Jul 19, 2023
Equities are again showing a positive tone today with each major US index trading higher, including a 0.44% gain from the Dow as of this writing. That puts the Dow on pace for its eighth straight daily gain. Looking throughout the index’s 100+ year history, such a winning streak is not particularly uncommon, however it has been a few years since such a run has been observed. Assuming the Dow finishes the day higher, it would be the first 8-day winning streak since September 2019. While plenty of streaks ended at eight days, there has been precedence of the Dow continuing its streak for even longer. That includes a near-record streak of 12 days recently in December 2017 or the record streak of 13 days in early 1970.
In the chart below, we show the performance of the Dow over the first 8 days of each winning streak that has gone for eight or more trading days throughout the index’s history. The Dow has risen 4.2% during the current stretch, which is essentially right in line with the past couple streaks from 2018 and 2019. That is also a little below the historical average of just under 5% (median: 4.6%).
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Jul 18, 2023
Log-in here if you’re a member with access to the Closer.
Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we begin with a look at options pricing (page 1) before turning over to Canadian inflation data (page 2) and the latest industrial production data (page 3). Next, we review homebuilder sentiment with regards to remodeling (page 4) and the latest credit access survey from the New York Fed (page 5).
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Jul 18, 2023
Housing activity has been somewhat muted given a dearth of inventories, but the lack of available existing supply has been positive for homebuilders. The NAHB’s monthly survey of homebuilder sentiment moved higher in July for its seventh straight monthly gain. Even after the rebound, the current level of 56 represents just a 13-month high and is below the range of readings from the few years prior to the pandemic and historic readings in two years before the pandemic.
The improvement in the headline index was primarily driven by increases in present sales and traffic. Geographically, the Midwest and South saw some modest softening in sentiment whereas the West and Northeast were much more impressive. The Northeast in particular saw an 8-point jump which ranks in the top decile of all monthly moves on record and brings the index into the top quartile of historical readings.
Although homebuilder sentiment has been rebounding solidly, it pales in comparison to the strength of homebuilder stocks. Proxied by the iShares US Home Construction ETF (ITB), homebuilders have continued to set new 52-week highs on a near-daily basis. The ETF has now risen 56% over the past year and has continuously traded in overbought territory (currently extremely overbought with a price more than 2 standard deviations above its 50-DMA).
Homebuilder earnings are also on deck in the next couple of weeks. Below, we show a screenshot from the Earnings Explorer function of our Custom Portfolios. As shown, all but three S&P 1500 Homebuilders are due to report through the first week of August. Of those, a vast majority have averaged positive moves on earnings.
Have you tried Bespoke All Access yet?
Bespoke’s All Access research package is quick-hitting, actionable, and easily digestible. Bespoke’s unique data points and analysis help investors better visualize underlying market trends to ultimately make more informed investment decisions.
Our daily research consists of a pre-market note, a post-market note, and our Chart of the Day. These three daily reports are supplemented with additional research pieces covering ETFs and asset allocation trends, global macro analysis, earnings and conference call analysis, market breadth and internals, economic indicator databases, growth and dividend income stock baskets, and unique interactive trading tools.
Click here to sign up for a one-month trial to Bespoke All Access, or you can read even more about Bespoke All Access here.
