U.S. Futures & World Markets
Stocks are flat premarket as high oil prices and bond yields continue to put macro pressure on equities. Despite all the fear-mongering, the VIX sits at 16.00 — well below its long-run average. The market isn't pricing a meltdown.
@bluekurtic: "42 days would make it the longest streak without a 1%+ down day for the S&P 500 since 2025." Breadth is weak and concentrated in a few sectors. The quote from Larry Thompson is priceless: "If breadth is bad, don't own breadth!"
CORE Headlines
- Iranian FM Araghchi expects to receive formal response to ceasefire plan. — CBS
- Eli Lilly: Zepbound delivered greater weight loss than Wegovy HD in indirect comparison.
- Middle Eastern oil exports reach highest level since the Iran war began. Iran appears to be losing its leverage. — WSJ
- OpenAI decided against releasing latest AI model due to safety concerns. — WSJ
- Anthropic will warn in IPO filing that AI poses "existential risks to humanity." — Reuters
- Target cuts prices on nearly 2,000 home and apparel items ahead of holidays.
Charts & Data
Equity sentiment remarkably constructive despite sharply rising bond yields — SPX 1M skew at the 5th percentile low as investors rotate out of hedges into upside calls. Mandy Xu, CBOE via Daily Chartbook.
US equities net sold (-1.0 SDs). Single-stock short selling largest in three months (-2.2 SDs). 7 of 11 sectors net sold. Cullen Morgan, Goldman via Daily Chartbook.
US Pensions modeled to sell $33B of US equities — 97th percentile in 3-year history. Cullen Morgan, Goldman via Daily Chartbook.
S&P within 1% of its record high but the median stock trades 16% below its 52-week high. Goldman's preferred breadth measure at its lowest since the Dot-Com Bubble. Goldman via Daily Chartbook.
21 of 28 net new lows last week came from Utilities, Staples, and Real Estate. "If breadth is bad, don't own breadth!" Larry Thompson via Duality Research.
Stocks have generally thrived under gridlock. Republican President with split or Democratic Congress has historically been the weakest setup. RBC via Daily Chartbook.
Over the last 90 years, the S&P 500 has produced an average return of +17% in the 12 months following midterm elections. Goldman via Daily Chartbook.
Global forward earnings FEMO is not just a US phenomenon — it's worldwide. AI may explain why. Yardeni Research via Daily Chartbook.
Interesting Reads
- Ben Carlson: Most stocks are losers — just 23% have beaten the S&P 500 over the past 10 years — A Wealth of Common Sense
- Why you waste your evenings: the neuroscience of post-work fatigue — X
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