Stock Market Today: September 5th - 9th, 2022

Morning Lineup - 9/7/22 - Eight in a Row?
Wed, Sep 7, 2022

The above quote from the ConocoPhillips (COP) CEO from earlier this year was referring to the energy policy of the United States, but it could just as equally have been used as a response to this morning's WSJ article that the FOMC is planning on a 75 bps rate hike at its September meeting. Whatever your views are regarding the path of inflation and whether a 75 bps hike is actually needed, the impacts will create some level of hardship on what is already a weakening economy. Chair Powell has admitted as much in numerous comments saying that the FOMC's fight to reverse the post-COVID inflation surge will be 'painful'.

Futures were modestly higher before the WSJ article was published but have since reversed into negative territory with the S&P 500 indicated to open down by 0.30% with the Nasdaq indicated lower by a similar amount. The Nasdaq is already down seven straight days, which is the longest losing streak since November 2016, and that streak ultimately went on for nine days before ending. Crude oil prices are modestly lower and treasury yields are lower as well.

Maybe we were just overdue for a losing streak like the Nasdaq is currently in the midst of now. Before this one, the last losing streak of seven trading days was right before the 2016 election, and the gap of 1,466 trading days between these two streaks was the longest in the Nasdaq's history. Prior to the current period, the longest gap between 7-day streaks was from late 2001 until 2006, and the only other gap of over 1,000 trading days ended in January 2016.

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Wednesday, September 7th, 2022.

 

Top of the morning StonkForumers! Happy Thursday to all of you! And welcome to the new trading day and a fresh start. Here is a quick check on those futures as we are a little over 2 hours from the cash market open.

GLTA on this Thursday, September the 8th, 2022!

 

Morning Lineup - 9/8/22 - Listless Trading
Thu, Sep 8, 2022

Futures have been trading rangebound around the unchanged line this morning as the ECB rate decision (hiked rates by 75 bps pretty much as expected) and lower-than-expected initial jobless claims have caused a pickup in trading activity generally in a lower direction. The only other indicator on the calendar in the US is Consumer Credit at 3 PM Eastern. Besides the data, there are plenty of investor conferences and even some Fedspeak on the calendar, so be on the lookout for tape bombs throughout the day.

New UK PM Liz Truss has announced a number of initiatives to help alleviate stress from surging energy prices. In a more long-term measure, she announced a lift of the ban on fracking and plans to approve more drilling for oil. In a more short-term-based measure, the new PM also announced a price cap on energy prices for consumers to take effect for the next two years. That should provide short-term relief, but the quote from Gerald Ford above should serve as a reminder - while prices may be capped, consumers will have to pay for it in some way (either through higher taxes or restrictions on the amount of energy one can use).

Investors have been able to buy and sell long-term US Treasuries via ETFs through the iShares 20+ Year US Treasury ETF (TLT) for just about 20 years now. In the first few years of the TLT’s existence, volatility in the ETF was what you would expect for a US Treasury – low. From 2003 through early 2007, the average daily move of TLT over a trailing 200-day period ranged between 0.30% and 0.70%.

Once the housing market crashed and the Financial Crisis set in, volatility in TLT surged with the average daily move breaching 1% on its way to 1.10%. As markets stabilized in 2009, volatility pulled back but never quite back down to its pre-Financial Crisis range. Then in 2011, volatility surged again as the US had its long-term credit rating downgraded in August 2011. Average daily volatility peaked in that period several months later in April 2012 and then began a multi-year decline to a range of around 0.50% per day.

Like everything else in the economy, COVID wreaked havoc on the Treasury market pushing the average daily move in TLT back up above 1%, but the exaggerated volatility was short-lived, and the market quickly returned to more stable levels by June 2021. The period of calm was just as short-lived, though. As the Fed found religion regarding inflation in late 2021 pushing long-term rates higher, volatility has once again surged. Just yesterday, the 200-day average daily move in TLT once again topped 1% for the first time since June 2020. How long this period of heightened volatility lasts remains to be seen, but if rhetoric on the part of Fed officials is to be believed, a return to calm seems a long way off.

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Thursday, September 8th, 2022.

 

Top of the morning StonkForumers! Happy Friday to all of you! And welcome to the final trading day of this week and a fresh start. Here is a quick check on those futures as we are a little over 4 hours from the cash market open.

GLTA on this Friday, September the 9th, 2022!

 

Good Friday 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 final trading day of this week ahead today.

 

Morning Lineup - 9/9/22 - Closing on a Positive Note
Fri, Sep 9, 2022

After its longest losing streak in years ended earlier this week, the Nasdaq is now on pace for a third straight day of gains and a positive week for stocks. The last time the Nasdaq was up three days in a row was to close out July. The catalyst for this morning's rally appears to be weaker-than-expected inflation data out of China and some weakness in the dollar. Treasury yields are flat to lower even as crude oil is up over 1%.

While she was queen 15 different prime ministers served under Queen Elizabeth II. That’s a lot! Another statistic we found interesting was that during her reign there were also 13 separate bear markets in the US (20%+ declines from a high on a closing basis with no rallies of 20%+ in between), including one where the S&P 500 declined over 50% and another where it dropped over 48%. Besides those, there were five other bear markets where the S&P 500 lost more than one-third of its value. In economic terms, there have been eleven confirmed recessions in the US since the Queen was coronated in 1953, and we could be on the verge of a twelfth now.

During each of these economic and market downturns, it probably felt like the end of the world, and you couldn’t have faulted someone for panicking at the moment, but with the benefit of hindsight, each of those periods ended up being nothing more than a bump in the road (some more than others). During the Queen’s reign, the S&P 500 rallied more than 16,000% or more than 7.6% annualized before even taking dividends into account. With dividends, the annualized rate of return is over 10%. US Real GDP per capita over that same period increased by three and a half times rising from $17,093 to $59,288. With the benefit of all that experience, if you had told the Queen that the economy was contracting or that stocks were on the verge of a bear market, rather than pull her hair out and freak out, instead, in her normally calm demeanor, she would have likely responded with something along the lines of “been there, done that”.

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Friday, September 9th, 2022.

 

A Year of Friday Action
Fri, Sep 9, 2022

There's still time left in the trading day which means that anything can happen, but the equity market is on pace to close out the week with a gain or loss of 1%+ for the 22nd time this year. Going back to 1953 when the five-trading day week started on the NYSE, there have only been four other years where the S&P 500 rallied or declined at least 1% on the final trading day of the week (there have been another six where there were 20). The only years where there were more 1% moves to close out the week were 1974 (23), 2000 (25), 2002 (23), and 2008 (26). Keep in mind, though, that while this year is just four off the record-high pace, there are still 16 weeks left in the year! The year is only two-thirds complete, but already Fridays have seen a lot of action.



To make more of an apples-to-apples comparison, on a percentage basis, 61% of all weeks this year have closed out with a one-day move of at least 1%. Granted, it's not a full year of prices yet, but in prior years since 1953, there was never a year where the S&P 500 closed out the trading week with a gain or loss of at least 1% more than half of the time. In 2008, half of all weeks ended with moves of that magnitude while the percentage in 2000 was 48.1%, and 1974 and 2002 each closed out the week with 1%+ moves 44% of the time. These levels of volatility are a far cry from a year like 2017 when there wasn't a single Friday that the S&P 500 rallied or declined 1%.