at least September has only a week left. Heading into the last trading week of the month, the S&P 500 has already shed 6.6% which ranks as one of the worst MTD performances heading into the last week of the month in the post-WWII period. The table below lists each year where the S&P 500 was down over 5% on the month heading into the last week of September along with how the index performed in the final week of the month. In the 12 prior months where the S&P 500 was down over 5%, the final week of the month experienced a median decline of 0.44% with positive returns just 42% of the time. That’s hardly anything to get excited about, but it is also not much worse than the average performance for the final week of the month in all years since WWII (-0.34%). One thing you can probably count on is volatility. To close out the month. In 7 of the 11 prior years show, the S&P 500 was up or down at least 1% in the final week of the month. The most extreme downside move was 2.2% in 2002 while the most positive upside move was 7.8% in 2001.
Top of the morning Stockaholics! Happy Tuesday to all and welcome to the new trading day and a fresh start. Here is a quick check on those futures as we are about 3 hours from the cash market open. GLTA on this Tuesday, September the 27th, 2022.
The pre-market thread is now up on the Reddits for any looking for some brief reading before today's cash market session open. GL to y'all's trading on this Tuesday, September the 27th, 2022! LINK: https://www.reddit.com/r/StockMarket/comments/xpe39l/927_tuesdays_premarket_stock_movers_news/
Morning Lineup - 9/27/22 - No Safety In Treasuries Tue, Sep 27, 2022 Futures are attempting to rebound this morning after yet another decline in the equity market yesterday. It's a busy day for economic data as Durable Goods Orders were just released and came in roughly in line with expectations, but there are still several more indicators on the calendar with FHFA House Prices and Case Shiller at 9 AM Eastern and then Consumer Confidence, Richmond Fed, and New Home Sales all at 10 AM. Treasuries took another pasting yesterday as yields once again surged to new multi-decade highs. Every day there’s another way to show the carnage, so here’s the one for today. The iShares Long Term Treasury ETF (TLT) fell nearly 2% yesterday taking its YTD decline to more than 30%. 30%. In Treasuries! Weren’t they supposed to be safe and boring? For most of our entire investment careers, when markets hit turmoil, market commentary would include something along the lines of “investors rotated into the safety and security of Treasuries. Even Treasurydirect.com, which is run by the Treasury Department says as much on its website. 2022’s word of the year could very well be turmoil, yet US Treasuries are having a down year for the ages. Even on a y/y basis, since its inception in 2003, TLT’s performance over the last 12 months has been the worst on record. It’s even down more than the Nasdaq! The weakness in Treasuries is not to say that the performance of US equities has been positive this year. With the exception of the Dow ETF (DIA), every other ETF that tracks a major US index is down more than 20%, and every single one of them closed yesterday at 'extreme' oversold levels (more than two standard deviations below 50-DMA).
I think SPX 4000 is still in the picture. But, trade management is a different issue. Exit possibilities: a. SPX 3800; b. SPX 3850; c. SPX 3900; d. SPX 3950 or e. SPX 4000. I think i have to see the price action to decide what makes best sense. But, this 3650 level is silly. Nothing seems to have changed from 1 month ago. It's already collapsed from 4800. And it had rallied to 4300. 4800. 4600. 4300. 4000 is not unrealistic at all.
Top of the morning Stockaholics! Happy Hump Day to all and welcome to the new trading day and a fresh start. Here is a quick check on those futures as we are over 2 hours from the cash market open. GLTA on this Wednesday, September the 28th, 2022.
The pre-market thread is now up on le Reddits for any looking for some brief reading material before today's cash market session open. GL to y'all's trading on this Wednesday, September the 28th, 2022! LINK: https://www.reddit.com/r/StockMarket/comments/xqbmlk/928_wednesdays_premarket_stock_movers_news/
Morning Lineup - 9/28/22 - Britain Blinks Wed, Sep 28, 2022 Equity futures have been whipping around all over the place this morning. After some relatively steep declines overnight, this morning's announcement from the Bank of England to buy long-dated government securities has put some temporary support in the market causing interest rates to pull back from their overnight highs and equity futures to rally. How long this reprieve lasts remains to be seen, but market participants will take any break they can get these days. On one positive note, we would note that from a historical perspective at least, over the last ten years, the upcoming three-month period for equities has been better than any rolling three-month period of the year. Buying equities during the throes of a bear market can be a humbling experience, and never has that been more true than in 2022. The chart below shows the percentage of time that the S&P 500 tracking ETF (SPY) has traded higher on the day versus the period day's close in each year of its existence. Since its inception in 1993, there have only been seven prior years where SPY traded higher on the day less than half of the time, but this year's current pace of 43.8% is easily the lowest reading since SPY's inception. The forces of gravity on stock prices haven't been this strong or consistent in at least 30 years.
Yeah looks like the BOE pushed the dollar and the yields lower and we are getting a relief rally from the market
Top of the morning Stockaholics! Happy Thursday to all and welcome to the new trading day and a fresh start. Here is a quick check on those futures as we are over 3 hours from the cash market open. GLTA on this Thursday, September the 29th, 2022.
The pre-market thread is now up on le Reddits for any looking for some brief reading material before today's cash market session open. GL to y'all's trading on this Thursday, September the 29th, 2022! LINK: https://www.reddit.com/r/StockMarket/comments/xr6j9k/929_thursdays_premarket_stock_movers_news/
Morning Lineup - 9/29/22 - Fundamentals Don't Matter Thu, Sep 29, 2022 The rally was fun while it lasted. Futures are sharply lower this morning and poised to give up over half of Wednesday's gains at the opening bell. An interview with Cleveland Fed President Loretta Mester where she reiterated her hawkish stance hasn't helped sentiment nor has the fact that initial jobless claims dropped below 200K and continuing claims were also lower than expected. As if that wasn't bad enough, the GDP Price Index and Core PCE were both revised higher. If there's any silver lining to those upwardly revised inflation readings, it's that it will make it more likely that these readings for Q3 show some deceleration. These days, either all stocks rise, or they all fall. There is little in-between. It’s like flipping a switch. In yesterday’s rally, the S&P 500’s net A/D reading was +477 which was the strongest single-day breadth reading since late July and before that April 2020. Yesterday’s strong breadth reading was the 7th this month and the 31st ‘all or nothing’ day (single day breadth reading either above +400 or below -400) for the S&P 500 this year, bringing the full-year pace to 42. That would be just one shy of the 2020 total of 43 and the sixth highest single-year total since 1990. Besides 2020, the only years with a higher number of all or nothing days were during and coming out of the Financial Crisis from 2008 through 2011. In a normal functioning market, fundamentals play a large role in the direction of individual stock prices. There are certain times, like now though, where the seas get rough, and Captain Macro takes the helm relegating fundamentals to steerage. If you’ve ever been seasick on a boat, though, the last place you want to be is down below.
Top of the morning Stockaholics! Happy Friday to all and welcome to the final trading day of the week, month and quarter and a fresh start. Here is a quick check on those futures as we are over 4 hours from the cash market open. GLTA on this Friday, September the 30th, 2022.
Morning Lineup - 9/30/22 - Q3 Almost Done Fri, Sep 30, 2022 Futures were a lot higher earlier in the morning but in what has increasingly become the norm this year, those gains were fleeting. Ahead of some important inflation data, equity futures were essentially flat, and the 10-year yield was trading down to 3.7% after topping 4% earlier this week. Nike (NKE) has been a drag on equity prices as the stock is down 10% in reaction to earnings. That would rank as the stock's largest downside gap in reaction to earnings since at least 2001. The other major report since the close yesterday was Micron (MU) and while the company lowered guidance, it's still trading up in the pre-market. In terms of economic data, Eurozone CPI came in at 10% y/y for the month of September which was nearly a full percentage point higher than August's reading of 9.1%. There's been no let-up in inflation on the other side of the Atlantic. Over here, it's a busy day for economic data to close out the quarter with Personal Income (inline), Personal Spending (stronger than expected), and PCE Core (higher than expected) all being released at 8:30. Chicago PMI will be released at 9:45, and then at 10, we'll close out the quarter's data with Michigan Sentiment. It's been a lousy back half of the quarter, so just about everyone is happy to see it come to an end, but there are still 6.5 hours of trading to get through. The Philadelphia Semiconductor Index (SOX) traded lower yesterday as it has on more than half of all trading days this year. As a result, the index is down just under 42% from its record closing high in late December. The current drawdown in the SOX is now deeper than the 35% drawdown from the COVID crash and ranks as the fourth largest decline from a record closing high in the index’s history. The only three that were deeper were two 50%+ declines in the mid to late 1990s, and then the 80%+ drawdown from the dot-com peak. The two drawdowns in the 1990s were short-lived lasting two years or less before new highs were once again reached, but the high from the dot-com peak in 2000 wasn’t eclipsed for another 18 years. One can only hope that in the late 2030s we aren’t finally celebrating the first new high in the Semiconductor index since 2021! Even though the SOX is down nearly 42% from its all-time high, it may sound hard to believe but throughout its history, it has been further below its all-time high than it is now 57% of the time! With semis consistently trading down so far from record highs over the years, you would think the sector has been a bad investment. Since its inception in 1994, though, the SOX has returned more than 12% annualized on a total return basis. Not bad for an index down over 40% this year.
SPX now breaking down below of that 3600s level, new intraday and new closing lows of the year coming up for the SPX most likely
Wow. BUT, I still believe that SPX 4000 is in the picture. SPX 3900 to 3850 likely. SPX 3800 almost guaranteed at some point. Of course, as the SPX continues to reverse and climb, the headlines will read something like, "The SPX rallying despite the FED action"
