7.29.22: Retail investors are NO longer bearish. The camp is now divided.
Key U.S. and China brief market notes by Larry's Analyst Staff Team.
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In our emails, we will provide the following coverage points:
Brief Snapshot of U.S. & China markets and valuation
Our Analyst Team’s Chart in Focus
U.S. & China Upcoming Economic Calendar Snapshot
Notable Chart from Media Outlets
Fear & Greed Index Recap
I hope you find this newsletter to be insightful and enjoyable! - Larry and Team
U.S and China Markets Brief Snapshot 🇺🇸 🇨🇳
(Powered by our Channel Financial Data Provider YCharts)
S&P 500 Index:
KWEB (Chinese Internet) ETF:
Analyst Team Note:
Some TA commentary from Bank of America:
The S&P 500 (SPX) can continue its summer rally toward the declining 100-day moving average (MA) near 4124 and big chart resistance in the mid 4100s (SPX 4150) if tactical support in the low 3900s (SPX 3900) continues to hold. Staying above the prior highs from 6/28 and 7/8 near 3946-3918 and the 10- and 50-day MAs near 3920-3918 would put in a tactically bullish breakout and retest pattern. A failure to do so would increase the immediate risk for a continued 2022 correction with the recent lows at 3738-3721 (6/30 and 7/14) to 3636 (6/17) support ahead of SPX 3500.
Macro In Focus
Analyst Team Note:
There will be a lot of data to go through until the next FOMC meeting in late-September, but the big question right now is will the Fed be forced to pivot on rate hikes? The market currently thinks so, hence the massive rally.
Some great lines from Bank of America today:
“inflation shock... check, rates shock... check, recession shock... check; and 24-hours after abandoning forward guidance / embracing data dependence US enters technical recession; since catalyst for bear market was repricing of interest rates (took SPX from 4800 to 3800), yields now falling & equities rallying makes sense; we remain of view this is a bear rally, would fade SPX >4200, and true lows SPX <3600”
“Bears are the worst people to listen to at the lows: just as bulls are the worst to listen to at the highs; still optimism that Fed done by Thanksgiving = lows are in. premature...”
“Catalysts for final bear move: higher-than-expected inflation, fresh geopolitical policy mistakes / new highs in oil, European stagflation / energy crisis, US/EM/EU credit events, contraction of housing prices causes deeper recession than expected next 12 months.”
Upcoming Economic Calendar
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U.S Economic Calendar (Upcoming Data Points)
China Economic Calendar (Upcoming Data Points)
Analyst Team Note:
Watch PMIs and Payrolls next week. Recession naysayers lose a LOT of ground if these two metrics continue to miss expectations…
Since 1947, there have never been two successive negative quarterly GDP prints in the U.S. without it being ultimately included in an ‘official’ recession as designated by the U.S. National Bureau of Economic Research.
Employment cost index (ECI) increased 1.3% QoQ vs. 1.1% estimate.
Personal consumption expenditures index (PCE) increased 1% MoM to highest in 40 years, fastest MoM change since 2005.
Source: Deutsche Bank, Bloomberg
Chart That Caught Our Eye
Analyst Team Note:
Chart shows S&P 500 P/E multiple drawdowns. Currently seeing the 2nd largest de-rating in 30 years.
Mega Cap earnings are proving that there is some level of corporate resilience. As companies are forecasting supportive growth for 2H, will we see multiples picking back up?
Source: J.P. Morgan
Sentiment Check
Analyst Team Note:
Fear and greed index hits “Neutral” rating for the first time since early April.
Tread carefully…
We want to take a moment to thank Interactive Brokers for being one of our Channel’s trusted Partners and to inform my audience of the special features they have given that our online friends here closely follow Chinese Internet stocks (BABA/Tencent).
Much of Larry’s audience is concerned about the US ADR issue of Chinese Stocks being delisted.
Interactive brokers allows investors to buy HK-listed shares of Alibaba, JD, Tencent, and other brand name Chinese Internet companies on the HK market. This will effectively reduce any confusion or work you will have to do in case there is the event of delisting US ADRs
Make sure to check Larry’s most recent market updates via his personal newsletter. See you in our next update.
