The Closer – AI Baskets, Used Autos, Earnings Streaks – 7/9/24
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we start out with a look into Bitcoin flows and performance of AI Basket members (page 1). We then check in on used car prices and European auto makers (page 2). Next, we look at Mexican inflation (page 3) followed by a look at a handful of noteworthy stocks ahead of earnings season (pages 4 – 6). We finish with a recap of today’s 3-year note auction (page 7).
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!
Daily Sector Snapshot — 7/9/24
This content is for members onlyBespoke Stock Scores — 7/9/24
This content is for members onlySmall Business Capex Tumble
Early this morning, the National Federation of Independent Businesses released its monthly Small Business Optimism Index. As shown below, that headline reading continues to recover from the more than decade low set back in March. With a move up to 91.5 in June, the index has now risen in each of the past three months and is at the highest level of 2024.
In the table below, we show each category of the report as well as the month-over-month change and how those readings rank as a percentile of all periods. As shown, even with recent improvements the headline number still sits in the bottom 13% of its historical range. Most other categories are similarly depressed. Breadth in June leaned positive with only one category falling: job openings hard to fill. Although that one category remains one of the more historically elevated of the report, as we discussed in today’s Morning Lineup, across all labor market readings there has been a trend towards weakness.
As mentioned before, breadth in this month’s report was generally positive with one input to the composite falling, five going unchanged, and four rising month-over-month. Of those gainers, one of the biggest was outlook for expectations for the economy to improve. As shown below, that index remains deeply negative (meaning on net there are more respondents expecting the economy to worsen than improve) and to a larger extent than has been observed throughout most of the survey’s history. That said, at -25 it has reached the highest level since July 2021.
The survey also questions firms on whether they view now as a good time to expand. Over the past four months, this reading has consistently come in at a lowly 4%. As shown in the second chart below, firms point toward economic conditions as the primary reason for that negative expansion outlook. Political climate is another common reason at 12% of negative responses followed by financials and interest rates at 7%.
Given interest rates rank highly in firms negative expansion outlook, below we show various expenditure related series. Cap ex plans are just shy of falling into the bottom quartile of their historical range. Actual capital expenditures is even weaker. That index fell down to the lowest level since the summer of 2022 in June. As for inventories, there are on net 2% more firms that evaluate current levels as too large than too low and as a result, there is also a net 2% of firms that report they plan to decrease inventories in the next three to six months.
Finally, we would note that firms are reporting cutbacks on all types of capital expenditures. Equipment remains the most commonly reported capex, but at 35%, that is tied with the February reading for the lowest since the end of 2020.
Bespoke’s Stock Market Summer Camp!
If you or any of your friends or colleagues have children, grandchildren, nieces, or nephews, please take note!
Here at Bespoke we’ve been following the stock market 24/7 for more than two decades, so based on the “10,000 hour” rule, we can confidently say that we are market “pros”.
At the same time, traditional education across grades K-12 doesn’t focus on the stock market, investing, and how it all works.
For years, we’ve thought about addressing the “stock market literacy gap” for students across the country. Now, we’ve come up with a plan!
Starting this summer, we are now offering “Stock Market Camp” for students in grades 5-8 and 9-12!
Bespoke’s Stock Market Camp will run for five days from Monday-Friday with each live Zoom class lasting roughly 75 minutes. Camp will be fun, engaging, and interactive, and by the end of the week, students will have a basic understanding of how the stock market and investing works! If a live class is missed, a recording will be available.
We don’t have to tell you how valuable knowing this information at a young age can be! Instead of kids playing video games, scrolling through TikTok, or messing around on Snapchat, we think our five-day Stock Market Camp will pay major dividends down the road!
For now we are making our Stock Market Camp available to students that are referenced by Bespoke readers. We are running one week of camp for high school students (grades 9-12) from July 22nd-26th, and one week of camp for middle school students (grades 5-8) from August 12th-16th. Each weekly camp will be capped at 40 students max, so please sign up ASAP to reserve your student’s spot. You can purchase as many spots as you’d like or forward this email to colleagues and have them sign up.
SIGN UP YOUR STUDENT OR STUDENTS TODAY AS THE CAMPS ARE LIMITED TO JUST 40 ATTENDEES!
