March 16, 2022
Market Performance (YTD)
Source: YCharts
Disclaimer: Past performance is no guarantee of future performance
Things are happening quickly
Nasdaq 100 closes in bear market for 1st time since Mar2020. Index, which is home to Big Tech like Apple, Amazon & Microsoft, has dropped 21% from its Nov19 closing record, enough to count as an official bear market. Russia invasion stokes fears of inflation shocks, higher rates. pic.twitter.com/fclfstKldd
— Holger Zschaepitz (@Schuldensuehner) March 14, 2022
NASDAQ 100 is having its worst quarter since fourth quarter of 2008, when it fell by 24%
[Past performance is no guarantee of future results] pic.twitter.com/YtHVyuACoE— Liz Ann Sonders (@LizAnnSonders) March 14, 2022
A broad index of government and corporate debt worldwide has fallen about 9.9% from its 2021 high, the biggest decline from a peak since 2008: Bloomberg Global Aggregate Index data, via @greg_ritchie pic.twitter.com/oHhFUPDTrs
— Lisa Abramowicz (@lisaabramowicz1) March 14, 2022
Crude oil has lost a quarter of its value since touching a 14-year high of $130.50 a barrel on March 6 falling below $100 today,
The cure for high prices is high prices… pic.twitter.com/WgwFZAH3QY
— Barry Ritholtz (@ritholtz) March 14, 2022
Move in oil today pretty incredible, some context of the move, 11% drop. (1/3) pic.twitter.com/Lo1rVX7kIA
— Danny Kirsch, CFA (@danny_kirsch) March 9, 2022
NASDAQ 100, NASDAQ, and Russell 2000 are all in bear markets for first time since March 2020 bear market (using technical -20% from peak definition) pic.twitter.com/iD2LIzrngh
— Liz Ann Sonders (@LizAnnSonders) March 15, 2022
The selloff in U.S. investment-grade bonds is deepening, with yields rising to the highest since March 2020. While this is less dramatic than the credit seizure two years ago, it has been an accelerating grind higher with both benchmark rates and relative yields. pic.twitter.com/092YSAtRz3
— Lisa Abramowicz (@lisaabramowicz1) March 15, 2022
The classic 60/40 stock-bond portfolio is down 10% so far this year, the biggest downdraft to start the year since 2008, via @michaellachlan pic.twitter.com/XTv2MWWwyu
— Lisa Abramowicz (@lisaabramowicz1) March 15, 2022
This is almost unbelievable…
The MSCI China Index total return (ignoring any fees, taxes, etc…) since its 12/31/92 inception is approaching a 0% nominal cumulative return
China is 30% of $EEM pic.twitter.com/DRQSZXkakl
— Jake (@EconomPic) March 15, 2022
Here’s what pessimists might point to
Global growth expectations are now at their lowest since mid-2008, according to BofA's fund manager survey:https://t.co/CmOpJNEkEd by @nchrysoloras pic.twitter.com/xQihrM2mbS
— Tracy Alloway (@tracyalloway) March 15, 2022
Conflict in Ukraine impacted growth and inflation estimates (below JPM revision index), increasing the probability of stagflation or low growth-flation scenario. pic.twitter.com/D7fCuPt6an
— Credit From Macro to Micro 🇺🇦 (@Credit_Junk) March 15, 2022
“A majority of investors now think inflation is permanent” – BofA Global Fund Manager Survey pic.twitter.com/BgKQBIl7Zy
— Sam Ro 📈 (@SamRo) March 15, 2022
Today, the S&P 500 50-day MA crossed below the 200-day MA (a "death cross") and the 200-day MA switched from an uptrend to a downtrend.
(not investment advice) pic.twitter.com/kDof2mxVf3
— Nick Reece (@nicholastreece) March 14, 2022
US HY spreads closed another 14bps wider at 408bps. First time printing over 400bps since Nov 2020 pic.twitter.com/EDfgtpz7PA
— 𝐄𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐭 𝐌𝐚𝐫𝐤𝐞𝐭 𝐇𝐲𝐩𝐞 (@EffMktHype) March 15, 2022
"The mean perceived probability that U.S. stock prices will be higher 12 months from now decreased by 1.5 percentage points to 37.0%. This is the lowest reading of the series since June 2013.” @NYFedResearch pic.twitter.com/cTX4SCPA8Y
— Sam Ro 📈 (@SamRo) March 14, 2022
OOPS! #Oil shock 'key tail risk' for high yield, BofA says, adding a wider 'credit crunch is possible.' Spreads have already risen. (via BBG) pic.twitter.com/YQY8AETYWo
— Holger Zschaepitz (@Schuldensuehner) March 14, 2022
With comparisons to 1970s/1980s piling up, @MorningstarInc analysis shows that $100 invested in mid-1960s wouldn't have started to yield consistent positive real return until 1980s @WSJ
[Past performance is no guarantee of future results] pic.twitter.com/v10zuZV9aJ— Liz Ann Sonders (@LizAnnSonders) March 14, 2022
2yr inflation expectations up from 3.3% to 4.7% in a month. via @acemaxx pic.twitter.com/NSsTV90lFS
— Mike Zaccardi, CFA, CMT (@MikeZaccardi) March 14, 2022
Misery Index is edging higher as CPI #inflation continues to climb … now at highest since summer 2020 pic.twitter.com/r4uAE9PXlK
— Liz Ann Sonders (@LizAnnSonders) March 14, 2022
Yield spreads on corporate bonds have been rising since the start of the year, indicating that financial conditions are tightening—even before the Federal Reserve officially raises interest rates. pic.twitter.com/QZZsgz3zJm
— Joey Politano (@JosephPolitano) March 13, 2022
High inflation typically leads to a slow down in economic activity because it starts killing demand. Commodity at these levels is already doing Jerome Powell’s job 👇 pic.twitter.com/lghYT5wJdh
— Gianluca (@Theimmigrant84) March 13, 2022
“Over time, the three biggest factors that tend to drive the U.S. economy into a recession are an inverted yield curve, some kind of commodity price shock or Fed tightening,” pic.twitter.com/2KELj7aI1e
— Danielle DiMartino Booth (@DiMartinoBooth) March 12, 2022
U.S. consumer sentiment fell to a new post-2011 low in the latest University of Michigan survey. Consumers expect inflation to rise 5.4% over the next year, the highest since 1981, with the highest-ever share saying they expect their finances to worsen over the next 12 months. pic.twitter.com/5vjW6OsiXI
— Lisa Abramowicz (@lisaabramowicz1) March 11, 2022
Real hourly wages in the U.S. are trending down to some of the lowest levels in recent history, with just 18% of Americans surveyed saying that their wages are keeping up with their rising cost of living. https://t.co/XuujpH493U pic.twitter.com/yDVwDomGnz
— Lisa Abramowicz (@lisaabramowicz1) March 10, 2022
Here’s what optimists might point to
S&P 500 ttm operating PE now well below the pre-Covid high via @FactSet pic.twitter.com/eKlm7vYf6X
— Mike Zaccardi, CFA, CMT (@MikeZaccardi) March 13, 2022
The $SPX EPS estimate for Q1 has declined by 0.8% since Dec. 31, which would be the first decline during a quarter since Q2 2020 (-37.0%). https://t.co/mlOyzBQYW5 pic.twitter.com/sOKUpqnSdj
— FactSet (@FactSet) March 12, 2022
"Nine S&P 500 companies
have filed 8-K reports during the past month disclosing revenue exposures to Russia
averaging 2% of sales. These companies account for just 2% of total S&P 500 sales
across their entire operations…” – GS pic.twitter.com/P03g7fTusB— Sam Ro 📈 (@SamRo) March 12, 2022
Via @WSJ
“Firms in the S&P 500 have outlined buyback plans valued at $238 billion through the first two months of 2022, according to data from @GoldmanSachs , a high for this point in the year.” pic.twitter.com/cZJUZbRGyO
— Danielle DiMartino Booth (@DiMartinoBooth) March 15, 2022
Energy goods and services make up only 4.2% of personal consumption (as of January).
Yes, this will go higher soon, but energy goods made up 10% of consumption in the early 1980s and nearly 7% in the GFC. pic.twitter.com/CtkTX6IAYi
— Ryan Detrick, CMT (@RyanDetrick) March 14, 2022
The consumer cushion is likely bigger than you think. Food & energy spending as a share of total is still below pre-pandemic levels, and far from its historic average of 17.4% since the 1960s. pic.twitter.com/AbzEyUItSJ
— Gina Martin Adams (@GinaMartinAdams) March 15, 2022
"Recession concerns legitimate but overstated… Given the pace of economic growth and inflation, Fed policy is far too accommodative. Even if the Fed were to raise rates 7 times in 2022, policy would still be too accommodative"
Credit Suisse
— Jonathan Ferro (@FerroTV) March 14, 2022
UBS: S&P 500 under different Russia/Ukraine scenarios pic.twitter.com/YPcbvtUW1h
— Sam Ro 📈 (@SamRo) March 14, 2022
Unlike market expectations with 5Y & 10Y breakeven at record highs, #US consumer still sees inflation as temporary, contrary to the early 80s.
√ Higher 1-year expectations (5.4%) and unchanged 5-year (3.0%) imply that 2 to 5-year inflation expectations are down to 2.5% pic.twitter.com/r7seyrGvbg— Patrick Zweifel (@PkZweifel) March 14, 2022
Impact of geopolitical events on the S&P 500 throughout history pic.twitter.com/vZPUCrbqYL
— Daniel Lacalle (@dlacalle_IA) March 14, 2022
Meanwhile in China..
"The market is crazy — there's no fundamentals anymore. This might be worse than the 2008 financial crisis." https://t.co/lQ4xzO2E5C pic.twitter.com/4weUlHOImB
— Jesse Felder (@jessefelder) March 15, 2022
🇨🇳 Panic Selling Grips #China #Tech Stocks Again as Concerns Pile Up – Bloomberg
*Link: https://t.co/nHHOqPwQT9 pic.twitter.com/yce5QdgIlu— Christophe Barraud🛢 (@C_Barraud) March 14, 2022
This has got to be one of the ugliest charts in the world right now.
High yield Chinese real estate dollar bonds.
Sector just continues to implode. https://t.co/knYVcjQzlE pic.twitter.com/B44rztPYy6
— Joe Weisenthal (@TheStalwart) March 14, 2022
🇨🇳 #China | The yield on Chinese junk dollar bonds just climbed to an all-time high of 25.8%, according to a Bloomberg index, reflecting deepening pessimism that firms will be able to repay their debts. pic.twitter.com/HFZQDX25Xu
— Christophe Barraud🛢 (@C_Barraud) March 11, 2022
It’s carnage in Chinese markets today. These four charts show just how ugly it’s getting. 🧵 1/5
— Rebecca Choong Wilkins 钟碧琪 (@RChoongWilkins) March 14, 2022
The China tech sell off continued in a big way today with new Covid lockdowns and regulatory crackdowns.
Now the entirety of publicly-listed Chinese tech is worth less than Amazon.
h/t @DavidInglesTV pic.twitter.com/pEaWI4aQGO
— Dani Burger (@daniburgz) March 14, 2022
This is a big move
(Chart of 1-day returns) https://t.co/fZQPkWB6d4 pic.twitter.com/6QkHssZ3M5
— JohannesBorgen (@jeuasommenulle) March 14, 2022
Feel like China’s housing market issues would be getting a lot more attention in normal news cycle. Land prices dropping 72% YOY seems significant. pic.twitter.com/3m2NwmTEfr
— Rick Palacios Jr. (@RickPalaciosJr) March 13, 2022
NEW: I’m not sure people appreciate quite how bad the Covid situation is in Hong Kong, nor what might be around the corner.
First, an astonishing chart.
After keeping Covid at bay for two years, Omicron has hit HK and New Zealand, but the outcomes could not be more different. pic.twitter.com/1Ol4HHs9kT
— John Burn-Murdoch (@jburnmurdoch) March 14, 2022
China slowdown is very evident.
Via JP Morgan. pic.twitter.com/EOd2dMzqwQ
— Daniel Lacalle (@dlacalle_IA) March 13, 2022
Extremely strong activity eco data out of China🇨🇳 pic.twitter.com/syAKATzZJU
— David Ingles (@DavidInglesTV) March 15, 2022
#China's Jan-Feb #industrial output, #retail sales, fixed-asset #investment data better than expected.https://t.co/haGgRmRP6L pic.twitter.com/m3KOuUXH6X
— YUAN TALKS (@YuanTalks) March 15, 2022
Hang Seng Volatility Index tops 40 for the first time since market meltdown in March/April 2020 market meltdown pic.twitter.com/U1tBYlYWH3
— David Ingles (@DavidInglesTV) March 15, 2022
This is the most ''holy crap'' graphics I've seen in a while.
In 20 years, China has managed to become the number one trading part for…
…basically the entire world.
Indeed, holy crap! pic.twitter.com/iwpt6BeBBl
— Alf (@MacroAlf) March 9, 2022
Picture, thousand words. Putin (& Xi) brilliantly captured in this James Ferguson cartoon. pic.twitter.com/R383Puqkpd
— david pilling (@davidpilling) March 14, 2022
China's state council has in one move just:
*Pledged to keep capital markets stable
*Vowed to support overseas stock listings
*Said dialogue with US re ADRs is 'good'
*Promised to handle risks for property developers
*Clarified regulation of Big Tech will end 'soon'
*BOOM pic.twitter.com/xHYgcbchCo— Sofia Horta e Costa (@SofiaHCBBG) March 16, 2022
Hang Seng Tech is trading 20% higher.
Tech stocks are in happy dance 💃🏻 https://t.co/bNx0llLCVR pic.twitter.com/bf52gQp4GU— Cathy Yuan Zhang (@cathyyuanzhang) March 16, 2022
Disclosure
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