1, risk of Fed disappointing (recall June disappointment)
2, possible negative re balancing month/quarter end flow (US pensions funds some $170bn, Norges around $15 bn, Japanese pensions some $22bn, total around $200 bn)
3, indecisive US election result
People have sold protection into the Fed event, maybe they will chase it after the Fed event just as they did in June?
Tech will lag the rest of the S&P by around 50% next year in terms of earnings growth.
Blackstone’s Executive Vice Chairman Tony James says;
Interest rates will normalize and companies will face “plenty of headwinds”..
Near zero interest rates has been the main driver of equities
Firms meeting the criteria have a track record of 10%+ sales growth during each of the trailing two years and the expectation that 10%+ revenue growth will continue for each of the next two years. Stocks meeting these criteria have a strong track record of outperformance
“we highlight potential “future five” stocks that our equity analysts believe are well-positioned and have compelling growth opportunities: ISRG, ADSK, NOW, PYPL, VRTX”
Chart: The “future five” market cap rank in the S&P 500 over time
“We are approaching our estimated S&P 500 blackout window (9/21/20 – 11/6/20). As of today we estimate ~40% of S&P 500 corporates are in blackout prior to their quarterly earnings, with ~70% to enter blackout by 9/21. During blackout companies are not prohibited from buying shares, but are limited in their ability to implement discretionary repurchases”.
Note: Q2 ’20 buyback executions at ~$103.0bn (R3000 and S&P 500) stand, down 47% y/y and down 54% q/q.
The crowd is increasingly negative to China. Bilateral tensions have changed to focusing on tech, capital markets and geopolitics.
Hard to trade from a shorter time perspective, but worth having in the back of your head for the longer term book…
The European sector has reduced already record low schedules by 10% over the last 4 weeks due to weak advance booking data for the second half, especially October and November. Demand will remain challenging as virus concerns increase and governments keep changing policies. Q3 capacity is at -66% of 2019 levels and Q4 capacity at -50%
CITI economic index rolled over recently…will Spuz follow?
Starting to rise again.
Nice steady quarter-on-quarter momentum….
Will this also come back to print new all time highs some time in 2021?
Impossible is nothing
Will people give back “all” the loans before the big one lower?