Stock Market Today: September 25th - 29th, 2023

Welcome StonkForums to the trading week of September 25th!

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.)

 

'Higher For Longer' Reality-Check Wrecks Bonds, Banks, & Big-Tech
FRIDAY, SEP 22, 2023 - 04:00 PM

Despite being told - for months - that The Fed wanted to keep rates "higher for longer" and that a 'pause' is not the start of a rate-cut cycle, markets ignored it... until this week. As the following chart of Google Trends shows, it appears people are 'believers' once again...


The Fed's blackout window lifts and the jawboning begins - and everyone said the same thing: "higher for longer":

• *FED'S COLLINS: FURTHER FED HIKES 'CERTAINLY NOT OFF THE TABLE', EXPECT RATES MAY HAVE TO STAY HIGHER FOR LONGER
  
  
• *FED's BOWMAN: MORE RATE HIKES LIKELY NEEDED TO GET INFLATION TO 2%, NEED TO REPEAT MONETARY POLICY ISN'T ON PRESET COURSE
  
  
• *FED'S DALY: I DON'T GET TO A POINT WHERE I'M READY TO DECLARE VICTORY, UNLIKELY INFLATION WILL REACH 2% GOAL IN 2024

On the week, between the data, the SEP, and the FedSpeak, the market has repriced its expectations for The Fed's rate trajectory significantly with rate-hike odds in 2023 lower and rate-cut odds in 2024 significantly lower...



Source: Bloomberg

And bear in mind that the supposed 'strength' in US macro data has been driven by 'soft' survey data as 'hard' real data has tanked...



Source: Bloomberg

Small Caps (heavily shorted) and Nasdaq (mega-cap tech, long duration) were the hardest hit on the week with the S&P close behind. The Dow was the prettiest horse in the glue factory, down around 2% on the week. Overall, US equities closed "on the lows" ugly going out...



The choppiness seen in the last hour or so was driven by the market's big shift to a negative gamma market...



Source: SpotGamma

All the majors closed below key technical levels...



"Most Shorted" stocks are on pace to see their second straight month of declines (and 7th down week of the last 8). This was the biggest weekly decline in the short-basket since March...



Source: Bloomberg

As Goldman traders noted, "It feels like sell-the-rally mode (and the market is susceptible locally to a squeeze given the quick pick-up in shorts). Overall, the equity market seems to be suggesting that economic growth expectations are being downgraded, and soft-landing trades are at risk."

As Vanda Research notes, inflows into the artificial intelligence (AI) sector continue to decline.

Companies such as MSFT, IONQ, AI, as well as NVDA and PLTR are all witnessing diminishing interest from retail investors.



As we extensively analyzed in earlier reports, the combination of waning retail demand and cautious risk sentiment among institutional investors may pose a substantial risk to the AI sector, potentially heralding a pronounced reversal in the weeks ahead.

It's a long way down...



Source: Bloomberg

VIX jumped back above 17 on the week (which is a relatively big deal given its compression of late)...



UBS traders noted that high Touch flow skewed to the sell side from Monday through Thursday as Long Only took profits and Tax loss selling picked up. Long Only and Hedge Funds turn buyer Friday.

Market downdraft and VIX uptick trigger systematic fund selling.

Retail continues to sell single stocks against ETFs albeit at a reduced pace this week.

Derivative desk did not see investors chase the downside as positioning already defensive, and the focus remains on sector rotations.

Derivative flows have been large counter-trend to the bid to vols with a massive about of overwriting supply hitting the tape.

The synchronized slide across stocks, bonds and many commodities hammered risk parity players, as evidenced by the $926 million RPAR Risk Parity ETF suffering its worst day since December and sent the fund to its lowest in 10 months...



Source: Bloomberg

Treasury yields were all higher on the week, despite a pullback today, with the curve basically converging and yields up 9-11bps across the curve...



Source: Bloomberg

For context, the 2Y yield erased most of Wednesday's post-Powell spike...



Source: Bloomberg

The dollar rallied on the week (up for the 8th week of the last 9)...



Source: Bloomberg

Bitcoin was noisy on the week but basically closed unch around $26,500...



Source: Bloomberg

Oil prices caused lots of excitement intraweek but ended unchanged with WTI hovering around $90.50...



Gold was flat on the week, breaking below its 200DMA...



..., but rallying back this afternoon to get back to that key technical level...



Finally, this morning's PMIs confirmed the overall trend of slowing growth (contraction in manufacturing and low growth in services) along with re-accelerating inflation (prices paid bouncing). That stagflation regime change is evident on a global scale...



Source: Bloomberg

How long before all the 'on hold' central banks start tightening again? Or is the next move a widespread deflationary malaise that brings out the doves?

 

Low Volatility Streak Ends at 102 Days – What’s Next?

Yesterday the S&P 500 daily streak without a greater than 1.5% daily loss came to end. What happens next? Expanding on our initial research we present the S&P 500 performance during the following three days after the last 42 “big down days” since 1950.

Historically the following day has essentially been a coin toss, up slightly more than half the time with an average gain of just 0.001%. The second day after is modestly more bullish, but still not overwhelmingly so, up 54.8% of the time with an average gain of 54.8%. The third day after has been bearish, down 59.5% of the time with an average loss of 0.19%. In the near term, it appears the S&P 500 tends to bounce around while trader and investors digest the full impacts to the catalyst that triggered the “big down day.” This time it was the Fed clearly stating that rates will be higher for longer and are likely to go higher yet.

Expanding the timeframe does not improve the near-term outlook. In the following monster table, performance on the “big down day” and to the subsequent low sometime during the next 90 calendar days have been added. “Big down day” losses are now excluded from the performance 1-week, 2-weeks, 1-month, and 3-months after.



Over the following 90 calendar days, the low on the “big down day’ was breached 88.1% of the time. Only five times did the S&P 500 not make a lower low, 1961, 1963, 1965, 1968 and 2017. The average decline was 5.44%. The lower low arrived within 2 weeks, 14 times, and took more than 2 weeks 23 times. This suggests the quicker the S&P 500 can shake off its current concerns, the better, but if they persist then more volatility and chop is likely along with sideways to lower trading.

We still anticipate additional weakness through September and potentially into October. September-Octoberphobia combined with inflation and rate fears is likely to trigger further market weakness over the next month or so. The potential for another federal government shutdown is also rising and could weigh on the market. We do, however, expect this weakness to be temporary, in the minor correction range of 5-10% from recent highs in July/early-August. And this should set up our perennial pre-election year Q4 rally and a solid “Best Months” Seasonal MACD Buy Signal.

100, 99, 98, 97...
Fri, Sep 22, 2023

Today marks the 265th day of the year, meaning there are just 100 days left in what still seems like a new year. Heading into the home stretch, the market certainly looks tired as stocks have erased much of the gains they posted in the late spring/early summer rally. If history is any use, though, equity performance in the final 100 days of the year tends to be positive. In the top chart below, we show the S&P 500's performance during the last 100 days of the year dating back to 1945, and for each year where the market was up over 10% heading into the last 100 days, we colored the bars dark blue. The overwhelming majority of the time, the S&P 500 traded higher during the last 100-day homestretch, but there were some big exceptions, notably 1987 (-22.7%), 2008 (-25.2%), and 2018 (-14.4%). In 1987 the S&P 500 was up 31% heading into the last 100 days, in 2008 it was down 18% heading into the last 100 days, and in 2018, it was up 9% before the plunge. In other words, a large plunge could come at any time.

Even taking the large plunges described above into account, the S&P 500's median gain in the last 100 days of the year has been a gain of 4.1% with positive returns 78% of the time, and for years when the S&P 500 was already up 10%, the rest-of-year returns are nearly identical. So as we get ready to wrap up 2023, the wind is at the market's back, although just because the winds are favorable doesn't mean the boat still can't spring a leak. Fair Winds and Following Seas!



Claims Back the Hawks
Thu, Sep 21, 2023

Among the reasons given for yesterday's "hawkish hold" at the FOMC meeting was that employment readings "remain strong". This morning's release of weekly jobless claims backed that up. Seasonally adjusted initial claims have begun to fall back down towards recent lows in the past few months, and today's print brought it to a new short-term low of 201K. That compares to expectations for an increase of 4K up to 225K. The recent decline brings claims down to the lowest level since January and just 21K above the multi-decade low reached almost exactly one year ago.



On a non-seasonally adjusted basis, claims are also very healthy. Claims were little changed week over week, remaining near the annual low. Relative to the comparable week of the year in years past, the most recent reading is above that of last year, but right in line with levels from 2018 and 2019. Entering Q4, jobless claims will begin to face some seasonal headwinds and will likely head higher through the end of the year.



As for continuing jobless claims, recent trends have been much calmer as they have not seen any sort of dramatic swing lower. That's not to say, however, that continuing claims have not improved. The reading has continued to trend lower and at 1.662 million it is at the lowest level since January.



Sentiment Drops Ahead of the Fed
Thu, Sep 21, 2023

The latest weekly sentiment surveys would have missed any reaction to the FOMC yesterday due to timing of data collection. However, leading up to equities' drop in reaction to a hawkish Fed, sentiment was already headed in a pessimistic direction. As shown below, the American Association of Individual Investors weekly sentiment survey saw bullish sentiment drop for a second week in a row last week. At 31.3% bullish, sentiment is down to the lowest level since June.



Bearish sentiment rose from 29.2% up to 34.6%. That is only the highest reading in a month given neutral sentiment picked up a larger share of losses to bullish sentiment the previous week.



While the increase in respondents reporting as bearish has been somewhat tame, the inverse moves this week have resulted in the bull-bear spread dipping back into negative territory. That means there are currently more investors reporting as bearish than bullish.



Below, we take a rolling average of the past year's readings in bullish and bearish sentiment. By this measure, bears again hold the upper hand having averaged 38.0% in the past year whereas bulls have averaged 30.4%. In the case of bullish sentiment, that remains a historically low reading as the average has generally trended lower over the past two decades while the reverse is true of bearish sentiment. That being said, there has been some reversion over the past few months with bearish sentiment falling and bullish sentiment rising towards more historically normal readings. In other words, over time, sentiment has taken a structurally higher bearish tilt, and 2022 saw that nearly reach a pinnacle. This year, though, has seen somewhat more normal but still elevated sentiment.



Dividends (DVY) Get Payback on Growth (VUG)
Tue, Sep 19, 2023

Checking in on our Trend Analyzer tool, the clear biggest losers over the past week have been growth stocks. As shown in the snapshot below, almost all of the growth ETFs regardless of market cap have fallen over 1% in the past week. Although these are the same groups that have posted some of the biggest gains on a year to date basis, that recent drop has brought them back below their 50-DMAs with some like the Russell Mid-Cap Growth ETF (IWP) and small-cap Russell 2,000 Growth ETF (IWO) falling into oversold territory.

On the other end of the spectrum, there are only a small handful of ETFs in this screen that have risen over the past five days. The strongest of those has been the Select Dividend ETF (DVY) with a nearly 1% gain in the past week. That has cut into modest year to date declines (few other ETFs in this screen are also down year to date, but those are also dividend or low volatility focuses). In other words, price action over the past week has to some degree been a rotation of year to date performance.



In the charts below, we show the ratio of the Dividend ETF (DVY) versus the Growth ETF (VUG). The ratio has been in a steep downtrend throughout 2023 meaning growth has trumped dividend payers. However, this month's reversal of that outperformance has resulted in the ratio to break out of that downtrend. Zooming out, that rebound in the ratio has also coincided with an uptrend line off of late 2020 and 2021 lows. Time will tell how lasting this reversal in relative performance will be, but from a purely technical standpoint, it has come at a logical point.



Housing Starts and Building Permits Go Separate Ways
Tue, Sep 19, 2023

Building Permits and Housing Starts are always reported on the same day, but today's report for the month of August was one of the more bizarre ones we've seen in some time. While Building Permits topped consensus forecasts by 100K (1.54 million vs 1.44 million), Housing Starts had a big miss coming in at just 1.28 million versus forecasts for a pace of 1.44 million. In the case of Starts, it was the biggest miss relative to expectations since February 2019 and the weakest monthly print since June 2020. In terms of the divergent results relative to expectations, going back to at least 2002, it was the first time that either Building Permits or Housing Starts missed expectations by at least 100K while the other beat forecasts by at least 100K.

As shown in the table below, all of the strength and weakness in this month's report was due to fluctuations in multi-family units. While multi-family starts were down 26% m/m, multi-family permits were up 16% m/m. Single-family units, meanwhile, were much more restrained with starts down just 4% while permits were up 2%. Thus, what looked like a very volatile report at the surface was more grounded below the surface.



Looking at Housing Starts on a 12-month average basis shows that activity has slowed sharply over the last year. At an average of 1.41 million over the last twelve months, total Housing Starts were the lowest in August since February 2021.



Again, while overall starts and permits have been driven by swings in multi-family units, both single-family permits and starts have actually started to stabilize and turn higher over the last two months. If that trend can continue in the months ahead, it would be a positive shift in the trend.



The Dirty Dozen
Mon, Sep 18, 2023

The later part of September has historically been one of the weakest periods of the year for the S&P 500, and last year was especially painful. The chart below shows the percentage of S&P 500 stocks that posted positive returns from the close on 9/18 through the end of September over the last ten years. Since 2013, there have only been two years where more than half of the index's components managed to eke out a gain during this period. The average over the last ten years was just 36% which is a pretty low number when you think about it. Even that looks good, though, when you look last year when just 2% of stocks in the S&P 500 managed to rally during the last twelve days of September!



The table below lists the seventeen S&P 500 stocks that have traded down from the close on 9/18 through month end at least nine out of ten times over the last ten years. Of those seventeen stocks, four - Viatris (VTRS), Sealed Air (SEE), Simon Property (SPG), and Johnson & Johnson (JNJ) have traded lower during this period in each of the last ten years. That being said, the range of declines varies widely from a median decline of 5.89% for VTRS to less than 1% for JNJ. Besides those four stocks another 13 stocks in the S&P 500 have traded lower during this period in nine of the last ten years, including names like Freeport-McMoRan (FCX), Discover (DFS), and CVS Health (CVS).



Some stocks have managed to buck the late September blues, though. O'Reilly Automotive (ORLY) was one of the few stocks to rally between 9/18 and the end of September last year, and it's traded higher during this period in eight of the last ten years for a median gain of 1.73%. ORLY is the only stock to trade higher during this period in eight of the last ten years, but Automatic Data Processing (ADP), WR Berkley (WRB), and Tyler Technology (TYL) have traded higher 70% of the time, and just seventeen other stocks have traded up at least half of the time. Some of the more well-known names in this cohort include, Domino's (DPZ), Chipotle (CMG), Cisco (CSCO), and IBM. Unless you've been heavily exposed to these stocks in the later part of September over the last ten years, you're probably counting the minutes until October!

 

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 9.22.23-


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 9.22.23-

 

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Here are the upcoming IPO's for this week-

 

Stock Market Analysis Video for September 22nd, 2023
Video from AlphaTrends Brian Shannon


ShadowTrader Video Weekly 9/24/23
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 (9/25-9/29) <-- click there to cast your weekly market direction vote and stock picks for this coming week ahead!

Daily SPX Sentiment Poll for Monday (9/25) <-- 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 9.25.23 Before Market Open:

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

Monday 9.25.23 After Market Close:

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

(T.B.A.)

Tuesday 9.26.23 Before Market Open:

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

(T.B.A.)

Tuesday 9.26.23 After Market Close:

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

(T.B.A.)

Wednesday 9.27.23 Before Market Open:

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

(T.B.A.)

Wednesday 9.27.23 After Market Close:

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

(T.B.A.)

Thursday 9.28.23 Before Market Open:

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

(T.B.A.)

Thursday 9.28.23 After Market Close:

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

(T.B.A.)

Friday 9.29.23 Before Market Open:

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

(T.B.A.)

Friday 9.29.23 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-
($COST $CCL $NKE $MU $ACN $KMX $CTAS $THO $FERG $JBL $PAYX $BB $SNX $AIR $NAPA $CNXC $FUL $UNFI $WOR $THTX $MLKN $MTN $NBTX $JEF $PRGS $AYTU $SANG)


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

• Most Anticipated Earnings Releases for the week beginning September 25th, 2023 <-- click there to view!

 

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 2 hours into the US cash market open.

GLTA on this Monday, September the 25th, 2023!

 

Morning Lineup - 9/25/23 - It's Almost Over
Mon, Sep 25, 2023

The September sag continued this morning as equity futures, which were higher overnight, steadily drifted lower to their lows of the session. The culprit this morning once again is higher yields where the 10-year yield has moved back above 4.5% even as the 2-year yield is basically flat. The threat of a government shutdown, which now looks increasingly likely, hasn’t helped either. Not all the news is bad this morning, though, as Hollywood writers have reached a tentative deal, and even the UAW has announced progress in talks with the Big 3 automakers.

There’s still a week left in the month that can’t end soon enough, but if you think this September’s 4.2% decline has been bad so far, remember that last year at this time, the S&P 500 was down 6.6% and then fell an additional 2.9% in the last week of the month. The year before (2021), the S&P 500 was down 1.6% at this point (before falling 3.2%) in the last week, and in 2020, the index was down 7.5% month to date (MTD) through 9/23 before rebounding 3.9% in the last week of the month.

The chart below summarizes the historical performance since 1952 (when the five-day trading week in its current form started) of the S&P 500 in the last week of September based on how the index performed MTD up until the last week. Unfortunately for bulls, the weakest returns to close out the month have come in years when the index was already down by as much or more than it is now. In the 16 years that the S&P 500 was down 3%+ MTD, its median performance in the last week of the month was a decline of 0.67% with positive returns less than 40% of the time. That’s more than twice the decline of the next closest category (up 3%+) and is the only performance range where the index was up less than 40% of the time.

 

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 25th, 2023.

 

Good afternoon StonkForumers! Happy Tuesday 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 over 2 hours into the US cash market open.

GLTA on this Tuesday, September the 26th, 2023!

 

Morning Lineup - 9/26/23 - Getting Real
Tue, Sep 26, 2023

Rising yields and oil prices have been two major headwinds to equity prices over the last two months, but this morning both are lower, and equity futures still don’t care. After some sizable losses overnight in Asia and Europe this morning, investors see little incentive to step up and buy. Especially when the CEO of the country's largest bank says that the market may not be ready for 7% interest rates. Other drivers of the weakness in Asia were news that Chinese real estate developer Evergrande missed an interest payment, higher-than-expected inflation data out of Japan, and a much weaker-than-expected report on Industrial Production out of Singapore. On the docket this morning in the US, we’ll get July home price data at 9 AM and then New Home Sales and Consumer Confidence at 10 AM.

We’ve talked about the weakening breadth of the US equity market frequently since the summer peak, but things have also been weakening on an international level as the declines from the summer highs start to get real. For example, we’ve seen a winnowing of the number of major international equity benchmarks trading above the 200-day moving averages. The chart below shows the current price versus the 200-DMA spread of the benchmark equity indices of the world’s 25 largest economies. At 3.4% above its 200-DMA, the US ranks relatively well trailing only Brazil, India, Japan, Russia, Turkey, and Argentina. While the double-digit percentage spreads of Argentina and Turkey look impressive, keep in mind that inflation in these two countries is in the range of 60% to 130% on a y/y basis. On the downside, China is the only country trading more than 5% below its 200-DMA, but Belgium and the Netherlands are getting close.



Overall, just over half of the 25 countries shown above are trading above their 200-DMAs which is down from over 100% in late July. Interestingly, while there have been plenty of times when every index was trading above its 200-DMA, there hasn't been a period since 2000 when all of them were trading below their respective 200-DMAs. Again, though, that’s partially a reflection of the fact that when you have some countries dealing with near triple-digit inflation, it’s hard not to have a rising stock market, unless the country is completely imploding.



What’s notable about the current level of indices trading above their 200-DMAs is that we have now gone 218 trading days with more than half of all indices above each of theirs. As shown in the chart below, since 2000, there have only been seven other periods where the percentage was above 50% for even longer. Unless global markets turn higher in the next couple of days, it’s highly likely that we’ll drop below 50% at some point soon. That probably wouldn’t be looked at as a positive development, but sometimes you need the market to break a little bit before it can get back on track.

 

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 26th, 2023.

 

Good afternoon 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 over 2 hours into the US cash market open.

GLTA on this Wednesday, September the 27th, 2023!