See what’s driving market performance around the world in today’s Morning Lineup. Bespoke’s Morning Lineup is the best way to start your trading day. Read it now by starting a two-week trial to Bespoke Premium.  CLICK HERE to learn more and start your trial.

“Luck’s a revolving door, you just need to know when it’s your time to walk through.” – Stan Lee

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

After two days of gains to start the week, futures are looking to make it a third as the S&P 500 trades up 0.4% while the Nasdaq jumps 0.6%. Treasury yields are lower after being closed for Veterans Day yesterday. Crude oil is down over 1% and back down to testing the $60 level, while gold and crypto trade higher with Bitcoin up over 2% and near $105K, while Ether surges 3.5% to just under $3,600.

Asian stocks were mostly higher overnight. South Korean stocks led the way as the ultimate high-beta country stock market rallied 1.1%, taking its week-to-date gain to 5%. It’s now less than 1.7% from its record closing high just over a week ago. The Nikkei was up 0.4% while China’s Shanghai Composite was down modestly (-0.1%) despite comments from the PBoC that it would maintain its appropriately loose monetary policy stance.

The rally in Asia made its way into Europe this morning, and the STOXX 600 is already up 0.7% in early trading. Most major benchmarks are more than 1% higher, while the UK’s modest decline sticks out like a sore thumb. German CPI rose 0.3% which was right in line with expectations and up from a rate of 0.2% in September, while the UK weakness has been driven by homebuilders after a warning from Taylor Wimpey.

Throughout the shutdown, there was a view that once Election Day passed, we would start to see some movement towards a resolution on the government shutdown. The idea was that Democrats wanted to use the shutdown as an election issue, so once the election passed, some members would cross the aisle. Sure enough, a week after Election Day, the Senate passed the resolution to fund the government, setting the stage for federal workers to get back to work.

Election Day also served as a catalyst for the market to broaden out. The chart below shows sector performance from mid-September (when the odds of a shutdown on betting markets first exceeded 50%) through Election Day and then in the week since Election Day. During the shutdown period from 9/15 through 11/4, it was a narrow market rally as just three sectors outperformed the S&P 500, led higher by Technology, Health Care, and Utilities. Since Election Day, though, seven out of eleven sectors have outperformed the index as the market broadened out. As a result, the equal-weighted index has performed much better than the cap-weighted index, whereas it seriously lagged the cap-weighted index during the shutdown period.

Stocks tied to the consumer have also rebounded. The table below shows the performance of stocks in the S&P 500 Consumer Discretionary and Retail Group during both the “shutdown period” and over the last week. During the shutdown period, just three of the 15 stocks in the group were up as investors avoided the group, as a large block of US consumers weren’t getting paid, and consumers overall retrenched given the uncertainty. On an average basis, they fell 5.7% compared to a gain of 2.36% for the S&P 500, which was driven higher by a handful of mega-cap names. Since Election Day, though, there has been a reversal in the performance of stocks tied to the consumer.  9 of the 15 stocks in the group have seen positive returns over the last week, and 8 of them have outperformed the S&P 500.

The group’s chart also looks positive. After hitting a marginal new high just before the shutdown, the group pulled back sharply towards its 200-DMA. After that successful test in mid-October, the group has erased all its initial shutdown declines and broken out to new highs and above resistance, forming what some technicians would describe as a positive cup and handle formation. We’ll drink to that!