U.S. Futures & World Markets

Lower crude prices are providing some relief to bond yields as earnings season kicks off today. Goldman Sachs is +3% on surging equities revenue and stronger investment banking. UnitedHealthcare is +2.5% after a beat-and-raise. JPMorgan is down -3% on a Q3 revenue miss. Johnson & Johnson is down 3% on soft med-tech growth.

BofA had an interesting piece on possible election outcomes: DEM sweep = big risk-off, stocks skid more than 10%, US dollar and bond yields fall into year-end, international stocks outperform. GOP Senate, DEM House = risk-on (stocks up more than 5%) as the narrative "Gridlock = Goldilocks" takes hold — play the US presidential cycle analog where Year 3 is the strongest. GOP sweep = biggest and most bullish surprise, stocks up more than 10%, AI rips into a bubbly 2027. Interesting scenarios, all while we have earnings, interest rates, and the AI trade to keep us busy in the meantime.

S&P Futures: flat

CORE Headlines

Charts & Data

After a sizeable selloff, the equal-weighted S&P 500 is ticking up off the lows — breadth is also ticking up after a hefty reset. The headline cap-weighted S&P 500 is also shaking off its period of relative stagnation and notching a new all-time high. Callum Thomas via Daily Chartbook.

The headline S&P 500 didn't really get a seasonal slump as many expected. But the equal-weighted S&P 500 followed the seasonal script very closely: rebounding off the lows almost exactly in line with the typical seasonal pattern. Callum Thomas via Daily Chartbook.

Semiconductor stocks are not faring as well — SMH has notched a lower high and breadth has rolled over again from overbought levels. SMH closed lower each of Tue/Wed/Thu/Fri last week. For what is supposed to be the main engine of the bull market, this is a concerning development. Callum Thomas via Daily Chartbook.

Money market fund assets sit at $8 trillion vs. $5 trillion in 2023 — the "cash on the sidelines" story is real. BofA via Daily Chartbook.

Gold Daily Sentiment Index at levels where contrarians say: "Gold bulls — this is your moment." @macrocharts via Daily Chartbook.

Bitcoin reclaimed its 200-day moving average on Aug 19 after 289 sessions below — the 3rd-longest stretch since 2014. 51 sessions on it: +19.2%. The 2019 reclaim was +62% at this point. Friday $82,546, -34% from the peak. Trend reclaimed. Lighthouse Macro via Daily Chartbook.

Goldman's US Equity Sentiment Indicator has slipped to -1.3. Historically, similar readings have been followed by an average 2.0% gain for the S&P 500 over the next month. Goldman via Daily Chartbook.

US stock funds have recorded 13 consecutive months of inflows — the longest streak in EPFR data going back to 2000. @gunjan_js via Daily Chartbook.

After being the most dollar net-bought US sector in 4 of the past 5 weeks, Info Tech was by far the most net-sold this week (-1.0 SDs 1-year), driven by long and short sales. Goldman via Daily Chartbook.

Since mid-August, Biotech has seen the largest dollar de-grossing activity among all US subsectors — the magnitude is the largest in more than five years. Goldman via Daily Chartbook.

The S&P 500 is at its 1-year 99th percentile while the percentage of stocks above their 200-day moving average is at the 20th. This spread has only been at this level a few times in 30 years — each time price responded by "catching down" to breadth. Andrew Thrasher, Thrasher Analytics via Daily Chartbook.

The median S&P 500 stock currently trades 16% below its respective high — pushing market breadth to its lowest level since the Dot-Com Bubble. Goldman via Daily Chartbook.

The S&P 500 is making new highs while beneath the surface we are at 30 consecutive days of more new lows than new highs. Willie Delwiche, Hi Mount Research via Daily Chartbook.

Since ChatGPT's unveiling, the cap-weighted S&P 500 has earned nearly 50 percentage points more of total return than the equal-weighted one — almost identical to the same number of trading days after Yahoo's 1996 IPO. Spencer Jakab, WSJ via Daily Chartbook.

We forecast strong ex-Tech earnings growth of 21% year over year in Q3, only slightly below the 23% recorded in Q2. The median S&P 500 company is expected to again deliver robust earnings growth in the mid-teens. Deutsche Bank via Daily Chartbook.

Interesting Reads

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