Weekly S&P500 ChartStorm - 3 July 2022

The?Weekly S&P500?ChartStorm?is a selection of 10 charts which I hand pick from around the web and post on?Twitter. The purpose of this post is to add extra color and commentary around the charts.

The 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 Month!?Pretty much a round trip for the S&P 500 index in inflation adjusted terms at this point. Up the escalator, down the elevator.

Source:??@topdowncharts

2. YTD Returns in Context:?H1 2022 was one of the worst first halves of the year in history for the S&P500, but it was not a lonely journey...

Basically nothing worked outside of cash and commodities.

Source:??Asset Class Returns

3. Stocks vs Bonds:?Interesting table to reflect on — over the period covered in this table, 60/40 always bet 100% stocks when stocks were down for the year, albeit “YMMV” with regards to *absolute returns*.....

Source:?@charliebilello

4. Bond Yields as Seen by Stocks:??Seems like "equities for rising rates" had their doubts on how far 10-year yields could go. Looks like the ceiling may be in for bond yields?

Source:??@AlfCharts

5. Financial Conditions:??The key point to note on this one, as the always excellent?SoberLook?remarked: "tighter financial conditions require higher compensation for investors to take on risk"

i.e. valuations have to not just mean-revert, but go to a level where it compensates for the risks of excess policy tightening and global recession.

Source:??@SoberLook

6. Stock Losses in Context:??This one is actually low-key shocking — US equity market drawdown is equivalent of -46% of US GDP, that's massive.

(i.e. speaking of financial conditions!)

Source:??@strategasasset

7. Easy-Peasy Margin-Squeezy:?Looks like a margin squeeze is incoming...

(recession will hit demand, inflation: input costs)

Source:??@TaviCosta

8. Earnings Outlook:??Another perspective on the outlook for corporate margins, this time looking at operating margins and cost pressures -- either way you cut it, the outlook for earnings is not good...

Earnings FUD is real. Expect more downgrades.

Source:??@JulianMI2

9.?Who Owns the Market:?Probably a few surprises in there for those who haven't seen this type of breakdown before...

Source:??@Ksidiii

10. Long-Term Perspective:??"Stocks for the Long-Term"*

*(n.b. beware of occasional lost-decade(s))

Source:??@MikeZaccardi?via?@MichaelAArouet

Check out original?source?and bonus charts:?ChartStorm Substack

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Thanks for reading!

Callum Thomas

Founder and Head of Research at?Topdown Charts

Feedback/questions/views welcome in the comment section below: