To The Moon

This week: annual charts, monthly charts, cross asset performance, earnings, VIX$Cboe Volatility Index(VIX)$ , global vs US, value vs growth, stocks vs bonds, Fed vs markets, and more... 

Welcome to theWeekly S&P500$S&P 500(.SPX)$ #ChartStorm— a selection of 10 charts which I hand pick from around the web (and my own files) and post onTwitter.

These charts focus on the S&P500 (US equities); and the various forces and factors that influence the outlook - with the aim of bringing insight and perspective.

1.HAPPY NEW YEAR !!

The S&P 500 closed down -19.4% in 2022 (or -18.1% including dividends) with a close of 3839.5 (vs the (closing) high for the year of 4796.56 (which was actually the first trading day of the year!) and low of 3577.03 in mid-October).

2. Monthly Chart Update

After a brief attempt at retaking it during November, the S&P500 closed 2022 below its 10-month (aka ~200-day) moving average — not exactly a position of strength going into 2023. Also out of curiosity: the CPI inflation adjusted S&P500 closed down almost -25% on the year.

3. Volatility

The VIX didn’t spike all that much during 2022 despite all that went on (at least relative to the high bar set by 2008 and 2020).

Yet, the average level of the VIX across 2022 was higher than average, and the minimum level for the year continued its apparent uptrend..

4. Asset Class Returns

Relative to other asset classes, US large cap equities were about middle of the pack of awfulness — some assets performed worse, others performed somewhat less worse, and only cash and commodities were up on the year.

5. Peak Earnings

After a roaring rebound post-covid (thanks to reopening, massive fiscal + monetary stimulus, and an element of inflation pushing up earnings in nominal terms), the peak has now been seen.  Compared to the experience of global equities ex-US the surge in US earnings does have an air of unsustainability to it — and perhaps between the two, US has the most to lose...

6. US vs Global Equities – Price

The big surge and breakaway of the USA vs rest of world ~earnings~ in that previous chart has been a key driver of the big surge in US vs global relative *price* performance (whodathunkit).

Interestingly though this trade ran into firm resistance this year...

7. Value vs Growth

Big story for US equities in 2022 was the turn in value vs growth ...albeit the real story was one of sectors: Cyclical Value (energy) was strong, Defensive Value held ground and performed well in relative terms (Healthcare, Consumer Staples, Utilities), and on the growth side: the tech + tech-related sectors came under heavy selling pressure (Technology, Consumer Discretionary, Communication Services).

8. Stocks vs Bonds Valuations

With some benefit of hindsight, it was never going to end well when both stocks and bonds were trading at expensive valuations.

9. Stocks & Bonds

Little wonder then that 2022 was among the worst combined returns for stocks & bonds (and outright worst for bonds).

10. Fed vs Markets

2022 saw the most rapid and substantial tightening of monetary policy in recent history by the Fed (but also globally). Naturally and logically, if stimulus was a tailwind on the way up, then tightening was and still is a headwind on the way down.

 https://chartstorm.substack.com/p/weekly-s-and-p500-chartstorm-1-january