Recommended
Recommended
More Related Content
Similar to End of 2023 Market Scenarios
Similar to End of 2023 Market Scenarios (20)
Recently uploaded
Recently uploaded (20)
End of 2023 Market Scenarios
- 1. End of 2023. Out of options. Visual Sectors Research
- 2. 3 Key Questions Why? What? When? Analysis. 15 indicators. 3 Scenarios. Specific time frames
- 3. WHY Analysis Map News Sentiment Fundamentals Liquidity Economy Cycle Media Cycle Value Multipliers Fiscal and Budget Fed Balance CPI PMI Monetary Policy Grey Rhino Events Corporate Debt Earnings Dynamics Reverse REPO Banks’ Cash GDP Savings Yield Curve Assets Behaviour
- 4. Sentiment: Waiting for a Grey Rhino Oct 2022 Nov 2022 Dec 2022 Jan 2023 Feb 2023 Mar 2023 Apr 2023 May 2023 Jun 2023 Jul 2023 45 Bars, 64 d Vol 119.263B -54 Bars, -78 d Vol 131.921B News Sentiment Cycle FED Tightening Peak Bank Crisis Debt Ceiling 70 Bars, 104 d Vol 172.329B
- 5. Fundamentals: Not Overpriced but in Debt Billions of Dollars 12,800 12,400 12,000 11,600 11,200 10,800 10,400 10,000 9,600 9,200 8,800 1950 1960 1970 1980 1990 2000 2010 2020 Q1 2018 Q3 2018 Q1 2019 Q3 2019 Q1 2020 Q3 2020 Q1 2021 Q3 2021 Q1 2022 Q3 2022 Q1 2023 Q1 2023: 12,725.000 Total Corporate Debt 22 2015 2017 2019 2021 2023 2024 17 20 25 30 35 40 42 25.72 P/E Ratio for S&P500
- 6. Earnings: Slowing on Growing Expectations 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% -40.0% -50.0% -60.0% Consumer Disc Comm Services Industrials Real Estate Financials Consumer Staples Info. Technology Utilities S&P 500 Health Care Materials Energy S&P500 Earnings Growth by Sector Below In-line Above Info. Technology Comm Services Consumer Disc Consumer Staples Health Care S&P 500 Energy Materials Real Estate Industrials Financials Utilities S&P500 Earnings vs Estimates
- 7. Cycle Stage: Slowdown! GDP Inflation Monetary Policy Yield curve Asset behavior Economic Cycle Indicators Current stage and favorable sectors Recovery Early growth Late growth Slowdown Recession Fast GDP growth to reach pre-crisis level High growth High growth Positive growth but slowing down GDP negative Low inflation but starts to increase Lower than target inflation Inflation peak Inflation slowing down Low inflation / deflation Stimulus / low rates Low rates getting ready for hikes Monetary tightening, rates growing Tightening stops Start to lower the rates Ascending: long-term rates are slightly higher than short-term Normal ascending: long- term rates significantly higher than short-term Flattening of the curve Inversion: short term rates higher than long-term rates Flattening Rates are low so the bonds are as expensive as they get, stocks starts to grow Bond yields slightly increase, stocks continue to grow Cash looks favorable because of the rates, bonds as cheap as they get, stocks reach peak Short-term rates peak, high quality bonds start to grow, stacks starts to decline Bonds grow fast, low rates make cash unattractive, stocks decline rapidly Target sector Technolog Consumer cyclical Industrial Transportation Commoditie Material Energy Consumer defensiv Utilitie Healthcare Bond Financials
- 8. Liquidity: Drought in Sight 900 800 700 600 500 400 300 2021-11 2022-01 2022-03 2022-05 2022-07 2022-09 2022-11 2023-01 2023-03 2023-05 2023-07 1990 1995 2000 2005 2005 2010 2015 2020 Wed, Jul 12, 2023: 463.2466 Small Banks Cash Assets 8700K 8600K 8500K 8400K 8300K 8200K 8100K 4 Feb 2023 - 1 Aug 2023 Aug ‘23 Jul ‘23 Jun ‘23 May ‘23 Apr ‘23 Mar ‘23 Wednesday, 22 Mar 2023 Total Assets (In millions of dollars) : 8 733 787 Federal Reserve Balance Sheet 0 1k 2k 24 Jul 29 May 5 Jun 12 Jun 19 Jun 26 Jun 3 Jul 10 Jul 17 Jul May 31, 2023 Treasury : $2,254.859B May 31, 2023 Treasury : $2,254.859B $Billions Reverse REPO -15 -10 -5 0 5 1973 1983 1993 2003 2013 2023 2033 Primary Deficit or Surplus Net Interest outlays Total Deficit or Surplus Federal Budget Deficit $1.5 trilllion, 5.5% GDP Deficit
- 9. Scenarios Basic Negative Positive 65% - S&P500 at $4000 by December 31st 2023 20% - S&P500 at $3200 by December 31st 2023 15% - S&P500 at $5000 by December 31st 2023 Slow down of Economy Gloomy consumer Liquidity crisis Major Recession Headlines Grey Rhino event makes the Fed print money
- 10. Crowd Wisdom A crowd of options traders: High accuracy Amazing knowledge Strong motivation
- 11. Options Benefits Specific time frames Specific targets Clear trade direction $400 $395 $380 $360 +41.5% Resistance Bets +34.5% Upside Bets $340 $330 $320 January 2024
- 12. Takeaways Sentiment runs in 90 day cycle Fundamentals look negativ Macro cycle stage - Slowdow Liquidity is a ris Base case: S&P500 will end 2023 at $4000 +timing: pullback starts in August-September