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

Good Tuesday 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 day ahead!

 

Morning Lineup - 8/22/23 - Bond Buyers Striking Out
Tue, Aug 22, 2023

On this day 34 years ago, Nolan Ryan came out to the mound in the top of the fifth inning against the A’s, and up to the plate stepped Ricky Henderson. Everyone knows that Ricky was known for his ability to draw walks, but he wouldn’t this time. After working a full count, he struck out swinging giving Ryan his 5,000th strikeout and putting him alone in the 5,000-club of strikeouts. It’s been more than a generation since Ryan notched his 5,000 K, but to this day no other pitcher has reached that level in their career. Randy Johnson (4,875) and Roger Clemens (4.672) got close, but the closest active players aren’t even in the same ballpark. Forever is a long-time, but with 5,714 strikeouts in his career and the way pitchers are coddled now, Ryan’s record may just be unbreakable.

Holders of long-term US Treasuries probably feel just like any of the batters coming up to the plate with the “Ryan Express” on the mound. Earlier this month, we highlighted the fact that the iShares 20+ US Treasury ETF (TLT) traded to its most oversold level in its history when on 8/3 it closed 3.8 standard deviations below its 50-day moving average.



Looking at the price of TLT relative to its trading range over the last year, you can see that it has been in oversold territory all month. While the degree to which it is oversold is nowhere near as much as it was earlier this month, it remains deeply oversold.



As bad as the last month has been, this year hasn’t been nearly as bad for TLT as last year. So far this year, TLT has closed at oversold levels for 48 trading days, which would put it on pace for 75 this year or once about every three to four trading days. That’s high, but it’s still less than half of last year’s total of 158 oversold days, and relative to the 20 prior years of trading for TLT, there have been six other years where TLT notched more than 75 daily closes in oversold territory. So, it’s been bad, but maybe more Don Sutton bad (3,574 career strikeouts) than Nolan Ryan bad.

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Tuesday, August 22nd, 2023.

 

Top of the morning StonkForumers! Happy Hump Day 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 under 10 minutes from the US cash market open.

GLTA on this Wednesday, August the 23rd, 2023!

 

Morning Lineup - 8/23/23 - Ending Before it Even Starts
Wed, Aug 23, 2023

A few hours ago, it appeared as though we’d be seeing a respectable rally to start the trading day, but much of the gains have faded and there’s still nearly an hour left before the opening bell. The pullback this morning has come in tandem with a sell-off in European stocks which are well of their highs of the day, and one catalyst has been a batch of mixed PMI readings for August. While activity in the manufacturing sector did not shrink by as much as expected, Eurozone services sector activity unexpectedly contracted. In Asia, most major indices were positive during the session, but China was a notable laggard as the CSI 300 fell 1.64% taking its MTD decline to just under 8%.

Weakness in China has really acted as a drag on the performance of Emerging Markets as an asset class as the country accounts for 30% of the entire index, but closer to home, Mexico, which has a much smaller representation in the index, has been moving in the exact opposite direction. The chart below shows the performance of the iShares China (MCHI) and Mexico (EWW) ETFs over the last ten years. While the two ETFs performed similarly with each other from August 2013 through August 2015, they really started to diverge from late 2015 through the onset of COVID, and as concerns over supply chains intensified during the pandemic, Mexico’s renaissance began. Despite periods in the last ten years where the performance of the two ETFs couldn’t have been more divergent, through yesterday’s close their performances was very similar; the MSCI China ETF (MCHI) was down 2.49% over the last ten years, while Mexico (EWW) was down 4.33%. On the chart, Mexico looks like the reflection of China much as the way a mountain range reflects on a lake.



The chart below shows the relative strength of EWW relative to MCHI over the last decade, and this chart further illustrates the roller coaster of Mexico relative to China. From late 2013 right through the onset of COVID, China steadily outperformed Mexico, but with the onset of COVID, the trend reversed abruptly, and in the span of three years has erased seven years of underperformance.

 

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, August 23rd, 2023.

 

thx for the well wishes here guys! today appears to be the peak of whatever i caught. home tests for COVID came out negative so that's good. but, wow, this one certainly packed quite the punch. will be resting all day, and likely will be out of commission rest of this week unfortunately. will still try to update the game threads whenever i can. have a great rest of your week guys!! and thx again for all you guys do to keep these thread active every week. can't say it enough!! love y'all's bigly time.