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“Simple can be harder than complex”– Steve Jobs
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
We almost made it through the week unscathed. The mega-caps reported generally good results, economic data didn’t ruffle any feathers, and Fed Chair Powell held to form and was a downer for stocks, but not by a lot. The only other hurdle was the August 1st tariff deadline, and for a President who thrives on volatility, his actions last night certainly shook things up. In a series of actions, Trump issued new tariff duties ranging from 10% to 41%. We cover this in more detail in the commentary of today’s Morning Lineup, and the actual impact will not be as painful as the headline numbers suggest. For a market that was already starting to act heavy, though, the tariff news pushed futures lower.
Along with weakness in US equities, Asian and European stocks fared even worse, bond yields moved slightly higher, oil prices declined, gold was little changed, platinum and palladium are both down close to 2%, and crypto prices are down sharply with declines of 1.5% in Bitcoin and over 3% in Ethereum.
We’re through most of the earnings data for the week, but on the economic calendar, we still have the July Employment report, ISM Manufacturing, Construction Spending, and Michigan Sentiment. Already this morning, the President has been railing against Powell, and if any of this morning’s data comes in weaker than expected, expect the volume on his Truth Social account to get to eleven quickly.
Hold on to your hats for a second, because the S&P 500 is on pace to not only open lower this morning, but at current levels, the decline would be about 1%. As shown in the chart below, the last time the SPDR S&P 500 ETF (SPY) gapped down 1%+ at the open was in late May, and it hasn’t opened lower since July 14th.
With 13 straight days of gains at the open, the streak that is about to end would be the second-longest in SPY’s history. The only streak that was longer ended in February 1997, and there were only two other streaks that lasted longer than ten days – July 1997 and February 1998. The comparisons always seem to go back to the late 1990s, don’t they?
