September 17 – 23, 2023

FEAR NOT Brave Investors

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The Week That Was – What Lies Ahead?

Contents

Click on the links below to navigate to the relevant section.

• Part A: Stock markets
• Part B: Bonds
• Fed and Banks
• Part C: Commodities
• Energy – Oil and Gas
• Gold and Silver
• Part D: Foreign Exchange
• Geopolitics and Economics
• Economy Week ahead

Editorial

With smoke bombs of uncertainty all around from labor strikes, rising rates, surging oil prices, past and present US Presidents fighting legal cases, there is plenty for markets to be nervous about. Mixed economic reports heightened market jitters with the Dow Jones Industrial Average ending with a slim gain this week while the S&P 500 and Nasdaq saw modest declines. During the week we saw retail sales exceed expectations, however a decline in consumer sentiment signaled a potential weakening in consumer spending in the future.

The big overhead risk appears to be oil prices as they are hit yearly highs, August headline inflation rose to rising fuel prices, unless we see a rapid decline September will be affected more. The past week’s highlight was Softbank’s IPO of chip designer Arm Holdings’ (ARM) IPO. This successful debut buoyed investor sentiment and hopes this year’s stagnant IPO activity may find life.

However, the initiation of the autoworkers’ strike after contract negotiations between the United Auto Workers (UAW) and the three largest U.S. automakers fell through is a huge headwind rattling investor and the economy. This a significant risk but one that has seemingly missed by most. The U.S. lost 4.1 million days in August, before the UAW strike. The highest in over twenty years.

Bond and currency markets have been jittery, as acting as such with the Central Bank risk. In the past week we had the ECB, PBOC and Peru central banks all acting as expected. In the week ahead we get a tidal wave of central banks meeting. The People’s Bank of China as already said lowered the foreign exchange reserve requirement ratio to 4.00% from 6.00%, effective September 15. The PBOC also confirmed speculation about rate cuts on some existing mortgages, effective September 25. The fluidity of financial conditions tightening as “risk on” transitions to “risk off” continued this week, through in some geopolitical gamesmanship.

There will be fifteen Central Bank decisions in the week ahead. Fed’s FOMC, Bank of England, Bank of Japan, PBOC, Norges Bank, Riksbank, Swiss National Bank, Banco Central do Brasil, Central Bank of China Taiwan, Hong Kong, Bangko Sentral ng Pilipinas, Bank Indonesia, Turkey’s Central Bank and South African Reserve Bank. Further to that a slew of global macro readings. Brace yourself.

Global central banks are facing pressure after a protracted period of policy tightening and amid uncertainty over their next steps. Oil continued its rise further hampers their future path. More geopolitical influences, Saudi Arabia and Russia are planning to extend their voluntary oil production cuts of 1 million barrels per day and 300,000 barrels per day, respectively, through the end of 2023.

Global bond market liquidity appears increasingly under the grips of deleveraging.

U.S. Treasuries closed the week on a modestly lower note as yields drifted higher for the week. The 2-yr note yield rose seven basis points this week to 5.04%. The 10-yr note yield rose seven basis points this week to 4.33%. It was a busy week for bonds with this week’s CPI and PPI inflation data which was supportive of stocks. August core consumer price inflation was up 4.3% year-over-year, versus 4.7% in July, which is what the Fed monitors more closely, showed ongoing improvement on a year-over-year basis; however, it is still well above the Fed’s 2.0% target, which will certainly keep the Fed in a “higher for longer” mindset.

The distortion and shameless political theater from all sides has mishappen reality and that irrationality has poisoned decision making for many. Remember in bonds, commodities and forex the rubber always meets the road. That is what matters and that is what is running the distorted equity markets, as they say pick your poison and pick it wisely.

This Week’s Main Stories We Covered

• Cost of Living Crisis Deepens as Consumer Inflation Rises +0.6% in August.
• ECB Raises Rates Another 25bps, Seen as a Dovish Final Hike
• Around The Barrel – US Crude Oil, Gasoline and Distillates Stocks Build as Production Increases
• OPEC Monthly Oil Market Report September 2023
• US Producer Prices Higher in August, Cost of Gasoline Surged 20%
• Into the Maelstrom – LNG and European Natural Gas Outlook for the Week Ahead
• Into the Vortex – U.S. Natural Gas Stocks Increased 57Bcf last Week EIA Reported
• Lower International Demand at 30-year Treasury Bond Auction Post CPI
• U.S. 10-year Bond Auction Auctioned at Highest Yield at Auction Since 2007 Ahead of CPI
• Softer Demand at 3-year Bond Auction in Another Week of Heavy Supply

September Mornings or Warnings?

Now that we heard from Fed Chair Powell at the Kansas City Fed’s Jackson Hole Symposium, the focus shifts back to the data and how bankers interpret it.

The September effect on risk appetite is a real thing, history suggests. That said we live in such manufactured times market wise, socially wise and sentiment wise we won’t put it all on that affect but is in the back of our minds.

Monthly returns on the S&P500 since 1928 lean towards September being the worst month for stocks on average at least for passive investing. In Septembers since 1945, the S&P 500 has declined an average of 0.7%, the worst performance of any month, according to CFRA.

Looking ahead for September there are a number of catalysts. We have had the jobs report and PCE. Next consumer price data due on Sep. 13 then the Fed’s monetary policy meeting Sep. 20. The Jackson Hole speech from Fed Chairman Powell fueled expectations of another rate increase this year, though a move in September was seen as less likely.

Outside the U.S. we had heightened financial stress and weak markets in China as we had been the pattern all year despite the constant dribbler and talking heads calling for a China turn around.

Risks Being Ignored or Opportunity Being Repriced?

With the swings of psychology and dominance of unemotional algorithm models dominating markets more than ever it is critical to stay unemotional and devoid of bias where best you can. For the next six months, we stick to our technical outlook via KnovaWave, watch the curve and EURUSD and USDJPY.

A reminder in these markets don’t get married to a view, leave biased partisan opinions at the door and find a leader. Right now, NVDA and TSLA continue to give us give good insights into crowd behavior. Note the divergence and convergence with it and other instruments. Be proactive.

These markets are constantly evolving, the important things is why we are here and it isn’t a surprise.

Where is the fear?

We got some movement these past weeks out of the tight range in markets but as we can see from the VIX chart it quickly reverted back after the initial breaks. We are aware of built-up energy ahead of key central bank decisions and potential fundamentals to set-up rate hikes or not. There is discontent globally with central banks and politician.

With optionality dominating markets along with quant funds, algorithms, systematic trading and automated trading volatility has collapsed as has been focused on at KnovaWave. Driving quant funds is a self-reinforcing dynamic, when market volatility drops, they add which causes those funds that have paid higher volatility to cover and hence we get the churn. At the end of March, quant-focused hedge funds held about $1.13 trillion in assets, according to research firm HFR, hovering just below last year’s record high. That represents about 29% of all hedge-fund assets.

To break out of this requires a continuing break in a major down, or up move to ignite delta chasing or covering.

So-called vol-control and risk-parity funds, which tend to automatically load up on riskier assets during calmer periods, ramped up equity exposure, according to the Deutsche Bank data, available through May 18. Other quants, such as trend-following CTAs, or commodity trading advisers, have similarly piled in.

The dominance of quants has helped explain previous periods of calm trading, including long stretches in 2017 and 2018. Those periods were punctured by rapid selloffs, including the 2018 selloff dubbed “Volmageddon” when the dynamics exerting calm on the market suddenly went away. Some warn a repeat could be ahead.

Caitlin McCabe WSJ

Cboe Daily Market Statistics

Talking about manic behavior it is not hard to argue the punter is overwhelming and influencing markets like no other time, well until the next time. Swirling greed and know it all came home to roost. FOMO (fear of missing out) and TINA (there is no alternative) ended how they always do.

When the VIX is highly reactive, VIX related products can serve as potentially effective hedging tools, when the VIX is not very reactive, traditional hedging techniques may be a better choice.

The VOLX`s underlying instrument is the Mini VIX™ Future. The CBOE Volatility Index (VIX) is an up-to-the-minute market estimate of expected volatility. The VIX is calculated using a formula to derive expected volatility by averaging the weighted prices of out-of-the-money puts and calls (options) on the S&P 500.

Worth repeating again in the low VIX environment.

Well, 2008 redux didn’t happen in the last few months, so the Fed moves have worked for now, much to Xi and Putin’s chagrin.

The doomsayers may be right, but we are seeing constant surprises to that theory. For example, early signs that the US housing market slump is finding a base are emerging, pending home sales having risen for a third month and to a 6-month high. we will keep an eye on consumer sentiment and business activity. We are far from being out of the woods, remember the market is not the economy. Saying that we got quite the distorted job picture per our main job stories which we reprise below. Are we simply taking some air out or is the beginning of the great meltdown?

What we continue to notice is how this market is still being treated by ‘experts’ as those in the past, hence the volatility and extreme in bulls/bears. Understanding crowd behavior is essential in these markets. The moves have caught analysts and strategists by surprise with the uber bear running amok in the past few weeks. Typical thinking is this from Morgan Stanley strategists a month ago; “Given the events of the past few weeks, we think … equity markets are at greater risk of pricing in much lower estimates”, noting that earnings estimates were 15-20% too high even “before the recent banking events.”

What non-traders are failing to grasp is this market with so many variables is not trading as they expect and they are constantly wrong. S&P 500 earnings for the first quarter are estimated to have fallen 5% from 2022, followed by an expected 3.9% drop in the second quarter, Refinitiv data shows. During recessions, however, earnings tumble at a 24% annual rate on average, according to Ned Davis Research. However how important is that in such a chaotic market? There is the answer structure your thinking around game theory or even chaos theory.

Week Ahead: Central Banks, Housing, PMI

Eyes will be on top macroeconomic reports that will emphasize the health of the US and global economies. Eyes and ears will be on central bankers given the market turmoil and the hiking of rates.

This week, there will be fifteen Central Bank decisions in the week ahead. Fed’s FOMC, Bank of England, Bank of Japan, PBOC, Norges Bank, Riksbank, Swiss National Bank, Banco Central do Brasil, Central Bank of China Taiwan, Hong Kong, Bangko Sentral ng Pilipinas, Bank Indonesia, Turkey’s Central Bank and South African Reserve Bank. Further to that a slew of global macro readings. Brace yourself.

The focus will be on the Federal Reserve’s meeting on Wednesday which is widely expected to maintain its key policy rates, enacting another “hawkish pause”. The follow through by the other central banks becomes significant. Then we move onto to data watch, if the data released leading up to the next meeting on October 31st indicates persistent inflationary pressures, the Fed may well resume its monetary tightening.

Earnings season has almost ended, but there are still companies reporting this week with earnings from FedEx (FDX), Darden Restaurants (DRI), AutoZone (AZO), General Mills (GIS), and FactSet (FDS).

How Hot is the American Economy?

More Macro and Micro data points, some highlights include.

• Monday: September NAHB Housing Market Index;
• Tuesday: August Housing Starts and Building Permits
• Wednesday: Weekly MBA Mortgage, FOMC Rate Decision and Summary of Economic Projections, Weekly oil inventories.
• Thursday: Weekly Initial and Continuing jobless claims, September Philadelphia Fed Index; Q2 Current Account Balance; August Existing Home Sales; August Leading Indicators; Weekly natural gas inventories,
• Friday: preliminary S&P Global US Manufacturing PMI – Prelim; S&P Global US Services PMI

» August’s Building Permits and Housing Starts – Tuesday, 9/19 – These reports provide valuable insights into the health of the housing market, as well as the economy overall, since the housing demand correlates with economic growth and consumer sentiment. Both reports are leading indicators, used by economists and analysts, among other data, to measure current demand and to estimate near-term trends in real estate, as well as in the connected industries.

» September’s Philadelphia Fed Manufacturing Survey – Thursday, 9/21 – This report, based on the survey performed by the Federal Reserve Bank of Philadelphia, measures the manufacturing conditions in the survey area (Philadelphia, New Jersey, and Delaware); it is considered to be an accurate leading indicator of the two nationwide reports, Manufacturing PMI and ISM Manufacturing indexes.

» September’s S&P Global Manufacturing PMI and Services PMI (preliminary) – Friday, 9/22 – These reports measure business conditions in the manufacturing and services sectors, two main sectors of the U.S. economy, which directly affect economic growth. PMI indices are leading economic indicators used by economists and analysts to gain timely insights into changing economic conditions since the direction and rate of change in the PMIs usually precede changes in the overall economy. via Yulia Vaiman

How is the Consumer Hanging?

The US relies on services for up to 90% of GDP. it relies on the consumer who is being battered by the California and New York regional bank debacle. On top of that is cumbersome if not ignorant politicians, with no clear regard for main street the evidence suggests in their behavior. Key retailers all gave a cautionary note with tightened household budgets continue to hit demand for big-ticket items and curb discretionary spending.

We get more data to help us gage the consumer: Weekly MBA Mortgage, Weekly Initial and Continuing jobless claims, September NAHB Housing Market Index; August Housing Starts and Building Permits; FOMC Rate Decision and Summary of Economic Projections; August Existing Home Sales; August Leading Indicators; S&P Global US Services PMI – Prelim

Earnings season has almost ended, but there are still companies reporting this week with earnings from FedEx (FDX), Darden Restaurants (DRI), AutoZone (AZO), and General Mills (GIS).

Click here to see the Full Week Ahead List Below

Some things never change, when you think Greed is Good

So how Screwed are We?

• Fed Z.1 for June with the release of Q2 Credit and flow data shows seasonally adjusted and annualized Credit growth of about $4.5 TN. One-year Treasury debt expansion of about $1.7 TN. Non-Financial Debt-to-GDP exceeding previous cycle peak levels. The ratio of Total Debt Securities-to-GDP is significantly higher than prior peaks.
• Household holdings of Financial Assets above previous peak levels. Household Net Worth inflating $5.5 TN in three months. Household Equities holdings as a percentage of GDP higher than previous cycle peaks.
• The value of Household Real Estate holdings jumped $2.480 TN to a record $48.870 TN, lagging only Q1 2022’s $3.561 TN increase. It’s worth noting that the largest quarterly Real Estate gain during the mortgage finance Bubble period was Q3 2005’s $864 billion. Over the past 15 quarters, Household Real Estate holdings inflated $15.809 TN, or 47.8%.
• The banking system is on much greater Credit risk than mortgage risks were offloaded during the 2008 mortgage finance Bubble. At $25.6 TN, Banking System Assets ended 2022 almost double the 2007 level.
• In nominal dollars, system Credit expanded $795 billion during Q2 to a record $96.327 TN, with NFD expanding $1.111 TN (to $71.248 TN), while financial borrowings contracted $329 billion (to $20.350 TN) (Foreign borrowings were little changed).
• System Credit posted one-year growth of $4.193 TN, or 4.6%. Over the 14 quarters since the onset of the pandemic, System Credit has surged $21.457 TN, or 28.7%. NFD has inflated $16.722 TN, or 30.7%, since the pandemic – and has doubled (plus $35.675 TN) since 2008.
• If it doesn’t burst well, we circle back to the popular view that Financial Sector debt included in analysis would be “double counting” borrowings already included elsewhere (i.e. mortgage and business). The swift end to backs, the shocking management out there and geopolitical cold war out there has us ready to expect the unexpected and aware of moves to mitigate by central banks as we saw a few weeks ago.
• GSE Assets declined $131 billion during Q2 to $9.409 TN. FHLB Loans fell $187 billion during Q2 to $855 billion. Still, FHLB Loans posted one-year growth of $335 billion, or 64.3%.
• Over six quarters, FHLB Loans expanded $520 billion, or 155%. GSE Assets expanded $1.117 TN, or 13.5%, over six quarters, and $2.279 TN, or 32.0%, over 14 quarters.
• FHLB plays a pivotal role, last year prolonging the lending boom and stabilizing bank liquidity.

The Credit cycle downturn is coming to the surface.

We have the reflective destabilizing Monetary Disorder. Take a peek at China and the markets collective cognitive dissonance to the property market there, the shadow banking as just one example. Have a look around the world. The hope is the collective mass continues to evolve and survive, while each time the destruction is evident in massive disproportion shifts of wealth and attempts of mind, if not physical control of the masses. Dial that back and try and get in the minds of those trying to right the ship and the market components that matter, not what the dribblers think matter.

Here’s a thought, knowing about the power of cognitive dissonance does not necessarily protect you from its effects. Traders are only too aware of this eureka moment when you grasp it. Why some of the best trades you ever do, are the ones you don’t. In option parlance, being delta neutral sometimes is the best trade.

Key this coming week will be the commencement of the next round of such indicators that will test whether these gains were one-offs or something that is sustainable. The key will be the extent to which downside risks to the US economy have been reduced enough to influence global central banks, and how markets react.

The Fed’s aggressive tightening cycle has had little effect on loose financial conditions.

Where to from here? It’s also okay to acknowledge and process any difficult emotions or experiences that you may have had during the past year. Looking back on the past year with perspective can help you to gain a greater understanding of what you have been through and how you have coped. I hope that you are able to find ways to manage any challenges that come your way and that you continue to feel fine moving forward. Embrace the chaos that is headed your way in 2023!

China; Behind the Iron Curtain

A big shift in 2022, China’s population is now falling and below that of India. China’s population fell for the first time since 1961 as births have steadily fallen in recent years despite the removal of the “one child policy”. The stalling working age population and its likely decline ahead means that potential growth in China is down from around 10% or so in the 2000s to around 4-5% now.

Growth in China’s metric of system Credit growth, Aggregate Financing, dropped to $175 billion, down significantly from March’s $773 billion and only 61% of estimates. It was also the weakest monthly growth since last October.

“China is warning domestic brokerages not to spread information that compromises national security, reinforcing a campaign that has roiled consulting firms and providers of financial data.”

• September 7 – Reuters (Ziyi Tang and Ryan Woo): “Five of China’s major state banks said… they will start to lower interest rates on existing mortgages for first-home loans, part of a series of support measures announced by Beijing in recent weeks. Chinese regulators announced the policy last week to help homebuyers amid growing concern over the health of the world’s second-largest economy and a series of crises in the nation’s property sector.”
• September 7 – Reuters (Joe Cash): “China’s exports and imports extended declines in August as the twin pressures of sagging overseas demand and weak consumer spending at home squeezed businesses… Exports dropped 8.8% in August year-on-year, customs data showed on Thursday, beating a forecast of 9.2%… and off a 14.5% drop in July. Meanwhile, imports contracted 7.3%, slower than an expected 9.0% decline and last month’s 12.4% fall.”
• September 5 – Reuters (Julie Zhu, Kevin Huang, Yelin Mo and Roxanne Liu): “China is set to launch a new state-backed investment fund that aims to raise about $40 billion for its semiconductor sector…, as the country ramps up efforts to catch up with the U.S. and other rivals. It is likely to be the biggest of three funds launched by the China Integrated Circuit Industry Investment Fund… Its target of 300 billion yuan ($41bn) outdoes similar funds in 2014 and 2019, which… raised 138.7 billion yuan and 200 billion yuan respectively.”

The Market Tripod of Destruction.

• Firstly, financial asset overvaluation has swung way past any sound underlying economic wealth structure.
• Secondly over-leverage in crowded bets.
• Thirdly we have greed enthused, as always in these cycles, risk engineering, transfer and management that ignores or understands bifurcation and contagion outcomes.

Leverage has become toxic, a development that if not addressed will have deep and with far-reaching sequels. It’s not too farfetched to suggest that the markets are on the verge of a rupture that would be difficult to contain. Should the crisis of confidence dynamics that hit Britain feed into other markets a powerful global contagion could be unleashed. The markets are dislocated, and financial stability is at risk. A sobering thought is the UK is just the initial first world pension system in this cycle facing the harsh reality of a steep devaluation of assets and the prospect of widespread insolvencies and debilitating negative sentiment.

Inflation Matters

• US Producer Prices Higher in August, Cost of Gasoline Surged 20%
• Cost of Living Crisis Deepens as Consumer Inflation Rises +0.6% in August
• Core PCE inflation Rises to +4.2% from 4.1% in July Keeping Fed Awake

Inflation with Henry Kaufman

Kaufman is the legendary chief economist and head of bond market research at Salomon Brothers is someone who knows Inflation.  Henry Kaufman in an interview with Bloomberg’s Erik Schatzker Jan 14, 2022:

 “I don’t think this Federal Reserve and this leadership has the stamina to act decisively. They’ll act incrementally. In order to turn the market around to a more non-inflationary attitude, you have to shock the market. You can’t raise interest rates bit-by-bit.”

“The longer the Fed takes to tackle a high rate of inflation, the more inflationary psychology is embedded in the private sector — and the more it will have to shock the system.”

“‘It’s dangerous to use the word transitory,’ Kaufman said. ‘The minute you say transitory, it means you’re willing to tolerate some inflation.’ That, he said, undermines the Fed’s role of maintaining economic and financial stability to achieve ‘reasonable non-inflationary growth.’”

Independence – Never Take It for Granted Traders

“In aggregate, the market goes from order to disorder, and on that journey little pockets of order can form, including in commodities, bonds, stocks, currencies that circle back and reorder disorder. Then there is us the market player that reflects through order and disorder in an ever-evolving loop towards independence. It all starts with gravity and ends with equilibrium and back we go.” KnovaWave “The rules of market flux”

The Fed has kicked off its first real tightening campaign since 1994, with securities markets already at the brink of illiquidity and dislocation. Markets could soon be screaming for assurances of the Fed’s “buyer of last resort” liquidity backstop, while the Fed is prepared to begin withdrawing liquidity by selling Treasuries and MBS.

Another important aspect is the Fed doesn’t Control corporate pricing or wage decisions. Let us be clear geopolitical, climate change developments and what an out of depth, politically motivated administration are outside the Fed’s sphere of influence. There has been over $5.1 Trillion new “money” in 126 weeks, it’s a reasonable conclusion the Fed has lost control of Inflation.

We need to grasp all the risks to be wary off and received plenty of flak from it. We always talk here about expect the unexpected and now that is front and center, gage the market’s reaction, the market is always right and that’s why we focused on the crowd psychology aspect over the past few weeks.

“We have a market trying to interpret the Fed who is trying to find out how they can interpret their long-only portfolio at a risk parity where rates cannot rise.”

– MoneyNeverSleeps

This move has crept up on many, to the extent the S&P 500’s is over the traditional measurement of a new bull market typically measured as a 20% gain from a significant low. The index above 4292.438 got that 20% move. That ended the longest bear market since 1948. The DAX and CAC40 have seen all-time highs recently also.

Our weekly reminder for risk. The downside is clear with the absence of moral hazard from repeated Federal Reserve market bailouts in an environment of some would say obscene liquidity pumps. Pure greed is the other part, not wanting to miss out on fees. The obvious question is, how deeply ingrained is this attitude through the markets? How do we ween the markets off this continuous dip feed? At this point the Central Banks have kicked that answer down the road.

Part A – Stock Markets

Weekly Highlights – USA

Indices

• S&P500 slipped 0.2% (up 15.9% y-t-d)
• Dow added 0.1% (up 4.4%).
• S&P 400 Midcaps dipped 0.3% (up 5.6%),
• Small cap Russell 2000 slipped 0.2% (up 4.9%).
• Nasdaq100 declined 0.5% (up 39.0%)

YTD Report Card for the S&P Sectors

Sectors

Notably despite a lower finish for the indices, eight of the 11 S&P 500 sectors closed higher. Information technology, which is the most heavily weighted sector, declined 2.2%. Apple (AAPL) again was a top laggard from the info tech sector, dropping 1.8% this week amid reports of ongoing scrutiny in China and following its product event that featured the introduction of the iPhone 15. Adobe (ADBE) was another weak component, dropping 5.6% following its underwhelming fiscal Q4 guidance.

Weak semiconductors also contributed to the sector’s underperformance. That weakness followed Arm’s (ARM) successful IPO on Thursday and a Reuters report that Taiwan Semiconductor Manufacturing (TSM) is delaying chip equipment shipments. The PHLX Semiconductor Index fell 2.5%.

A breakdown of the performance of the S&P 500 sectors:

• Utilities jumped 2.8% (down 9.8%).
• Banks rallied 2.4% (down 18.4%),
• Broker/Dealers gained 1.3% (up 13.0%).
• Transports increased 0.9% (up 14.5%).
• Semiconductors slumped 2.5% (up 37.3%).
• Biotechs declined 0.3% (down 1.9%).
• With bullion up $5, the HUI gold equities index rallied 4.7% (down 0.2%).

Biggest SPX Stock Winners and Losers Last Week

When Markets Get Short Behind the Curve

Worth reading again what fueled the recent rally… and then the sell off after ….

We analyzed the short component of this year’s rally back in May and it an important component of the market’s structure. Global stocks have continued to climb the wall of worry in 2023, with what has become a series of saves from the brink of economic disaster in a political episode worthy of the best Monty Python minds. The end result has left many investors over insured at times as we have been focusing on with option saturation, short bets and long only investors out of the market. The latter in a rising market essentially makes them short.

This background is not new we have seen it many times over the last 20 to 30 years. The difference here is the sheer weight of money in the system and the introduction of shorter dated options and so many playing it.

Speculators and hedge funds had put on the largest short positions in the S&P 500 since 2007 according to Bespoke Investment Group using CFTC data measured as a percentage of open futures-market interest.

At the same time, they have bet long on the Nasdaq-100, with net bullish plays nearing the highest levels since late last year, remember that. Markets go where the most pain is. The move, in a world where averaging your position is seen as trading has fueled larger positions. Anyone understand the martingale principle?

Fed Assets expanded $364 billion over three weeks in March in banking crisis liquidity operations (the market has a short memory that was only 8 weeks ago and helped create bigger shorts out there). Assets remain about $45 billion above the March 1st level. FHLB assets expanded an unprecedented $317 billion during Q1 ($802bn over 4 quarters). Indicative of the liquidity surge, money market fund assets inflated $384 billion in the five weeks beginning March 8th. In affect we got a massive boost a surge in financial sector Credit with those FHLB money market borrowings to finance its massive banking liquidity support operations.

That’s all well and good the trouble it is up, and substantially and the cost of carry is around 6-12% not 0-2% from last year. Trading from the short side is about timing, recognition and as they say strike like a cobra. The demise of the Californian and New York Regional Banks was a prime example, they were on the radar and once the cracks appeared, go hard, go fast.

Where are the Shorts Trapped at? (Becomes the Longs After Wave C’s or 3’s)

There is two ways of looking at this the bears and the dribblers out there argue it all has to come down. The rationale being the S&P 500 was up 12% this year, however it would be negative without the contribution of seven big tech companies. The argument is should any of those plunges then we are back to bringing it all down. The problem is it has gone up, we look at the AAPL and NVDA for just two names that dominate structure.

Global Stock Market Highlights

Highlights – Europe Stocks

Week/YTD

• U.K.’s FTSE equities index surged 3.1% (up 3.5% y-t-d).
• France’s CAC40 gained 1.9% (up 14.0%).
• German DAX equities index added 1.0% (up 14.1%).
• Spain’s IBEX 35 equities index jumped 2.0% (up 16.0%).
• Italy’s FTSE MIB index recovered 2.3% (up 21.9%).

Germany’s benchmark Blue Chip DAX 30 index (Deutscher Aktienindex) expanded to 40 companies on 20 September 2021 adding 10 new members to the German stock index from the MDAX which will be reduced from 60 to 50 members.

Highlights – Asia Stocks

Week/YTD

• Japan’s Nikkei Equities Index rallied 2.8% (up 28.5% y-t-d).
• South Korea’s Kospi index jumped 2.1% (up 16.3%).
• India’s Sensex equities index rose 1.9% (up 11.5%).
• China’s Shanghai Exchange Index was little changed (up 0.9%).

Highlights – Australian Stocks

• Australia’s S&P/ASX 200: +1.3% on Friday to 7279 (+1.7% for the week)
• Singapore iron ore October futures up 1.95% Friday to near $US123, highest levels since March, a 20% rally since mid-August.
• Iron ore miners, with Fortescue Metals Group up 9.7% and Rio Tinto up 7.5% BHP up 5.53%
• Champion Iron shares were the best-performing on the ASX, up 14.09 per cent.

Highlights – Emerging Markets Stocks

Week/YTD 

• Brazil’s Bovespa index rallied 3.0% (up 8.2%),
• Mexico’s Bolsa index fell 2.2% (up 6.0%)
• Turkey’s Borsa Istanbul National 100 index dropped 4.4% (up 44.5%).
• Russia’s MICEX equities index increased 0.3% (up 46.3%).

Technical Analysis

S&P 500

Daily: The daily SPX closed above the previous roof (Key Spits) which were also at 7/8 and clustered around the 50% & August breakdown. With energy and with a very low VIX it has mirrored the get cloud to get through overhead. The bullish take is that we completed the correction off last year’s high at the low and this is a larger 1-2 to go higher with support at the previous resistance and cloud. The bearish outlook is this move becomes a rising wedge and we are working out the uber bears before new lows.

When we talk about crowd psychology this is a great example. The market after spitting the 4100 and 38.2% retracement broke to capture the Tenkan. This underscores the power from the SPX spat of June & October lows with impulse through the tenkan and Kijun energized by the daily cloud twist that fueled this rally. The completive wave came off extreme fear and bear that ended with relief. Now we have sated much of the greed phase and short fear phase. We have completed that cycle and from here we measure the alternatives.

It is worth looking back at the completive highs (all-time highs) and how we played out so far. Tracing back from highs the fuel from the top of the channel after completing 3 waves off ATH, accelerated after broke the Tenkan through to the 4600 OI where it reversed with impulse back to Tenkan. Bulls, this is likely a (ii) of a 5. Bears this is 1-2 of (i) completive V of degree. We watch if this low was a (iii), (a) or C. We have to respect the number of alternatives of degree of 5. With such trends keep it simple. From no fear to panic is the driving element.

On the downside the Kijun and those June lows now critical and is our trading Bear/Bull pivot in a high vol scenario. Watch each measured 3 wave move on the 240 & Murrey Math highlighted in the podcast. The prices pulled through the downward cloud pulled by the twist ‘helium contusion’ on the completive. For fractal purposes, SPX completed 5 waves up where it reversed with impulse. Energy fueled from the power impulse down from +1/8 ATH spit of a spit fail. On the way down (just like up) it accelerated after it broke the Tenkan through the rejected Kijun and then through the median after tapping 8/8.

Weekly: The SPX has a clear channel off the lows on the weekly timeframe off the sphere of influence and has ground higher since it closed over the cloud above the Tenkan. Key support is the Tenkan, channel and +1/8. Power initially came from launching out of the sphere of influence as one would expect in a 3 or C. We had the Kijun spit also. Above is the channel and +3/8.

In the bigger picture we are playing out S&P 500 energy after it held the sphere of influence from Nov 2020 reversed higher after spitting the 38% and key lows. At the time we opined “We do have a weekly cloud twist; however, the energy is waning without sharp impulse.” We got the sharp impulse right to weekly Kijun. For major cycles we watch the S&P 500 over 4,231, the 50% retracement of losses from the Jan. 3 & June 16 close. Since 1950 there has never been a bear market rally that exceeded the 50% retracement then gone on to make new cycle lows. Is this time different, as we tested and spat those June lows?

On the way up each new high evolved after testing Tenkan key support on the way and we are now getting a retest as resistance. We reiterate this needs to be recovered for a resumption of the uptrend meanwhile the bear market plays out. Watch Tenkan this week and watch for Kijun reaction. Extensions are difficult to time, keep it simple.

THE KEY: Key for the impulse higher was the spit or retest of MM 8/8 and Tenkan San, which held with the previous highs and Tenkan.  To repeat “We look for 3 waves down and reactions to keep it simple with the alternatives in the daily.”  Keep an eye on the put/call ratio with recognition to the sheer size of contracts AND keep in mind the stimulus distortion. The spit per channel fractal and Adams rule launched back over the cloud where we were encased AND we are back testing it. Watch if a spit or clear break support as Chikou rebalances.

A reminder that Apple Inc $AAPL, Microsoft Corp $MSFT, Amazon.com Inc $AMZN, Facebook Inc $FB, and Google-parent Alphabet Inc $GOOGL make up approximately 23% of the total weight of the S&P 500. With that comes gyrations that are an outsized impact on broader markets

NASDAQ 100

The down move saw Nasdaq spit the weekly Kijun and a 1-2 off tenkan we spat MM 5/8 after holding the key 61.8% Fib. We watch the Tenkan & Kijun confluence above, the breakup level and between the 38/50 Fibs. The Nasdaq is well behind the S&P pace with the weekly cloud and 50wma well above. Support the 61.8% retest.

Recall ATH was after it broke and held the weekly Tenkan to see a spit of a spit fail which is completive of 5 of some degree with Chikou rebalancing. Watch Chikou for divergence for continuation or failure. Divergence with Russell also a clue.

Russell 2000

The small cap Russell RUT bounced in double bottom off 1600 5/8 confluence which was the Nov 2020 breakup. Russell 2000 Resistance Tenkan and Kijun, note previous rejections. This is the index showing more of the fast money crowd and is trading like it. Needs to get traction in here for bulls. 7/8 & 8/8 support collapsed on the way down and is now major resistance.

Dow Jones

The Dow led the indices and closed above the weekly Tenkan after closing and testing last week. Prior test after the reaction off the June lows and sphere of influence. Support is the channel and Fibs. Tenkan and Kijun after the reaction empowered. Support is the channel and Fibs.

Semiconductors

NVidia $NVDA

NVidia surged 179.3% in H1 2023. It has been relentless since earnings and is the focus of the AI craze. With all manic moves beware of the pullbacks and topping potential. That said the extensions have played out and so far to +2/8 on the weekly. This was a classic set up as we can see. It has a textbook of KnovaWave methodology and rules from the 61.8% break and reverse through the sphere. NVDA accelerated after it broke the double top spheres at 5/8 giving is a near 4/8 move. A reminder that the dominance was in.

NVDA took off after the breakup retest from May 2021. NVidia is a clear leader of SOX & SMH look for cues there and ABC failures for changes. NVDA never looked back after the Key Break (mauve) and Tenkan to a flat cloud and holding support the recent low at the 61.8% extension.

Apple $AAPL

Apple has consistently driven upwards after it held the sphere of influence after retesting 6/8 & break up. Kijun and Tenkan crossing and then the 50wma with the cloud twist have been magnetic. Apple & other mega-cap names dominant the major indices, and a plethora of funds that hold it as a core position. The Vanguard Mega-Cap Growth ETF (MGK) delta is important to watch.

A firm rejection at $175 at +2/8 triggered a waterfall down for Apple last year. We regathered that and more and broke the weekly bull flag higher. On the way up Apple gently motored up to new ATH over the massive $160 then $170 thru to $180 gamma level on the way down these levels became key energy levels all the way to $132. Support held at the May break (just like NVDA) where from there it spat the cloud pulled by a flat Tenkan and Kijun as it rebalanced Chikou. The old channel break and MM +2/8 is now key. Remember the impact $AAPL has, at least short term on all the major indices.

ARKK ETF

The ARK Innovation ETF (ARKK) finally found some support at -1/8, 78% off highs and the 423.6% extension! The ARK Innovation ETF returned 29% for Q1 2023. The fund is filled with growth stocks and was the top-performing U.S. equity fund tracked by Morningstar in 2020, it has not been a pretty slide. For the quarter, Nasdaq Computer Index up 25.7% and the NYSE Arca Technology Index gaining 26.1%. The Nasdaq100 (NDX) jumped 20.5%.

The ARKK ETF trading clinically, tested triangle breakdown and failed off 50 WMA. Some work at support at 61.8% of whole move and then wrecked again. Clear crowd behavior, we saw ATH in NASDAQ & SPX, yet this couldn’t raise a bid – very telling negative divergence. $ARKK rebalanced Chikou at week’s end

ExxonMobil XOM

XOM has completed 5 waves from -3/8 to +3/8 on the weekly. with a double top. Alternatives 5 complete of degree. We are in a 1-2 (A-B depending on degree. Support is the cloud which has held 3 times since the high and the 50WMA resistance the tenkan and Kijun. Pattern wise we are in the bull flag until proven otherwise.

Part B: Bond Markets

Bond Watch

Treasuries

Ahead of a tidal wave of global central bank monetary policy decisions over the coming week U.S. Treasuries closed the week on a modestly lower note as yields drifted higher for the week. The 2-yr note yield rose seven basis points this week to 5.04%. The 10-yr note yield rose seven basis points this week to 4.33%. It was a busy week for bonds with this week’s CPI and PPI inflation data which was supportive of stocks. August core consumer price inflation was up 4.3% year-over-year, versus 4.7% in July, which is what the Fed monitors more closely, showed ongoing improvement on a year-over-year basis; however, it is still well above the Fed’s 2.0% target, which will certainly keep the Fed in a “higher for longer” mindset

Treasury Yield Watch

Friday/Week

• 2-yr: +3 bps to 5.04% (+7 bps for the week)
• 3-yr: +2 bps to 4.70% (+1 bp for the week)
• 5-yr: +3 bps to 4.45% (+5 bps for the week)
• 10-yr: +4 bps to 4.33% (+7 bps for the week)
• 30-yr: +2 bps to 4.41% (+8 bps for the week)

Higher for longer is a serious threat.

Surging market yields are a serious issue for a banking system loaded with long duration securities portfolios. This may well be a push over the cliff for troubled commercial real estate (CRE). Leveraged lending and leveraged finance gets more costly. Simply there are trillions of floating rate loans among individuals, speculators, businesses, and nations.

Remember this? There is a reason why we focused on it recurring, you didn’t need Fitch to remind you:)

• The iShares Investment Grade Corporate ETF (LQD) declined 1.01% Thursday, the largest loss since May 1st. The 2.40% loss for the week was the largest since February.
• The iShares High Yield ETF (HYG) declined 0.73% Thursday, also the largest decline since May 1st. The 1.63% loss for the week, the worst weekly performance since early-March.
• Friday Bloomberg headlines: “HYG ETF Daily Outflows $1.13 Bln, Biggest Move Since March 28th.” and “Two Giant Credit ETFs Hit by $2 Billion Exit on Hawkish Fed Bets.”

For our complete Weekly Fixed Interest Analysis and Outlook visit our Bond Traders Weekly Outlook:

Mortgage Market

• Freddie Mac 30-year fixed mortgage rates jumped 10 bps to 7.24% (up 122bps y-o-y).
• Fifteen-year rates gained nine bps to 6.75% (up 154bps) – the high since 2002.
• Five-year hybrid ARM rates rose nine bps to 7.01% (up 208bps).
• Bankrate’s survey of jumbo mortgage borrowing costs had 30-year fixed rates down 14 bps to 7.53% (up 135bps).

Global Debt Monitor

Highlights Unprecedented and Ongoing Surge in Global Debt

Last week, the Institute of International Finance (IIF) released their Q1 2023 Global Debt Monitor (GDM), highlighting the unprecedented – and ongoing – surge in global debt.

GDM Highlights:

• “The global debt stock grew by $8.3 trillion to a near-record $305 trillion in Q123; the combination of high debt levels and rising interest rates has pushed up debt service costs, prompting concerns about leverage in the financial system.”
• “Total debt of emerging markets hit a fresh record high of over $100 trillion (or 250% of GDP) – up from $75 trillion in 2019.”
• “At close to $305 trillion, global debt is now $45 trillion higher than its pre-pandemic level and is expected to continue increasing rapidly.”
• “Rise of private debt markets: Non-bank financial institutions (NBFLs) continue to gain prominence in global credit intermediation. The so-called ‘shadow banks’ now account for more than 14% of financial markets, with the majority of growth stemming from a rapid expansion of U.S. investment and private debt markets.”
• “The Size of Private Debt Markets Surpassed $2.1 Trillion in 2022, Up From Less Than $0.1 Trillion in 2007.”

From the end of Q3 2019 through Q1 2023, Total Global Debt jumped $52.3 TN, or 20.7%, to $305 TN.

Over this period, “Mature” economy debt expanded 13.4%, while “Emerging” economy debt surged 38.9%. It’s worth nothing that in the “Emerging” category, “Household” debt surged 41.7%, “Non-Financial Corporate” 35.1%, and “Government” 55.7%. Since 2016, total global debt-to-GDP has surged from 210% to 360%. Global financial conditions remain loose. When they inevitably tighten, be prepared for serious dislocation.

Part C: Commodities

Highlights

Key Long Term Commodity Charts

Copper

Gold

China added to its gold reserves for an eighth consecutive month. People’s Bank of China holdings of bullion rose by 680,000 troy ounces last month, according to official data released Friday. That’s equivalent to 23 tons.

Energy

For complete Oil and Natural Gas Coverage please visit our dedicated publications ‘Around the Barrel’ and ‘Into the Vortex.’ – Weekly Analysis and Outlook for Energy Traders and Investors

WTI Oil

Natural Gas

BDI Freight Index

For our complete Weekly Commodity Analysis and Outlook visit our Commodity Traders Weekly Outlook:

Charts and commentary via KnovaWave on:

• Grains: Wheat, Corn, Soybeans
• Metals: Copper, Aluminum
• Precious Metals: Gold Silver
• Lumber
• Oil and Natural gas are covered separately (see below)

Part D: Forex Markets

John Maynard Keynes, 1920: “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction and does it in a manner which not one man in a million is able to diagnose.”

Highlights

• For the week, the U.S. Dollar Index gained 0.2% to 105.32 (up 1.8% y-t-d).. 2022 gains were 8.2%
• For the week on the upside, Mexican peso increased 3.0%, the Brazilian real 2.5%, the Australian dollar 0.9%, the Canadian dollar 0.9%, the South African rand 0.6%, the South Korean won 0.5%, the New Zealand dollar 0.3%, and the Singapore dollar 0.2%. The Chinese (onshore) renminbi gained 0.94% versus the dollar (down 5.18%).
• On the downside, the Norwegian krone declined 0.9%, the British pound 0.7%, the Swedish krona 0.6%, the Swiss franc 0.4%, and the euro 0.4%.

For our complete Forex Weekly Analysis and Outlook visit our Forex Traders Weekly Outlook:

Charts and commentary via KnovaWave on the US Dollar, Euro, Japanese Yen, British Pound, Euro Pound, Swiss Franc, Canadian Dollar, Australian Dollar, New Zealand Dollar, Turkish Lira, Mexican Peso. Currency dynamics are complex. There are myriad facets to analyze and contemplate that influence all markets.

Cryptocurrencies

Bitcoin

Bitcoin continues to be plaything of levered speculators; this week we saw the markets turn against those short. Where did this come from? Forced coverage from yield curve punts blowing up. Yen shorts and levered “carry trades” at risk.

It had been a churn following the FTX collapse. BTC had been stuck in the sphere of influence in continuation awaiting a catalyst, and it came. Continues to perform technically to perfection. Impulse begets impulse. To understand panic, understand greed. $BTC tested the top of a rising channel after the preceding sharp downturn which was the downside breakout of an earlier bearish flag, after breaking downside a H&S top and then down it went….

Recall Bitcoin exploded higher following it’s correction impulsively upon completing 5 waves up at +2/8. Each Tenkan and Kijun tap saw an explosive kiss of death until we completed 3 waves to around 28,000. From there we have seen extreme volatility.

Looking back Bitcoin put in a high of $63,000 around Coinbase, the largest US crypto exchange successfully went public which signaled profit-taking. The high over $68,000 came after the launch over the Bitcoin ETF. From that high we have 2 main alternatives a V of a 1 of a V. For bears it a completive five with impulse right to the 50wma – an incredible 26% fall in a Friday night session. That’s impulse!

On the Risk Radar

Fed Warnings on Possible Medium To Long Term Risks

 Geopolitical Tinderbox Radar

Economic and Geopolitical Watch

Banks

Major US Banks for Q2, 2023

America’s big money center banks kicked of second quarter earnings with a solid start with solid beats by JP Morgan Chase, BlackRock, Wells Fargo, Citigroup and State Street.

Q223 Reports

• Big Banks Kick Off Second Quarter Earnings Season with Citigroup, JPMorgan, State Street and Wells Fargo
• Wells Fargo Earnings Stabilizing with Higher Net Interest Income on Higher Rates
• JPMorgan Profit Soars with First Republic & Record Net Interest Income
• Citigroup Earnings Hampered by Slump in Trading and Investment Banking
• US Bancorp Earnings Top Expectations, Net Interest Income Guidance Tightens
• The Giant Squids Horror Stretch Continues, Goldman Sachs Profit Drops 58%
• Bank of America Earnings Boosted by Global Banking, Debt Securities Portfolio Losses at $105.8
• Morgan Stanley Profit Hit by Lower Trading Revenue
• PNC Bank Lowers 2023 Guidance Again after Revenue Lower Than Expected

The Week Ahead – Have a Trading Plan

What Macro and Micro Risks and Opportunities Lie Ahead this week

Global Watch

Next Week’s Risk Dashboard via Scotiabank

• Central bankers return in droves
• FOMC to deliver a hawkish pass
• BoE to hike as inflation, wages remain hot
• BoJ to stand pat
• Chinese banks unlikely to cut lending rates
• Canadian CPI to inch closer to BoC’s next decision
• BoC communications will probably be low risk
• PMIs: EZ, UK, Japan, Australia, US (not ISMs)
• UK core CPI isn’t cooling yet
• Norges Bank to hike, because they said so!
• Riksbank to reach terminal rate?
• SNB to hike
• Brazil’s central bank will cut again
• Turkey’s central bank can’t stop the lira’s plunge
• BSP could resume tightening
• BI, CBCT, SARB to hold
• Global macro readings

Central Bank Watch

In the week ahead there will be fifteen Central Bank decisions in the week ahead. Fed’s FOMC, Bank of England, Bank of Japan, PBOC, Norges Bank, Riksbank, Swiss National Bank, Banco Central do Brasil, Central Bank of China Taiwan, Hong Kong, Bangko Sentral ng Pilipinas, Bank Indonesia, Turkey’s Central Bank and South African Reserve Bank. Further to that a slew of global macro readings. Brace yourself.

Eyes and ears will be on central bankers. We have the backdrop of a more hawkish Fed Chair in the face of escalating systemic risk. How will this affect Fed policy given the massive treasury positions out there and the risk of uninsured funds? In this environment we get pivots daily. How much damage is the Federal Reserve willing to do in the guise of controlling inflation?

This Week’s Interest Rate Announcements (Time E.T.)

In the week ahead we get 15 central banks delivering policy decision.

Tuesday, September 19, 2023

• 21:15 PBOC China Loan Prime Rate

Wednesday, September 20, 2023

• 14:00 Fed Interest Rate Decision
• 17:00 Banco Central do Brasil Interest Rate Decision
• 22:30 HKMA Interest Rate Decision

Thursday, September 21, 2023

• 03:00 Bangko Sentral ng Pilipinas Interest Rate Decision
• 03:30 Riksbank Interest Rate Decision
• 03:30 Swiss National Bank Interest Rate Decision
• 03:30 Bank Indonesia Interest Rate Decision
• 04:00 Central Bank of China Taiwan Interest Rate Decision
• 04:00 Norges Bank Interest Rate Decision
• 07:00 BoE Interest Rate Decision
• 07:00 Turkey Central Bank Interest Rate Decision
• 23:00 BoJ Interest Rate Decision

For our complete Central Bank Analysis and Outlook Visit our Central Bank Watch:

U.S. Economic Data Watch

US Data Focus

• Monday: September NAHB Housing Market Index; July Net Long-Term TIC Flows
• Tuesday: August Housing Starts and Building Permits
• Wednesday: MBA Mortgage Applications Index; EIA Crude Oil Inventories; FOMC Rate Decision and Summary of Economic Projections
• Thursday: Weekly Initial and Continuing Jobless Claims; September Philadelphia Fed Index; Q2 Current Account Balance; August Existing Home Sales; August Leading Indicators; EIA Natural Gas Inventories
• Friday: S&P Global US Manufacturing PMI – Prelim; S&P Global US Services PMI – Prelim

US Stocks Watch Earnings and Event Watch

Earnings Highlights This Week:

The Q2 2023 reporting season has almost ended, but there are still companies reporting this week.

• Monday includes Stitch Fix (SFIX).
• Tuesday includes AutZone (AZO), Steelcase (SCS), Endava (DAVA), Investcorp Credit Management BDC (ICMB) and Apogee Enterprises (APOG).
• Wednesday includes FedEx (FDX), General Mills (GIS), and KB Home (KBH).
• Thursday includes Darden Restaurants (DRI), Valneva (VALN), Flux Power Holdings (FLUX), and Factset Research (FDS).
• Friday includes

Investors (and algos) will focus on the conference calls and outlooks. Last quarter everyone expected the worse, we saw critical updates on production in coronavirus impacted regions and if there is extended halting of operations weighing on multi-nationals. 

Events

Saturday, Sept. 16

• Global Geothermal Conference in Beijing
• Informal meeting of EU finance ministers concludes in Spain

Notable conferences running during the week include:

• CL King Annual Best Ideas Conference,
• J.P. Morgan Annual U.S. All Stars Conference,
• Wells Fargo Consumer Conference,
• TD Cowen FutureHealth Conference.

Monday

• Russian and Chinese foreign ministers to talk in Moscow
• German Finance Minister Lindner speaks at the Bloomberg Future of Finance Conference in Frankfurt
• Ukraine defense ministers meet in Germany
• All day – Oracle (ORCL) will holds it four-day CloudWorld event in Las Vegas. The event will cover all things Oracle (ORCL), including AI on OCI, the progress of Oracle Autonomous Database, the company’s multi-cloud strategy, and the use of Oracle Analytics throughout the portfolio. CEO Safra Catz will give a keynote address and Uber (UBER) CEO Dara Kohsrowshahi will be a featured speaker.
• 6 a.m. Pfizer (PFE) presents at the JPMorgan 14th Annual U.S. All Stars Conference. Investors are interested in any comments on the Seagen (SGEN) $43 billion deal status.
• 12:30 p.m. – Campbell Soup (CPB) presents at the TD Cowen Sipping & Snacking Summit with investors interested in comments/update on the planned Sovos Brands (SOVO) acquisition.

Tuesday

• General debate starts at the United Nations’ 78th general assembly
• OECD releases interim economic outlook report on the global economy
• ECB’s Elderson addresses conference at Goethe-Universität/Center for Financial Studies in Frankfurt
• EU European affairs ministers to meet in Brussels
• Pinterest (PINS) Investor Day event.
• Fortis’ (FTS) Investor Day, Portillo’s (PTLO) Investor Day,
• IonQ (IONQ) Analyst Day,
• Revance Therapeutics’ (RVNC) Investor Day,
• Coherent Corp.’s (COHR) Communications Market Overview Webcast,
• Workiva’s (WK) Investor Day.
• All day – TechCrunch Disrupt will run for three days. Several AI sessions could attract attention from analysts and the closely-watched Startup Battlefield will showcase the top 200 startups from around the world.
• 12:00 p.m. Crowdstrike (CRWD) CEO George Kurtz will give a talk on “The Future of Cybersecurity and Generative AI” at the Fal.Con Conference.

Wednesday

• Intel (INTC) Innovation Day,
• Myriad Genetics’ (MYGN) Investor Day,
• Boston Scientific’s (BSX) Investor Day,
• Driven Brands’ (DRVN) Investor Day,
• Avient’s (AVNT) Sustainability Day,
• CrowdStrike’s (CRWD) Investor Briefing,
• Procore’s (PCOR) Investor Day,
• Exxon Mobil’s (XOM) Product Solutions Spotlight.
• All day – Microsoft (MSFT) will hold a special event in New York City that is expected to feature details on new hardware products an an update on the latest AI innovations across the company. CEO Satya Nadella and other Microsoft executives from product groups covering Microsoft 365, Surface, Windows, and Bing will present.
• All day – Amazon (AMZN) will hold a Devices and Service Event. Analysts expect to hear about new Echo and Fire TV devices this year.

Thursday

• Charles River Laboratories’ Investor Day (CRL),
• Celcuity’s (CELC) Virtual Science Day,
• Cidara Therapeutics’ (CDTX) Virtual R&D Day.
• All day – Shareholders with Magellan Midstream Partners (MMP) will vote on the deal for the company to be acquired by ONEOK (OKE) for $25.00 in cash and 0.667 shares of ONEOK stock for each outstanding Magellan common unit.
• 9 a.m. – Reata Pharameuticals (RETA) shareholders will vote on its planned $7 billion sale to Biogen (BIIB).
• 1:30 p.m. – The Federal Trade Commission will hold a closed door meeting on multiple matters.

Friday

• Atlantic Council’s “Transatlantic Forum on GeoEconomics” in Berlin, with German Economy Minister Habeck and others
• Riksbank Governor Thedeen speaks on “Why is the Swedish krona so weak” in separate events
• All day – It is the last trading day before the FDA action date on GSK’s (GSK) PD-1 receptor blocker Jemperli. GSK and AnaptysBio (ANAB) have a collaboration agreement for commercialization of dostarlimabUnder an FDA initiative called Project Orbis, regulators in Australia, Canada, Switzerland, Singapore, and the U.K. will simultaneously review the sBLA for Jemperli.

Sovereign Rating Updates

• Germany (S&P)
• Poland (Moody’s)
• Finland (DBRS)
• France (DBRS)

IPO Wrap

US IPO Week Ahead:

Focus on yourself and what YOU CAN INFLUENCE, set your trading plan and goals in be set for 2022.

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