November 3, 2021
Market Performance (Month of October)
Disclaimer: Past performance is no guarantee of future performance
The Good News
Earnings continue to beat estimates
And profit margins are hanging in there for now
Employment costs are going up per surge in employment cost index (blue); yet, market’s profit margins (orange) have not been hit by higher labor costs so far pic.twitter.com/M3hDQVfLm9
— Liz Ann Sonders (@LizAnnSonders) November 2, 2021
The Mixed News
But the surprises are coming in lower
Earnings so far came in 12.0% above expectations at the start of the season, while the sales surprise was 2.2% pic.twitter.com/rMpmkC2buO
— Mike Zaccardi, CFA, CMT (@MikeZaccardi) October 28, 2021
And the increases in earnings estimates are getting smaller
Source: John Butters
The Bad News
3Q GDP came in lower than expectations
Source: Liz Ann Sonders
The State Of The Market
It’s been a good year
Make that 60 new highs in 2021 for the S&P 500.
Only a few more from the second most ever, but still a lot of work to do to catch 1995. pic.twitter.com/ELKsWt5SER
— Ryan Detrick, CMT (@RyanDetrick) November 1, 2021
And October was a good month
it didn't feel like it, but that was the S&P 500's best October performance in 6 yearshttps://t.co/GHqKCYuBc2 via @markets by @luwangnyc & @VildanaHajric pic.twitter.com/AnyWcJfYxF
— Katie Greifeld (@kgreifeld) November 1, 2021
Excess liquidity has surely played a role.. but seems to be drying up
Savings rate has round-tripped: U.S. personal savings rate fell to 7.5% in September, lowest since December 2019 and slightly above post-GFC and pre-pandemic average of 7.1% (orange line) pic.twitter.com/AEmrUcHX9O
— Liz Ann Sonders (@LizAnnSonders) November 1, 2021
Which could be another spark for the labor market
Personal savings rate fell back to pre-pandemic levels in September. One theory on why the labor market recovery has been sluggish is that a savings glut has made up for a lack of income. If that's the case, declining savings could accelerate the labor recovery. pic.twitter.com/5vZNegFAYb
— Liz Young (@LizYoungStrat) November 1, 2021
And may put a dent in the wage growth we are seeing
Wages and salaries were up 1.5% in the third quarter, the highest on records dating back 20 years.
— Chris Rugaber (@ChrisRugaber) October 29, 2021
Employment cost index confirms a big increase in pay for the lowest paid workers pic.twitter.com/Q2Y1W1oAdy
— Dr. Julia Coronado (@jc_econ) October 29, 2021
But many also remain content staying retired
Boomers calling it quits pic.twitter.com/jp97PhNb7X
— Mike Zaccardi, CFA, CMT (@MikeZaccardi) October 29, 2021
Amazon reported last week.. what did did they tell us?
Wow, $AMZN says it's possible that in Q4 it could have up to $140 billion in sales, but thanks to surging costs, it could have $0 profit. https://t.co/WifBme9Olv
— Joe Weisenthal (@TheStalwart) October 28, 2021
AMZN profit margin collapse everywhere but AWS. Intl margins turned negative after 5 quarter in the green. If it wasn't for AWS, Amzon's total profit would be negative! pic.twitter.com/AqCuS7o934
— zerohedge (@zerohedge) October 28, 2021
And be careful out there
After surging 310,000%, the ‘Squid Game’ crypto has crashed to $0, wiping out all investors. pic.twitter.com/QVfT4l77yP
— Fintwit (@fintwit_news) November 2, 2021
Squid Game Crypto Coin Today…
5:40am: $0.0007926$SQUID pic.twitter.com/uN6walQRqC
— Charlie Bilello (@charliebilello) November 1, 2021
NFT people tell me this was a "flashloan." Meaning, this individual took out a loan to fake someone buying it, bought from himself, then immediately payed the loan.
Who the hell gives out a $532 million loan to an individual? Even for an instant? https://t.co/Qs2vVFd8gL
— Ryan Patrick Kirlin 🐎 (@RyanPKirlin) October 29, 2021
People in crypto now discovering "wash trading", basically trading with yourself in a disguized way to mark prices higher or "paint the tape".
Finance requires experience & a minimum of sophistication Bitdiots don't seem to want.https://t.co/xWIe1et7TT
— Nassim Nicholas Taleb (@nntaleb) October 31, 2021
This wallet bought roughly $8,000 of $SHIB last August.
It's now worth $5.7 billion.
From $8,000 to $5.7 billion in roughly 400 days.
This investor figured out a way to do less diligence than a VC and still outperformed them all. pic.twitter.com/H3YS6y3owo
— Turner Novak.🍌🧢 (@TurnerNovak) October 28, 2021
Stat Of The Week
Absurd stat of the day
Manufacturers sold 203.7 billion cigarettes in 2020, up from 202.9 billion the year prior.
It's the first annual increase in two decades.
— Morning Brew ☕️ (@MorningBrew) October 27, 2021
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