September 28, 2021
Market Performance For The Prior Week
Source: YCharts
Disclaimer: Past performance is no guarantee of future performance
The Good News
Economic surprise index creeping back up
And the leading economic index continues to be a positive signal
And earnings remain strong
The average investor is always shocked to hear just how much more profitable the S&P 500 is today versus 2019. Earnings are 36% higher. pic.twitter.com/nkeDcs6q0o
— David Schawel (@DavidSchawel) September 21, 2021
And consumers are historically financially healthy
The worst recession since World War II and the highest growth in net worth on record. https://t.co/aokyFbFz9b
— Morgan Housel (@morganhousel) September 23, 2021
The Bad News
Inflation concerns remain in the limelight
The Global Supply Chain is a &#$*ing Mess—in 4 JPM graphs
1. Dozens of containerships stacked up outside LA
2. Shipping rates to the moon
3. Global delivery times at 25-yr highs
4. Our surging demand for WFH and home improvements imports —> wild surge in eastbound freight rates pic.twitter.com/feeEzZKz7U— Derek Thompson (@DKThomp) September 27, 2021
Even a normally cold winter in the Northern Hemisphere is expected to drive up natural gas prices further across much of the world. U.S. gas prices, while lower than Europe, are trading near the highest level since 2014. https://t.co/qpti07cX5Y via @economics @markets @BW pic.twitter.com/VcDLY63cQt
— Steve Matthews (@SteveMatthews12) September 27, 2021
And the debt ceiling conversation is heating up
NEW: JPMorgan Chase CEO Jamie Dimon tells Reuters that the nation's largest bank is preparing for a potential U.S. credit default as debt limit talks go down to the wire in Washington. pic.twitter.com/JqWNDLJlsF
— CNBC Now (@CNBCnow) September 28, 2021
Resulting in rising yields
U.S. yields are climbing again today to some of the highest levels since before the pandemic. Yields on 5-year notes just touched the highest since February 2020. pic.twitter.com/YNHgmiGt39
— Lisa Abramowicz (@lisaabramowicz1) September 27, 2021
The State Of The Market
The rise in yields has hurt tech stocks the most
Yesterday was strongest performance for @Bloomberg value factor relative to growth since early March 2021
[Past performance is no guarantee of future results] pic.twitter.com/bMkq0Teu3x— Liz Ann Sonders (@LizAnnSonders) September 28, 2021
And volatility seems like it could be on the rise again
Source: Bloomberg
And retail traders continue to play a role in this market

Which probably helps explain why equity flows have been all over the place
U.S. stocks had their worst weekly outflow in more than three years, with traders pulling $28.6 billion from U.S. equity funds in the week through Sept. 22: BofA & EPFR Global data.
— Lisa Abramowicz (@lisaabramowicz1) September 24, 2021
"Clients were big net buyers of US equities last week… Buy-the-dip mentality underscores optimistic sentiment… Inflows were the fourth-largest in our data history since '08 (and the largest since Dec. as a % of S&P 500 mkt. cap)…” – BofA
— Sam Ro 📈 (@SamRo) September 28, 2021
Look at the flows in 2020 & 2021 compared to prior years..
And they are surely involved in this crazy options market
These options stats…
9 of 10 most active call option trading days in history this yr.
39mil option contracts traded on avg day in 2021, ↑ 31% from 2020 & highest level since market inception in 1973.
Daily avg notional value of traded single-stock options > stocks.
via @WSJ pic.twitter.com/MRd7WBSm21
— Nate Geraci (@NateGeraci) September 27, 2021
'When individual investors buy call options, the Wall Street firms that sell options often hedge their positions by buying the shares, further contributing to rising markets. "It creates a circular kind of melt up. It’s a reinforcing loop."' https://t.co/a0Ot0Ux2jj pic.twitter.com/aijo48wvTr
— Jesse Felder (@jessefelder) September 26, 2021
And this has been happening while liquidity has been on the decline
Charts Of The Week
“History shows that US government shutdowns generally have not meaningfully impacted equity returns.” – GS pic.twitter.com/CBi9yggcnu
— Sam Ro 📈 (@SamRo) September 22, 2021
Chart of the week👇 ht @MacroAlf pic.twitter.com/EKHehEoxCU
— Michael A. Arouet (@MichaelAArouet) September 24, 2021
Speculative trade boom looks to be over in terms of 12m change … @GoldmanSachs indexes of non-profitable tech, most-shorted, and retail-favored stocks—along with newer IPOs—saw up to triple-digit % gains earlier this year; performance is still strong but well off boil pic.twitter.com/l6O4LFXP8q
— Liz Ann Sonders (@LizAnnSonders) September 27, 2021
Disclosure
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