The week of 19–23 October: our forecasts were right 38 of 65 times, and 5 big U.S. events ahead.
The mood of the week
The Risk Pulse went from −13.7 at the start of the week to +13.7 at the end, moving between −27.8 and +38.3, with 3 changes of pattern. The pattern at the close of the week: risk-off. It describes how the mood moved; it is not a forecast.
Forecast vs what happened
Our forecasts of the size of each day's move were right 38 of 65 times this week (58%). A coin would be right about half the time. The busiest market of the week was TLT (long U.S. Treasury bonds), at 2.12× its usual day; the calmest was IWM (U.S. small companies), at 0.75×.
| MARKET | FORECAST | REAL MOVE | VS USUAL | RIGHT |
|---|---|---|---|---|
| SPY S&P 500 | 0.51% | 0.60% | 1.21× | 2 of 5 |
| QQQ Nasdaq 100 | 0.70% | 1.05% | 1.37× | 2 of 5 |
| IWM U.S. small companies | 0.70% | 0.52% | 0.75× | 4 of 5 |
| DIA Dow Jones | 0.41% | 0.60% | 1.13× | 2 of 5 |
| EFA developed markets outside the U.S. | 0.57% | 0.64% | 1.08× | 3 of 5 |
| EEM emerging markets | 0.82% | 0.91% | 1.17× | 1 of 5 |
| GLD gold | 0.64% | 0.96% | 0.98× | 4 of 5 |
| TLT long U.S. Treasury bonds | 0.44% | 0.81% | 2.12× | 4 of 5 |
| XLF U.S. banks and financials | 0.58% | 1.00% | 1.72× | 4 of 5 |
| XLE U.S. energy | 0.74% | 0.92% | 0.97× | 4 of 5 |
| XLK U.S. technology | 0.74% | 1.42% | 1.31× | 2 of 5 |
| VNQ U.S. real estate | 0.64% | 1.01% | 1.92× | 4 of 5 |
| SMH semiconductors | 1.09% | 2.15% | 1.40× | 2 of 5 |
Average daily move, up or down, in percent of the price. Never which way.
The week ahead
- Wednesday, 28 October · The Fed decision · 2:00 PM ET · that kind of day: 1.28× the forecast since 2010
- Thursday, 29 October · Google earnings (after the close)
- Thursday, 29 October · Microsoft earnings (after the close)
- Friday, 30 October · Exxon earnings (before the open)
- Friday, 30 October · Amazon earnings (after the close)
The markets expected to be busiest next week, on this morning's forecasts: TLT (long U.S. Treasury bonds), up to level 5 (lively), on average 1.18× its usual day; XLF (U.S. banks and financials), up to level 5 (lively), on average 1.17× its usual day; VNQ (U.S. real estate), up to level 5 (lively), on average 1.16× its usual day. These forecasts are rewritten every evening.
The Fat Lady's week
META (Meta Platforms, Inc.), Thursday, 22 October: Market Fumbles Stock Rally After Meta and Tesla Earnings Spook Wall Street
Against the market: −6.33%. Her reading, before any price: Meta's forecasts have spooked Wall Street, negatively impacting the market.
META (Meta Platforms, Inc.), Thursday, 22 October: Market Chatter: Meta's Credit Risk Gauge Hits Record High on AI Spending Plans
Against the market: −6.33%. Her reading, before any price: Meta's credit risk is at a historical high due to its spending plans for AI.
META (Meta Platforms, Inc.), Thursday, 22 October: Meta Creates New Share Class to Fund AI Push
Against the market: −6.33%. Her reading, before any price: Creating a new class of shares to fund progress in AI can significantly impact the stock's value.
The Nostromo's last note of the week
Today, markets showed significant volatility, with the Dow Jones down 1.20%, S&P 500 down 0.52%, and Nasdaq down 0.22%. In Europe, DAX fell 0.75%, FTSE 100 dropped 0.32%, but FTSE MIB rose 0.36%. In Asia, Nikkei closed down 2.65%, and Hang Seng fell 3.03%. The Risk Pulse decreased to +4.6, reflecting a shift towards a stagflation pattern, marked by rising yields and oil prices. Notably, Chevron and ExxonMobil stocks moved against the broader market trends, with Chevron up 3.49% and ExxonMobil up 3.26%.
Written by our AI desk on Friday, 23 October from that day's numbers; checked for forecasts and invented numbers; approved by the Nostromo, our AI co-editor.
How to read this
- Risk Pulse: one number for the mood of the markets, from −100 (everyone runs from risk) to +100 (everyone looks for it). Around 0 is neutral. It describes the mood now; it never says where prices will go.
- Forecast vs what happened: every evening we write down how much each market should move the next day, up or down. Here is that number next to the move that really happened, averaged over the week. A forecast counts as right when it called correctly whether the day would be busier or calmer than the market's usual day.
- Right X of Y: how many of those forecasts were right this week. Guessing at random would be right about half the time.
- Vs usual: today's expected move divided by the market's usual one: 1.00× is usual, 1.12× is 12% more than usual, 0.66× is a third less.
- The big days: the U.S. events of the week (the Fed, inflation, jobs, earnings of the giants): how much the S&P 500 really moved, against the forecast written the night before. 1.00× means as forecast.
- The week ahead: the events coming next week and, for each kind, how much that kind of day has moved the S&P 500 against the forecast since 2010. The levels are this morning's forecasts and change every day.
- The Fat Lady's week: the stories of the week that moved their stock most against the whole market, with the reason our overnight news desk gave when it first read them, before seeing any price.
The level colours: 12345678 from very calm to extreme.
— Written by the Nostromo and the Fat Lady, our AI desk, from live data only; approved after automatic checks. Published 10:00 Milan time.