Bespoke’s Morning Lineup – 3/21/25 – Will the Streak End?
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.
“When you see only problems, you’re not seeing clearly.” – Phil Knight
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
For the first time since the S&P 500 peaked in mid-February, there’s a chance that we will get by with a positive week. The S&P 500 heads into the last trading day of the week with a gain of 0.42%, but futures are lower, so it’s hardly a done deal. The Nasdaq has also been down for the last four weeks, but unless it rallies 0.35% today (it’s on pace to open 0.4% lower), the streak will extend to a fifth week. If there’s any silver lining, the Nasdaq’s streak of four weeks in a row of 2%+ declines looks likely to end. The Russell 2000 also came into this week riding a streak of four straight weekly declines of at least 1%, but heading into the day, it was up over 1% on the week, so barring a lousy Friday (anything is possible these days), that streak is likely to end.
The tone overnight in Asia has been negative. Hong Kong’s Hang Seng Index dropped over 2% for the second day in a row, capping off the worst two-day decline for that index since October. Japan was down fractionally, and Chinese stocks fell over 1%. European stocks are also closing the week on a down note as the STOXX 600 trades down 0.68%, even as it still hangs on to gains for the week. Travel stocks in Europe are leading the declines today as a fire near Heathrow Airport has shut down all air traffic for the rest of the day. The German upper house of Parliament also passed the country’s 500-billion euro spending package for defense and infrastructure, but that was widely expected.
Here in the US, there’s nothing on the economic calendar, so it would make sense to expect a quiet day, especially with the NCAA tournament this afternoon, but you never know when you know who will decide if they have something to say.
Looking at all the red candles in the SPDR S&P 500 ETF (SPY) chart shows that the market has primarily only been seeing problems lately. In looking at the ETF’s recent intraday performance, we came across a fascinating trend (at least to us it was). On a trailing four-week basis (20 trading days), SPY closed below its opening price 14 times. Over the last 20 years, that high frequency of down days in four weeks has been uncommon, and there has only been one other period (January 2008) when there was a higher frequency of down days.
Since 2005, there have been 17 periods when SPY was down from the open to close 14 times in 20 days, so it occurs an average of about once every 14 months. What’s unique about the last year is that this is the fourth different period in the last year that the rolling 20-day total of declines from the open to close reached 14. Since 2005, there’s never been a one-year period with four separate periods. The only other period with even three was back in 2005. We’re living in unique times!
Bespoke’s Morning Lineup – 3/20/25 – Higher Lows
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.
“What’s your hurry? Because now is the only time there ever is to do a thing in.” – Uncle Tom’s Cabin, Harriet Beecher Stowe
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
From the FOMC’s interest rate announcement through the end of Chair Powell’s press conference, the S&P 500 steadily rallied higher. Almost exactly when Powell stopped speaking, though, stocks started to weaken, and they closed well off the intraday highs. The post-presser weakness has continued this morning as S&P 500 futures are down about 35 bps while the Nasdaq is down half a percent. There’s not much in the way of a catalyst to point to for this morning’s weakness, but overnight Asia was lower, and European stocks are also in the red. ECB President Lagarde commented that 25% tariffs on US imports of European goods would knock 0.3 percentage points from Eurozone economic growth in the first year of their implementation while an escalation would only exacerbate those impacts.
There are several economic reports on the calendar this morning, including jobless claims and the Philly Fed report at 8:30 followed by Leading Indicators and Existing Home Sales at 10 AM. On the sentiment front, the weekly survey from AAII showed that bearish sentiment came in at 58.1%. That marks the fourth straight week of readings above 55% which has never happened in the survey’s history (since 1987), and it’s only the seventh time that bearish sentiment has been above 50% for four or more straight weeks.
It’s not often that you get a setup where just about all of the major US indices rally more than 1% over the last week and yet every single one remains in oversold territory. After the plunge in stocks during the first two weeks of March took all the major index ETFs into ‘extreme’ oversold territory as of last week, the rally we have seen since last Thursday’s close has only been enough to move them merely into oversold territory, and based on where futures are trading now, they’re on pace to remain oversold today.
The last four trading days were a welcome respite from the barrage of selling, and it was the first time since the February peak that the S&P 500 traded higher three times in a four-trading day span. With that pause in the selling, the S&P 500 is looking to find some semblance of stabilization from what has practically been a straight down leg lower. Stabilization doesn’t mean immediately reversing and trading in a straight line higher. Usually, it takes a period of back-and-forth churning before the market can gain enough energy to stage a rally. Looking at the chart, bulls hope that is exactly what the S&P 500 is doing now, but only time will tell.
With such a steep drop lower in the last month, it’s hard to remember that the S&P 500 had another leg lower from late 2024 and into early 2025 when the S&P 500 pulled back just over 4%. Back then, it seemed like a meaningful pullback, but not so much now.
The Lag 7
Stocks are higher today ahead of the FOMC’s interest rate announcement, Summary of Economic Projections (SEP), and the Powell press conference. Gains are good, but the S&P 500 is still down 8.1% from its 52-week high in February. While a decline of 8% sounds relatively modest, individual stocks in the index, especially the ten largest, have seen much larger declines. The chart below shows how far each of the ten largest stocks in the S&P 500 were trading from their closing 52-week high as of this morning. Of the ten, nine have seen pullbacks of at least 10%, and six of those have shed a fifth of their value. That’s a bear market! The only stock bucking the trend has been Berkshire Hathaway (BRK/b), which was trading at 52-week highs this morning. When stocks representing more than a third of the entire S&P 500 are down a median of more than 20% from their respective 52-week highs, you can understand why some investors have been feeling more pain in their portfolios than the decline in the S&P 500 would suggest.
Of the ten largest stocks in the S&P 500, most still have rising 200-day moving averages (DMA), which would suggest their longer-term uptrends remain intact. The two exceptions are Microsoft (MSFT) and Alphabet (GOOGL). Both stocks have just recently seen their 200-DMA peak and start to roll over in the last few weeks.
Along with MSFT and GOOGL, Nvidia (NVDA) and Tesla (TSLA) are two stocks among the top ten where the 200-DMA is still rising, but it’s coming really close to rolling over. Unless these stocks see a pretty big bounce in the days and weeks ahead, a rollover in their respective 200-DMAs is inevitable. That doesn’t mean the stocks will continue to decline, but if the 200-DMA tends to act as resistance and it’s also falling in the process, it doesn’t present a good technical setup.
Bespoke’s Morning Lineup – 3/19/25 – More Uncertainty
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.
“The world keeps ending but new people too dumb to know it keep showing up as if the fun’s just started.” – John Updike
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
To view last night’s CNBC segment which covered Nvidia’s (NVDA) AI conference and the broader market weakness, click on the image below.
As investors wait on the FOMC’s interest rate decision (or lack thereof), the Summary of Economic Projections (SEP), and the press conference from Chair Powell, US equity futures have a modestly positive bias heading into the opening bell.
Besides the FOMC, there are no major economic or earnings-related reports on the calendar, but one newsworthy item just coming across the tape is comments from Bank of America (BAC) CEO Brian Moynihan saying that as of Monday, consumers have put 6% more dollars into the economy this year than they did over the same period last year. Wait. What? Haven’t these recent consumer sentiment surveys been suggestive of the consumer falling off a cliff? As Moynihan commented, “the economy is holding up better than people think”.
Uncertainty is everywhere you look as any index that attempts to measure it has surged in the last couple of months. Within today’s FOMC statement and SEP, we’re likely to see more of that. The Fed releases its SEP four times a year, and in the last release back in December we started to see some of that.
In addition to updating their forecasts for GDP Growth, the Unemployment Rate, Inflation, and the expected level of the Fed Funds rate in the coming years, in each SEP, members of the FOMC also note their level of uncertainty about each of their forecasts along with whether the risks to their projections are weighted to the upside, downside, or not at all.
Back in December, FOMC members noted big increases in the level of uncertainty about PCE inflation on both a headline and core basis and almost unanimously agreed that the risks to inflation were to the upside. That was a big shift to September when most participants thought inflation risks were ‘broadly balanced’. Since those projections back in December, the country’s tariff policy has only grown murkier, so don’t expect any improvement in these readings today.
Back in December, levels of uncertainty regarding GDP Growth and the Unemployment Rate weren’t nearly as high. For most members of the FOMC, risks to GDP growth and the Unemployment Rate were ‘broadly balanced’. However, given the plunging levels of sentiment in various measures of consumer and business confidence plus the rapidly declining levels of forecasted growth in models like the Atlanta Fed GDP Now, it’s hard to imagine that FOMC members are any more confident about expected economic growth and the state of the jobs market going forward.
