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Stock Market Today: October 14th - 18th, 2024

Discussion in 'Stock Market Today' started by bigbear0083, Sep 29, 2024.

  1. bigbear0083

    bigbear0083 Administrator
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    Welcome to the trading week of October 14th!

    Dow jumps 400 points to a record on Friday, S&P 500 closes above 5,800 for the first time: Live updates

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    The S&P 500 and Dow Jones Industrial Average powered to new highs on Friday and capped off a winning week as banking behemoths ushered in a promising start to the third-quarter earnings season.

    The broad index gained 0.61% to end at 5,815.03, while the Dow rallied 409.74 points, or 0.97%, to finish at 42,863.86. Both averages hit fresh all-time highs and closed at records. The Nasdaq Composite added 0.33% to finish at 18,342.94 and less than 2% below its all-time high.

    “What we’re seeing — and I think you’re seeing it hit pretty hard today, in a good way — is a broadening of the market,” said Craig Sterling, head of U.S. equity research at Amundi US.

    The major averages also registered a fifth straight week of gains. The S&P 500 and Nasdaq jumped 1.1% each, while the Dow toted a 1.2% gain.

    A strong start to the third-quarter earnings season provided a lift to stocks. JPMorgan Chase rose 4.4% after topping profit and revenue expectations, while Wells Fargo popped 5.6% on stronger-than-expected profits. Investors overlooked disappointing revenue and an 11% decline in net interest income.

    “Net interest income used to be the bellwether of whether [a] bank is doing well or not,” said Kim Forrest, chief investment officer at Bokeh Capital Partners. “Investors have comprehended that they’ll make money in good times and bad.”

    Wall Street tends to view the banking sector as a barometer for the health of economy, setting the tone for the remainder of the earnings season. However, Forrest notes they lack the visibility into forward guidance that often impacts the post-earnings stock moves.

    Stocks also benefited from data that alleviated fears that inflation wasn’t cooling off quickly enough. That included a cooler-than-expected September producer price index reading after the consumer price index increased slightly more than expected. The findings signaled that the Federal Reserve may in fact attain a soft landing scenario and reach its 2% goal, which Goldman Sachs economists think upcoming September inflation data may already show.

    “Overall, these numbers are getting less impactful as inflation moderates,” said David Russell, global head of market strategy at TradeStation. “The Fed could still be on track for 25 basis points at the next two meetings.”

    Fed funds futures trading suggests a nearly 90% likelihood that the Federal Reserve will dial back interest rates by a quarter point in November, according to the CME FedWatch Tool. Central bank policymakers will keep a close eye on additional data, which will shape their course on rates.

    Elsewhere, Tesla shares tanked 8.8% on the back of an underwhelming robotaxi event.

    This past week saw the following moves in the S&P:
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    S&P Sectors End of Week:
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    Major Indices End of Week:
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    Major Futures Markets End of Week:
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    Economic Calendar for the Week Ahead:
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    What to Watch in the Week Ahead:
    (N/A.)
     
    #1 bigbear0083, Sep 29, 2024
    Last edited by a moderator: Oct 14, 2024
  2. bigbear0083

    bigbear0083 Administrator
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    Bitcoin, Bullion, & 'Biggest Shorts' Blast Higher To End 'Bad Data' Week
    FRIDAY, OCT 11, 2024 - 04:00 PM

    Goldilocks it wasn't... as inflation macro data surprised to the upside and growth macro data to the downside (we love the smell of stagflation in the morning)...

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    Source: Bloomberg

    ... but that didn't stop stocks soaring for the fifth straight week, with Small Caps exploding higher today (back into the green for the week)...

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    ...as "most shorted" stocks saw a massive squeeze higher today...

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    Source: Bloomberg

    Of course, a market wrap would not be complete without discussing the shitshow in Shanghai as Chinese stocks witnessed the greatest volatility since their meltdown in 2015, capping almost $500 billion of combined losses in mainland and Hong Kong markets, as investors demanded even more stimulus than authorities in Beijing have already pledged.

    The CSI 300 Index’s weekly trading range - the gap between high and low prices - surged above 600 index points this week for the first time since July 2015.

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    Source: Bloomberg

    Back then, Chinese markets witnessed an exodus of foreigners driven by mounting economic concerns and a government crackdown on traders which only exacerbated the panic.

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    Source: Bloomberg

    This time, the turbulence is driven by sluggish consumer demand that threatens even the scaled-down growth ambitions of the country. The index’s 10-day and 20-day realized volatility also rose to a nine-year high.

    Notably, the rise in macro surprise data has come as financial conditions have loosened to their 'easiest' since Nov 2021...

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    Source: Bloomberg

    Today saw the 45th all-time-high of the year, but none of the prior 44 have occurred alongside this elevated a level of volatility; this will be the first week of the year where the VIX has closed above 20 every day, and so ongoing elevated risk is expected as we progress through October...

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    Source: Bloomberg

    The vol term structure is notably upward-sloping into the election now (and the coincidental FOMC meeting)...

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    Source: Bloomberg

    Treasury yields were very mixed today and on the week the short-end dramatically outperforming (practically unch on the week as the long-end blew out)...

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    Source: Bloomberg

    After a huge flattening last week, the yield curve steepened by the most since the start of August this week with 2s10s dropping to inversion to start the week and steepening to erase the post-payrolls plunge by the end...

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    Source: Bloomberg

    Rate-cut expectations rose modestly this week (with all the focus on 2025 as 2024 remains priced for less than 2 full rate cuts now)...

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    Source: Bloomberg

    The dollar rallied for the second straight week, testing up to August's highs before stalling a little today...

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    Source: Bloomberg

    Despite the dollar strength, Gold extended yesterday's rebound to end the week higher, finding support at $2600 once again...

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    Source: Bloomberg

    Oil was flat today holding on to gains on the week (with WTI back above $75)...

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    Source: Bloomberg

    Bitcoin exploded back higher today (from $59,000 to $63,000), to end the week solidly in the green (after testing near one-month lows)...

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    Source: Bloomberg

    Is this the start of Bitcoin's rip on the back of surging liquidity...

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    Source: Bloomberg

    Finally, this weekend represents the two year anniversary from the bear market lows. The S&P is up 66% from the lows in October 2021, helped by and endless supply of liquidity from global central planners...]

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    Source: Bloomberg

    BUT... the last week or two has seen liquidity start to contract a little (even as stocks soared to record-er highs)...

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    Source: Bloomberg

    Will the money-printers get back to work... or will stocks sink into the election (which Trump is now leading in all the prediction markets - but not the polls)?

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    Source: Bloomberg

    There's no bears left...

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    Source: Bloomberg

    ...well maybe some...

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    #2 bigbear0083, Sep 29, 2024
    Last edited by a moderator: Oct 11, 2024
  3. bigbear0083

    bigbear0083 Administrator
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    Ghosts of Elections Past: Some Lessons from 2016 and 2020
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    We are now within four weeks of election day, although early voting is already taking place in an increasing number of states. My colleague Sonu Varghese provided an excellent update on the election Tuesday. If you read it, you’ll notice it’s called Part 1. Watch for Part 2 next Tuesday.

    One of our top market takeaways in our election commentary has been don’t let your political views shape your market views. It’s not a popular take. People across the political spectrum really seem to want the election outcome to have a meaningful impact on markets, even if their interpretation of what that would be differs. There are in fact ways the election matters, but it’s easy to get carried away. (See the always insightful Ryan Detrick’s “16 Charts (and Tables) to Know This Election Year” to get some of that history.)

    It’s not that policy doesn’t matter to markets or to the health of the economy. It’s just that policy is often dominated by larger economic forces or simple business fundamentals, and markets price in what policy effects there are at a pace that can be quite different from what many investors expect.

    The 2016 Case Study: Donald Trump’s Election Win
    Donald Trump’s 2016 election win makes a nice case study in the market response to elections. The initial immediate market reaction was probably a purer representation of Trump’s policy impact than we usually get following elections. There are a couple of reasons for this. First, the conventional wisdom was that Trump was a meaningful underdog heading into election day, so markets had at least partially priced in a Hilary Clinton win, even if there was still a lot of uncertainty. Second, we knew the results on election night so the market could respond relatively quickly. Major press outlets called the election at about 2:30 am ET on Wednesday, November 9. At 2:35 am, Clinton called Trump to concede the election. Trump than gave a brief victory speech that was among his most gracious and pragmatic.

    Given the quick outcome and reversal of expectations, markets arguably exhibited a relatively pure Trump policy response on the day after the election. After an initially reactive overnight response where S&P 500 futures fell over 5%, cooler heads prevailed. And it was pretty much what you would expect. Sectors that were likely to benefit most from a shift from a Democratic to Republican regulatory backdrop (energy and especially financials) saw active buying. Economically sensitive areas of the market (small caps, value stocks) outperformed. Yields rose (which means bond prices fell) in anticipation of better growth and potentially higher inflation. If you looked at the top of the individual stock leader board you would also see some standout performance from sub-industries, like for-profit prisons and for-profit education, that were considered Trump-oriented plays at the time.

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    The effect did persist for a while, but as we moved further from election day, it faded and broader economic and market forces came to play a more dominant role. The broader theme in place prior to the election, strength in U.S. technology-oriented large cap stocks, reasserted itself. All this stands out in the chart below, which compares the first month post-election in 2016 with the next 11 months.

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    Through the Looking Glass: Trump v Biden
    If we want further evidence that larger forces than policy tend to drive markets, we can look at the performance of the same indexes during the Biden administration to date. To keep these parallel, I used election day 2020 as the starting point even though there was a much clearer “Trump effect” immediately post-election in 2016 than a corresponding “Biden effect” in 2020 for the reasons discussed above.

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    Some observations:

    -Markets did well under both presidents.

    -The energy sector seemed to love Biden and dislike Trump.

    -The financials sector seemed to have a strong preference for Biden.

    -Biden was harder on emerging markets.

    -Commodities favored Biden.

    If you put both these sets of returns in front of an average investor who didn’t know the market history and asked which was Trump and which was Biden, the odds are pretty good they would pick incorrectly. The natural response to the comparison is, “Well, there was a lot more going on.” And I would agree, but that’s really the point. There’s always a lot more going on.

    A lot does happen around elections that’s market relevant. It’s just that what most people pay the most attention to, “Who will win the White House?”, isn’t high on the list. As always, it’s important to distinguish the facts from the feelings.

    Helene Spikes Claims
    Thu, Oct 10, 2024

    It was a busy morning for economic data, and there wasn't much to like at first glance. On top of a hotter-than-expected inflation print, weekly jobless claims came in above expectations on both an initial and continuing basis. The previous week's seasonally adjusted initial claims reading was unrevised at 225K, and this week's reading was expected to tick up to 230K. Instead, claims surged up to 258K matching the high from the week of 8/5/23 for the most elevated reading since 8/17/23. Outside of the extremely elevated readings observed through the pandemic, current levels are some of the highest since the fall of 2017.

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    On a non-seasonally adjusted basis, claims were up to 234.8K. As shown in the second chart below, claims have generally followed the usual seasonal track this year with declines throughout the first half followed by a brief bump in the summer that reversed until bottoming in the early fall. From September through year-end, claims have historically tended to rise, and that exact result appears to be playing out again.

    While a week-over-week increase in the current week of the year is typical (such has been the case 86% of years historically), this week's jump of 53.6K was more than twice as large as the historical average. Furthermore, the last time the comparable week of the year saw as large of an increase was in 2013. In other words, the direction of claims could be expected, but the magnitude of the move was more of a surprise.

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    Fortunately, most of the big jump in claims this week can be explained. For starters, Michigan alone accounted for 30% of initial jobless claims as it saw an outsized increase with claims more than doubling to 16.27K versus 6.8K the prior week. The report indicated that these were due to layoffs in the manufacturing sector. The even larger contributors to claims were the states affected by Hurricane Helene. In the heatmap below, we show each state's week-over-week percentage change in non-seasonally adjusted initial jobless claims. As shown, those states in the direct path of Hurricane Helene and where the most severe damages occurred like South Carolina, Tennessee, Kentucky, and Florida all saw a massive increase in claims and accounted for more than half of all national claims on a combined basis.

    The state with the single largest percentage jump was North Carolina where claims surged 290% WoW. Going back to 1986 when state data starts, the only other times (outside some seasonal blips around year-end) when claims rose as much were the onset of the pandemic, Hurricane Florence in September 2018, and during the recession in September 1990.

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    To summarize, national jobless claims have deteriorated with the caveat that a significant portion of that damage is weather-related. Below we show the national claims count (adjusted for seasonality) as well as claims excluding those storm-effected states (Florida, North Carolina, Tennessee, and Kentucky) with national seasonal factoring applied. As shown, with or without those storm-hit states, seasonally adjusted claims have risen in the past few weeks. Excluding those states, though, claims wouldn't even be at summer highs let alone some of the highest levels in recent years.

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    Bears Head to Hibernation Early
    Thu, Oct 10, 2024

    The latest sentiment data from the American Association of Individual Investors was published today. The release indicated the percentage of respondents with a bullish outlook for equities over the next six months ticked up to 49% versus 45.5% previously. While sentiment was more elevated only two weeks ago and was above 50% three weeks ago, this week's reading still indicates a high level of bullish investor sentiment.

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    While bullish sentiment didn't reach any new highs, bearish sentiment earned more of a superlative. As shown below, bears dropped to only 20.6% for the lowest reading since December 14, 2023.

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    Traders Much Less Enthusiastic Now Versus 2021
    Thu, Oct 10, 2024

    This week we got an update from the Schwab Trading Activity Index, also called the STAX. We initially covered this data in Tuesday's Closer for subscribers, but we also wanted to highlight it here on Think BIG.

    Whereas most investor sentiment readings like the AAII survey directly ask investors how they feel about the market, indicators like the STAX are derived by measuring what retail investors are actually doing in their accounts. In September, Schwab's Trading Activity Index fell to 47.1, which is the lowest reading since January. That drop occurred even though the stock market continued to rally to new all-time highs.

    The STAX data dates back to 2019, and as shown below, the index surged in late 2020 through late 2021 during the first post-COVID bull market when Americans were flush with stimulus cash and were actively bidding up pretty much everything that traded! At the time, the STAX index saw record highs with readings above 75 in June and November 2021. November 2021 was ultimately the peak for growth stocks before the bear market of 2022.

    Notably, there's a big difference between the STAX reading now versus 2021. The stock market is currently up 60%+ off the late 2022 lows and has registered 44 all-time highs already this year. Similarly, the market was also making a new high after a new high back in 2021. During this year's rally, though, the STAX has remained quite subdued compared to going gangbusters in 2021. This tells us that there's less complacency, enthusiasm, and overall interest in the market right now versus 2021 levels, which is good if you're a long-term bull.

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    The Schwab STAX index was established in 2019, but before TD Ameritrade's acquisition by Schwab, it had a counterpart index called the Investor Movement Index that featured data dating back over a decade. Standardizing the two indices shows they've had comparable readings with only minor discrepancies. As mentioned earlier, current sentiment levels are much more depressed than at the time of past record S&P 500 highs like in 2020/2021 and 2017. During those periods, these trader activity indices were well over 2 standard deviations above the historical average. Right now, they're basically neutral, meaning retail investors are neither overly bullish or bearish.

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    Happy Second Birthday to the Bull Market
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    “The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts.” – Bertrand Russell, British philosopher

    First things first — our thoughts go out to everyone that has been impacted by Hurricane Helene and those in the path of Hurricane Milton. If there is anything Carson Group can do, do not hesitate to reach out and stay safe!

    The Bull Is Young
    This Saturday marks the official two-year birthday of the bull market that stared on October 12, 2022. That was a vicious 25% bear market made worse by also having some of worst bond market performance ever. As long-time readers know, Carson Investment Research has been on record since November of 2022 that the lows were indeed in and prices were going higher, and that the economy would surprise to the upside and avoid a recession. Two years later, we are still saying it .

    To be bullish two years ago (and most of 2023) was quite an experience, since any optimism was widely greeted with scorn. The quote above from Bertrand Russell perfectly fits the permabears, who were so certain of a recession and bear market in early 2023, only to see the complete opposite to occur.

    I’ll never quite understand why so many people were bearish, and almost seemed to take joy in rooting for bad things to happen. But fortunately instead we have stocks up more than 60% from those lows and an economy that appears to be warming up, not slowing down.

    Want some more good news? This bull market is actually quite young. That’s right, a two-year bull market historically has plenty of life left, with the average bull market since 1950 lasting more than five years and gaining more than 180%. How long this bull will last is anyone’s guess, but we remain in the camp that looking out the next six to nine months we simply don’t see any reason to expect a recession or end of the bull market. Will it last another three years? All we will say there is the odds are better than many expect.

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    A year ago at this time we noted that previous bull markets that made it to one year made it to year two every single time except the post-pandemic bull, and even that one saw a gain of over 100%. Remember, a year ago right now we were told by many that a weak first year to a bull market suggested the end was near, as stocks were barely up more than 20%. We noted this was probably the wrong way to look at it and suggested being open to the possibility of huge gains in year two. Well, after more than 30% gains during the second year of the bull market we would say that indeed was the way to look at things.

    Will this bull market make it to three? We think so, but history would say we should temper our expectations for another 30% gain. We found that out of 16 previous bull markets (after bear or near bear markets), 12 of them made it to their third birthday, with an average gain of about 8% and a median return of nearly 10% in year three, pretty much what your average year does. All in all, we expect stocks to be up at least low double digits over the next year and this study does little to change that view.

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    Some Bad News
    As we laid out last week, October can be volatile and historically the S&P 500 hasn’t done well in October during an election year. The good news is November and December tend to be quite strong after the October seasonal weakness. Turning to times the S&P 500 was up at least 30% the previous 12 calendar months heading into October, there is reason to be on the lookout for some near-term weakness, as stocks fell five out of six times. But it is noteworthy that outside 1987, the S&P 500 did make gains the final two months of the year.

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    Some More Good News
    Big picture though, the underpinnings that got us to new highs and huge gains the past year are still alive and well. We might sound like a broken record, but this is still a bull market, we believe there is not a recession coming, and any weakness should be fairly contained and eventually bring higher prices.

    One reason to expect higher prices over the next year? The S&P 500 is up five months in a row. That’s right, it turns out that five-month win streaks tend to happen in bull markets and higher future prices are the hallmark of bull markets.

    Going all the way back to 1950, we found 29 other five-month win streaks and stocks were higher a year later 28 times, for a win rate of nearly 97%. Yes, this is just one signal and we would never suggest investing based on a single data point, but looked at in the context of all the bullish signals we continue to see, it further reinforces our overall bullish stance.

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    Conclusion
    So many investors were tricked into believing the constant doom and focused on things like yield curves, LEIs, PMIs, weak breadth, and many other scary sounding warnings, all of which ended up being completely wrong the past two years. Hopefully if you are reading this, then you’ve been on the right side of what has been a tremendous two years for investors. We thank you for reading our research and we will continue to give an honest (and maybe not always in consensus or popular) take on what is really happening out there.

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    Election-Year Octoberphobia Hangs Over Market

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    From one October day to the next, the market seems unable to decide which direction to go. Election-year Octobers going back to 1950 have been the worst month of the year, but in the last 21-years October has been fair ranking #4 for DJIA, S&P 500 and NASDAQ, #5 for Russell 1000 and # 6 for Russell 2000. And then there is October’s history of major market drops occurring during the month, hence Octoberphobia.

    At today’s solid close, DJIA, S&P 500, NASDAQ, and Russell 2000 are all still in the red for October and appear to be tracking the typical election-year seasonal pattern. Russell 2000 is struggling the most, down 1.57% as of today. NASDAQ is least negative, down a small 0.03%. S&P 500 and DJIA are respectively off 0.20% and 0.59%. Should the market continue to track past election years, more sideways chop is likely heading into mid-month. A more decisive move lower in the second half of the month, ahead of Election Day, cannot be ruled out.

    Geopolitical tensions are at or near the top of the list of market concerns as Israel’s response to Iran’s latest missile attack is still awaited. Last Friday’s much better than expected jobs report has sent the 10-year Treasury yield back above 4% rather effectively quashing expectations of another large Fed interest rate cut. Inflation readings later this week, CPI on Thursday and PPI on Friday, remain important, but barring a wild miss could fail to move the market considering how solid employment data has been.

    Election Update Part 1: Where the Odds Stand and What It Means
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    We have only four weeks to go to election day, although close to 2 million people have already voted, including close to half a million in states like Pennsylvania, Wisconsin, and Michigan. We figured this would be a good time to do an update on where the race stands, and what it means (or could mean) for the economy and markets as we move beyond the election. But first, let’s level set as to where we are.

    2024 has already been an exceptional year, with the S&P 500 up 22% over the first nine months of the year. As Carson’s Chief Market Strategist Ryan Detrick pointed out, that is the best we’ve seen in any presidential election year since 1950. Perhaps it shouldn’t be entirely surprising given corporate profits are rising amid a solid economic backdrop. Employment is in a reasonable place, with recent data showing signs of stabilization. Real GDP growth was revised higher recently and is up 3% over the last year (as of Q2). Q3 GDP growth looks set to come in strong as well. As I wrote in my recent blog discussing September payrolls, income growth is powering the economy, as opposed to credit. Inflation has also come off the boil, with lower oil prices helping. That’s allowed the Fed to start cutting rates, an added tailwind for the economy and markets.

    A note on the data: I mostly use Nate Silver’s (Founder of FiveThirtyEight) data in this blog because he has the longest (successful) election forecasting model, which included putting much higher probability on a Trump win in 2016 (29%) than other forecasters, and even prediction markets. A couple of others also have a good methodology but they are more recent, including Split Ticket and FiveThirtyEight (previously the Economist model). I’m setting aside the prediction markets and betting sites for two reasons. One, a good forecasting model has historically done better than prediction markets, on average. Two, for popular major events (including the Super Bowl), there’s so much recreational money and not enough “sharp money” to take it all off the table. The more “knowledgeable” bettors don’t dominate the pool, which means the information content from these betting pools are less predictive, more sentiment driven, and overresponsive to short-term news flow.

    The Presidential Race – Looks Stable
    There was a lot of volatility in the presidential race back in June (after the Biden/Trump debate) and then in July (when Biden stepped down). But since then, the race can be characterized by one word: stability. At least on the face of it. None of these major events really moved the numbers: the Democratic National Convention, third-party candidate Robert F. Kennedy dropping out and endorsing former President Trump, a presidential debate, and a vice-presidential debate. Vice President Harris has held a narrow but fairly steady lead against Trump in the polls, mostly ranging between 2.5-3%. Note this is less than Biden’s polling lead in 2020 (+9.8%) or Clinton in 2016 (5.0%) on October 8 according to Nate Silver’s polling average.

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    Despite Harris’s narrow but steady lead, the race is still a toss-up, with only a very slight edge to Harris. That’s because of the electoral college “bias” towards Republicans. The bias exists because Democrats typically run up the score in populous areas like New York and California. But key swing states like Pennsylvania, Wisconsin, Michigan, Nevada, North Carolina, Nevada, Arizona, Georgia are all polling within 1-2 points. Harris has a slight lead in the polls in the first 4 states, which would be enough to take her to victory.

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    However, a normal-sized polling error could result in one of the following:
    • A Harris landslide (if we see an error similar to 2022 polls)
    • A Trump win exceeding his narrow 2016 margins (if we see an error similar to 2020 polls)
    Both are within very reasonable bounds of possibility. All three forecasting sites I referenced account for correlated errors (but in different ways). That means the “stability” of the race in the polls hides enormous uncertainty in the outcome. A shift in one direction in one state implies a somewhat parallel shift in many other states. That is why Harris has somewhere around a 55% chance of win (as of October 7), i.e. not far from a toss-up.
    • Silver Bulletin: 55% Harris – 45% Trump
    • Split Ticket: 57% Harris – 43% Trump
    • FiveThirtyEight: 55% Harris – 45% Trump
    A key point is that the above numbers DO NOT represent vote share (I see people making this error online all the time). A 55%-45% probability is not too far from 50-50 (pretty much the same, for all practical purposes).

    At the same time, Harris is much more widely favored to win the popular vote, with Silver Bulletin putting the odds above 75% (I’ll come back to the relevance of this).

    The Senate – Republicans Favored
    Democrats currently have a majority in the Senate of 51-49. That means they can only afford to lose one seat and maintain a majority, assuming Harris wins the Presidency (the sitting VP gets the tie-breaking vote). Democrats are almost assured of losing Senator Manchin’s seat in West Virginia. Which means if they lose one more seat, Republicans take the Senate irrespective of who wins the White House. (It also means if Trump takes the White House, a Republican Senate majority is extremely likely.)

    Right now, Montana is increasingly favored to go for Republicans, with Split Ticket putting an 82% probability of a Republican win. Democrats are almost as likely at this point to flip Nebraska, Texas, or Florida, so there’s a chance Democrats lose Montana and hold the Senate, but only on an extremely good day. Ohio is also looking very tight, with odds of 51-49 in favor of Democrats. As a result, Split Ticket currently has a 73% probability on Republicans taking the Senate, i.e. leaning Republican.

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    Taken from: https://split-ticket.org/senate-2024-ratings/

    The House – Democrats Hold a Slight Edge
    As I noted above, Harris is well favored to win the popular vote. That by itself means Democrats ought to have an edge in the House. Running up the score (or votes) in New York and California is not going to help Harris much, but it helps House Democrats. The fight for the House will likely be decided in these two states. Democrats currently lead in the “generic ballot” against Republicans, based on national polls that look at preference for a Republican or Democrat in Congress with no reference to a specific race. But the generic ballot lead is (you guessed it) narrow, with Democrats leading by just under 2%-points. This is why Split Ticket puts a probability of 56% in favor of Democrats taking the House. That’s only a very slight edge in favor of Democrats.

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    Split Party Control?
    Based on current polls, and forecasts based on those polls, we could very well be looking at split party control of DC in 2025. That’s not a bad thing — especially if it means we’re unlikely to get big swings in policy, since presidents can’t “go big” with divided control. And that ought to be comforting for investors. As much focus as is on the Presidential race, control of Congress matters just as much. Here’s a nice chart from Ryan showing that a split Congress (House and Senate led by different parties) tends to be best for stocks, with average annual returns of 15.7%. Versus 8% when you have unified control.

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    Blue or red waves aren’t great for investors. Years with a Democratic President and Republican/split Congress and Republican President with a split Congress tend to be better for stocks.

    [​IMG]

    Right now, it looks like odds favor split party control of Congress and the White House next year. That’s historically been positive for markets as you saw. Of course, it doesn’t mean a “blue wave” (Democrats sweep all three branches) or a “red wave” (Republicans sweep) is unlikely. The odds of either of these are not insignificant. Keep in mind that a sweep with a narrowly divided Congress acts a little like a split Congress, since each party’s most centrist members have a lot of influence.

    Control of Congress is especially important this time around. That’s because we have a massive fiscal event, or cliff, at the end of next year. If Congress does nothing, a lot of elements of the Tax Cut and Jobs Act of 2017 (signed into law by former President Trump) expire on December 31, 2025. Most expiring provisions are on the individual side, but there’s some risk to corporate taxes as well. Keep in mind that 2026 is a midterm election year, and so it’s unlikely Congress will want to go into it having just raised taxes on households. In any case, Washington DC in 2025 is likely to dominated by tax policy related negotiations, getting ever more feverish as the deadline approaches.

    In part 2 of this blog, I’ll discuss the main risks associated with a blue or red wave, and the potential big picture impact of tax policy on the economy and markets. Stay tuned.

    [​IMG]

    [​IMG]

    October Isn't Just Volatile in the US
    Tue, Oct 8, 2024

    It was a brutal overnight session for stocks in Hong Kong where the Hang Seng plunged 9.4% after Chinese stocks rallied less than investors had hoped after re-opening from the six-trading session National Holiday. Last night’s decline was the largest one-day decline for the Hang Seng since the depths of the Financial Crisis in October 2008 and before that two days in October 1997. Although stocks in Hong Kong were down sharply during the session, the Hang Seng is still up over 23% from its September low.

    [​IMG]

    As mentioned above, the last four times that the Hang Seng has declined more than 9% in a day occurred in October. Including these four days, eight of the eighteen days that the Hang Seng has declined by more than 9% occurred in October. So while October is the most volatile month of the year for US stocks, the same applies to Hong Kong as well!

    To illustrate this another way, the chart below shows a distribution of 5% one-day drops in the Hang Seng since 1964. Of the 132 occurrences, 20 occurred in October, and the next closest month is March with just 14.

    [​IMG]

    October has not only been the champion of 5%+ daily declines, but 5%+ gains as well. Throughout its history, the Hang Seng has gained 5% or more 138 times, and 23 of those occurred in October which is more than 50% greater than the next closest month (November). Overall, October has been home to 43 (15.9%) of the Hang Seng’s 270 daily moves of at least 5%.

    [​IMG]

    Small Businesses Fearing the Election
    Tue, Oct 8, 2024

    Early this morning, the NFIB published small business sentiment data for September. The Small Business Optimism Index ticked up from 91.2 to 91.5. While stronger, that wasn't as large of an uptick as was expected as the consensus forecast expected an increase to 92.0. Regardless, sentiment remains historically low in the bottom quintile of historical readings back to 1986.

    [​IMG]

    In the table below, we show each category of the report including the previous month's reading, the month-over-month change in index points, and how those rank as a percentile of all periods of the survey's history. Breadth for components to the headline number was slightly positive with five categories rising, two going unchanged, and another three falling month over month. As for other categories, the results were much weaker. Of the non-inputs to the optimism index, only three components were higher versus five that declined. Across indicators, the vast majority are historically low—many ranking in the bottom decile of readings—save for some labor market-related points like Job Openings Hard to Fill, Compensation, and Compensation plans. With that said, those labor indices are also well off highs from recent years, and as we discussed in today's Morning Lineup, the past few months have seen stabilization in these indicators.

    [​IMG]

    Of those indices that saw improvement in September, the largest MoM jump was in expectations for higher real sales. That index jumped from -18 in August to -9 in September. That ties July for the strongest reading of the year, albeit it is also the 33rd consecutive negative reading in this index, a record streak. While sales expectations improved materially, actual sales changes have continued to deteriorate falling 1 point to -17. That ties last November and October for the lowest readings since the pandemic. As actual top-line results have been reported as weaker, actual earnings changes improved from -37 to -34 even as the higher prices index rebounded a couple of points. Granted, even with that improvement, actual earnings changes continue to see some of the weakest readings in this index since the Great Recession.

    [​IMG]

    One other key area of weakness we noted in today's Morning Lineup concerned capex. Both actual and expected capex dropped in September. For plans, the index is down to 19 which is the lowest reading since April 2023 whereas actual capex at 51 hit its lowest since July 2022.

    [​IMG]

    Finally, we would note that an auxiliary index to the report, the Economic Policy Uncertainty Index, is surging. This index tracking small business trepidation concerning economic policy typically rises during presidential election years; at that, those increases are usually far larger than non-election years. However, the 24-point leap over the past year through September is the largest YoY jump for that month of any year in the index's history, Presidential election year or otherwise, and the index itself is now at a record high. As we noted last month (see here and here), the NFIB survey typically has political sensitivities and the increasingly tight presidential race would make sense with that rise in policy uncertainty.

    [​IMG]

    Insurance Cost Concerns Surging
    Tue, Oct 8, 2024

    Within the NFIB's Small Business Optimism report, the survey also provides a look into what firms are seeing as their biggest challenges each month. In September, inflation once again came in at top of mind with 23% of businesses reporting this as their biggest issue. Quality of labor and taxes were the two next most common concerns and the only others that single-handily accounted for double-digit shares. Of those, quality of labor saw a particularly large 4 percentage point drop last month.

    [​IMG]

    As mentioned above, taxes were the third most common response in September at 14%. That was up slightly from 13% the month prior. Government requirements and red tape also rose a percentage point and combined the two problems made for 23% of responses. As the election closes in, that is actually a relatively small increase in these concerns as other indicators like the Economic Policy Uncertainty Index have surged.

    [​IMG]

    At a combined 23%, government-related concerns on a combined basis equal the share of businesses reporting inflation as the biggest problem. As mentioned previously, inflation responses were lower month over month. Additionally, current levels are much lower than they were at the peak a couple of years ago. That said, current levels also remain very elevated historically, remaining in the upper decile of readings.

    [​IMG]

    Factoring other categories that can be inflationary-adjacent, the picture changes slightly. One interesting area that has seen a surge recently is the cost or availability of insurance. That index is up to 8% of responses versus only 3% three months ago. That is the most elevated reading since the August 2021 spike to low double digits. Although that is the highest reading in a few years, this problem is not yet elevated from a longer-term historical perspective with September's reading actually matching the historical median. Furthermore, combining a range of expense-related categories (inflation, cost of labor, and cost/availability of insurance) shows that there has been an uptick in cost concerns over the past few months, but things aren't quite as bad as they were a couple of years ago.

    [​IMG]

    Speaking of cost of labor, the combined share of businesses reporting cost or quality of labor as their biggest problem has continued to trend lower, consistent with a cooling labor market. With September's reading coming in at 26%, it was the lowest reading since the spring of 2020.

    [​IMG]

    [​IMG]

    [​IMG]

    [​IMG]

    [​IMG]

     
    #3 bigbear0083, Sep 29, 2024
    Last edited by a moderator: Oct 11, 2024
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  4. bigbear0083

    bigbear0083 Administrator
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    Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2024-
    [​IMG]
    [​IMG]

    S&P sectors for the past week-
    [​IMG]
     
    #4 bigbear0083, Sep 29, 2024
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  5. bigbear0083

    bigbear0083 Administrator
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    Here are the current major indices pullback/correction levels from 52WK highs as of week ending 10.11.24-
    [​IMG]

    Here is also the pullback/correction levels from current prices
    [​IMG]

    Here are the current major indices rally levels from 52WK lows as of week ending 10.11.24-
    [​IMG]
     
    #5 bigbear0083, Sep 29, 2024
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    bigbear0083 Administrator
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    [​IMG]

    Here are the upcoming IPO's for this week-

    [​IMG]
     
    #6 bigbear0083, Sep 29, 2024
    Last edited by a moderator: Oct 14, 2024
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  7. bigbear0083

    bigbear0083 Administrator
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    Stock Market Analysis Video for October 11th, 2024
    Video from AlphaTrends Brian Shannon


    ShadowTrader Video Weekly 10/13/24
    Video from ShadowTrader Peter Reznicek
     
    #7 bigbear0083, Sep 29, 2024
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  8. bigbear0083

    bigbear0083 Administrator
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    StockBoarders! Come join us on our stock market competitions for this upcoming trading week ahead!-

    ========================================================================================================

    StonkForums Weekly Stock Picking Contest & SPX Sentiment Poll (10/14-10/18) <-- click there to cast your weekly market direction vote and stock picks for this coming week ahead!

    Daily SPX Sentiment Poll for Monday (10/14) <-- click there to cast your daily market direction vote for this coming Tuesday ahead!

    ========================================================================================================

    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! :cool:
     
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  9. bigbear0083

    bigbear0083 Administrator
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    [​IMG]

    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 10.14.24 Before Market Open:

    [​IMG]

    Monday 10.14.24 After Market Close:

    (T.B.A.)

    Tuesday 10.15.24 Before Market Open:

    (T.B.A.)

    Tuesday 10.15.24 After Market Close:

    (T.B.A.)

    Wednesday 10.16.24 Before Market Open:

    (T.B.A.)

    Wednesday 10.16.24 After Market Close:

    (T.B.A.)

    Thursday 10.17.24 Before Market Open:

    (T.B.A.)

    Thursday 10.17.24 After Market Close:

    (T.B.A.)

    Friday 10.18.24 Before Market Open:

    (T.B.A.)

    Friday 10.18.24 After Market Close:

    (NONE.)
     
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  10. bigbear0083

    bigbear0083 Administrator
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    And finally here is the most anticipated earnings calendar for this upcoming trading week ahead-
    ($NFLX $TSM $WBA $UNH $ASML $C $BAC $CMA $JNJ $PGR $SCHW $UAL $MS $ISRG $GS $IBKR $AA $KARO $AXP $TRV $SLB $WDFC $PNC $REXR $STT $HBAN $ELV $ABT $BX $JBHT $PG $KMI $PPG $STLD $USB $PNFP $INFY $SGH $ERIC $CSX $CCK $CFG $FBK $FITB $ALV $MWBM $RF $TCBI $TFC $SYF)
    [​IMG]

    If you guys want to view the full earnings post please see this thread here-
     
    #10 bigbear0083, Sep 29, 2024
    Last edited by a moderator: Oct 12, 2024
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  11. StockBoards Bot

    StockBoards Bot Administrator
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    Top of the morning StockBoarders! :coffee: 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 over 2 hours into the US cash market open.

    GLTA on this Monday, October the 14th, 2024! :cool3:

    [​IMG]
    [​IMG]
     
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    StockBoards Bot Administrator
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  13. StockBoards Bot

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    Here are today's gappers up & down:

    [​IMG]
     
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    StockBoards Bot Administrator
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    StockBoards Bot Administrator
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  16. StockBoards Bot

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    Here are today's analyst stock upgrades & downgrades:

    [​IMG]
    [​IMG]
    [​IMG]
     
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    Here are this morning's pre-market earnings results:

    (NONE.)
     
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    Morning Lineup -- 10/14/24
    Mon, Oct 14, 2024

    Dow futures are trading just south of the flat line this morning, while S&P 500 and Nasdaq futures are trading slightly higher. There are no earnings reports to speak of today, but tomorrow morning we'll hear from three more of the "big six" US banks and brokers: Bank of America (BAC), Citigroup (C), and Goldman Sachs (GS).

    The Q3 earnings season began last Friday with five companies reporting before the open. All five beat consensus EPS estimates, while four of five beat sales estimates (WFC was the lone miss). As shown below, four of the five companies that reported to kicks things off posted strong share-price gains on Friday. While BNY Mellon (BK) posted a "meh" reaction with a small drop of 0.4%, BlackRock (BLK) gained 3.6%, JP Morgan (JPM) gained 4.4%, Wells Fargo (WFC) gained 5.6%, and Fastenal (FAST) gained 9.8%. FAST's 9.8% gain was its best earnings reaction day in five years, while Wells Fargo had its best earnings day since July 2022.

    [​IMG]
     
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    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 14th, 2024.
    [​IMG]
    [​IMG]
    [​IMG]
     
    #19 StockBoards Bot, Oct 14, 2024
    Last edited: Oct 14, 2024
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  20. stock1234

    stock1234 Well-Known Member

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    Looks like the market is melting up again lol :D I don't know, seems like it is pretty tough to bet against the market here. I think Q3 earnings will be coming in pretty strongly for the coming weeks, the only question is whether the market has priced in too many good news for the high flying big cap tech stocks but otherwise I could see the meltup to continue.

    As for the election, I think the only very bad outcome for the market would be the Dems taking both the WH and the Congress, if we have a divided Congress then the market might not care that much who would be in the WH. Just my guess though, we will find out soon :popcorn:
     
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