If There’s a Recession Coming, Why Are Semis Rocking?

Equity markets are likely completing a short-term low after peaking, right on track, during the week of the last FOMC meeting mid-September and that month’s option expiration. I have to admit the downside move this week was more than I expected, but the timing of the low looks right, just as equity indices and bellwether industry groups bottom at support.

Rather than simply highlight a chart of the S&P 500 index, I’d like ensure that readers, particularly those with a bearish outlook, keep an eye on the technical behavior of one of the more important industry groups, semiconductors. Why? Well, if the economy is deteriorating so badly, why are the semis within 3% of their all-time highs. More importantly, why is the relative performance versus the S&P 500 index for this economically sensitive group within 0.35%, yes 0 .35%, of all-time highs?

You are trying to access FSI member-only content.
You need to have an active FSI Macro, or FSI Pro subcription in order to read this article.
If you are already a member at FSInsight, please Sign In here. If you don’t have a subscription to FSInsight yet, you can sign up below.

Choose one of our yearly plans to save nearly 20%

We accept crypto via BitPay for yearly subscriptions.
    • Macro
      FSI Macro
      billed anually
      Get access to all the macro research on FSInsight
      • Tom Lee's Live Market BLASTs
      • View from Tom Lee
      • Signal From Noise
      • Portfolio Strategy
      • Technical Analysis
      • Granny Shots – Stock Ideas
      • US Policy
      • Live Conference Calls with Q&A
      First Month Free!
    • Crypto
      FSI Digital Assets
      billed anually
      Get access to all the crypto research on FSInsight
      • Tom Lee's Crypto First Word
      • Tom's Take on Crypto
      • Crypto Weekly Newsletter
      • BitDigest Daily Newsletter
      • Crypto Technical Analysis
      • Benchmark Indices Review
      • Bitcoin Valuation & Misery Indexes
      • Live Conference Calls with Q&A
      First Month Free!
    • Macro + Crypto
      FSI Pro
      billed anually
      Get access to all the exclusive research on FSInsight
      • Looking at code?
      • I am hidden!
      • FSI Macro
      • +
      • FSI Digital Assets
      • Designed by
      • HANGAR115
      • -
      First Month Free!
Disclosures (show)

Want to receive Regular Market Updates to your Inbox?

I am your default error :)
FSInsight logo
150 East 52nd St, 3rd Floor, New York, NY 10022

Subscribe to our Free Weekly Report

An insitutional-grade report delivered to your inbox every week.

© 2021 FSInsight. All rights reserved. Developed by HANGAR115.

Illustrations by Karl Wimer.