November 3, 2021

Market Performance (Month of October)

Source: YCharts
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…
1:35am: $38.19
2:35am: $89.91
3:35am: $93.64
4:35am: $434.70
5:35am: $2,856.64
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.

h/t @business

— Morning Brew ☕️ (@MorningBrew) October 27, 2021

Disclosure

Clear Rock Advisors, LLC is registered with the SEC as a registered investment advisor with offices in Texas. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by Clear Rock Advisors, LLC) or any investment-related or financial planning consulting services will be profitable, equal any corresponding indicated historical performance level(s), or prove successful. It remains the client’s responsibility to advise Clear Rock Advisors, LLC, in writing, if there are any changes in the client’s personal/financial situation or investment objectives for the purpose of reviewing, evaluating or revising Clear Rock Advisors, LLC’s  previous recommendations and/or services, or if the client would like to impose, add to, or modify any reasonable restrictions to Clear Rock Advisors, LLC’s services. A copy of Clear Rock Advisors, LLC’s current written disclosure statement discussing its advisory services and fees are available upon request.