the Bespoke 50 — 3/22/18

Every Thursday, Bespoke publishes its “Bespoke 50” list of top growth stocks in the Russell 3,000.  Our “Bespoke 50” portfolio is made up of the 50 stocks that fit a proprietary growth screen that we created a number of years ago.  Since inception in early 2012, the “Bespoke 50” has beaten the S&P 500 by 71.7 percentage points.  Through today, the “Bespoke 50” is up 168.6% since inception versus the S&P 500’s gain of 96.9%.  Always remember, though, that past performance is no guarantee of future returns.

To view our “Bespoke 50” list of top growth stocks, click the button below and start a trial to either Bespoke Premium or Bespoke Institutional.

Bespoke Morning Lineup – Pre-Market News and Analysis

Bespoke’s Morning Lineup is the top pre-market report on Wall Street. We cover everything you need to know to get your trading day started, including international market moves and events, post-market and pre-market earnings news, upgrades and downgrades, dividends and splits, economic indicators and estimates, big stock movers, market internals and much more. It’s all presented in the original and concise format that Bespoke is known for so you can digest lots of information quickly and efficiently.

Start a two-week free trial to Bespoke Premium to see today’s full Morning Lineup report. You’ll receive it in your inbox each morning an hour before the open to get your trading day started.


Bespoke’s S&P 500 Sector Weightings Report — March 2018

S&P 500 sector weightings are important to monitor.  Over the years when weightings have gotten extremely lopsided for one or two sectors, it hasn’t ended well.  Below is a table showing S&P 500 sector weightings from the mid-1990s through 2016.  In the early 1990s before the Dot Com bubble, the US economy was much more evenly weighted between manufacturing sectors and service sectors.  Sector weightings were bunched together between 6% and 14% across the board.  In 1990, Tech was tied for the smallest sector of the market at 6.3%, while Industrials was the largest at 14.7%.  The spread between the largest and smallest sectors back then was just over 8 percentage points.

The Dot Com bubble completely blew up the balanced economy, and looking back you can clearly see how lopsided things had become.  Once the Tech bubble burst, it was the Financial sector that began its charge towards dominance.  The Financial sector’s sole purpose is to service the economy, so in our view you never want to see the Financial sector make up the largest portion of the economy.  That was the case from 2002 to 2007, though, and we all know how that ended.

Unfortunately we’ve begun to see sector weightings get extremely out of whack once again.

If you would like to see the most up-to-date numbers for S&P 500 sector weightings, simply start a two-week free trial to our Bespoke Premium or Bespoke Institutional service.  Click back to this post once you’re signed up to see the numbers.

Fixed Income Weekly – 3/21/18

Searching for ways to better understand the fixed income space or looking for actionable ideals in this asset class?  Bespoke’s Fixed Income Weekly provides an update on rates and credit every Wednesday.  We start off with a fresh piece of analysis driven by what’s in the headlines or driving the market in a given week.  We then provide charts of how US Treasury futures and rates are trading, before moving on to a summary of recent fixed income ETF performance, short-term interest rates including money market funds, and a trade idea.  We summarize changes and recent developments for a variety of yield curves (UST, bund, Eurodollar, US breakeven inflation and Bespoke’s Global Yield Curve) before finishing with a review of recent UST yield curve changes, spread changes for major credit products and international bonds, and 1 year return profiles for a cross section of the fixed income world.

In this week’s note, we take a look at the ex ante carry of various global currencies.


Our Fixed Income Weekly helps investors stay on top of fixed income markets and gain new perspective on the developments in interest rates.  You can sign up for a Bespoke research trial below to see this week’s report and everything else Bespoke publishes free for the next two weeks!

Click here and start a 14-day free trial to Bespoke Institutional to see our newest Fixed Income Weekly now!

Bespoke’s Global Macro Dashboard — 3/21/18

Bespoke’s Global Macro Dashboard is a high-level summary of 22 major economies from around the world.  For each country, we provide charts of local equity market prices, relative performance versus global equities, price to earnings ratios, dividend yields, economic growth, unemployment, retail sales and industrial production growth, inflation, money supply, spot FX performance versus the dollar, policy rate, and ten year local government bond yield interest rates.  The report is intended as a tool for both reference and idea generation.  It’s clients’ first stop for basic background info on how a given economy is performing, and what issues are driving the narrative for that economy.  The dashboard helps you get up to speed on and keep track of the basics for the most important economies around the world, informing starting points for further research and risk management.  It’s published weekly every Wednesday at the Bespoke Institutional membership level.

You can access our Global Macro Dashboard by starting a 14-day free trial to Bespoke Institutional now!

FANG Check-Up After Facebook (FB) Struggles

Facebook (FB) has had a rough start to the trading week as shares have dropped from $185 down to $168 in what seems like the blink of an eye.  With the drop, we wanted to see how Facebook (FB) and other FANG+ names look in our popular Trend Analyzer tool (available to Premium and Institutional subscribers).

To do this, we’ve simply set up a custom portfolio of the four FANG names (FB, AMZN, NFLX, GOOGL) plus a few more momentum names that trade similarly.

The first snapshot below shows the FANG+ names in our Trend Analyzer sorted alphabetically.  The second snapshot is sorted from most oversold to most overbought.

As you can see, Facebook (FB) has experienced a dramatic drop of 7.55% over the last week to put it into extreme oversold territory.  The only other name in the screen that’s oversold is Tesla (TSLA).

The one stock that stands out to the upside is Alibaba (BABA).  Given that it’s a Chinese-based Tech behemoth, there doesn’t seem to be much concern over privacy issues (like we’ve seen with some of the big FANG names this week).  Over the last week, BABA is up 5.59%, which has left it in overbought territory as of the close today.

Along with BABA, the four other overbought stocks in this group are Netflix (NFLX), NVIDIA (NVDA), Priceline Group (BKNG), and Amazon (AMZN).

FANG+ sorted by most oversold to most overbought:

The Closer — Digital Economics, International Sectors — 3/20/18

Log-in here if you’re a member with access to the Closer.

Looking for deeper insight on markets?  In tonight’s Closer sent to Bespoke Institutional clients, we review new data from the BEA analyzing the digital economy. We also take a look at sector performance for the non-US global equity market.

See today’s post-market Closer and everything else Bespoke publishes by starting a 14-day free trial to Bespoke Institutional today!

Take the Trading Day Off

In early February we published a report for our research subscribers showing that more than 100% of SPY’s price change since 1993 (when it began trading) can be attributed to after-hours trading.  If you bought SPY at the close on every trading day since 1993 and sold it at the next trading day’s open, you’d have a gain of 569%.  Conversely, if you bought SPY at the open of every trading day and sold it at the close that same day, amazingly, you’d be down 8.2%.  Below is a historical chart showing the cumulative price change since 1993 for both of these strategies.  (Jeff Sommer at the NY Times wrote a piece referencing this trading phenomenon that we found that you can view here.)

The chart above looks at the trading strategy over a very long time period.  Today we wanted to see how the strategy has been doing just over the last year.

As shown below, after-hours trading is still where it’s at.  Over the last year, had you bought SPY at the close every trading day and then sold it at the open the next morning, you’d be up 12.2%.  Had you done the opposite and bought SPY at the open of every trading day and sold it at the close that same day, you’d only be up 0.9%.

So far in 2018, the after-hours strategy has meandered along, while the intraday strategy has really struggled of late.  Translated: there has been a lot of selling going on during regular trading hours recently.

A Defensive Stand Heading into Month End

With just eleven days left in the first quarter, it certainly isn’t looking like it’s going to go out the way it came in.  While the year started with equity markets ripping higher, led by FANG, equities can’t seem to catch a break lately as any gains seem to be met with selling.  Looking out over the final days of Q1, any strength that the market has shown in the final days of Q1 over the last ten years has been on the defensive side with sectors known for their higher yields leading the way.

The chart below is from our Stock Seasonality Tool (available to Premium and Institutional members), where you can look up seasonal trends for the US market, sectors, individual stocks, ETFs, foreign markets, and even your own custom portfolios in just a few easy clicks. Using the tool , we have screened the S&P 500 for its performance from the close on March 20th through the end of the month.  If you run the screen yourself with the same criteria, you will not only see the chart below, but the screen will also show the best and worst performing stocks in the S&P 500, as well as the five best and worst performing stocks in each sector.  If you click on the “Custom Seasonality Analysis” section, you can refine your “US Equity Markets” search further by market cap and number of years to analyze.  For “Global Equity Indices” you can refine the search by region, and for ETFs you can narrow down your search by Styles, Sectors, Groups, Regions, Countries, Currencies, Commodities, Fixed Income, and Hedged/Leveraged.

Real Estate has been the top performing sector from March 20th through March 31st with a median gain of 1.47%.  After Real Estate, the next best-performing sectors are Utilities, Consumer Staples, Consumer Discretionary and Telecom Services.  While these sectors have seen median gains of close to 1% or more, the S&P 500’s median gain has been 0.36%, and no other sector has seen a gain of more than 0.50%.  On the downside, Financials have been the worst performing sector with a median decline of 0.50%, and the only other sector that has been down is Materials (-0.21%).

With five of eleven sectors seeing median gains of close to 1% or more, you may be asking yourself how the S&P 500’s median performance is so much lower.  A big part of that has to do with the weighting of the five sectors that have outperformed.  With sectors like Real Estate, Utilities, and Telecom Services each accounting for less than a 3% weight in the index, their gains don’t move the needle very much.  In fact, even when you account for both consumer sectors, the combined weight of the five top performing sectors totals just over 27%, which is only two percentage points more than the 25%+ weighting of the Technology sector.

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