Despite the rally, energy stocks remain under-owned and not expensive vs. history.
Source: BofA, RBC
With buybacks stepping away, downside moves become more exposed.
McCullen: "We are expecting the next blackout window to begin this week ~3/18, estimating ~45% of the S&P 500 to be in blackout by that point, assuming entry 6 weeks prior to earnings ... We expect blackout to run through the end of April." Source: TME
Oil-equity correlations break during oil supply shocks
Source: zerohedge JP Morgan
While equity indices are holding in reasonably well amidst market stress, the more important market story is under the hood.
There is meaningful dispersion across constituents beneath the surface, reflecting a market that is quickly separating durable growers from more challenged business models. Source: Rick Rieder
Over the past 75 years, the average intra-year drawdown for the S&P 500 has been about 14%.
Volatility is the toll we pay to invest. Source: PeterMallouk, The Chart Report
Over 40% of the stocks in the S&P 500 are down 20% from their 52-week highs:
Source: Brian Sozzi
All about oil
SPX and oil moving in pretty much perfect inverse tandem. Correlations since March 4th around 96%. Source: TME
Bluekurtic Market Insights: "$SPX volatility index $VIX remains above 20 and oil at multi year highs.
Sustained oil supply shocks can risk deeper drawdowns. In prior cases of prolonged supply disruptions, S&P 500 saw above average drawdowns in the following 3 months". Source: Bluekurtic
