Stock Market Today: September 19th - 23rd, 2022

Welcome StonkForums to the trading week of September 19th!

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 on Friday:


Economic Calendar for the Week Ahead:


What to Watch in the Week Ahead:

(N/A.)

 

FedEx Nukes "Economy's Doing Fine" Narrative, Global Stocks/Bonds Lose $4 Trillion In Week
While some 'soft' survey data provided opportunities for the narrative-writers to suggest hope remains, 'hard data' this week was not pretty at all (and prompted The Atlanta Fed to slash its Q3 GDP outlook). Bloomberg's macro surprise index (ex-survey data) tumbled to its weakest since July 2019...



Source: Bloomberg

Additionally, CPI wrecked the 'Fed Pivot' narrative, and given Powell's reiterated position that inflation is the priority - even if a recession is enabled - that sent inflation-fighting rate-hike expectations soaring this week (and notably sent subsequent recession-fighting rate-cut expectations soaring too)...



Source: Bloomberg

And then FedEx CEO last night confirmed a global recession was underway (which bodes very poorly for global PMIs)...



Source: Bloomberg

All of which stole the jam out of the global "peak inflation and Fed will pivot" narrative that bid stocks and bonds up for a few weeks... wiping out almost $4 trillion in wealth from debt and equity markets worldwide this week...



Source: Bloomberg

That's quite drop for the "strongest economic recovery in recent history"...

As Goldman's Chris Hussey noted late in the day today, this week saw the 'stag' in staglation-nation show its teeth:

Stagflation has been a market concern for about a year now as investors started to realize late last summer that the Fed may need to raise rates fairly aggressively to stave off emerging persistent inflation impulses.

Monetary tightening regimes seek to slow growth in an effort to reduce upward pressure on prices -- effectively to bring demand back inline with available supply. And such a tightening regime can be most successful when growth is slowed just enough to match up supply with demand -- a so-called soft landing -- but not so much so that demand actually declines, companies layoff a lot of workers, and the economy slips into a recession. And arguably the worst outcome from a tightening regime can come if growth declines, but for whatever reason, inflation does not recede -- a so-called stagflation economy, and one not seen in the US since the 1970s.

This week, however, the camp of investors who think that the current environment of high inflation and slowing growth will persist may have grown a bit on the back of the bad mix of data that was released. Essentially, we saw signs of growth slowing (the Philly Fed index fell to -9.9, and FDX talked about a sudden global slowdown in shipping volumes) and inflation rising (Core CPI inflation rose by 0.57% mom in August versus 0.3% a month earlier).



In a scenario where the Fed has to keep pushing against growth until the unemployment rate reaches 5%, we see S&P 500 down-side to 3400.

And in a scenario where unemployment hits 6%, the S&P 500 may dip below 2900. In other words, there may be a lot more downside to markets if stagflation persists.

Today was also quad witch (with $3.2 trillion in OpEx not helping the chaos) as Nasdaq ended the worst on the week, down almost 6%...



The Nasdaq is down over 14% from its mid-August highs, S&P and Dow are down over 10% from those highs...



Put volumes soared this week (outpacing the rise in call volumes) into OpEx, but we note the Put/Call ratio is back at the same level it was at in mid June that marked the interim low in stocks...



Source: Bloomberg

Treasury yields were up across the entire curve this week but the short-end was the big underperformer...



Source: Bloomberg

The yield curve (2s30s in this case) flattened hard this week, to its most inverted since Sept 2000...



Source: Bloomberg

As yields have soared, bonds are now at their 'cheapest' relative to bonds since Feb 2011...TINA has been Epstein'd



Source: Bloomberg

The Dollar surged higher this week,. extending gains after Tuesday morning's hot CPI print...



Source: Bloomberg

The offshore yuan puked for the 5th straight week to its lowest against the greenback since July 2020. Most notably, Beijing has been setting the onshore yuan fix dramatically stronger for 17 straight days as they attempt to show face and fight gravity...



Source: Bloomberg

Sterling fell to its lowest since 1985 today (on the anniversary of 'Black Wednesday')...



Source: Bloomberg

Cryptos were all weaker on the week with Ethereum - having successfully transitioned throug the Merge to a PoS protocol - the worst performer...



Source: Bloomberg

Dr.Copper & Mr.Crude both slid lower this week on global growth concerns (thouhg some comeback overnight after China's macro data miraculously beat). More noatble was the fact that Silver rallied on the week, dramatically outperforming silver...



Source: Bloomberg

The Gold/Silver ratio plunged on the week after silver hit its cheapest relative to the barabrous relic since the COVID crisis. The last two weeks have seen silver's biggest gains relative to gold since August 2020...



Source: Bloomberg

Spot Gold ended back below $1700 - its lowest since April 2020...



Source: Bloomberg

Finally, the S&P 500 has now closed below the 200-day for the longest time since the Financial Crisis...



Source: Bloomberg

And extending the Financial Crisis analog suggests this leg down won't stop until mid-to-late October...



Source: Bloomberg

But would Powell really come out and say something 'pivotal' that close to the election? CPI is released on October 13th?

 

Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2022-



S&P sectors for the past week-

 

What a Way to Start the Weekend
Fri, Sep 16, 2022

If you've been in a particularly bad mood heading into weekends this year, you're obviously paying pretty close attention to the markets. With today's decline, the S&P 500 is in the familiar position of ending the week with a decline of 1% or more. If the current declines hold up into the close, it will be the 12th daily drop of 1% or more to end a week this year. Going back to 1952 when the five trading day week started, there have only been five other years (1974, 2000, 2001, 2002, and 2008) where there were as many or more down 1% Fridays (or last trading day of the week) in a given year. As you might expect, all five of those years were lousy for the stock market.



While this year is currently tied for having the fourth-highest number of 1%+ down days, the year isn't even three-quarters done (heaven help us). After today there are still another 15 weeks left in the year, so there is plenty of time to move up the rankings. On a percentage basis, the S&P 500 has closed down at least 1% on the last trading day of the week just under a third (32.4%) of the time, and if that pace were to keep up for the remainder of the year, 2022 would easily set the record for the highest frequency of 1% declines to close out the week. Never have we needed a happy hour more than this year.



S&P 500 Down 25 of 32 Week After September Triple Witching, Average Loss 0.89%

On page 108 of the Stock Trader’s Almanac (see pinned tweet) we discuss the Aura of the Triple Witch, when stock options, stock index options and stock index futures all expire at the same time four times each year. It’s important as it usually increases volume and volatility.

The week after September options expiration week, has a dreadful history of declines most notably since 1990. Substantial and across the board gains have occurred just four times: 1998, 2001, 2010 and 2016 while many more weeks were hit with sizable losses.

Average losses since 1990 are even worse; DJIA –0.98%, S&P 500 –0.89%, NASDAQ –0.85% and Russell 2000 –1.44%. End-of-Q3 portfolio restructuring is the most likely explanation for this trend as managers trim summer holdings and position for the fourth quarter. And next week we have the Fed rate hike decision to contend with.

Full stats since 1982 since S&P index futures began trading April 21, 1982:



Bad CPI, ugly trading, but history of 4% daily declines shows good gains…eventually

Today’s hotter than anticipated CPI report was the bad that triggered the day’s ugly across-the-board declines. Surging Treasury bond yields hit NASDAQ the hardest, off 5.16% today. Tech-heavy S&P 500 was down 4.32% while DJIA was off 3.94%. Since 1950, S&P 500 has declined 4% or more in a single day 53 times before today. In those previous 53 occurrences, on the next trading day S&P 500 was higher 35 times and lower 18 with an average gain of 1.08% on all days. Based upon historical performance, the odds of a gain tomorrow are 66.04%.

However, the line chart of the 30 trading days before and 60 trading days after the last 53 greater than 4% drops does not suggest any significant advance in the near-term as S&P 500 only managed a modest recover, on average over the next 20-25 trading days (a typical month is generally 21 trading days). But the following table does showcase solid gains in the majority of occurrences when looking forward the next 3-, 6- and 12-months. S&P 500 was higher 82.7% of the time one year after a greater than 4% daily decline with an average gain over 25%.



11%+ Annualized - Not Bad for the 'Worst Trade Ever'
Mon, Sep 12, 2022

It has now been 14 years since Lehman Brothers' last day as a solvent company - an event that set off one of the biggest market meltdowns of all time. In hindsight, the events leading up to and after September 2008 may not seem all that bad. How quickly we forget. Three-quarters of a century removed from the Great Depression, most Americans had never given a second thought to the safety of the funds in their savings account or even money-market funds, but shortly after Lehman, these were legitimate concerns on the part of all Americans. People were actually going to ATMs and taking out extra cash to literally put 'under their mattress' just in case they woke up and the ATMs weren't working anymore.

Most of these extremes came after the Lehman bankruptcy, but the period leading up to Lehman wasn't a picnic either; that's actually why Lehman went belly-up. From the S&P 500's peak in October 2007 through 9/12/08, the S&P 500 was down over 20%. But after an early summer sell-off, the S&P 500 rallied from mid-July to mid-August before selling off into Labor Day. Heading into the weekend after Labor Day, the S&P 500 was down 4% from its mid-August high but appeared to be stabilizing at a higher low relative to July. With the S&P 500 still down 20% from its all-time high, you couldn't have faulted someone heading into the weekend for thinking "maybe I'll try to buy something on sale."



On 9/12/08, stocks may have been on sale relative to the October 2007 highs, but any buys on that day would quickly go down as one of the 'worst trades ever.' After Lehman announced its bankruptcy that weekend, cracks spread all over the financial district from a Wall Street parched of liquidity. September ended with a decline of nearly 10% but continued to get worse from there, and by the following March, the S&P 500 was down just under 46% - or 71% annualized - from its 'pre-Lehman' close'. Stocks that seemed cheap less than six months earlier were now down by nearly half, so getting back to even from there would pretty much require a double. Speaking from experience, any investor who bought any stocks in those six months quickly felt like the stupidest investor in the world.



While any equity purchases made 14 years ago just before Lehman collapsed quickly turned into some of the worst trades ever, time is an investor's best friend. Anyone who had time gradually looked less foolish. From a longer-term perspective, the decline from September 2008 to March 2009 still looks painful, but over time, the market (as it has to this point always done) dug itself out of its hole. The snowball effect of compounding has rewarded investors who were in it for the long haul. Not including dividends, the S&P 500 has rallied more than 227% since the Friday before Lehman's bankruptcy, and including dividends, it has delivered an annualized return of more than 11%. You'd probably sign the bottom line as fast as you could for an annualized return of 11% between now and 2036!

Not bad for what seemed like the "worst trade ever" at the time.



Buckle Up, Late September Can Be Rocky
Posted on September 16, 2022

We are winding down an absolutely awesome time at Carson’s Excell experience in Las Vegas. It has been a ton of fun meeting with our advisors, learning more about our industry, presenting our investment views, but best of all making new friends. If you want to come to the very best conference for advisors, please be sure to make it next year in Nashville.

Here’s a quick blog I put together (take note I’m running on fumes out here) that looks at seasonality and why late September and into October is one period that investors need to be aware can be bumpy.

First off, here’s your average year for the S&P 500. This time of year is fairly choppy, as stocks tend to catch their breath before the end of year surge.



Here’s a similar chart, but it looks at midterm years. Yes, right about now isn’t historically a bullish timeframe, but check out what tends to happen once you get later in the year and past the uncertainty of the midterm election. We are optimistic that history could repeat itself once again.



Zooming in some and it becomes even more clear that late September can be a slide down.



Another look at this is a popular chart we’ve shared before, but it really does a nice job of showing just how weak some of the upcoming days are for the S&P 500.



So buckle up, as the calendar isn’t doing to any near-term favors, but we remain overweight equities and think the low for the year is in and once we can get past this seasonally weak period, a nice end of year rally is quite possible.

Sentiment Contradicts Price Action
Thu, Sep 15, 2022

The S&P 500 may have fallen around 1.5% over the past week, but individual investors have reportedly become increasingly bullish. 26.1% of responses to the weekly AAII sentiment survey reported as bullish this week, up from a recent low of 18.1% last week. With the S&P 500's worst day in since June 2020 and a hotter-than-expected CPI print occurring late in the response collection period (12:01 AM on Thursday through 11:59 PM Wednesday night), the timing of responses is a potential cause for the increase in optimism that was contrary to equities' price action. In other words, responses that came in prior to Tuesday were likely far more bullish than those that came in afterward and therefore elevating the level of bullish sentiment. As such, next week will be a more telling read on individual investor sentiment as it will more fully capture recent price action and inflation data.



While bulls rose back above a quarter of responses, bears fell back below 50%. Bearish sentiment dropped to 46% which was only the lowest level since the week of August 24th.



Those moves meant the bull-bear spread rose 15.3 points week over week going from -35.2 up to -19.9. That was the largest one-week jump in the reading since the end of June. However, that indicates sentiment remains heavily in favor of pessimism as the streak of negative readings grows to 24 weeks long; the second longest streak of negative readings on record.





The AAII survey was not alone in showing a rebound in sentiment. Both the Investors Intelligence survey and the NAAIM Exposure Index highlighted increased bullishness in the latest week's data. As with the AAII survey, though, the collection periods likely did not fully capture the effects of Tuesday's inflation data and historic one-day decline. Overall, the story remains that investors are remarkably bearish.



4% Daily Drop with VIX Under 30 Unheard Of

Today’s bounce back was in line with the stats we posted yesterday, but the gains and trading were uninspired. What stuck out was the 4% drop came with VIX below 30 all day. Never happened before.

Since 1990 when VIX data began S&P 500 had 42 daily declines of 4% or more. Only 8 had a VIX print below 30 and zero that did not have a print above 30. 7 of the 8 opened below 30 and one hit a low below 30 intraday. VIX was below 30 all day 9/13/2022.

October 27, 1997 Asian contagion mini crash, February 5, 2018 inflation fear selloff and June 11, 2020 Covid second wave scare were one-offs. The rest were just the beginning of trouble. Triple Witching, end Q3, Fed decision, September’s bearish history, Octoberphobia, midterms could make the comps between now and then a little fuzzy. But September 15, 2008, was also Monday of Triple Witching Week – and that brings in the scary 2008 analog into play, but that’s for another day.

Big Gap Down Takes Out the 50-Day
Wed, Sep 14, 2022

Headed into Tuesday, the S&P 500 had been on a solid post-Labor Day rally, however, the hotter-than-expected CPI reading sent stocks reeling. After gapping down below its 50-day moving average, the S&P 500 (SPY) finished the day with a decline of over 4%. Additionally, another technical development of note as a result of yesterday's move was that the breakout above the past few weeks' downtrend line appears to have only been a pump fake.



While moves above or below the 50-DMA are a fairly common technical development, those similar to Tuesday are a bit rarer than might be expected at first glance. Prior to yesterday, the S&P 500 ETF (SPY) had only opened below its 50-DMA thanks to a gap down of at least 2% four other times since the ETF began trading in 1993: April 8, 1996, April 27, 2000, June 24, 2016, and February 24th, 2020. Looking across each of these instances, the 2020 occurrence was the only one that was followed by a prolonged period with the SPY staying below its 50-day. By comparison, the 1996 and 2000 instances saw the S&P continue to fluctuate around its 50-day in the months ahead. In fact, the April 2000 occurrence actually saw the S&P 500 rise back above its 50-day by the end of that same day. Meanwhile, the 2016 instance saw SPY quickly regain its losses as it traded above its 50-DMA for much of the next few months.



Pain in CPI
Tue, Sep 13, 2022

With investors expecting consumer prices to fall month-over-month heading into the day, this morning's higher-than-expected headline and core CPI reports caused an instantaneous reversal in market sentiment heading into the opening bell. While equity index futures were indicating a gain of around 75 basis points heading into the print, after the release, indications were for a decline of 2%. When the opening bell finally rang, the S&P 500 gapped down 2.27% as indicated by the tracking ETF - SPY.

Going back to 1998, today marked just the sixth time that SPY gapped down in excess of 2% on the day of a CPI release. As shown in the top of the table below, on four of the five prior 2%+ gaps down on CPI days, SPY not only gapped down by over 2%, but it continued lower throughout the trading day. While that doesn't necessarily bode well for today, we would note that on many of those prior occurrences, there were other overriding factors impacting the market. From the Russian debt default and collapse of Long-Term Capital Management (LTCM) in 1998 to the Financial Crisis in 2008, the US debt downgrade in 2011, and then COVID in 2020, on most of these other days, investors had other issues besides inflation to worry about. The only time that there wasn't another major issue impacting the market was on 5/14/99 when headline CPI exceeded forecasts by 0.3 ppts and core CPI exceeded consensus estimates by 0.2 ppts.

At the bottom of the table, we have listed every other time since 1998 that core CPI exceeded consensus forecasts by 0.3 ppts or more. Today's report is just the fourth time that core CPI has topped estimates by such a wide margin, but what stands out most is that every other prior occurrence since 1998 came after COVID. We noted numerous times in the past how COVID has created so many distortions in the economy that the job of forecasting it has become exceedingly difficult, and the fact that every 'beat' of this magnitude in core CPI has occurred since COVID only reinforces this point.

 

Here are the current major indices pullback/correction levels from ATHs as of week ending 9.16.22-


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


Here are the current major indices rally levels from correction low as of week ending 9.16.22-

 

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Here are the upcoming IPO's for this week-

 

Stock Market Analysis Video for September 16th, 2022
Video from AlphaTrends Brian Shannon


ShadowTrader Video Weekly 9/18/22
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 (9/19-9/23) <-- click there to cast your weekly market direction vote and stock picks for this coming week ahead!

Daily SPX Sentiment Poll for Monday (9/19) <-- 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 9.19.22 Before Market Open:

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

Monday 9.19.22 After Market Close:

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

(NONE.)

Tuesday 9.20.22 Before Market Open:

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

Tuesday 9.20.22 After Market Close:

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

Wednesday 9.21.22 Before Market Open:

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

Wednesday 9.21.22 After Market Close:

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

Thursday 9.22.22 Before Market Open:

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

Thursday 9.22.22 After Market Close:

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

Friday 9.23.22 Before Market Open:

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

(NONE.)

Friday 9.23.22 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-
($COST $AZO $FDX $ACN $GIS $ACB $DRI $LEN $APOG $KBH $FDS $SFIX $AJG $FUL $MANU $RLX $TCOM $CAMP $SCS $FLUX $IBEX $AIR $IVA $DCFC $DLNG $RSSS)


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

• Most Anticipated Earnings Releases for the week beginning September 19th, 2022 <-- click there to view!

 

Top of the morning StonkForumers! Happy Monday to all and welcome to the new trading week 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 Monday, September the 19th, 2022!

 

Morning Lineup - 9/19/22 - More of the Same
Mon, Sep 19, 2022

There's very little in the way of economic or earnings data this morning, the Fed is in its blackout period, and the buyback window is closed. Therefore, there appears to be very little in the way of catalysts to interrupt the current path of equities which has been lower and interest rates which have been higher. Futures are indicating a decline of about 0.75% at the open for the S&P 500, and the 10-year yield is above 3.5%. The only economic report on the calendar today is homebuilder sentiment, and given the moves in interest rates, it's hard to imagine an upside surprise.

The negative start to this week follows what was a lousy week for not just US equities but equities all over the world. US stocks were easily the worst performers last week with the S&P 500 (SPY) and Nasdaq 100 (QQQ) both falling 5%, but other major regional equity ETFs all fell at least 2.5%. Of the nine ETFs listed below, they are all at least 4% below their 50-DMAs, all of them are oversold, and all but three (SPY, ACWI, and VPL) are down 20% YTD. It’s not even three-quarters finished, but 2022 is already shaping up to be one of the worst in the post-WWII period for not just US stocks but stocks all over the world.

 

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, September 19th, 2022.

 

Top of the morning StonkForumers! Happy Tuesday to all and welcome to the new trading day and a fresh start. Here is a quick check on those futures as we are a little under 4 hours from the cash market open.

GLTA on this Tuesday, September the 20th, 2022!

 

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 - 9/20/22 - Weak Start as Fed Meeting Begins
Tue, Sep 20, 2022

Just like yesterday, futures are lower this morning as interest rates continue to make new multi-year highs while crude oil is marginally higher. The major news event of the overnight session was a 100 basis point rate hike from Sweden's Riksbank. That was the largest rate hike for the central bank since 1992. In economic news, Germany's headline PPI increased 7.9% month over month. Yes, you read that right- month over month. In the US, Building Permits and Housing Starts came in mixed relative to expectations. Housing Starts were expected to come in roughly unchanged at 1.45 million, but the actual reading came in at 1.575 million. Building Permits, however, missed expectations by just about as much as starts beat (1.517 million vs 1.610 million consensus forecast).

As has been the case for most of the year, interest rates are on the rise again this morning. The 2-year and 10-year US Treasury yields are up about 4 basis points (bps) pushing both up to new multi-year highs. What’s somewhat notable about the moves in the last 24 hours is that for the first time in just over three months, both the 2 and 10-year yields are at 52-week highs.

In the case of the 2-year yield, its yield has been hitting 52-week highs pretty much every day since Labor Day, but the 10-year yield only took out its June highs yesterday. No matter how many times we say it, it’s hard to imagine that less than nine months ago, ten-year yields were at 1.5% while two-year yields were less than 0.75%.

 

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, September 20th, 2022.