Contrarian catalysts
What is the risk of a short squeeze now?
"Still present, but potentially delayed...A squeeze might not accelerate unless we get 1) evidence consumer spending isn’t slowing too much, 2) relatively good earnings season, 3) Fed communicating they’re on hold. Given the conditions that might have to be met, a sustained move higher in shorts seems like a greater possibility in Nov than right now" (JPM Position Intelligence)
Lowest beat level
As for earnings, we’re only ~17% of the way through results for the SPX and the beat rate is coming in at its lowest level so far in ’23. The 73% reading is still 2ppts above the LT average, and decently above the 2 Qs it broke below 70% last year. That said, stocks are getting punished. The poor tape is definitely a big contributing factor, but misses (of which there have been plenty) are being punished the hardest vs. every other quarter since 2010, averaging -3.7% 1D moves.