What began as churn and chop and drifting higher, turned to something that felt much more like whiplash. Although closing higher on the day, US equities were jolted lower midday as crypto markets faltered in an unsuccessful attempt to hold equities under with them. The tug-of-war was first from the side of US midterm elections anticipation, hopeful equity markets, USD relief, US Treasury yield declines/stabilization, commodity/precious metal rally (ex-crude), China re-open optimism- all contributing to a continued market rally of the past few days.

A lackluster [ /ˈlakˌləstər/adjective/ lacking in vitality, force, or conviction; uninspired or uninspiring ] session in US equities today after yesterday’s proverbial punch to the market’s gut. Early follow-thru from global markets found the US initially under heavier pressure in the am, drifting marginally higher into the afternoon and then again a touch lower into the close. All action maintained in the red today, however.

People were looking for the pivot today, after the most aggressive tightening in over 40 years. But this was not the pivot. Investors watched markets ramp up in a straight line as the initial read on The Fed announcement leaned dovish. But, stocks came right back down in a straight line as Jerome P continued hawk-king. The longer he spoke, the harder the market dove (not a pun). Cries of “someone get him off stage!” were heard across Wall Street.

October as we know is the month that concludes with a celebration of the macabre. But the stock market has resembled a non-stop horror movie for much of 2022. Fortunately for many investors, the stock market chose a bull as its costume for Halloween this year and wore it for most of the month. Indices opened the day in the red and didn’t budge much from that position throughout, but a small retreat as monthly books come to a close could almost be predicted. Especially in light of what’s to come.

So if I told you coming into this week that Microsoft, META, Amazon and Google would largely disappoint on earnings, what would the guesses have been for where the S&P/Nasdaq closed on Friday? I’m quite confident that most of you, yours truly included, would be wildly off base. Despite the famous 4 failing to confirm the rally we’d seen over the last week plus from a fundamental perspective, markets shrugged it off and kept on their merry way.

US equities having another mixed day of trading as a complete deluge of earnings has again descended upon us and bringing with it more interesting and/or disappointing datapoints and insight from Q3 to digest and process (to say the least!…). In the perfect demonstration of sector performance divergence- we saw the Dow and Russell hold in +ve territory, while the relatively more tech-heavy SPX fell lower as well as the heavy tech-heavy Nasdaq was under more significant pressure.

Initially, it looked like Microsoft (-7.7%) and Alphabet’s (-9.6%) reporting foibles overnight would not interrupt the current uptrend. Markets spent the first few hours of the day climbing higher in the face of tech-versity, assisted by the Bank of Canada after they surprised with a smaller than expected rate hike. Surely, a leading indicator for the Fed!? The USD 10yr even fell below 4% for a spell – another positive sign. But then came a dose of reality…or mean reversion.

Markets drifting higher to kick the week off ahead of much-anticipated earnings from the likes of “Big Tech”. Equities seemed largely unimpressed with depressed PMIs across the globe- all signals pointing to the tightening-induced contraction we’ve been on the lookout for. US Manufacturing component fell below the 50 mark for the first time since June 2020 along with Services well below expectations, and therefore, bringing a disappointing Composite print.