Equities
US Equities Did Relatively Well This Week, Despite A Selloff Ahead Of Potential Weekend Surprises
Defensives and highly liquid stocks outperformed this week, as the downside focus was obviously on weak balance sheets and rates sensitive sectors like regional financials

Equities
US Equities Had A Difficult Week As Powell And Regional Financials Provide One-Two Punch
The speed at which things got out of hand with SVB is the worry for US regional banks, with short-term implied volatility on financials getting a little panicky while the broader market stays relatively calm

Equities
Broad Rebound For US Equities This Week, Though S&P 500 Ends February Down 2.6%
The story of equities so far this year has been one of resilient revenue, declining margins and expanding valuations on the back of more positive than expected growth; as such, the greatest risk to the market remains that of recession and growth downgrades

Equities
US Valuations Have Come Down Somewhat With Higher Rates, But The Equity Risk Premium Remains Low
In the absence of pressure on risk premia, the story of equities this month has been entirely driven by a shift in the economic narrative, with investors wondering how high rates will need to go for the Fed to achieve a landing

Equities
US Equities Fairly Resilient Through Recent Rates Repricing, But Hard To See A Lot Of Upside Given Current Valuations
Despite the tremendous rebound in Chinese equities since October, the valuation levels remain reasonable compared to US and European large-cap equivalents

Equities
Derisking Ahead Of Much-Awaited CPI Data After US Equities Start The Year Up 10%
Expectations for FY2023 S&P 500 EPS continue to come down: they were around $250 last year and the median estimate now stands at $227 according to S&P Capital IQ (the consensus still sees around 2.5% EPS growth YoY)

Equities
Strong NFP Surprise Takes Equities For A Slide Into The Weekend; S&P 500 Still Up 8% YTD
Global equities are off to a spectacular start this year, underpinned by a broadly positive growth outlook and fueled by short covering; estimates of speculative net exposure remain low, meaning that the rally could go on for a while

Equities
Market Participants Are Taking Advantage Of The Current Equities Rally, Lower Volatility To Buy Downside Protection
Earnings have been unspectacular so far, essentially in line with lowered market expectations; excluding energy, results are down about 5% YoY, with a focus on margin compression

Equities
Equities Weaken As 4Q22 Earnings Start Rolling In, With 17% Of The S&P 500 Reporting In The Week Ahead
It's hard to see much upside from here for US stocks over the next 12 months, with the S&P 500 forward P/E around the 80th historical percentile and downward earnings revisions just beginning in earnest

Equities
Global Equities Surf On The Current Goldilocks Vibe And Kick Off 2023 With Solid Gains
Although S&P 500 EPS estimates for CY2023 have fallen almost 5% over the past 3 months, they still project an EPS growth of nearly 5% vs CY2022; Goldman sees EPS growth of 0% this year and Jefferies expects -6.5%

Equities
Weakness Across Global Equities, As Hawkish Central Banks And Soft Data Add Up To A Challenging Environment
The year 2023 is setting up as a tale of two halves in the US: the first one should be dominated by earnings revisions and bring in a possible new bottom for the cycle, while the second half should be a positive recovery trade

Equities
As Expected, US Equities Down 3.6% For The Week Ahead Of Critical Macro Events Next Week
China's mainland and Hong Kong equity markets continued to rebound on the back of looser local COVID restrictions, with a full national reopening expected around April next year

Equities
Nice Further Gains For Global Equities This Week, Driven By Hopes Of Looser Fed Policy And Chinese Reopening
At current levels US equities are pricing in a soft landing, and with the VIX sub 20 and US CTAs now 80% net long (from net short a month ago), it's hard not to be cautious into year end

Equities
Mostly Poor Performance Across US Equities This Week, With Higher Rates And Falling 2023 EPS Forecasts Weighing
Looking at 2023 sell-side outlooks, it's worth noting that most firms don't see much upside for US equities from here: Credit Suisse's end of 2023 S&P 500 index forecast is at 4,050, Goldman Sachs at 4,000 and Jefferies at 4,200

Equities
Tremendous Rise In US Equities As CPI Print Brings Hopes Of A Soft Landing, Shorter Hiking Cycle
Chinese equities continued their rebound this week, largely driven by a fear of missing out, as most observers point out that the most likely time for a change of covid policies will be after the two sessions in March 2023

Equities
US Equities Dropped This Week Along With Implied Volatility, An Illustration Of A Nervous Market With Low Convictions, Light Positioning
Optimism about China's reopening drove speculative enthusiasm through the Mainland and HK markets this week, with the most depressed sectors (internet stocks) leading the way

Equities
Solid Bounce In US Equities Despite Mediocre Earnings, As Fed Scores Own Goal Hinting At Policy Slowdown
With a little over half of S&P 500 companies having now reported their 3Q22 earnings, the results have been broadly disappointing, tracking well below weak expectations (2.2% EPS growth realized vs 3% expected)

Equities
Broad Rise In Global Equities This Week, With China + HK Still The Most Visible Laggards
As the equity risk premium continues to look too skinny against the rise of real yields, Goldman strategists see the S&P 500 trough around 3,150 in a hard-landing scenario (down 16% from where we stand at pixel time)

Equities
Light Directional Positioning, Combined With A Lot Of Hedging, Drive Unintuitive Moves In US Equities This Week
The broad selloff today came with a drop in implied volatility, indicating that portfolio managers took advantage of lower prices to cash in on their hedges

Equities
Choppy Week For US Equities, Ending Modestly Up After Big Gapping Moves On Tuesday And Friday
3Q22 earnings season is upon us, with Pepsi kicking things off on Wednesday; estimates have come down over the past month, but probably not enough to reflect a US recession 1Y forward

Equities
Choppy Trade For US Equities This Week; S&P 500 Price Index Ends September Down 9.4% For The Month, Down 5.3% For The Quarter
We still expect to see lower cycle lows: valuation multiples are too high relative to real yields and corporate margins expectations will need to compress further

Equities
No Surprises In The Extended US Equities Drawdown, With Rates Volatility Driving Further Losses
Although we still expect lower lows for this cycle, from a compression in multiples and corporate margins, we should see a bounce this week, as multiple technical indicators point to short-term capitulation

Equities
Ugly Week For Equities, With All Major Global Indices Falling: S&P 500 Down 4.8%, Nasdaq Composite Down 5.5%
As mentioned last week, we continue to expect equities to make new cycle lows: with US core inflation still rising, the rates complex is repricing the path of Fed Funds higher, which will inevitably lead valuation multiples lower

Equities
Broad Rebound In Global Equities From Oversold Levels, Helped By Lower Rates Volatility
Considering the current level of the US equity risk premium, and the stretched implied volatility skew on 1-month S&P 500 options, we doubt this technical move higher will prove durable

Equities
Tough Weak For Global Equities, As The Perspective Of Higher Rates And Weaker Growth Starts Getting Repriced
As Peter Oppenheimer (Goldman Sachs) has pointed out recently, the split between growth and value stocks is no longer important: what matters more in the current context is identifying reasonably priced defensive positions (as opposed to cyclicals or long-duration unprofitable growth)

Equities
Friday Meltdown For US Equities As Fed Not Amused By Recent Loosening In Financial Conditions
Despite a little jolt today, volatility remains low considering the difficult background for the remainder of the year: if the labor market and the economy stay strong, the flight path will need to be higher rates, wider credit spreads, lower equity valuations

Equities
US Equities Fly Higher As 2Q22 Earnings Showed Surprisingly Robust Margins, Corporates Mostly Able To Pass On Higher Costs
The path of least resistance is up for now, with strong technicals and low summer liquidity; but at some point, perhaps after Jackson Hole, the Fed will have to ensure that financial conditions aren't getting too loose to bring down inflation

Equities
Mixed Day For Equities On Friday, A Fairly Positive Development Considering The Rates Backdrop
The second quarter earnings season is coming to an end, with 86% of S&P 500 companies having already reported, and the numbers are better than expected (though not spectacular from a historical perspective): about 60% of S&P 500 stocks beat on both revenue and earnings

Equities
US Equities Up 4.2% This Week, Energy Stocks Up Another 10%, With The Brent Crude Spot Price Closing Around $110/bbl
The current bear market rally is likely one of the most unloved: beat-up stocks rising double digits with very low participation, as hedge funds and real money managers had to reduce gross exposures markedly to provide cash for client withdrawals that have yet to materialize

Equities
Losses On Friday Ahead Of Big Earnings Week, Which Will See About A Third Of S&P 500 Companies Reporting
While US equities have performed well recently, Chinese stocks have seen a slight turn of fortune: main CN+HK indices showed strong performance after the reopening of major cities, but have been weaker again in the past weeks, down about 1.4% over the past month
