The S&P 500 Is Flashing The Same Warning Signs Seen In 2018 And 2022

Liquidity strains are emerging beneath the surface, with market breadth deteriorating in both stocks and high-yield bonds. The NYSE Advance-Decline line and summation index signal weakening liquidity, despite headline indices holding up. Upcoming Treasury bill issuance and ongoing Fed tightening are likely to further pressure liquidity into October and November. Falling SOFR volumes and money market outflows highlight cumulative liquidity risks that could eventually impact broader market indices.