Dec 16, 2024
Alphabet (GOOGL) has continued to surge higher since last week when it had a delayed response to news that its Willow quantum computing chip had made a breakthrough in the speed in which it can solve problems. GOOGL shares are up another 4.5% today and are now up more than 13% since last Monday’s close. As shown below, GOOGL experienced a sharp drawdown (-22%) from mid-July to mid-September, but its recent jump higher has taken it back to new all-time highs.
Since the “quantum” news from Google last week, smaller companies focused on quantum computing have skyrocketed. Below is a table of four small-cap quantum computing stocks along with their year-to-date and quarter-to-date percentage changes. Below the table, we provide price charts for each stock.
As you can see, all four of these stocks are up more than 300% this quarter alone, while Rigetti (RGTI) and Quantum Computer (QUBT) are up more than 1,000% quarter to date! A little over a month ago, QUBT was trading for $1.38/share, but today shares are trading at $10.91. Rigetti (RGTI) was at $1.41/share on 11/15, and this afternoon shares are trading at $8.73.
While these quantum stocks are experiencing a quantum leap right now as speculators trade the Google news, this is their second rodeo. As you can see in the charts below, IONQ is the only one of these four quantum stocks that is currently trading at an all-time high. RGTI, QUBT, and QMCO all traded at prices higher than they’re at now during the COVID stimulus-fueled SPAC and meme-stock craze back in 2021, and then they all experienced drawdowns of more than 95%! IONQ managed to only see a drawdown of 88% from its 2021 high to its late 2022 low.
For investors that would rather play an ETF than a specific stock in the quantum computing space, there’s the Defiance Quantum ETF (QTUM), which we show below.
During bull markets, you often see short bursts higher like this in speculative industries due to the “FOMO” trade (fear of missing out). And they often end in tears, as we’ve already seen once in the quantum computing space. This is another way of us reminding you to “be careful out there.” These kinds of moves are not normal and usually prove that there is no easy money on Wall Street.
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Dec 13, 2024
As we continue to work on our 2025 Annual Outlook report due out next Friday, this week’s Bespoke Report provides an update on everything going on in markets and includes our popular investment stats in bullet-point format. To read this week’s Bespoke Report newsletter and access everything else Bespoke’s research platform offers, start a two-week trial to Bespoke Premium.
Dec 9, 2024
If you’ve had a good year so far in the stock market, chances are you had a pretty bad day in the market today. On the surface, today’s action wasn’t awful. The S&P 500 (SPY) was down 0.5% while the Russell 1,000 was down 0.7%. Within the Russell 1,000, the average stock was down even less at -0.33%.
So what’s the big deal? Well, what made today noteworthy was the near-perfect performance distribution based on how stocks had performed so far this year heading into today. In the chart below, we’ve broken up the Russell 1,000 into deciles (10 groups of 100 stocks each) based on YTD stock performance through last Friday. Decile 1 contains the 100 best-performing stocks YTD, decile 2 contains the next best 100, and so on until you get to decile 10, which contains the year’s bottom 10% of performers. In the chart, we show the average performance today of the stocks in each decile. As shown, the decile of the best-performing stocks YTD through last Friday was down 2.9% today, while the decile of the worst-performing stocks YTD was up 2%! As you work your way down from the best decile to the worst, today’s performance gets better and better.
At the very top end of the YTD performance spectrum are the 26 stocks in the Russell 1,000 that entered today up more than 100% on the year. As shown below, these stocks fell more than 5% on average today, and every single one was down!
On the flip side are the 25 worst-performing stocks YTD coming into today. These 25 stocks were down an average of more than 50% on the year through last Friday, but they averaged a gain of more than 3% today!
Rarely do we see such uniform performance in one direction based on prior performance in the opposite direction, but that’s exactly what we saw today. Investors were selling winners and buying losers to quite an extreme degree.
Given this type of action, we wouldn’t make any rash long-term investment decisions based on one day’s moves. Sometimes it’s just opposite day in the market where we see downside mean reversion from winners and upside mean reversion from losers.
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Dec 9, 2024
Below is a look at year-to-date total returns for 46 country ETFs available to investors on US exchanges. While the US (SPY) is sitting on a huge gain of 28.6% this year, the average year-to-date change for these country ETFs is just 8.7%, while the median is even lower at 5.8%. Keep in mind that returns also take into account any movements in the dollar.
Before we get to the biggest winners, nine country ETFs are in the red for the year. France (EWQ) is the most notable and the only G7 country that’s down in 2024. South Korea (EWY), Mexico (EWW), and Brazil (EWZ) have been the biggest losers with declines of 17%+. Brazil (EWZ) has gotten smoked with a decline of 24.3%. It’s bad enough to see a drop of 20%+, but it’s especially bad when the average country is up 8.7% and the US is up nearly 30%.
On to the positives…other than France, the other six G7 country ETFs are all up more than 10% on the year. Behind the US, Canada (EWC) has been the second-best of this group with a gain of 18%.
Interestingly, China (MCHI) and the US (SPY) are up nearly the exact same amount this year at just over 28%. Peru (EPU) ranks as the third best just ahead of SPY with a gain of 31.6%. Israel (EIS) has been the second best with a YTD gain of 34.5%. And finally, the best country ETF this year by a significant margin has been Argentina (ARGT) with a gain of 66%. US investors have so far given Argentine President Javier Milei two thumbs up…way up!
Below we highlight the price change (not total return) of country ETFs going all the way back to the COVID-Crash low on 3/23/20. While China (MCHI) is up about as much as the US (SPY) in 2024, it’s the only country ETF that’s in the red since the COVID lows.
On the flip side, Argentina (ARGT) once again crushes every other country ETF with a massive 491% gain. Behind Argentina is Greece (GREK) with a gain of 173.5%, followed closely by the US (SPY) and India (INDA), which have essentially seen the same price change of 171% since 3/23/20.
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Dec 9, 2024
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.
“I’ve got an old saying: at the poker table, you’ve got to pay to learn. You can talk all you want, but you’ve got to get in the game.” – Steve Cohen
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Even though the S&P traded higher on four of five trading days last week and finished the week up nearly 1%, the index saw more decliners than advancers (negative breadth) on all five trading days. Fortunately, the index had a streak of seven straight days of positive breadth heading into last week, so maybe it was just downside mean reversion, but we’ll be watching breadth closely over the next few days.
As shown below, eight sectors fell more than 1% last week, while three sectors gained more than 2%. Last week was a mega-cap AI-led rally, while pretty much everything else traded lower.
