Liquidnet’s Q3 2022 Mid-Quarter Review: Retail And Institutional Activity Return, And Sharp Changing Market Volume Sources Jeffrey O’Connor, Head of Market Structure, Americas

It’s time to check in on the conditions of the markets as the last four weeks have certainly brought change.

While Q2 earnings did manage to keep volumes off the lows in the mid-summer stretch, it didn’t play out as much of an activity catalyst compared to Q1. And as we’ve seen this peaking inflation theme play out over the past few weeks, maybe corporate reports for the Q1 season carried more weight in terms of a “window into the health of the economy” versus Q2—and with it heightened trading activity.

But while volumes may not have jumped as much during the Q2 season, the price volatility certainly stayed elevated. The below chart demonstrates just how sustained and consistent the price action has been, really going back to December 2021. But in both cases, some of the only semblance of orderliness or normalization was in the couple of weeks preceding the earnings kickoff (red box showing the smallest daily moves on the S&P 500, followed by green box as earnings season unfolded).

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