91 is the number of trading sessions since at least a 1.5% sell off session in SPX
This length of time without a 1 day equity shock is rare ... has happened ~five times in the last 15 years. Source: Goldman Sachs, TME
As Goldman's Brian Garrett noted yesterday, it has been 91 days since the sp500 suffered a 1.5% loss or greater in a day...
That's unusual - it has happened only 5 times in the last 15 years. As we have discussed recently, Sep + Oct are seasonally-volatile months... Source: Goldman Sachs
Inflation has been a boost to sp500 companies top-line growth
Now that inflation starts to cool down, could it work the otehr way around? here's the view from Morgan Stanley: "Our boom/bust framework would suggest inflation as it relates to corporate earnings (i.e., pricing) falls toward zero or even below. This is likely to have a significant impact on sales growth and, consequently, on earnings growth as negative operating leverage takes hold." Source: TME
Mind the gap: The valuation of S&P 500 has become cheaper but attractiveness vs interest rates has decreased massively as US 10y real yields now at almost 2%
Chart via Goldman Sachs thru HolgerZ
ANALYSTS ARE RAISING QUARTERLY S&P 500 EPS ESTIMATES FOR THE FIRST TIME SINCE Q3 2021
At the end of the earnings season for the second quarter, have analysts lowered EPS estimates more than normal for S&P 500 companies for the third quarter? The answer is no. During the months of July and August, analysts increased EPS estimates for S&P 500 companies for the third quarter. The Q3 bottom-up EPS estimate increased by 0.4% (to $56.10 from $55.86) from June 30 to August 31. While analysts were raising EPS estimates in aggregate for the third quarter, they were also increasing EPS estimates for the fourth quarter. The bottom-up EPS estimate for the fourth quarter increased by 0.6%. Source: Factset
Is the US stock market severely mispriced?
Typically, the dividend yield on the S&P 500 is well above the US 30y real yield. That has changed. Source: Bloomberg, HolgerZ
Global liquidity slump could become a drag on risk assets
Source: Bloomberg, HolgerZ
The median year since 1928 has experienced a 13% intra-year drawdown in the S&P 500, making 2023 relatively mild by comparison
The 7.8% pullback in February-March is the largest thus far. Soruce: Charlie Bilello
