Stock Market Today: November 6th - 10th, 2023

Welcome StonkForums to the trading week of November 6th!

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.)

 

Bonds & Stocks Explode Higher As 'Bad' Data & Benign Powell Ease Financial Conditions
FRIDAY, NOV 03, 2023 - 04:00 PM

Best week of the year for stocks and bonds, 2nd worst week of the year for the dollar...

A smaller-than-expected (and less duration-extended) Treasury-Refunding kicked off this week's chaos, sending bond yields careening lower (and exciting long-duration stocks). A less-hawkish-than-expected Powell helped and weaker-than-expected macro data (bad news is good news) stoked the fire more to prompt a massive short-squeeze in both stocks and bonds.

That helped propel expectations for 2024 Fed rate-cuts dramatically higher, from 67bps of cuts to 110bps now priced in next year...



Source: Bloomberg

Significant softening in global macro data this week:

• German recessionary data: Retail Sales miss, Flash GDP turns negative on drop in consumption, German inflation data makes a two year low
  
  
• Eurozone flash (dis)inflation continues to fade with more “downside surprise,” making a two-year low and evidencing further confirmation of European economic contraction, especially with deeply negative ECB Bank Lending Survey, showing that Credit Demand is drying-up meaningfully
  
  
• Chinese contractionary Manu PMIs did the same
  
  
• UK Manu PMIs contractionary downside surprises as well
  
  
• Canada GDP print a back-to-back contraction in Q2 and Q3
  
  
• And then quite most importantly signs of a turn in US data...with a soft Manufacturing ISM which further fed the Treasuries squeeze earlier in week...then followed by this morning’s CRITICAL Labor / Wages data, with headline NFP “miss,” a prior down Revision of over 100k, and weaker AHE... massive, esp when adding in the Service- and Composite PMI “miss” along with the ISM Services and Employment downside prints too

Global growth scare?



Source: Bloomberg

Domestically, US macro serially disappointed as the impact of recent tightening financial conditions starts to weigh on the economy...



Source: Bloomberg

However, the headline macro index is misleading as it includes 'soft' survey data which has been - until this week - surging in the face of plunging 'hard' data. 'Hard' data is at its weakest since Oct 2022...



Source: Bloomberg

But, Financial Conditions eased dramatically at the end of this week (the biggest weekly easing since March) with the post-FOMC/TSY-Refunding collapse in yields sparking the biggest 2 day easing in a year...



Source: Bloomberg

All of which completely screws up The Fed's cunning plan to "let the market do its job".

When Powell hinted at The Fed being 'done', he unleashed a wave of buying in bonds, stocks, credit (and USD weakness) all of which eased financial conditions dramatically... much more of this and The Fed will be forced to actually do its job and hawkishly push back.

In other words, markets should stay range-bound as The Fed and The Market trade off the 'job' of tightening financial conditions.

As Nomura's Charlie McElligott notes, The Fed will soon risk the hilarity of “too much FCI EASING” which then risks UPSIDE surprises to data if it re-jiggers “Animal Spirits”...and may need to “talk it tighter” again soon, especially with the lone standout “upside surprise” today being the ISM Services Prices Paid BEAT.

For now, as we have warned, negative/bearish positioning helped spark a massive surge in stocks this week with Small Caps up over 8%. The Dow was the biggest loser, only managing a measly 5% gain on the week with Nasdaq and S&P around 6%...



Stocks are up 5 days in a row (S&P's first +1.5% or more day since May) - at a pace that seems to be capped...



Here's why stocks are suddenly melting up, as we have been warning...

Nasdaq had its best week since Nov 2022, but this was the Russell 2000's biggest weekly gain since June 2020 as it ripped hard to try and regain its 50DMA. The rest of the major all surged back above their 200DMA and 50DMAs...



The biggest short-squeeze in stocks in a year sent Small Caps soaring with a basket of the "most shorted" stocks up over 11% in the last 2 days (and the biggest weekly short-squeeze since January)...



Source: Bloomberg

...with shorts massively outperforming Hedge Fund's most important positions...



Source: Bloomberg

"Fear" has left the building...



Source: Bloomberg

Bonds were also dramatically bid with the long-end significantly outperforming...



Source: Bloomberg

Putting that in context, the entire curve has bull flattened hard...



Source: Bloomberg

TLT - the Treasury Bond ETF - saw its best week since the start of January, with the biggest 3-day climb since Oct 2022. This came as TLT call volume hit its highest in history...



Source: Goldman Sachs

This was the best week for a combined stock-bond portfolio since Nov 2022...



Source: Bloomberg

The dollar has fallen for 3 straight days - close the worse 3-day decline this year - back to its lowest since the September FOMC meeting...



Source: Bloomberg

After a couple of exciting weeks, crypto was relatively calm this week (despite a midweek surge up to $36,000 after The Fed), but hovered around $34,500...



Source: Bloomberg

A lack of escalation from Nasrallah's speech this morning sent oil prices significantly lower today (less fear of escalation). WTI is now below the pre-Israel-attack lows...



Gold (futures) held up this week above $2000, but considering the slump in the dollar, this was weak performance by the precious metal...



Finally, as a reminder, it's not just stocks that crashed in 1987. Bond yields collapsed too...



Source: Bloomberg

Imagine how much that would 'ease' financial conditions... and how quickly The Fed would need to step in to jawbone things 'tighter' again.

 

A Boomerang Bounce for US Stocks
Fri, Nov 3, 2023

It has been a great week for the US stock market with the S&P 500 ETF (SPY) up 5.9%. Unfortunately, that only gets the market back to where it was trading just over two weeks ago on October 17th! That's because SPY fell 5.9% from 10/17 through last Friday (10/27).

Right now SPY is stuck in a short-term downtrend after making a series of lower highs and lower lows since the end of July. From a technical perspective, SPY needs to make a "higher high" for things to look more positive. Today, the ETF got stuck as it approached its highs from mid-October, so it's not going to be easy.



The rally this week has been broad based, but the best performing stocks have been the names that did the worst in the 10 days prior. Below we've broken the large-cap Russell 1,000 into deciles (10 groups of 100 stocks each) based on stock performance during the market's decline from 10/17 to 10/27 (last Friday). As shown, the decile of the worst performing stocks during the 10/17-10/27 pullback is averaging the strongest gains during this week's rally.



Looking at individual stocks, below are the 30 best performing names this week in the Russell 1,000. At the top of the list is Roku (ROKU), which is up more than 50%! Another eight stocks are up more than 25% this week, including names like DoorDash (DASH), DraftKings (DKNG), Pinterest (PINS), Paramount (PARA), and Palantir (PLTR). Other noteworthy stocks up big this week include Wayfair (W), Block (SQ), Avis (CAR), Warner Bros. (WBD), Coinbase (COIN), TopBuild (BLD), and even Peloton (PTON).



Bears Shrug Off a Rally
Thu, Nov 2, 2023

Even though the S&P 500 has moved decisively higher over the past week, sentiment has entirely shrugged off price action. The percentage of respondents reporting as bullish to the AAII's weekly sentiment survey dropped back below 25% versus a reading of 29.3% last week. Bullish sentiment has now dropped for three straight weeks, having fallen 15.7 percentage points in that span for the largest three-week decline since August 24th. That has also resulted in the lowest bullish sentiment reading since May 18th.



That was matched with a rise in bearish sentiment back above 50%. That was the first time a majority of respondents reported as bearish since last December. As shown in the second chart below, the 44 consecutive weeks weeks without such a reading is sizeable, but far from any sort of record.





With new near-term lows in bulls and highs in bears, the spread between the two widened to 26 points in favor of bears. That is the most negative bull-bear spread reading since March



Other sentiment surveys echoed that negative tone among investors. The NAAIM Exposure Index was actually slightly higher week over week, although it continues to show low levels of long equity exposure. Meanwhile, like the AAII Bull-Bear spread, the Investors Intelligence survey also indicated the most bearish reading since March. Put together, our sentiment composite is now back below -1. That means the average sentiment reading is a full standard deviation more bearish than its historical average for the weakest reading since the first week of the year. Although current readings are rather pessimistic, due to the timing of data collection, the results would not have captured any response in sentiment following the FOMC on Wednesday. In other words, next week we will get a read if the latest updates on monetary policy had any effect on investor pessimism.



Continuing Claims Keep On Rising
Thu, Nov 2, 2023

Following up on yesterday's slowing ADP and JOLTS numbers, today's release of weekly jobless claims likewise showed a cooling labor market. Initial claims were revised up by 2K last week to 212K, and this week's number came in higher at 217K. That was 7K above expectations which would have assumed no change to claims. With the rise over the past two weeks, claims have now rounded out a bottom but still have significant headroom until reaching the highs from earlier this year.



Before seasonal adjustment, claims were slightly higher at 196.8K. That increase is consistent with seasonal patterns as claims tend to rise throughout Q4. For example, the current week of the year has historically seen claims rise week over week 83.9% of the time; one of the most consistent weeks of increases of the year. Granted, claims are experiencing the usual seasonal increase and have bottomed after seasonal adjustment, but current levels remain historically strong. For instance, this week's NSA number is right inline with those readings of the comparable week of the couple of years before the pandemic and 2022.



Continuing claims are a less rosy picture with a much greater and more consistent increase over the past several weeks. Since the recent low of 1.658 million put in place in early September, continuing claims have risen 9.65%. As shown below, that is certainly on the large side of historical increases in such a time span. In fact, most other times (though not always) claims have risen that rapidly, the economy has been in recession. Given that rise, seasonally adjusted continuing claims topped 1.8 million this week, which is the most elevated reading since April 15th and is only 43K below the recent high from the spring. Zooming further out, though, claims remain at historically strong levels.





Stocks in a Correction and the Best Month of the Year Is Here


“If there were ironclad rules, we would all be following them.” -Josh Brown of Ritholtz Wealth Management

Although we saw a late October bounce, the S&P 500 officially moved into correction territory last week. By definition, a correction is when stocks are down more than 10% from a recent peak, in this case, down more than 10% from the late July peak.

Yes, the past three months haven’t been very fun for bulls, but let’s put some context around market corrections. Going back to 1980, the average calendar year has experienced an average drawdown of 14.3%.22 out of 44 years saw stocks experience a peak-to-trough correction of 10% or more. Out of those 22 years that had a correction we found 12 years still managed to finish higher. So it is quite possible to see a correction and stocks still finish green on the year. Lastly, for the 12 years that saw a correction and still finished higher, the S&P 500 gained 17% on average for the year. So the bottom line is a correction is quite normal and a solid year, when all is said and done, is also quite normal when we have one.



According to our friends at Ned Davis Research, there are 1.1 corrections per year on average, again suggesting that while corrections aren’t fun, they’re not abnormal.



We will be the first to admit the depth of the weakness in October surprised us, but we also didn’t expect to see a major war break out in the Middle East. We remain optimistic for a year-end rally though, as the economy is showing very few signs of weakness, stock valuations are getting quite attractive, and overall sentiment is very negative.

Let’s talk about November for a second. Did you know this has been the best month of the year for the S&P 500? And it has been quite strong the past 10 and 20 years as well? Yes, you should never blindly invest based on just the calendar, but we wouldn’t ignore this information either.



We will end with two interesting studies increasing the odds of a year-end rally. The S&P 500 was down in each of the past three months, heading into the normally bullish month of November. It turns out persistent weakness ahead of November could be a positive sign for the remainder of the year, with November higher every time (back to 1950) and the final two months together tended to do well also. The last two times we’ve seen this were in 1990 and 2016, with both years experiencing big end of year rallies the final two months.



Lastly, stocks were lower in October, but still up on the year. October has seen some spectacular crashes, but this year saw more modest weakness, with stocks still up nicely for the year. We found that under this scenario stocks have been higher the past 7 times in November and the final two months together have been strong overall as well.



Net Short No More
Tue, Oct 31, 2023

In last night's Closer, we discussed the latest positioning data from the weekly Commitments of Traders report published by the CFTC. Released last Friday with data as of the prior Tuesday, the report would have captured October options expiration, and likely thanks to this, there were a number of significant changes to positioning across assets. As discussed last night, one key area that saw big changes was equities.

Perhaps the most notable of these was in S&P 500 futures. Whereas this past summer saw positioning shift to the most net short (meaning a higher share of open interest is positioned short versus long) levels in over a decade, the past few months have seen those readings steadily unwind, and last week marked the first net long reading since June 14, 2022. Meanwhile, the small-cap Russell 2,000 still remains deep in net short territory, although there was some improvement. The Russell went from a recent low of 14.3% net short only five weeks ago to 8.53% net short last week. That was the highest reading since March.



As previously mentioned, the S&P 500 is back to net long for the first time in well over a year. In fact, the streak of net short readings concluded at 70 straight weeks. That is now the longest such streak in the record of the data dating back to the late 1990s. The only other streak that comes close in length ended at 60 weeks in April 2016.



As for the Russell 2,000, its streak of net short positioning has also bene impressive at 135 weeks long. However, that is not even half the length of the previous record that lasted from the back half of the 2000s through the early 2010s. Put differently, positioning in Russell 2,000 futures has historically held a more pessimistic tilt with net short readings 72.5% of the time since data for the index begins in August 2002. Although current readings indicate there continue to be more speculators betting against rather than for the index, the recent rise also indicates there has been some improvement in optimism towards small caps.



Typical November Trading: Solid Start, Some Chop & Strong Finish

Being a bullish month, November has seven bullish days based upon S&P 500, with four occurring in the first five trading days of the month. This bullish stretch is visible in November’s seasonal chart with solid gains spanning the first six trading days. Following a strong open, the market has tended to drift sideways with some chop through mid-month and into the Thanksgiving holiday before rallying strongly to finish the month. Although historically a bullish month, November does have weak points. NASDAQ and Russell 2000 exhibit the greatest strength at the beginning and end of November. In pre-election years, performance in November has been softer, but full-month performance remains positive on average.

A Slow Correction
Mon, Oct 30, 2023

On Friday, the S&P 500 joined the Nasdaq in officially entering a correction having fallen over 10% from its July 31st high without a 10% rally in the interim. That is the 55th correction since 1952 when the five day trading week began, and as shown below, it was one of the longer streaks for the index to officially hit that 10% threshold. The median number of trading days across all corrections since 1952 to reach that 10% decline has been 32 days. That puts current correction at nearly twice as long at 63 trading days. That is the slowest (for lack of a better term) correction since May 2015 and April 2011 when it took 65 and 67 trading days, respectively. However, looking further back, there were much longer periods like 1980 when it took half a year.



As we have noted in the past, the S&P 500 entering correction is not exactly as scary as it may sound with regard to performance going forward. While there is always the chance that a correction will extend further (potentially becoming a bear market), historically, returns have been solid once the index first enters correction. In the chart below, we show the average one and five-year annualized performance of the S&P 500 from the day the S&P 500 first enters correction territory (the day the S&P closes 10% from a high without having a 10% rally in between). As shown, whereas any normal one-year period has seen the S&P average a gain of close to 9%, after the first close down 10% from a high, it has averaged an even stronger 10.6% gain over the following year. As for five-year annualized performance, periods after a correction tend to outperform the norm albeit by a much smaller margin.

 

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 11.3.23-


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 11.3.23-

 

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Here are the upcoming IPO's for this week-

 

Stock Market Analysis Video for November 3rd, 2023
Video from AlphaTrends Brian Shannon


ShadowTrader Video Weekly 11/5/23
Video from ShadowTrader Peter Reznicek

 

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 (11/6-11/10) <-- click there to cast your weekly market direction vote and stock picks for this coming week ahead!

Daily SPX Sentiment Poll for Monday (11/6) <-- 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 11.6.23 Before Market Open:

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

Monday 11.6.23 After Market Close:

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

(T.B.A.)

Tuesday 11.7.23 Before Market Open:

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

(T.B.A.)

Tuesday 11.7.23 After Market Close:

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

(T.B.A.)

Wednesday 11.8.23 Before Market Open:

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

(T.B.A.)

Wednesday 11.8.23 After Market Close:

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

(T.B.A.)

Thursday 11.9.23 Before Market Open:

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

(T.B.A.)

Thursday 11.9.23 After Market Close:

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

(T.B.A.)

Friday 11.10.23 Before Market Open:

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

(T.B.A.)

Friday 11.10.23 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-
($AMC $UBER $DIS $CELH $RIVN $DVN $PLUG $UPST $TWLO $U $TTD $OXY $RBLX $MARA $DDOG $DHI $WYNN $AFRM $FSR $MLCO $DUOL $HUBS $WBD $APPS $PBR $MOS $IONQ $WISH $GILD $BROS $AXON $CGC $SPCE $TOST $ACB $ARM $ZBH $LI $AKAM $NVAX $LCID $OTLY $VTRS $LYFT $CRSR $NVEI $CPNG $MODN $ACMR $EBAY)


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

• Most Anticipated Earnings Releases for the week beginning November 6th, 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, November the 6th, 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 - 11/6/23 - Please Don't Go
Mon, Nov 6, 2023

The market is catching its breath this morning after the big moves of last week. Equity futures, treasury yields, and crude oil are all modestly higher while the dollar follows through on its declines from last week. There's very little in the way of economic data this morning, and the pace of earnings has been relatively slow so far, but the pace will pick up later this afternoon and into tomorrow as earnings season remains in full swing- at least in terms of the number of reports.

Last week’s 5.82% gain for the S&P 500 was the best week of the year and the best week for the major US benchmark since the week ending November 11th from last year. With geo-political tensions remaining hot, earnings looking not so hot, and interest rates surging, the prospects for equities looked dim. You couldn’t fault an investor for thinking that it may be a good time to lighten up and sit things out for a bit until things cool off and some of the uncertainty recedes. As the market tends to prove time and time again, though, just when things look their worst, the market has a way of going the other way. In addition, timing the market remains one of, if not, the most difficult aspects of investing. Without fail in the markets, the best weeks tend to come when they’re least expected.

The chart below shows the growth of $100 invested in the S&P 500 at the start of 2010 (dividends not included) on both a buy-and-hold strategy as well as if an investor missed out on the best week of each calendar year. The gap is enormous. While the original $100 is now worth $390.85, had you missed out on the best week of each year, you would have less than half of that amount at $193.55. In other words, well over half of the gains since 2010 can be attributed to those 14 weeks. Admittedly, you could make the counterargument that most of the losses during this period have also occurred in a small number of weeks, but trying to successfully anticipate when these good weeks or down weeks will occur is IMPOSSIBLE. As “KC and the Sunshine Band” advised in 1979, “Please Don’t Go”.

 

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, November 6th, 2023.