The Bespoke Report – 1/15/21 – Can You See The Light?

Global equity markets took a breather this week as a quick debate played out amongst the FOMC over whether asset purchases might be “tapered” this year. Bond markets got a peak of the big fiscal support they priced in last fall and after Democrats retook the Senate on January 6th via Georgia runoffs. COVID prevalence looks to be peaking in the US as vaccine distribution starts to scale up despite an uneven run. And the galaxy of aggressive retail investors continue to press their favorite plays despite a hiccup for renewables stocks this week.

Put together, it feels like investors are starting to see the light, even if that light doesn’t necessarily mean good things for the market as a whole. Earnings season covering calendar Q4 will provide more insight as companies have started to report in earnest.

We discuss all the data and details that mattered this week, including a US earnings preview, reversals in renewable stocks, big gains for highly shorted names, a possible bottom in the dollar, the policy backdrop in China, commodity price action, and more in this week’s Bespoke Report.

This week’s Bespoke Report newsletter is now available for members.

To read the report and access everything else Bespoke’s research platform has to offer, start a two-week free trial to one of our three membership levels.  You won’t be disappointed! 

The Bespoke Report – 1/8/21 – Scary Start But a Strong Finish

This week’s Bespoke Report newsletter is now available for subscribers.  Here’s the intro:

If you thought the new year was going to mark a turning point from all the craziness of 2020, think again.  In the equity market, the year couldn’t have started out any worse.  It was only five trading days ago, but we wouldn’t excuse you for forgetting what happened on Monday given all the events in between.  So here’s a recap.

The year started off innocent enough on Monday morning.  Futures were firmly higher, and the S&P 500 opened in positive territory.  Within minutes, though, traders began to ring the register locking in gains from 2020 and deferring the taxes from those winnings until the end of the year. Within the first 90 minutes of trading the S&P 500 was down over 1%, and by noon it was down more than 2%.  Things started to stabilize in the afternoon, but at the end of the day, the S&P 500 was still down about 1.5%.

A 1.5% decline is nothing extreme in terms of market moves, but in looking through our intraday database going back to 1983, only two other years started out in positive territory at the opening bell only to finish the day down more than 1%.  Those two years were 2000 and 2008.  Even if you’re new to the market, you probably know how those two years played out.

Thankfully, the rest of the week looked nothing like what transpired in 2000 and 2008.  In both of those years, the S&P 500 continued declining throughout the week, but this year the market came back strong.  Even in the midst of Tuesday’s Georgia Senate run-off, Wednesday’s riots at the Capitol, and Friday’s much weaker than expected non-farm payrolls report, equities glided higher.

While the market’s rally against the backdrop of this week’s news events seems detached from reality, sometimes all you need to remember is that just as markets sometimes inexplicably decline during bear markets, there’s no taming bull markets either.

To read this week’s full newsletter and access everything else Bespoke’s research platform has to offer, start a two-week trial to one of our three membership levels.

The Bespoke Report – A Good Month in Four Days

If you were expecting a bit of a pullback to start December after November’s big gains, it didn’t come this week.  While November’s performance for the US and global equities was the equivalent of a good year, December’s MTD returns already would be considered a great month!  Major US equity indices are all up 2% already, and the small-cap Russell 2000 is up close to 4%.  Every sector with the exception of Utilities is also up on the month, but Energy is by far the biggest winner with a gain of over 10%. Even after that gain, though, it is still down nearly 30% on the year. In international markets, we’ve also seen big gains with countries like Brazil, Mexico, Spain, Russia, and the UK all up over 5%.  Lastly, as one might expect given the big gains in equities, bonds are all lower on the month with the most weakness at the long end of the curve.

This week’s Bespoke Report is a bit shorter than normal as we have also started to publish various sections of our annual Bespoke Report Market Outlook.  To view this week’s Bespoke Report as well as our Annual Outlook report as it’s published, take advantage of our 2021 Annual Outlook Special.

This week’s Bespoke Report newsletter is now available for members.

To read the report and access everything else Bespoke’s research platform has to offer, start a two-week free trial to one of our three membership levels.  You won’t be disappointed! 

The Bespoke Report – Waiting is the Hardest Part

There’s the old saying that if at first you don’t succeed, try, try, and try again.  After positive vaccine news from Pfizer (PFE) on November 9th helped to push the S&P 500 and the Nasdaq to new highs, the major averages couldn’t hang onto those gains. If it didn’t work the first time, though, maybe news this Monday that Moderna’s (MRNA) vaccine was even more effective would do the trick.  Markets rallied again, but once again couldn’t hang on to the gains.  Throughout this week, there were more positive vaccine headlines, but each booster shot was less effective.  The result?  While equities closed out the week right near all-time highs, they’ve essentially been rangebound for the last two weeks as well as the last two and a half months.

Since Pfizer’s positive vaccine news before the open on 11/9, the S&P 500 and Nasdaq have essentially been on a treadmill with a number of swings up and down, but really nothing to show for any of it.  Investors just can’t seem to make up their minds at this point between placing more emphasis on the shorter-term concerns of rising COVID hospitalizations or the positive long-term impacts of viable vaccines.  Decisions. Decisions. We discuss all the latest trends in the market and the economy in this week’s Bespoke Report.

This week’s Bespoke Report newsletter is now available for members.

To read the report and access everything else Bespoke’s research platform has to offer, start a two-week free trial to one of our three membership levels.  You won’t be disappointed! 

The Bespoke Report — Event Risk Off, Event Risk On

US equity performance this week was dominated by vaccine news. Good data from Pfizer early in the week sparked all-time highs for small caps and robust equity rallies around the world. Technical backdrops have improved dramatically both in the US and Europe versus where they sat just before the US election. The relief rallies in stocks around the world are indicative of just what can happen when risk events are taken off the table. Unfortunately for investors, the risk events moving off the table have been replaced by others: government funding deadlines in mid and late December, as well as more Phase 3 trial data from vaccine companies. In the background, the US economy is starting to slow as COVID prevalence explodes across the country. We discuss all the latest US data, earnings results, and more in this week’s Bespoke Report.

This week’s Bespoke Report newsletter is now available for members.

To read the report and access everything else Bespoke’s research platform has to offer, start a two-week free trial to one of our three membership levels.  You won’t be disappointed!