Stock Market Today: August 21st - 25th, 2023

Welcome StonkForums to the trading week of August 21st!

This past week saw the following moves in the S&P:


S&P Sectors End of Week:


Major Indices End of Week:


Major Futures Markets End of Week:


Economic Calendar for the Week Ahead:


What to Watch in the Week Ahead:

(N/A.)

 

Worst Week For Stocks Since Banking Crisis; Bonds, Bitcoin, & Bullion Battered
FRIDAY, AUG 18, 2023 - 04:00 PM

Aggressive interventions by Chinese authorities were a notable theme on the week (strong-arming funds not to sell stocks, tapping banks on the shoulder to buy yuan against the dollar, and making firms an offer they can't refuse with regard share buybacks). However, Chinese stocks closed lower...



Source: Bloomberg

..and so did the offshore yuan...



Source: Bloomberg

So Mission Unaccomplished Beijing.

Interestingly, Goldman traders suggest that:

"to this point in the sequence, I’d argue the slowdown in China had been a net positive for US equities... with specific regard to the disinflationary impulse and the flow of capital...

...that said, coming out of a week that featured another disappointing set of data... and another dose of CNH weakness...

...it now feels like China growth fears can provoke a more global risk-off dynamic"

But, bear in mind that while the yuan has been spanked like a monkey against the dollar, it has actually rallied against the rest of its trading partners' currencies...



Source: Bloomberg

And while Chinese data was a shitshow, US macro (hard and soft) surprised to the upside this week...



Source: Bloomberg

Which, combined with relatively hawkish Fed Minutes pushed rate expectations higher on the week (reducing expectation for cuts next year also)...



Source: Bloomberg

This prompted 'risk-off' as the S&P fell for the 3rd straight week, its longest weekly losing streak since Feb, and suffered its biggest weekly loss since the collapse of SVB in March. Small Caps were the ugliest horse in the glue factory...



All of the US Majors closed below their 50DMAs (note in upper right that Small Caps dropped to 100DMA and bounced)...



Regional bank stocks fell for the 3rd straight week...



The put/call ratio surged up to the highest since the SVB collapse...



Source: Bloomberg

Most notably it appears the $2.2 trillion OpEx was put-monetization day for all options players (including 0-DTEs)...



Source: SpotGamma

Treasury yields were all higher on the week with the long-end notably underperforming (30Y +12bps, 2Y +4bps)...



Source: Bloomberg

Which steepened (dis-inverted) the yield curve (2s10s) further (remember its the resteepening that is the real peril)...



Source: Bloomberg

Also of note is that the 2Y Yield ripped up to 5.00% once again... and failed...



Source: Bloomberg

The dollar rallied for the 5th straight week to its highest since early June, breaking back above its 200DMA....



Source: Bloomberg

Crypto was clubbed like a baby seal this week with three big legs lower...



Source: Bloomberg

Bitcoin plunged back to pre-BlackRock ETF headlines...



Source: Bloomberg

The intraday pattern of overnight strength and post-London-Fix weakness continued every day this week in Gold. Spot Gold is back below $1900...



Source: Bloomberg

Oil prices fell on the week - the first weekly loss since June - with WTI finding some support at $80...



Finally, next week brings NVDA's "guidance heard around the world" on Wednesday and Jay Powell's Jackson Hole speech on Friday, both of which could catalyze major moves in the market.

The S&P volatility term structure is starting to fear it...



Source: Bloomberg

And NVDA bulls 'smell the fear'...



Source: Bloomberg

But could Powell really push us off the cliff?



Source: Bloomberg

Of course not, we have Bidenomics (oh, talking of which, there's always the chance that the govt shuts down in a week or two - that would slow the flow of money).

 

Bulls Back Off
Thu, Aug 17, 2023

This month's negative tone continued in the past week as the S&P 500 collapsed through its 50-DMA. Not susprisingly, the weakness has put a dampener on sentiment. The latest investor sentiment survey from AAII showed only 35.9% of respondents reported as bullish. That is down for a second week in a row from 49% two weeks ago, and the 13.1 percentage point drop during that span ranks as the largest since the back half of February when bullish sentiment fell by more than 15 percentage points. It is an even more pronounced drop from 50%+ reading that was put in place the week of July 20th.



Bearish sentiment picked up some of the difference this week, rising 4.6 percentage points to 30.1% and is the highest reading since the first week of June.



With inverse moves in bullish and bearish sentiment, the bull bear spread has fallen sharply to 5.8 after ten consecutive weeks of double digit positive readings (what had been the longest such streak in over two years as shown in the second chart below). In other words, sentiment continues to favor bulls, but by a much narrower margin than what has been seen in the past few months.





In the table below, we show every other instance in the AAII survey's history in which streaks of at least ten weeks or more of bulls outnumbering bears by at least ten percentage points have come to an end. As shown above and below, these sorts of streaks tend to happen every few years and typically when they end, bullish and bearish sentiment are not far off from their overall historical averages. As for how the S&P 500 has tended to perform going forward, short term performance has been weak with an average decline one week later. However, performance one month to one year out is much more consistently positive. That being said, average/median returns six months to one year out have been smaller than the norm.



Finally, we would note that the AAII survey was not the only sentiment indicator to have taken a bearish turn in recent weeks. Other weekly sentiment gauges like the Investors Intelligence survey of newsletter writers and the NAAIM Exposure Index have also turned lower. In the case of the former, the percentage of respondents reporting as bullish is back below 50% for the first time since the end of May. The latter similarly shows active managers are the least exposed to equities since the end of May. Combined with the AAII survey, our sentiment composite shows investors are only slightly more bullish than what has historically been normal.



Claims Seasonal Strength Fading
Thu, Aug 17, 2023

Jobless claims have continued to occupy the past several months' range between a low of 221K in late July and a high of 265K from a month earlier. This week, claims came in slightly below expectations of 240K falling to 239K. That compares to last week's reading of 248K which was at the higher end of the aforementioned range.



As we close in on the one year mark of last September's post pandemic and multi-decade low of 182K in initial claims, they have plateaued and are merely trending sideways. Of course, that is not to say claims are in a bad spot. Although claims have come well off that low, they have yet to move back above 300K. In fact, it has almost been 100 weeks since initial claims last printed a level of more than 300K which ranks as the third longest streak of sub-300K prints on record.



On a non-seasonally adjusted basis, claims actually dipped slightly in the latest week's data which is somewhat unusual from a seasonal perspective. As shown below, historically the past two weeks have marked modest seasonal bumps in claims before reaching a seasonal low in late August/early September. Worth noting, next week has been one of the most consistent weeks of the year to see unadjusted claims fall with a week over week drop 98% of the time.



Continuing claims are lagged an additional week to initial claims and the latest reading for the first week of August showed claims ticked back above 1.7 million. As shown below, that is only a modest turn higher as the overall trend of falling continuing claims appears to still be in place for the time being.



Now They Turn Bullish?
Posted on August 17, 2023

“When the facts change, I change my mind – what do you do, sir?” -John Maynard Keynes

One of the main reasons we were overweight equities at the start of this year was because virtually no one else was, as we explained in mid-December in Is Anyone Bullish?. Sure, there were a few bulls, but if you were bullish for the majority of this year you were crushed on social media, as it was obvious to everyone that a new bear market and recession were around the corner. Always remember what Joe Granville told us many years ago, “If it is obvious, it is obviously wrong.”

Then a funny thing happened. The economy surprised to the upside and stocks had one of their best starts to a year ever, with the Nasdaq having its best first six months ever.

Now wouldn’t you know it, we see many of those same bears changing their tune?

Mike Wilson over at Morgan Stanley is known for being one of the most bearish of the bears. He does great work and was quite right last year, but things haven’t worked so well this year, as at the start of the year he was looking for S&P 500 to go to 3,000. It’s currently around 4,400. Then two weeks ago he was saying we were in a 2019-like rally. He even apologized for being wrong on July 24 and upped his target to 3,900 this year. This by itself caught my attention that maybe it was time for some potential stock weakness when the biggest bear out there was changing his tune.



Carl Icahn is another big name who has been extremely bearish this year and is also changing his tune. In a letter to his investors sent earlier this month, he admitted he wagered too much against the stock market advance and will now focus less on hedging stocks and more on sticking to his activist strategy. “Our returns have been overwhelmed by our overly bearish view of the market,” Icahn said. “Going forward, we intend to stick to our knitting and focus on our activist strategy.”

So that’s two bears changing their views, but what about other signs?

Goldman Sachs hedge fund clients showed the cumulative dollar amount of short covering by hedge funds in June and July combined at the largest over a two-month period since 2016. It isn’t so cool (or prudent) to be bearish anymore is it? Here’s what the Wall Street Journal had to say.



One of my favorite monthly surveys is Bank of America’s Global Fund Manager Survey. This survey looks at real managers that manage hundreds of billions of dollars. The recent survey showed that sentiment was the least bearish since February 2022. Of course, one look at the below and it is clear that there are less bears than before, but by no means is this near what we’d call over-the-top optimism.



Another sign sentiment has shifted significantly is we are seeing bulls on magazine covers now. This recent MoneyWeek cover sure has a much different feel to it than we were seeing late last year. (But I must say I got a kick out of E.T. in the upper right-hand corner)



Speaking of last year, here’s a good reminder of what we were bombard with constantly. As horrible as a “100% chance” of a recession sounds, take note stocks formed a major bear market lows a few days before.



The economy continues to surprise nearly everyone to the upside and the Atlanta Fed is now expecting third-quarter GDP to come in at an incredible 5.8%! Take note the median expectation was for 0% at the start of the quarter, meaning half of all those economists surveyed expected negative growth! Well, that sure isn’t going to happen now. Reminds me of the old joke about why God created economists … to make weathermen look good!



One thing that has clearly worked this year and last year has been seasonality. We’ve been all over this, pointing out how bear markets tended to end in October, especially in midterm years, with the first half of pre-election years extremely bullish. That’s all played out exactly like history would have suggested, yet so many blatantly chose to ignore history.

Which brings us to now. Go read the quote from Keynes at the beginning one more time if you want. Some of the clues that had us bullish have been shifting, plain and simple. Let’s be clear, I don’t expect stocks to see a significant correction here, but some more modest weakness or consolidation would be perfectly normal. In fact, it’d be abnormal not to happen if you ask me.

Today we have some ‘johnny come lately’ bulls right as we entered a weak period historically. I discussed some of this two weeks ago in Stocks Don’t Like August, Now What? and I even joined Michael Santoli on CNBC on August 1st to discuss the increased likelihood of some volatility and weakness in August.

Here’s a chart I shared on Twitter (sorry, I’m not calling it X yet) that was quite popular. It showed that looking at prior years that were up at least 10% by the middle of the year tended to see some seasonal weakness right around here. Again, not a shock if you follow history. The good news is once you could get past that, the rest of the year tended to be strong with new highs happening later in the year. This is how we see 2023 potentially playing out as well, with potential new highs in the S&P 500 still our base case before the ball drops.



One final note is the S&P 500 recently closed beneath its 50-day moving average after being above it for more than four months. This got a lot of media attention and rightfully so. The good news (and I like to end on good news) is stocks did just fine when this triggered. In fact, since 1990, higher a month later eight of nine times and higher a year later (again) eight of nine times, but up more than 14% on average.



The bottom line is stocks had a great run, too many bears waved the white flag, and we entered a weak time seasonally. This is perfectly normal market behavior. We remain overweight equities here (like we have been since late December 2022), likely looking to use any continued weakness as an opportunity to add to positions.

Stable Housing
Wed, Aug 16, 2023

The latest reads on Housing Starts and Building Permits for the month of June were released earlier this morning and showed mixed results relative to expectations (starts slightly better than expected, permits modestly weaker). The table below breaks down the report by single and multi-family units as well as on a regional basis. Two notable trends that stand out in the table concern single-family vs multi-family and regional trends. First, for both starts and permits, single-family was stronger than multi on both a m/m and y/y basis. Single-family units have more of an economic impact, so it's good to see strength on that score. On a regional basis, we found it interesting to see that while most regions of the country experienced double-digit y/y increases in starts, permits in all-four regions were down by at least 9% on a y/y basis which would suggest that the pipeline for future starts is getting smaller.



Below are a couple notable charts worth highlighting from the report. On a 12-month average basis, both Housing Starts and Building Permits are down sharply from their early 2022 peaks, but the last few months have seen some stabilization in the pace of starts. Permits, meanwhile, remain stuck in their trend, and based on the current pace and where they were last fall, we're unlikely to see any stabilization in this reading over the course of the next few months.



Last but not least, the chart below compares the trend in Housing Starts over a three-month rolling basis to the performance of homebuilder stocks as tracked by the iShares Home Construction ETF (ITB), and it provides a great example of how the market is always looking past the headlines. Even as Housing Starts continued to crater in the middle of 2022, homebuilder stocks began what looked like an inexplicable rally, but just as stocks in the group peaked ahead of the peak in Housing Starts in April 2022, they also bottomed well before the February low.



Homebuilders Consolidating
Tue, Aug 15, 2023

As the national average for a 30-year fixed rate mortgage eclipsed 7.5%recently, homebuilder sentiment has turned lower. The Housing Market Index from the NAHB fell to 50 in August from 56 the previous month. That six point drop month over month ranks as the eleventh largest decline in the survey's nearly 40-year history.



Homebuilders reported significantly weaker sentiment across the board with mid-single digit declines for present and futures sales as well as traffic. Geographically likewise also saw broad declines. The West experienced the biggest drop and now has the lowest reading with respect to its historical range. Meanwhile, the Northeast index has managed to hold at a more historically healthy level, albeit it too fell significantly in August.



Homebuilder stocks are trading higher today, but they have come well off the early highs since the release of the sentiment numbers. As things stand for the group, the past month has seen the homebuilders consolidating as they continue to trade handily above their respective 50-DMAs.



Manufacturer Spending Plans Spin Around
Tue, Aug 15, 2023

The New York Fed published the first of regional manufacturing surveys this morning, and results were disappointing. Whereas last month saw a slightly expansionary reading of 1.1 in the headline index, the August reading fell firmly back into contraction at a level of -19 far exceeding forecasts of -1.



In the table below, we show each category of the report. As shown, the drop in the headline number was almost entirely driven by significant deterioration in new orders, shipments, and employment metrics. Breadth otherwise was actually fairly positive. As for six month expectations, readings across the board have been much healthier. In addition to significant increases month over month (many of which rank in the top decile of historical monthly changes), these readings are not as historically weak as their corresponding levels for the current condition indices.



As previously mentioned, the big drop in the headline index was largely driven by weakness in new orders and shipments. Each of those (as with the headline index) fell by more than 20 points month over month which ranks in the 3rd percentile of all monthly moves. That shift from slightly expansionary to historically contractionary readings is another bout of volatility in these readings consistent with big swings in previous months. Amidst that volatility, these readings have generally pointed to the side of demand having weakened, but expectations have begun to move in the opposite direction. As shown below, expectations indices for new orders, shipments, and unfilled orders have all reached the highest level since March 2022.



Both prices paid and received rebounded in August with those month over month increases coming in the 87th and 91st percentiles, respectively, of all monthly changes. In spite of those increases, that overall picture of prices trending lower remain in place.



As mentioned earlier, aside from new orders and shipments, employment metrics were the other point of weakness for current condition indices. However, number of employees is the most elevated category of all expectations indices after a 96th percentile month over month increase in August. Meanwhile, both capital expenditures and technology spending likewise experienced large month over month jumps in August. All combined, that would indicate a dramatic turnaround in manufacturing firms spending plans.

 

Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2023-



S&P sectors for the past week-

 

Here are the current major indices pullback/correction levels from 52WK highs as of week ending 8.18.23-


Here is also the pullback/correction levels from current prices-


Here are the current major indices rally levels from 52WK lows as of week ending 8.18.23-

 

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Here are the upcoming IPO's for this week-

 

Stock Market Analysis Video for August 18th, 2023
Video from AlphaTrends Brian Shannon


ShadowTrader Video Weekly 8/20/23
Video from ShadowTrader Peter Reznicek
(VIDEO NOT YET POSTED!)

 

StonkForumers! Come join us on our stock market competitions for this upcoming trading week ahead!-

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StonkForums Weekly Stock Picking Contest & SPX Sentiment Poll (8/21-8/25) <-- click there to cast your weekly market direction vote and stock picks for this coming week ahead!

Daily SPX Sentiment Poll for Monday (8/21) <-- click there to cast your daily market direction vote for this coming Monday ahead!

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It would be pretty sweet to see some of you join us and participate on these!

I hope you all have a fantastic weekend ahead!

 

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Here are the most anticipated Earnings Releases for this upcoming trading week ahead.

***Check mark next to the stock symbols denotes confirmed earnings release date & time***

Monday 8.21.23 Before Market Open:

Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES!

Monday 8.21.23 After Market Close:

Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Tuesday 8.22.23 Before Market Open:

Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Tuesday 8.22.23 After Market Close:

Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Wednesday 8.23.23 Before Market Open:

Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Wednesday 8.23.23 After Market Close:

Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Thursday 8.24.23 Before Market Open:

Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Thursday 8.24.23 After Market Close:

Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Friday 8.25.23 Before Market Open:

Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Friday 8.25.23 After Market Close:

Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES!

(NONE.)

 

And finally here is the most anticipated earnings calendar for this upcoming trading week ahead-
($NVDA $SNOW $MRVL $BIDU $AFRM $ZM $PTON $AAP $ULTA $MDT $KSS $M $INTU $LOW $CSIQ $SPLK $WDAY $ADI $TOL $FL $ADSK $GPS $DKS $JWN $BURL $WSM $DLTR $NTAP $TD $BBWI $BJ $DY $FUTU $FLXS $GRAB $ANF $LANC $FN $NDSN $IQ $RY $MNSO $COTY $OSIS $QFIN $LU $CLGN $WOOF $SCSC $WB)


If you guys want to view the full earnings post please see this thread here-

• Most Anticipated Earnings Releases for the week beginning August 21st, 2023 <-- click there to view!

 

Top of the morning StonkForumers! Happy Monday to all of you and welcome to the new trading week and a frrrrrrrrrrrresh start. Here is a quick check on those futures as we are a little over an hour from the US cash market open.

GLTA on this Monday, August the 21st, 2023!

 

Good Monday morning StonkForumers!

Here is this morning's pre-market news thread for those of you wanting to get a quick read before today's open-
<-- click there to read!

Hope everyone has a great new trading week ahead!

 

Morning Lineup - 8/21/23 - Stuck in a RUT
Mon, Aug 21, 2023

After a rough night in Asia as issues in China continue to weigh on growth prospects for the region (more on this in page five of today's Morning Lineup), European stocks pivoted right at the opening bell and are now firmly in positive territory to start the week. US futures are following the European lead and currently point to a 0.5% gain at the opening bell. While the S&P 500 was down on Friday ending what was its third negative week in a row, we would note that stocks pretty much opened at their lows of the day and drifted higher throughout the trading session.

For all the drama in markets on a day-to-day basis, the moves in the small-cap Russell 2000, often abbreviated as the 'RUT', have primarily been noise as the index has been stuck in a trading range for the last year. The 'valleys' of each sell-off have found support right around the pre-COVID highs in the 1,650/1,700 range multiple times since last summer, but each 'hill' has run out of steam right around 2,000. After the latest rally that began to take hold in late May petered out at the end of July, the Russell has pulled back just over 7% and finds itself smack dab in the middle of the 12-month range.



Looking at the Russell on a shorter-term basis, the pullback off the latest failed rally has been relatively swift, but one encouraging aspect so far has been that Friday’s 1.5% rebound off the intraday low occurred right around the 50-day moving average and at support from the uptrend off the early May low. Let's see if that bounce can hold in the days ahead and mark a higher valley for small caps and ultimately break the small cap index out of its rut.

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Monday, August 21st, 2023.

 

hey guys, just a quick heads up here. it appears i may be coming down with something (cold, flu, covid, etc?). not sure, but i might've caught it from someone at my sister's wedding the other week...pfft! =/

so to play it safe here, i've gone ahead and threw in all of the thread updates that i normally post towards the end of the week today in case i'm just not well enough to do it then.

markets appear to be chopping around a bit here, so not a whole heck of a lot going on. kinda quiet out there tbh. not sure what can get us moving decisively in either directions again. maybe nvda earnings on wednesday? who knows..

we will see if friday's jackson hole event brings about any notable volatility. i'm not sure if we'll see any huge spikes in vol yet still, absent your garden variety black swan.

appears to me like the market may be comfortable just chopping around here to close out this month but we will see. anything is certainly possible in this market.

i'm kinda just observing things from the outside nowadays and not trading. my IRL is truthfully a little too hectic to pay much attention to the daily action anymore. sucks, but it is what it is.

i'm hoping as we get closer to the fall season and with schools returning back in session that i'll get more time for this.

really do appreciate everyone's contributions to these threads every week as always!! can't say it enough

in case i'm not well enough to check in here rest of this week, will hope you all have a great rest of your trading week ahead!!!

 

Top of the morning StonkForumers! Happy Tuesday to all of you and welcome to the new trading day and a frrrrrrrrrrrresh start. Here is a quick check on those futures as we are a little over an hour from the US cash market open.

GLTA on this Tuesday, August the 22nd, 2023!