Reasons for HOPE

Good Morning Everyone!

Credit Suisse, one of the world’s largest banks is in trouble. Stock trading at record low, credit default swaps at 2009 highs and CEO says bank is at a “critical moment”. Buckle up another bumpy week ahead!

Prices as of 4 pm EST, 9/30/22; % YTD

MARKET UPDATE

U.S. stocks heading for their worst performance since the 2009 financial crisis

• Worst start in any year since 2002

  • S&P500 YTD -25%

  • NASDAQ YTD -32%

• Has closed lower 6 of the past 7 weeks

TSX holding up much better

• YTD -13.1% 

Investors are asking: Are rates and the U.S. dollar peaking?

• Investors waiting for the sell side to cut their 2nd half 2022 and 2023 estimates

• New year-to-date lows to start Q4

• Investors positioned defensively: Low cash levels and low hedge fund leverage

• The bond market is calmer to start Q4, which should help equities stabilize

HOPE

• Seasonality is reason for HOPE

• Mid-term Q4 quarters tend to have good returns historically in this time period

• The S&P 500 is 10% below its 63-day moving average. It’s only crossed that threshold 4 times in the past 10 years.

• Stocks and Bonds have never BOTH been down year-over-year in 3 consecutive quarters – EVER

• Perhaps, earnings season will turn the market around

10yr 3.7%'

US$ 112 up 14% in 2022, FX will squeeze U.S. earnings

C$ 72.8

VIX 31

Crude $84 +5%

• OPEC+ meets this week

• may cut production to balance weaker demand by 1 million bbl/d

• Press Conference is October 5 (Wednesday)

Earnings

• None

CRYPTO UPDATE

Solana SOL/USD suffers 4th major outage

• Misconfigured node took network offline Friday

Former Celsius CEO Alex Mashinsky: confirmed scumbag

• Allegedly withdrew $10 million from company ahead of freezing customer accounts

Digital asset flows (into popular crypto ETPs, mutual funds, and OTC trusts) last week

• Third consecutive week of (low) inflows

• Bitcoin (3-week streak) and Ethereum (2-week streak) led

• Broad outflows in altcoins

  • Most effected: Polygon MATIC/USD, Avalanche AVAX/USD, Cardano ADA/USD