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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.
“There are far, far better things ahead than any we leave behind.” – C.S. Lewis
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
It may be a slow day in the US with a shortened session, but it’s business as usual for the rest of the world. It was a busy day for data in Japan, and most of it was weaker than expected. Industrial Production, Retail Sales, and Housing Starts all missed expectations. At the same time, CPI surprised to the upside with the Core reading rising at a 2.2% y/y pace versus expectations for an increase of just 2.0%. Even with the weaker data, the yen rallied as the higher-than-expected CPI print increased the odds of a rate hike at the December meeting. The Nikkei fell 0.4% during the session, but Chinese stocks finished the day and the week in positive territory.
In Europe, the STOXX 600 is marginally higher after a positive session on Thursday. While inflation data in Japan came in hotter than expected, Eurozone CPI was up 2.3% y/y which was right in line with expectations while Core CPI was slightly weaker (2.7% vs 2.8%).
US futures are higher across the board with modest gains, and there’s no data on the calendar to speak of. Treasury yields are slightly lower, and bitcoin is looking to make another run at $100K after failing to rally through that level late last week.
The day after Thanksgiving is considered a day when stocks usually trade higher, and since 1945, the S&P 500’s average performance on the day has been a gain of 0.23% with positive returns two-thirds of the time. Looking at a long-term chart of the S&P 500’s performance on this day, though, shows that in “the old days”, it used to be a much better day. In the 40 years from 1945 through 1953, the S&P 500’s average daily change on the Friday after Thanksgiving was a gain of 0.44% with positive returns 80% of the time, and in the 29 years from 1956 to 1984, it was down just twice! If the market was going to make you come to work the day after Thanksgiving, at least it usually gave you an up day!
Since 1985, performance the day after Thanksgiving has been more of a turkey. In the last 39 years, the S&P 500’s average performance on the Friday after Thanksgiving has been a gain of just 0.02% with positive returns just 54% of the time. Not only has today become much more of a coin flip over the last 40 years, but it has also included the worst after-Thanksgiving performances. In 2021, the S&P 500 plunged 2.27% thanks to the Omicron ‘scare’. Then in 2009, the S&P 500 dropped 1.72% on concerns about debt problems in Dubai while in 1987, it fell 1.5% as investors were still worried about the crash a month earlier.
As bad as those days all were, they weren’t a bad omen for the rest of the year. In 1987, the S&P 500 finished the year 2.8% higher, while in 2009, it rallied 2.2% into year-end. Finally, in 2021 it finished 3.7% higher. Maybe C.S. Lewis was right, after bad Thanksgiving Fridays, “There are far, far better things ahead”!
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.
“Knowledge speaks, but wisdom listens” – Jimi Hendrix
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Heading into the last trading day before Thanksgiving, equity futures are modestly lower while crude oil sees a modest rally (still below $70), and the 10-year yield is down close to 5 bps trading near 4.25%. After a sharp pullback from record highs in the first half of November, gold prices have caught a bid in the last week, and prices are pushing back close to $2,700 per ounce after dropping as low as $2.540 on the 14th. Bitcoin prices have also pulled back since their all-time high of just below $100,000 last week, and after dropping below $91K yesterday, the price is rallying over 2% today and back above $93K.
With today being the last full trading day of the month, a ton of economic data is getting packed into the day (good luck trying to keep up), so where the market stands at 4 PM today will likely differ a lot from where it is now.
After an initial post-election surge that took the S&P 500 barely above 6,000, stocks took a bit of a breather mid-month as the S&P 500 closed lower than it opened for five straight days pulling back just over 2%. The second half of November has put the market back on track, though, with the S&P 500 now riding a seven-day winning streak into the last trading day before Thanksgiving.
Going back to 2000, the current run for the S&P 500 is the 26th time the index has been up at least seven trading days in a row. Of the prior 25 streaks, only eight stretched to an eighth day, and the longest was nine trading days in November 2004. What makes the current run somewhat unique is that it is the fourth time in the last five months that the S&P 500 put together a streak of at least seven positive days in a row. The only other year since 2000 that saw even four seven-day winning streaks in an entire calendar year was 2013.
Both the S&P 500 and Russell 2000 came into the day riding 6-day winning streaks, and based on where both indices are trading at mid-day, the S&P 500 looks poised to extend that streak while the streak looks like it’s going to end for small caps. The current six-day streak for the two indices is the first time that both indices have simultaneously been up six days in a row since February 2021. Since 2000, there have only been 16 other streaks, so while they aren’t particularly rare, they aren’t too common either.
In the charts below of the S&P 500 and the Russell 2000, the red dots show each time the two indices were up six days in a row at the same time. Looking at the various occurrences, there were several from 2013 to 2014 and then from late 2016 through 2017, and in most cases, they occurred within longer-term uptrends. The only notable exception was in June 2007.
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