Feb 12, 2025
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.
“Time would become meaningless if there were too much of it.” – Ray Kurzweil
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Equity futures are mixed heading into the open and the January CPI report but based on Powell’s testimony in front of the US Senate yesterday, this report will probably have no impact on short-term Fed policy which looks to be on hold. A key reason for that view from the Fed is that while inflation has come down considerably from its peak, it’s become stuck at levels too high for the Fed’s liking. Hence, the moderately restrictive policy stance.
The chart of Core CPI encapsulates this pattern. After peaking at a year/year rate of 6.6% in September 2022, Core CPI steadily pulled back over the next 20 months dropping to a rate of 3.2% last July. Since July, though, the core inflation rate has been stuck at that 3.2% level. The year/year rate was forecast to fall to 3.1% in this morning’s report for January which would have been the lowest rate since April 2021. The actual rate came in higher than expected at 3.3% which is still within the stall speed range we’ve been in since last July. Even if the y/y rate did fall to 3.1%, though, the core rate would still be 0.7 ppts above its pre-Covid peak of 2.4% from 2015 through 2020.
Feb 11, 2025
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.
“Common sense is the most widely shared commodity in the world, for every man is convinced that he is well supplied with it.” – René Descartes
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Equity futures are moderately lower this morning with technology leading the way to the downside as markets digest the latest round of tariffs from the President last night. Treasury yields and crude oil are higher, and the only economic report of the day – the NFIB Small Business Optimism survey showed a modest deterioration after the historic post-election surge.
As you probably know by now, this is an important week for interest rates. It starts with today’s Senate testimony by Fed Chair Powell. Then, we’ll get CPI and more Powell testimony at the House tomorrow. Thursday will cap things off with PPI, but there will also be plenty of other Fedspeak sprinkled in between. Maybe all this Fed/inflation news will allow the market to shift some of its attention from the White House!
Heading into today’s Powell testimony, Treasury yields are at an important juncture. The 10-year yield saw a sharp decline from its mid-January peak of 4.8% down below 4.4% but increased in the last few days moving back above 4.5% this morning. As shown in the chart, these levels put the 10-year yield back above its 50-day moving average (DMA) but still below the uptrend line that was broken to the downside last week. It’s common to see a test of a former trend line after it has been broken, and how that test turns out in the short term can often signal the intermediate-term direction going forward. An upside break would potentially signal higher rates going forward while a failed test could indicate a longer downtrend in rate from here.
Feb 10, 2025
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“To become good at anything you have to know how to apply basic principles. To become great at it, you have to know when to violate those principles.” – Garry Kasparov
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
US equities sold off throughout the trading session on Friday on concerns that there would be another round of tariff headlines over the weekend that would send stocks lower to kick off the week. Well, we did get another round of tariff headlines (25% tariff on all steel imports to the US and the potential for reciprocal tariffs later in the week). Still, equity futures have taken the news in stride so far, and the major averages are all indicated to open with gains of between 0.4% and 0.7%. As the Super Bowl showed us last night, while the Chiefs were favored and everyone was expecting a close game, outcomes don’t always match expectations.
For just about everyone on the planet, it’s been nearly impossible to stay on top of everything going on in Washington over the last few weeks. And for those who have been trying to keep up, it’s been exhausting. In the Old Testament, even God rested on the seventh day! Since the Inauguration, though, whether you love or hate him, we can all agree that President Trump’s second term has started with a nonstop fire hose of news and headlines.
Amid the backdrop of a nonstop news flow, the market has been surprisingly calm. Over the last 100 trading days, the S&P 500 ETF (SPY) has traded in a relatively narrow range of less than 10%, and Friday’s close was essentially right where the market was just days after the election.
10% may sound like a wide range, but it ranks in just the 13th percentile of all 100-trading day periods dating back to SPY’s inception in 1993. Back in Covid, this reading spiked above 50% and during the Financial Crisis, it widened even more, peaking above 75%!
In the post-Covid era, the current narrow range is even more extreme. As shown in the chart below, there have only been two other times when the 100-trading day range dipped below 10%, and the current level of 9.4% is the lowest of any of them. Let this be a word of advice, the market may seem volatile now, but you can guarantee that things will get more volatile in the weeks ahead.
Feb 7, 2025
As Super Bowl LIX approaches, Americans are quickly finalizing party plans for Sunday, and this year’s spread of just 1.5 points suggests that Sunday’s game could come down to the final seconds. Not only is this year’s Super Bowl expected to be close, but it will also break what is a tie in each conference’s total number of Super Bowl wins at 29 each. In the early years of the Super Bowl, the AFC dominated, but a 13-year drought from Super Bowl XIX to Super Bowl XXXI put the NFC comfortably in the lead.
After Super Bowl XXXI, the NFC had won 7 more Super Bowls than the AFC, which was its widest ever margin. Since then, there has been much more parity between the two conferences where neither has seen a wide cumulative advantage.
Now for the important stuff. Which teams winning the Super Bowl have historically had the most positive and negative impact on the market? The table below lists every team that has won a Super Bowl (20) along with how many each team won and how the S&P 500 performed for the remainder of the year after each team won. With four championships up to this point, the Chiefs are tied with the Packers and Giants for fifth overall, but if they win Sunday, they will move into a tie with the 49ers and Cowboys for third place overall. The Eagles, meanwhile, are one of five teams with just one Super Bowl championship, and if they win on Sunday, they’ll join four other teams (Colts, Ravens, Rams, and Dolphins) with two each.
In terms of market performance, in the four prior years when the Chiefs won, the S&P 500’s average performance for the remainder of the year was a gain of 12.4% with positive returns 75% of the time. Regarding the Eagles, their only win was in Super Bowl LII in February 2018. After that win, the S&P 500 fell by over 9% through year end. Unfortunately, this year’s game isn’t between the 49ers and the Steelers. Both teams have won at least five Super Bowls over the years, and the S&P 500 has traded higher for the remainder of the year after every one of their wins!
In addition to looking at market performance following which team wins the Super Bowl, we also looked at forward returns following different scenarios in the game. While the S&P 500 has rallied an average of 12.4% after the Chiefs won the Super Bowl, after their two losses, the S&P 500 rallied an average of 18.4%! Overall, though, the best scenario for a bull is a high-scoring game. As shown in the chart, in years when the loser scores at least 28 points, the winner scores at least 35, the total is at least 60, or it’s a blowout (21+ points), the S&P 500’s average rest of year gain has been at least 10%. Conversely, in those years when the total is less than 31, the winner scores less than 21, or the loser scores less than 8, the average rest-of-year performance for the S&P 500 was +5.7% or less.
It should go without saying that the score of the game or even who wins has zero impact on how the stock market will perform for the remainder of the year, but some of these online betting platforms have some even crazier bets people can make. At least these figures will give you something to talk about if the game or commercials start to get boring! Enjoy another Super Bowl Sunday!
