What moves stock prices
Source: Brian Feroldi
With 46% of companies reported, S&P 500 Q2 GAAP earnings per share are up 7% over the last year, the highest YoY growth rate since Q4 2021.
Source: Charlie Bilello
US Treasuries sold off yesterday and are now on the verge of a breakdown from support
The chart below courtesy of Crescat Capital / Tavi Costa is a reminder of the divergence between rising yields and the highly valued Nasdaq index. Is this divergence sustainable? Source: Bloomberg, Tavi Costa
It has never been cheaper to hedge against a market crash
According to Bank of America's derivatives strategists, it has never cost less to protect against an #sp500 crash drawdown in the next 12 months. Why is the cost of longer-dated S&P protection at record lows today? The most common explanations are a mix of fundamentals (e.g. a recession, if it materializes, will be short-lived and shallow; or, realized correlation is too low to warrant higher implied correlation) and vol technicals (e.g. the supply of vega on US underlyings for yield remains robust; or, due to the rise of short-dated option selling, the next shock will likely be a “gamma event” in which systemic tenors of risk don’t react strongly). Source: BofA, www.zerohedge.com
Forward S&P 500 Performance by VIX Decile
While a low VIX indicates that investors are complacent and signal that unexpected negative events could push the VIX upwards (and thus equity markets downward), a low VIX reading isn’t necessarily something to fear. As shown on this chart courtesy of Todd Sohn, it is a typical characteristic of bull markets. Source: J-C Parets
S&P 500 hits fresh 52-week high while the Dow heads for 13th straight daily gain as markets hope that the US interest rate hikes cycle is over.
The Fed just said they are taking a "meeting by meeting" approach to future interest rate policy. As expected, the Fed raised interest rates to the highest level in 22yrs as expected and left the door open to additional increases as officials fine-tune their effort to further quell inflation. The quarter percentage-point hike, a unanimous decision, lifted the target range for the Fed’s benchmark federal funds rate to 5.25% to 5.5%, the highest level since 2001. It marked the 11th increase since March 2022, when the rate was near zero. Source: Bloomberg, HolgerZ
$LVMH Q2 2023
"Thanks to the desirability of our brands, we approach the second half of the year with confidence and optimism" - Bernard Arnault Organic Growth by Business Group - source: Quartr
S&P 500 Forward Earnings Yield
The S&P 500 equity risk premium hit the lowest level in two decades, which will be a headwind for longer-term returns. Source: The Daily Shot