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“A minute’s success pays the failure of years.” – Robert Browning
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
If futures are any indication, today would be the S&P 500’s seventh straight day of gains as positive international markets, M&A news, and the government shutdown continue to provide an upside lift to equities. Overnight, the Nikkei rallied more than 4.7% for its best day since April after the election of Takaichi as the new leader of the LDP. Takaichi is a noted dove, and her advisers have already come out against a fall rate hike by the BoJ. The rally in Japanese stocks has been accompanied by rising yields and a weak yen, so despite the big gain on a nominal basis, the EWJ ETF is only up a bit more than 1%.
In Europe, the tone isn’t as positive, but the STOXX 600 is still in positive territory with a gain of 0.1%. At the country level, Germany and the UK are higher, while France, Italy, and Spain are all lower. France is notably weak, with a decline of 1.3% as PM Lecornu resigned, continuing the trend of political turmoil in the country.
Getting back to the US, the data calendar is light today and for the remainder of the week (with or without a shutdown), and earnings season won’t really start until next week, although we’ll hear from Constellation Brands (STZ) after the close today and then Delta (DAL) and Pepsi (PEP) on Thursday.
Shares of Advanced Micro Devices (AMD) are on pace to trade more than 25% higher this morning on news of its chip supply deal and equity investment with OpenAI. If AMD manages to finish the day with a gain of 27% or more (a percentage level it has reached throughout the morning), it will rank as the second-largest one-day gain for the stock since at least 1985.
With today’s gain, shares of AMD will also be trading at “extremely extreme” overbought levels. Over the last 45 years, there have only been a handful of other days when the stock traded four or more standard deviations above its 50-DMA, and if the stock holds onto these gains throughout the trading session, today would be another one.
