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“When they call the roll in the Senate, the Senators do not know whether to answer ‘Present’ or ‘Not Guilty’.” – Theodore Roosevelt

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

US equity futures are strong to start the week as the government shutdown nears an end, lifting investor spirits. Pretty soon, we may even have economic data again! The S&P 500 is indicated to open higher by just shy of 1% while the Nasdaq is up 1.5%. It may be strange to think that the market rallied in early October when the shutdown first started, and now it’s rallying when the government is poised to reopen! But investors are breathing a sigh of relief. A short shutdown is easily digestible, but the longer it lasted, the greater potential it had to ground US air travel to a halt, and that would have had major economic implications. And that’s just one of many ways the shutdown impacts overall economic activity, not to mention the hundreds of thousands of employees who haven’t been getting paid.

As stock futures rally, treasury yields are 3 to 4 bps higher, crude oil is only fractionally higher at just over $60, but gold is surging with a gain of 2.5% and back above $4,100. Meanwhile, crypto has also responded very well to the news of the shutdown ending, as Bitcoin is back above $106K and Ether trades above $3,600.

Asia was the first market to open following news that the shutdown was coming to an end, and markets started the week with broad-based gains. South Korea surged 3.0% followed by Hong Kong (+1.6%) and Japan (1.3%). Chinese inflation came in stronger than expected, reversing September’s deflationary reading (-0.3% y/y up to 0.2% y/y), but PPI remained negative as it has for an astonishing 37 straight months with a 2.1% y/y decline. There’s also some relief as the Chinese government relaxed some of its restrictions on rare earth exports and resumed exports of Nexperia chips.

Europe picked up right where Asia left off this morning, and the STOXX 600 is up 1.5% even as November investor confidence, as measured by Sentix, declined to -7.4 from -3.9 and below expectations for -5.4. Leading the way higher, Italy and Germany are up over 2%, but every major national equity benchmark is up at least 1%.

This morning’s rally to start the week comes as the S&P 500 and Nasdaq both successfully tested short-term uptrend lines and their 50-DMAs on Friday. If the morning gains can hold through the trading session, bulls will likely feel even more emboldened.

With today’s rally, both the S&P 500 and Nasdaq are on pace to gap up to start the week for the seventh straight week.  That’s an impressive run and just the 15th such streak for the S&P 500 SPDR ETF (SPY) since it launched in 1993 and the 11th streak of seven or more weeks since the Nasdaq 100 ETF (QQQ) started trading in 1993. The chart below shows streaks of positive starts to the week for QQQ since it started trading in 1999, and the current streak is the longest since the 10-week record streak that ended in June of last year.

What’s even more impressive about the streak in QQQ is that every one of the positive opens has seen QQQ gap up at least 0.5% at the open. That’s the longest streak of 0.5%+ upside gaps to start a week in the ETF’s history.