Stock Market Today: October 9th - 13th, 2023

Welcome StonkForums to the trading week of October 9th!

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.)

 

Big Squeeze Saves Stocks From Bond Bloodbath
FRIDAY, OCT 06, 2023 - 04:00 PM

'Hard' data collapsed further this week with 'soft' data staying near cycle highs as today's jobs data offered something for everyone with stalling wage growth (yay, we beat inflation), a jump in job gains (yay, growth and a soft landing), but a scratch or two below the surface of the 6-signa headline beat and things are not so pretty after all...



Source: Bloomberg

Financial Conditions continued to tighten aggressively this week, having turned after the July FOMC and now near the tightest it has been during this cycle...



Source: Bloomberg

Today saw a hawkish shift in rate-change expectations but on the week, 2023's curve moved higher (slightly higher chances of more hikes) and 2024's curve was flat to slightly lower (modest chance of more cuts)...



Source: Bloomberg

US stocks were bolstered in morning trading by the largest buy imbalance since mid-July and short cover. Momentum can beget more upside momentum in stocks.

Around 1140ET a massive buy program hit and smashed stocks higher...



Source: Bloomberg

At the same time, the 'most shorted' stocks basket also went vertical...



Source: Bloomberg

By the end of the week, thanks to today's meltup, Nasdaq ended significantly higher on the week (along with the S&P). The Dow ended the week marginally lower while Small Caps lagged 2% in the red...



Tech and Healthcare were the only sectors green on the week with Energy the ugliest horse in the glue factory...



Healthcare was helped by the GLP-1 Analogs going bid...



Source: Bloomberg

VIX didn't even make it to 20 this morning as payrolls hit and stocks and bonds dumped. And then it just collapsed down to bear 17 the figure....



One big options trader potentially had a bad day. Chatter was a large VIX Call buyer stepped in early this morning ahead of the payrolls print, betting on a blowout number...



They got the blowout number, and for a split second things looked good, then everything reversed lower



And the aggressive positioning and reversal can be seen in SpotGamma's HIRO indicator as the trader was forced to unwind his calls at a loss...



Still, at least he wasn't long bonds this week!

Bonds were clubbed like a baby seal this week, most notably the long-end, but today's chaotic reversal put a little lipstick on the bond pig...



Source: Bloomberg

It all had a very technical feel with yields spiking on the payrolls print and running stops from earlier in the week before collapsing back lower...



Source: Bloomberg

The yield curve (2s30s) bear steepened most of the week, surging back up to a key level... next stop 'un-inverted'



Source: Bloomberg

The dollar ended higher on the week, even with today's pump-and-dump...



Source: Bloomberg

Bitcoin was its usual chaotic self this week, but ended higher (Friday to Friday), back above 28k...



Source: Bloomberg

Gold (spot) ended lower on the week, despite today's bounce...



Source: Bloomberg

Ugly week for the energy complex with WTI puking down to a $81 handle intraday - 6-week lows...



Source: Bloomberg

Finally, Goldman notes that The 60bp increase in 10-year Treasury yields this year is starting to have an impact on stock valuations as the S&P 500 is now down about 7% from the 2023 high it hit back in late July. But higher rates don't just impact how much you pay for a company. Higher rates can also weigh on the amount of money a company earns...



...and as the chart above shows , this year, S&P 500 companies are staring down the biggest increase in borrowing costs since 2006.

Making 5%-plus lending money to the US government certainly raises the bar for the level of corporate performance needed to attract investors...



Source: Bloomberg

...TINA's not back yet.

 

More Healthy Claims Data
Thu, Oct 5, 2023

Following up on a disappointing ADP employment number yesterday, today's release of weekly jobless claims also indicated a modest deterioration in labor market data. Seasonally adjusted initial claims have risen in back-to-back weeks up to 207K. On the bright side, that was below expectations and is only a minor increase as claims remain below their range from throughout the spring and summer this year. Additionally, in the low 200K range, claims are still at a historically healthy level.



Before seasonal adjustment, claims were actually lower at 172.78K. In one sense, that lower reading is not exactly surprising as week-over-week declines have been observed roughly 70% of the time historically in the current week of the year. However, what is now more unusual is that it sets a new low on the year. As we have frequently noted in recent weeks, this time of year typically sees claims put in an annual low, but the new low this week is a bit later than normal. In fact, outside of the pandemic years (2020 and 2021) when claims were historically volatile, the last time an annual low occurred this late in the year was 2014. Prior to that, 1967, 1980, 2000, and 2011 were the only other years with an annual low in the 39th week or later. In other words, claims have remained strong, and seasonal headwinds haven't yet seemed to come into play in any impactful way.



Like initial claims, seasonally adjusted continuing claims came in stronger than expected at 1.664 million. That is a tiny drop from 1.665 million the previous week but is still off of the low of 1.658 million from two weeks prior. In all, that leaves claims at historically strong levels with a modest multi-month downtrend still in place.



S&P 500 Slide Further Hits Sentiment
Thu, Oct 5, 2023

The S&P 500 has continued to hit new lows in the past week, and some sentiment readings have reflected that negative tone. The AAII sentiment survey was not necessarily one of those as this week saw a mixed result. For starters, bullish sentiment actually ticked up to 30.1% from 27.8%. That ends a streak of three straight weeks of declines as bullish sentiment was above 40% as recently as the first week of September.



While bullish sentiment went the other way of price action, bears did increase slightly from 40.9% to 41.6%. That brings the total increase in bears over the past three weeks to 12.4%, the largest three-week increase since late August.



That means that on net, AAII sentiment actually shifted slightly more bullish this week. The bull-bear spread continues to be negative (meaning more investors are reporting bearish than bullish sentiment), but that reading was higher at -11.5 this week.



Other sentiment surveys were not as hopeful. Both the NAAIM Exposure index and Investors Intelligence survey saw readings shift more bearish in the latest week's data. In fact, both of those surveys' readings have been more bearish week over week in each of the past three weeks. All plugged into our sentiment composite, that has outweighed the modestly more bullish reading in the AAII survey. As a result, the composite indicates sentiment levels are 0.69 standard deviations more bearish than what has historically been the norm. While not exactly an extreme, especially in the wake of the past couple of years, that is the most bearish read on sentiment in just over six months.



That’s Cracked! Consumers May See Relief at the Pump Despite High Oil Prices
Posted on October 3, 2023

It seems like there’s always one shoe or another ready to drop on the economy. There were fears over a government shutdown (punted for now) which Ryan wrote about, along with the restart of student loan payments and strikes. Other issues that have investors worried are another bank crisis (like Silicon Valley Bank), or a commercial real estate crash. I don’t want to minimize these issues but often, it’s things that most people are not talking about that could potentially have a greater impact.

One thing that could upset the economic apple cart is an energy price shock. Falling energy prices have been the main force driving inflation from 9.1% in June 2022 to 3.7% as of August, as measured by the Consumer Price Index (CPI). However, oil prices have been rising since July, and a month ago I wrote about an energy price shock being my biggest concern.

The problem with rising energy prices is that they can adversely impact the economy in several different ways. The most immediate impact is via higher pump prices, especially if that forces consumers to cut back elsewhere. Then you have the impact of higher diesel prices on freight and even food prices. Higher jet fuel prices can raise airfares. All of which could lead the Fed to tighten policy a lot more. We saw this happen last year when inflation-adjusted incomes fell while energy prices surged.

The bad news is that oil prices have surged about 14% since I wrote that piece, taking West Texas Intermediate crude (WTI) to above $90 a barrel. That’s the highest level since last November.



However, we’ve caught a lucky break. Nationwide average gas prices at the pump have more or less remained flat over the last couple of months.



This has surprised a lot of people, but there’s a good reason why gas prices haven’t surged.

Oil prices are not the only thing that determine gas prices, or even diesel prices. Another major factor (and a volatile one) is refining spreads, which is directly tied to refiners’ margins. Refining or “crack” spreads are the price difference between crude oil and refined product. Here’s a schematic from the Energy Information Administration (EIA) showing what makes up prices at the pump. Oil prices account for just about 50%, while refining spreads make up 20-25% of the rest.



The chart below shows crack spreads for gasoline, and a few things stand out. Spreads spiked last summer, contributing to high inflation. They pulled back soon after that but started to rise again over the first seven months of this year. Which is part of the reason gas prices at the pump also climbed over the same period. However, crack spreads have crashed 74% since the end of July, falling all the way down to pre-pandemic levels. This has offset the recent surge in crude oil prices.



In fact, signs suggest that there may be more relief coming at the pump, with gasoline futures falling 15% over the past month. That’s going to be a tailwind for households.

Of course, gas prices can just as easily go up again, especially if oil prices continue to climb and crack spreads reverse. This is something I’m keeping an eye on because it matters to the economy. For now, we continue to overweight the energy sector in our portfolios, and hold energy commodities as well, which works as a hedge in the event of an energy shock.

Typical Octoberphobia! Brace Yourself

High interest rates have spooked the market in the very scary market month of October. But as we’ve told you: October is a bear-killer, bargain month and turnaround month. It looks like the anticipated correction is now upon us. As of today’s close, from the recent summer highs DJIA is –8.0%, S&P -8.5% and NASDAQ -9.9% respectively.

Everyone has been chattering about the coming big Q4 rally and how October is when stocks selloff. Well, here you are. Seasonal patterns have been tracking all year. And we’ve been on the sidelines in short term bonds and cash since our late June MACD Seasonal Sell Signal. Our Seasonal MACD Buy Signal is setting up extremely well. To Wit: Buy In October and Get Your Portfolio Sober!

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Over the last twenty-one years, the full month of October has been a solid month for the market, ranking #2 for DJIA and NASDAQ, #4 for S&P 500. DJIA, S&P 500, NASDAQ, Russell 1000 and Russell 2000 have all recorded gains ranging from 1.3% by Russell 2000 to 2.2% by NASDAQ. But these gains have come with volatile trading, most notably during the early days of the month.

October has opened softly with modest average gains on its first trading day. On the second day, all five indexes have been weak followed by a rebound on the third trading day before additional weakness pulled the market lower through the seventh trading day. At which point, the market has historically found support and begun to rally through mid-month and beyond.

In pre-election years since 1950, October has been stronger in the first half of the month and weaker in the second half. October 1987’s substantial declines heavily influence the pre-election year pattern.

Lower Daily Lows Becoming the Norm
Wed, Oct 4, 2023

While maybe not as relentless as the move higher in rates over the last two months, selling in equities has been pretty consistent. In the year-to-date chart of the S&P 500 tracking ETF (SPY) below, we show the last 50 trading days in gray to point out that there have been an extremely large number of days during this span where the day's intraday low was lower than the prior day's low. We highlighted this trend in a Chart of the Day last week, but it has remained pronounced since then. In total, 33 of the last 50 trading days have seen SPY make a lower low relative to the prior day's intraday low, and if SPY falls below $420.18 today, it would be a record 34 days in a trailing 50-trading day period where the ETF made a lower low relative to the prior day's low.



The chart below shows the number of days over a rolling 50-day period where SPY made lower lows, and at a level of 33, the current period is tied with three others (March 2022, October 2008, and March 2008) for the most since SPY's inception in 1993. You don't need us to tell you that none of these periods were positive for the market. What makes the current period unique is that the magnitude of the decline during this period has been relatively mild at less than 10%. During each of the three other periods, SPY was down at least 10% from a 52-week high and as much as 45% (October 2008).



Labor Demand Holds Up
Tue, Oct 3, 2023

This morning we received two of the latest updates on labor market demand with the release of the August JOLTS report in addition to postings data from Indeed through the end of September. The JOLTS report came in well above expectations (9.61 million versus 8.83 expected) indicating a solid rebound in labor market demand headed out of the summer. In spite of that positive reading, the overall trend of lower openings remains in place and is echoed by Indeed's data. As shown below, the more timely and higher frequency postings data has also been trending lower since the end of 2021. That being said, the summer has seen those declines decelerating with postings only slightly lower over the past three months. Modeling the JOLTS number on the less lagged Indeed data would predict that postings would remain around these levels next month. In tonight's Closer, we will provide a full rundown of the latest JOLTS report.



In addition to national reads on job postings, the Indeed data also provides geographic breakdowns by US metro, and in the table below, we highlight the 25 MSAs (metropolitan statistical area) that have seen the best and worst postings growth relative to pre-pandemic baselines as well as how far they have fallen from their respective peaks (we highlight when each of those peaks were as well). Many of those with the highest number of openings relative to pre-pandemic are also those with smaller populations. Conversely, many of the largest metros have seen job postings fall off the most. There have also been a growing number of cities where postings are now below pre-pandemic levels. San Francisco is the worst of these with postings down nearly 20% from baseline.



Rocky Road Ahead?
Mon, Oct 2, 2023

After a relatively dismal two months for stocks, the market kicked off what has historically been its strongest period of the year today. In the post-WWII period, the S&P 500's average performance in Q4 has been a gain of 4.1%, which is more than double the 2.0% average gains of Q1 and Q2 and ten times the average gain of Q3 (0.4%).



While Q4 has been positive for equities, the month of October has historically been volatile. Since 1945, the spread between the month's daily closing high and closing low has been 7.1%. While the average spread for every month except October fits within a 1.3 percentage point range of 4.7% to 6.0%, October is all alone at more than a full percentage point from the high end of that range.



With Q4 being the strongest quarter of the year and October being the most volatile month, they don't call October the month of market bottoms for nothing. In looking back at every market decline of at least 5% (without a rally of 5%+ in between), market lows have easily been the most prevalent in October. As shown in the chart below, 33 (14.4%) of the 'market lows' since 1945 have occurred in October, and the only two other months that account for even 10% of all market lows were March and September. Seasonality is on the side of bulls heading into Q4, but that doesn't mean the road is smoothly paved.

 

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 10.6.23-


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 10.6.23-

 

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Here are the upcoming IPO's for this week-

 

Stock Market Analysis Video for October 6th, 2023
Video from AlphaTrends Brian Shannon


ShadowTrader Video Weekly 10/8/23
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 (10/9-10/13) <-- click there to cast your weekly market direction vote and stock picks for this coming week ahead!

Daily SPX Sentiment Poll for Monday (10/9) <-- 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 10.9.23 Before Market Open:

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

Monday 10.9.23 After Market Close:

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

(T.B.A.)

Tuesday 10.10.23 Before Market Open:

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

(T.B.A.)

Tuesday 10.10.23 After Market Close:

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

(T.B.A.)

Wednesday 10.11.23 Before Market Open:

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

(T.B.A.)

Wednesday 10.11.23 After Market Close:

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

(T.B.A.)

Thursday 10.12.23 Before Market Open:

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

(T.B.A.)

Thursday 10.12.23 After Market Close:

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

(T.B.A.)

Friday 10.13.23 Before Market Open:

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

(T.B.A.)

Friday 10.13.23 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-
($PEP $JPM $DAL $WBA $UNH $BLK $C $APLD $DPZ $WFC $CMC $NEOG $PGR $PNC $AZZ $ETWO $SGH $FAST $RELL $BYRN $CMTL $INFY $FRCOY $SOTK $SVNDY)


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

• Most Anticipated Earnings Releases for the week beginning October 9th, 2023 <-- click there to view!

 

Earnings Season Begins! Here are the Most Anticipated Earnings Releases for the next 5 weeks.
($TSLA $AAPL $NFLX $PEP $META $JPM $DAL $BA $SOFI $WBA $UNH $BAC $QCOM $APLD $BLK $CLF $C $LLY $T $AAL $XOM $TSM $UAL $INTC $IBM $NVO $VZ $PG $DPZ $NEOG $ASML $JNJ $PFE $SQ $WFC $ISRG $CVNA $CMC $AA $LMT $GS $F $KO $PGR $PNC)

 

Good afternoon 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 3 hours into the US cash market open.

GLTA on this Monday, October the 9th, 2023!

 

Morning Lineup - 10/9/23 - Geo Political Turmoil
Mon, Oct 9, 2023

Whenever we get a major episode of geo-political unrest, especially when it pertains to the Middle East, there are some things you can count on in the market- equity futures trade lower while oil, gold, and treasuries rally. This morning has been no different. Equity futures are trading over half a percent lower, gold is up 1%, and after a horrendous week for crude oil, WTI is trading up over 3.5%. Turning to the bond market, with banks closed for Columbus Day, there is no official trading in the treasury market, but you can get an idea of where the market stands by looking at other areas of the market. Treasury-linked ETFs are one example. In pre-market trading today, the iShares 20 Plus Year Treasury ETF (TLT) is trading higher, but the gains are hardly convincing.

As shown in the image below from Google Finance, as we type this, TLT is trading up 10 cents this morning or 0.12%. That would only be enough to erase a fraction of Friday’s losses or basically the declines that took place in the last eight or nine minutes of trading. That’s how bad the current environment is for the US Treasury market right now. Not even a major outbreak of geo-political violence can spark a rally these days.

 

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, October 9th, 2023.