September 3 – 9, 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

The reaction of both the stock and bond markets in particular on Friday led to the questions, is the Goldilocks soft landing scenario a myth and does it really matter? The answer lies somewhere in your definition of what a myth is. To does it matter, what is clear is being ahead of what the parrot nature of the herd and their influencers spouting off is what matters. We can’t recall a market where the self-proclaimed experts have been so wrong, the ignorance and lack of responsibility is laughable.

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.

To recap S&P500 futures popped 0.7% immediately following the release of Friday’s August jobs report. Non-farm job gains of 187,000 were marginally above the 170,000 consensuses estimate but a year of revisions lower is spooking the market of what is true. Is this a political ruze? Recall this comes off a largely meek PCE report, the Fed’s favorite indicator for inflation.

The increase in Average Hourly Earnings of 0.2% was below the 0.3% forecast and July’s 0.4% and the weakest reading since February 2022. A jump in reentrants boosted the Labor Force Participation Rate to a higher-than-expected 62.8% (high since February 2020) this helped the Unemployment Rate increased a market-pleasing (screw the people) from 3.5% to 3.8%. But are these numbers real?

From the goldilocks perspective the data was close to perfect. Slowing wage and job growth makes life easier for the Federal Reserve with no rate hikes necessary a “soft landing” to be had. Certainly, the media thinks that. Friday morning headlines from:

• Bloomberg: “Goldilocks Is Back as Wall Street’s Jobs-Day Gift.”
• Financial Times: “US Jobs Data Raises Hope of Goldilocks Scenario as Economy Cools.”
• Real Money: “The Fed Must Be Jumping for Joy After a Goldilocks Jobs Report.”

Hold your glasses! Post the Employment report for August the initial rally pressured yields to levels not seen since the first full week of August with the 5-yr yield slipping below its 50-day moving average (4.211%), but the market reversed swiftly with longer tenors leading the slide. What stands out to us is bonds are just not seeing much benefit from changes in Fed rate policy expectations.

The data was not pretty this week

• Conference Board Consumer Confidence was reported 10 points below expectations at 106 (down 8 from July). The Present Situation component fell eight to a 2023-low 144.8.
• ADP’s August job gains were reported Wednesday at a weaker-than-expected 177k (expectations 195k), the fewest jobs added since March.
• Tuesday’s “JOLTS” job openings data (8.827 million) were much weaker-than-expected, dropping to the lowest level since March 2021.
• Revision to the Q2 GDP Price Index (2.0% vs. 2.2%) reduced second quarter growth to 2.1% (from first reading 2.4%).

For all the weaker data, 10-year bond yields declined a measly six bps this week, with Friday’s closing yield (4.18%) only 16 bps below the 16-year closing high (4.34%) from nine sessions ago (August 21st). Longer-term bonds reacted meekly to weak data, 30-year long bond Treasury yields were up a basis point this week to 4.30%, even as two-year yields sank 20 bps to 4.87%.

Jumps in the ISM Manufacturing Survey’s Employment (48.5 vs. July’s 44.4) and Price (48.4 vs. 42.6) perhaps spooking traders, but it has been a week of soft data mostly. Ten-year Treasury yields ended the session up seven bps to 4.18%. The long bond finished unchanged for the week while shorter tenors narrowed their recent gains.

Longer-term bonds reacted meekly to weak data, 30-year long bond Treasury yields were up a basis point this week to 4.30%, even as two-year yields sank 20 bps to 4.87%. The rates market says the Fed’s tightening cycle is likely over, yet bonds have not fully bought it or is the overhanging heavy supply the devil in all this?

What we know is in this casino like speculative cycle, risk markets will overreact to data supportive of the bullish narrative, hit equilibrium, sell off and the cycle continues until it doesn’t. The Nasdaq100 surged 3.7% this week, boosting 2023 gains to 41.6%. Economic softening stokes speculative impulses for now, butas we said the bond market isn’t buying it wholeheartedly. One thing pointed out to us this “risk on” is feeding strong corporate debt issuance.

Corporate risk premiums narrowed further this week.

• Investment-grade spreads (to Treasuries) were little changed at 1.19 percentage points (near low since February ‘22)
• Investment-grade CDS traded down to 62 bps in Wednesday trading, just above lows back to February 2022.
• High yield spreads narrowing 14 bps to 3.66 – the low since April ’22.
• High yield CDS dropped 16 this week to 422 bps, trading at about the same level as in April 2022 (as the Fed commenced “tightening”).

Ride ’em cowboy and myth busters

This Week’s Main Stories We Covered

• U.S. Unemployment Rate Rises to 3.8%, Highest in 18 Months in August, NFP Revisions Concern
• Chicago Economic Activity Improves in August but Still in Contraction ISM PMI Shows
• Core PCE inflation Rises to +4.2% from 4.1% in July Keeping Fed Awake
• Yields Fall After ADP Report 177K Jobs Added in August, Led by Small and Medium Businesses Again
• Around The Barrel – Crude Oil Draws -10.584Mbbls Erasing US Commercial Crude Storage Gains For 2023
• U.S. Pending Home Sales Rose 0.9% in July for the Second Monthly Rise Defying Analysts
• Strong 7-year A+ Treasury Bond Auction Completes Week’s Offerings with Higher Yields
• American Consumer Confidence Slumps in August with Employment Anxiety
• Into the Vortex – EIA Reports U.S. Natural Gas Builds 32Bcf Last Week
• US Home Prices Rise 0.3% in June FHFA House Price Index Shows, New England Strongest
• Solid Demand in 5-Year Treasury Auction as Market Absorbs Today’s New Supply
• Treasury Auctions 2-year Notes at 5.024%, Part of $133 Billion Fresh Bond Supply This Week
• Texas Manufacturing Sees Lower Production with Sharp Jump in Wages – Dallas Fed

Financial conditions are tightening. “Risk on” began the transition to “risk off” but seemed to hold that thought this week. That emerging markets and U.S. markets succumbed to the greed fueled, FOMO intensified “melt-up” dynamics in the face of festering Chinese issues only exacerbated vulnerabilities.

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.

We have seen volatility in the recent weeks. The S&P 500 from up nearly 15% has retreated more than 4% from its July 31 high. Weakness in China’s economy and a surge in Treasury yields weigh.

Last Friday the final reading of the University of Michigan Consumer Sentiment Index for August came in at 69.5 (consensus 71.2) versus the preliminary reading of 71.2. The final reading for July was 71.6, which marked the highest level since October 2021. In the same period a year ago, the index was at 58.2.
The reports show consumers think the rapid improvements seen in the economy in the past three months have moderated if not illusory.

It is also globally that we look, and a heavy macro data week could materially inform the subsequent round of policy decisions by the RBA on the 5th, the BoC on the 6th, the ECB on the 14th, the Federal Reserve on the 20th, the BoE on the 21st and the Bank of Japan on the 22nd.

FOMO meets Passive with Tesla

We look at Tesla as it mirrors part of the FOMO crowd and part of the passive crowd, we can see from the chart it ran up ahead of earnings, dropped after it and sideways since. much like the belly of active stocks. From there we have created a potential bull flag which is in line with bond and sentiment. The bear side is it all falls what it is trying to correct. Clearly visible in the chart pattern below.

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. The latest was the ushering in a new Governor at the Reserve Bank of Australia.

With optionality dominating markets along with quant funds, algorithms, systematic trading and automated trading volatility has collapsed as has been focused on at KnovaWave. The S&P 500 moved less than 1% in either direction for 36 of the 46 sessions heading into June, according to Dow Jones Market Data, the quietest 46-day stretch since December 2021. This was all in a period of a regional bank crisis and debt ceiling crisis. These systems have no emotion and trade accordingly. The weeks since then continued the pattern for the most part.

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: Labor Day, PMI, RBA, BoC and Beige Book

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.

How Hot is the American Economy?

More Macro and Micro data points, some highlights include.

• Monday: Bond and equity markets closed for Labor Day
• Tuesday: July Factory Orders 
• Wednesday: Weekly MBA Mortgage, July Trade Balance; final August S&P Global US Services PMI (prior 51.0); August ISM Non-Manufacturing Index (prior 52.7%); September Fed Beige Book
• Thursday: Weekly Initial and Continuing jobless claims, revised Q2 Productivity, revised Q2 Unit Labor Costs; Weekly natural gas inventories, Weekly oil inventories.
• Friday: July Wholesale Inventories and July Consumer Credit

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, housing data, retail sales and consumer sentiment.

Earnings season continues with earnings from American Eagle Outfitters (AEO), GameStop (GME), DocuSign (DOCU), Kroger (KR) and Rent the Runway (RENT.

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?

• 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.
• Financial Sector debt growth jumped to a 9.66% rate last year, the strongest since 2007’s 13.50% Z.1 data showed. Now we are looking at this given the quick demise of regional banks and the concerns of the commercial structure. Why? we simple note a jump in Financial Sector borrowings signals a surge in risk intermediation. Is this fateful late-cycle intermediation gong to haunt the financial sector and economy when the Bubble bursts.
• 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 expanded an unprecedented $2.094 TN, or 29.4%, over the past three years to a record $9.224 TN. FHLB Assets surged $524 billion, or 72%, in 2022, with indications for Q1 growth upwards of (yes) $400 billion.
• FHLB plays a pivotal role, last year prolonging the lending boom and last month 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 affect 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 1 – Reuters (Ziyi Tang, Clare Jim and Xie Yu): “China stepped up measures to boost the country’s faltering economy on Friday, with top banks paving the way for further cuts in lending rates and sources saying Beijing plans further action including relaxing home-purchase restrictions… The measures cheered investors, and analysts said they should prevent a further downturn in the ailing property sector.”
• August 31 – Financial Times (Echo Wong, CK Tan and Peggy Ye): “Vacancies are rising in China’s most exclusive office buildings as businesses look to reduce rental expenses during the country’s disappointing economic recovery… ‘Activity began to cool down again in the second quarter,’ said Soho China, a Hong Kong-listed owner of office buildings in Beijing and Shanghai, as it reported a 93% fall in first-half profits… ‘Rents and occupancy rates will be under continuous pressure.’”
• August 27 – Wall Street Journal (Karen Lema): “Ideology is driving China’s economic policy to a degree not seen since the country’s opening to the West nearly half a century ago, deterring its leaders from taking steps to spur the sputtering economy. Economists and investors have been calling on Beijing to make bolder efforts to boost output—especially by promoting consumer spending… But top leader Xi Jinping has deep-rooted philosophical objections to Western-style consumption-driven growth, people familiar with decision-making in Beijing say. Xi sees such growth as wasteful and at odds with his goal of making China a world-leading industrial and technological powerhouse, they say.”

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 Price Disinflationary Trend Continues in June, Reprieve for Profit Margins
• Consumer Inflation in June Eases, Evidence of Disinflation Encouraging Markets
• Key Fed Inflation Guage Falls in May, Core PCE 4.6% from 4.7%

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 jumped 2.5% (up 17.6% y-t-d),
• Dow rose 1.4% (up 5.1%).
• S&P 400 Midcaps surged 3.5% (up 9.8%),
• Small cap Russell 2000 jumped 3.6% (up 9.1%).
• Nasdaq100 advanced 3.7% (up 41.6%).

YTD Report Card for the S&P Sectors

Sectors

The best-performing sectors this week were information technology (+2.6%), consumer discretionary (+1.1%), and communication services (+1.0%). All these sectors have mega-cap stocks in their index. The energy sector (-1.4%) was the biggest decliner this week with oil and natural gas prices fading some on continued concerns about China’s weakening economy.

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

• Utilities fell 1.7% (down 12.9%).
• Banks rallied 2.9% (down 18.3%),
• Broker/Dealers gained 2.2% (up 13.5%).
• Transports added 1.4% (up 18.2%).
• Semiconductors surged 5.4% (up 45.4%).
• Biotechs rose 1.8% (up 1.1%).
• With bullion rising $25, the HUI gold equities index gained 2.1% (down 1.7%).

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 rose 1.7% (up 0.2% y-t-d).
• France’s CAC40 increased 0.9% (up 12.7%).
• German DAX equities index increased 1.3% (up 13.8%).
• Spain’s IBEX 35 equities index rose 1.2% (up 14.8%).
• Italy’s FTSE MIB index gained 1.6% (up 20.9%).

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 jumped 3.4% (up 25.4% y-t-d).
• South Korea’s Kospi index advanced 1.8% (up 14.6%).
• India’s Sensex equities index increased 0.8% (up 7.5%).
• China’s Shanghai Exchange Index rallied 2.3% (up 1.4%).

Highlights – Australian Stocks

• Australia’s S&P/ASX 200: -0.4% to 7278.3 Friday (+2.3% for the week)
• Ended the week 2.3% higher after two weeks of losses.
• Friday iron ore stocks Rio Tinto up 1.2% at $114.23 on Friday, BHP 0.3% to $44.74.
• Fortescue Metals dropped 5.3% to $20.3 following the departure of Guy Debelle from Fortescue Future Industries, the third high-profile exit in a week.
• Qantas closed the week 6.9% lower, the largest weekly loss since June, after the competition regulator on Thursday alleged that the airline breached consumer law.

Highlights – Emerging Markets Stocks

Week/YTD 

• Brazil’s Bovespa index rose 1.8% (up 7.5%),
• Mexico’s Bolsa index was little changed (up 9.7%).
• Turkey’s Borsa Istanbul National 100 index jumped 4.4% (up 46.2%).
• Russia’s MICEX equities index gained 2.3% (up 50.0%).

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.

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.

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.

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

In a week of mostly soft data U.S. Treasuries on Friday finished broadly lower lifting yields off their lowest levels in three weeks, though still stronger on the week mostly. U.S. Treasuries completed this week’s note auctions with strong demand with no issues. Post the Employment report for August the initial rally pressured yields to levels not seen since the first full week of August with the 5-yr yield slipping below its 50-day moving average (4.211%), but the market reversed swiftly with longer tenors leading the slide. What stands out to us is bonds are just not seeing much benefit from changes in Fed rate policy expectations.

This week’s action alleviated some more pressure on the 2s10s spread, expanding it by ten basis points to -71 bps. Crude oil climbed for the seventh day in a row, rising past $85.00/bbl, to a level not seen since mid-November. The U.S. Dollar Index reclaimed the remainder of this week’s loss. The Index rose 0.6% to 104.23 today, finishing the week unchanged.

Treasury Yield Watch

Friday/Week

• 2-yr: +2 bps to 4.88% (-17 bps for the week)
• 3-yr: +4 bps to 4.57% (-17 bps for the week)
• 5-yr: +5 bps to 4.29% (-14 bps for the week)
• 10-yr: +8 bps to 4.17% (-7 bps for the week)
• 30-yr: +8 bps to 4.29% (UNCH 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 rose eight bps to 7.30% (up 175bps y-o-y) – the high back to 2002.
• Fifteen-year rates gained eight bps to 6.73% (up 188bps).
• Five-year hybrid ARM rates surged 40 bps to 7.11% (up 275bps).
• Bankrate’s survey of jumbo mortgage borrowing costs had 30-year fixed rates unchanged at 7.58% (up 171bps).

Thirty-year mortgage rates have pulled back from 7.30%, the high back to December 2000. MBS yields traded up to 6.27% that week, the peak since July 2007, before ending the week down seven bps at 6.08%.

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 unchanged at 104.25 (up 0.7% y-t-d). 2022 gains were 8.2%
• For the week on the upside, the Australian dollar increased 0.8%, the New Zealand dollar 0.6%, the South Korean won 0.5%, the Norwegian krone 0.4%, the Singapore dollar 0.3%, the Japanese yen 0.2%, the Swedish krona 0.1%, the British pound 0.1%, and the Canadian dollar 0.1%. The Chinese (onshore) renminbi increased 0.29% versus the dollar (down 5.06%).
• On the downside, the Mexican peso declined 2.0%, the Brazilian real 1.5%, the South African rand 1.1%, the euro 0.2%, the Danish krone 0.1%, and the Swiss franc 0.1%.

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!

Ethereum

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

• BoC will likely defer to October
• Canada could witness a rebound in jobs
• Canadian immigration: macro effects and policy
• RBA to stand pat
• Chile’s central bank expected to deliver another mega-cut
• Bank Negara will likely hold
• Other global macro reports

Central Bank Watch

In the past week we had just one bank rate meeting, where The Monetary Council of the National Bank of Hungary (MNB) lowered interest rates by 100 basis points. On Friday Cleveland Fed President (non-voter) Mester said that inflation remains too high, though some progress has been made. The People’s Bank of China said they will lower 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.

In the week ahead we have Bank of Canada, Reserve Bank of Australia and Bank Negara all expected to stay pat. Banco Central de Chile and Poland are both expected to cut rates. We also have the Fed’s Beige Book and speakers from the BoE, BoJ, RBA, ECB and Fed.

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 5 central banks delivering policy decision.

Tuesday, September 5, 2023

• 00:30 RBA Interest Rate Decision
• 17:00 Chile Interest Rate Decision

Wednesday, September 6, 2023

• 08:00 National Bank of Poland Interest Rate Decision
• 10:00 BoC Interest Rate Decision

Thursday, September 7, 2023

• 03:00 Malaysia 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: Bond and equity markets closed for Labor Day
• Tuesday: July Factory Orders (prior 2.3%) at 10:00 ET
• Wednesday: Weekly MBA Mortgage Index (prior 2.3%) at 7:00 ET; July Trade Balance (prior -$65.5 bln) at 8:30 ET; final August S&P Global US Services PMI (prior 51.0) at 9:45 ET; August ISM Non-Manufacturing Index (prior 52.7%) at 10:00 ET; and September Fed Beige Book at 14:00 ET
• Thursday: Weekly Initial Claims (prior 228,000), Continuing Claims (prior 1.725 mln), revised Q2 Productivity (prior 3.7%), and revised Q2 Unit Labor Costs (prior 1.6%) at 8:30 ET; weekly natural gas inventories (prior +32 bcf) at 10:30 ET; and weekly crude oil inventories (prior -10.58 mln) at 11:00 ET
• Friday: July Wholesale Inventories (prior -0.5%) at 10:00 ET and July Consumer Credit (prior $17.9 bln) at 15:00 ET

US Stocks Watch Earnings and Event Watch

Earnings Highlights This Week:

• Monday includes Bond and equity markets closed for Labor Day
• Tuesday includes Zscaler (ZS), HealthEquity (HQY), Asana (ASAN), America’s Car-Mart (CRMT)
• Wednesday includes UiPath (PATH), American Eagle Outfitters (AEO), C3.ai (AI), Torrid Holdings (CURV), and GameStop (GME)
• Thursday includes DocuSign (DOCU), Guidewire Software (GWRE), Smartsheet (SMAR), Planet Labs (PL).
• Friday includes Kroger (KR), Rent the Runway (RENT).

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

Notable conferences running during the week include:

Monday

• The U.S. stock markets will be closed for observance of the Labor Day holiday.

Tuesday

• IPO quiet periods will expire on Fitell (FTEL), NeurAxis (NRXS), LQR House (LQR), Atlas Energy Solutions (AESI), and Xiao-I (AIXI) to free up analysts to post ratings.
• Arm Holdings Ltd (ARM) plans to launch its roadshow for investors during the week and potentially set its initial pricing range.
• All day – Maris-Tech Ltd. (MTEK), AgEagle Aerial Systems (UAVS), Draganfly (DPRO), and Amprius Technologies (AMPX) will be giving presentations or demonstrating products at the Commercial UAV Expo in Las Vegas.
• All day – The three-day Voice & AI Conference in Washington, DC will include presentations by executives from Walmart (WMT), JPMorgan (JPM), OpenAI, and Nvidia (NVDA).
• All day – The three-day Goldman Sachs Communacopia Technology Conference will give investors the latest reads on consumer spending trends. Some of the retail companies due to give presentations include eBay (EBAY), Fiverr International (FVRR), Etsy (ETSY), IMAX (IMAX), Peloton Interactive (PTON), and Mattel (MAT). Notable tech companies such as Shopify (SHOP), Juniper Networks (JNPR), Palo Alto Networks (PANW), Mobileye Global (MBLY), and Intel (INTC) will also be participating.
• All day – Arbe Robotics (ARBE) will provide a live, in-vehicle demo of its perception radar at the IAA Mobility Conference in Munich. XPeng (XPEV) will also be participating at the event to highlight the launch of its P7 model in four European markets.
• All day – Adidas (OTCQX:ADDYY) will hold its annual corporate conference in Frankfurt.

Wednesday

• All day – HubSpot (HUBS) will host its Analyst Day in conjunction with the INBOUND 23 conference. Align Technology (ALGN) will hold an Investor Day event. Intuit (INTU) will host an Innovation Day event.
• All day – Shareholders with Diversified Healthcare Trust (DHC) and Office Properties Income Trust (OPI) will hold shareholder votes on their pending business combination. Major proxy firms have recommended against the deal

Thursday

• All day – Guardant Health (GH), First Solar (FSLR), Freshworks (FRSH), Synaptics (SYNA), and Trex Company (TREX) will all hold investor events that may include guidance and strategy updates. Freshworks’ event could be of particular interest due to the company recently unveiling new AI-powered services.

Friday

• All day – PodcastOne is expected to start trading after being spun off from LiveOne (LVO). Earlier in the year, LiveOne (LVO) announced that it had received an independent, third-party valuation from ValueScope of between $230M and $274M for the advertiser-supported podcast company.
• All day – Roblox (RBLX) will hold a two-day developer conference. RDC23 will include keynote presentations from Roblox (RBLX) CEO David Baszucki and other top leaders.
• All day – Global Net Lease (GNL) shareholders will vote on the planned merger with Necessity Retail (RTL). Several proxy firms have advised against the deal.
• 8:30 a.m. Kennametal (KMT) and AptarGroup (ATR) will hold investor events that include guidance and strategy updates.

Sovereign Rating Updates

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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