BofAML Michael Hartnett:
1. Sept/Oct = “midlife crisis” phase of investment year…however sees this as “healthy rather than dangerous correction”

2. tactical view: Sept correction is part of “topping process” but don’t expect big bear move when Fed so easy, Wall St flush with cash, vaccine expectations strong

3. upside risks taking SPX back in…[Read more]

JPM derivatives team headed by Dr Kolanovic sees CITI volatility screening cheap.

JPM equity research analyst concurs and wants to buy the dip in the sector as a) fundamental operating environment is unchanged b) the $2T in assets referenced were part of suspicious activity reports (SARs) –so banks acted exactly as they were supposed to act and c…[Read more]

Citigroup:
1. FED and COVID more important: Expect volatility in a contested election, but the Fed and pandemic recovery likely will have greater influences.

2. USD could rally……a USD rally is possible in a disputed election, but will remain unsupported otherwise.

3. Trump winners……Sectors that may benefit from a 2nd Trump term include…[Read more]

S&P 500 up 13 of last 17 September option expiration weeks – September’s option expiration week is up 60.5% of the time for S&P 500 since 1982. DJIA and NASDAQ have slightly weaker track records with gains 55.3% of the time and 57.9% of the time

Flow & Liquidity expert at JPM, Nikos P, sees significant equity selling into month-end. Flows have clearly been important in September. Will this one also spook the market?

“We estimate around -$200bn of negative rebalancing flow by entities that tend to rebalance on a quarterly basis, such as US defined benefit pension plans, Norges Bank, i.e.…[Read more]