Jun 3, 2022
This week’s Bespoke Report newsletter is now available for members.
It’s a turbulent and frustrating time in American society and financial markets alike. But amidst the chaos, there are reasons for optimism. Lower valuations mean higher forward returns, all else equal, and underlying earnings continue to rise at a robust pace. Economic activity is slowing, but from a high level, while some of the tightest commodity markets with the most dramatic price action have been pulling back over the last few months amidst very high volatility across commodities. The dollar is also pulling back broadly against almost all foreign currencies, with implications for relative performance of stocks that have international exposure. We also take a deep look at manufacturing and services sector activity indices for May released this week and the results of Friday’s employment situation report. We also discuss background checks for firearms purchases, jobless claims data, trends in interest rates, equity valuations, and more in this week’s Bespoke Report.
To read this week’s full Bespoke Report newsletter and access everything else Bespoke’s research platform has to offer, start a two-week trial to one of our three membership levels.
May 27, 2022
This week’s Bespoke Report newsletter is now available for members.
Finally! After seven consecutive losing weeks for the S&P 500, the index managed to close higher this week. And it was quite the move with SPY up more than 6% for its best one-week gain since the first week of November 2020 (Election Week).
Looking for further insights into the move, we noticed that the market also traded higher during regular trading hours (from the open to the close) on all five trading days this week as well, which signifies a sentiment-driven rally with buyers rushing into stocks intraday due to FOMO (fear of missing out). In SPY’s history, there have actually been 50 other weeks since the ETF began trading in 1993 where it gained from the open to the close on all five trading days from Monday through Friday. But this was the first time we’ve seen SPY post intraday gains all five days during the week with at least four of those gains being 1% or more.
For the month now, the S&P 500 is up 0.65%, and the bond market is also up more than 1%, which means that if we can make it one more trading day (Tuesday) without falling apart, all of those “60/40” investors out there will be able to open their May statements without a spike in blood pressure!
The snippet above is pulled from a page from this week’s Bespoke Report newsletter. If you’re not a Bespoke subscriber and you want to read this week’s full Bespoke Report (and access everything else Bespoke’s research platform has to offer), start a two-week trial to one of our three membership levels.
May 20, 2022
This week’s Bespoke Report newsletter is now available for members.
How’s the glass? Half-full? No way. It’s not even half empty. It’s been emptied, put in the recycling machine, and crushed to pieces. We have a Fed chair talking about a ‘painful’ period of policy normalization, and a Treasury Secretary telling the public that a soft-landing is ‘conceivable’ with a little bit of ‘skill and luck.’ Somebody get us a rabbit’s foot and some four-leaf clovers, the fate of the world’s largest economy hinges on it! Need they be reminded of the famous quote: “Hope is not a strategy”?
We’re trying something a little different this week. With no economic data and little in the way of earnings news to speak of today, we’re sending out this week’s Bespoke Report early. Given the volatility in the market lately, we’re sure to miss some big moves throughout the trading day, but they’re unlikely to have a major impact on this year’s trends (famous last words).
Barring a 3.1% rally on Friday, this week will mark the seventh straight week that the S&P 500 finished the week in the red. That would be the longest streak of weekly losses for the index since March 2001 and just the fourth streak of seven or more weekly losses in the post-WWII period. It’s a small sample size, but these types of streaks haven’t occurred during particularly positive periods for the equity market.
The snippet above is pulled from a page from this week’s Bespoke Report newsletter. If you’re not a Bespoke subscriber and you want to read this week’s full Bespoke Report (and access everything else Bespoke’s research platform has to offer), start a two-week trial to one of our three membership levels.
May 13, 2022
This week’s Bespoke Report newsletter is now available for members.
For both the S&P 500, Nasdaq, and the Russell 2000, 52-week lows were the norm this week, and in the case of the Nasdaq and Russell 2000, the recent plunges took them back to levels not seen since around the November 2020 election. Who would have ever thought that coming out of COVID would prove to be more difficult for markets than COVID itself?
Following up on last week’s Pros and Cons presentation, for this week’s report, we are including a macro update on global markets and the economy that was put together by our macro strategist George Pearkes. Therefore, this week’s Bespoke Report provides just an abbreviated recap of markets this week.
The current backdrop could easily be the most complicated backdrop that investors have ever faced, so our hope is to put things into perspective. The bottom line? Supply chains and inflation remain in flux, but there are signs that these issues could start to work themselves out in the second half. If they do, a less hawkish FOMC could be the market surprise for the second half. A key risk, though? Economic activity remains strong, but there are legitimate signals that demand has peaked.
In addition to this week’s Bespoke Report, we have also included our updated quarterly macro overview (“Capped Inflation & Capped Hike Pace Uncap Returns”). To read this week’s full Bespoke Report and access everything else Bespoke’s research platform has to offer, start a two-week trial to one of our three membership levels.
May 6, 2022
This week’s Bespoke Report is an updated version of our “Pros and Cons” edition for Q2 2022.
With this report, you’re able to get a complete picture of the bull and bear case for US stocks right now. It’s heavy on graphics and light on text, but we let the charts and tables do the talking!
On page two of the report, you’ll see a full list of the pros and cons that we lay out. We then provide slides for each “pro” or “con” that we’ve highlighted.
To read this report and access everything else Bespoke’s research platform has to offer, start a two-week trial to Bespoke Premium.
Apr 29, 2022
This week’s Bespoke Report newsletter is now available for members.
An appointment for a root canal has sounded better than having to watch this stock market lately. Just when you think things can’t get any worse in this market, they do, as every bounce has been quickly repudiated with stocks grinding down to new lows for the year.
It’s never a good feeling when equities close out the week at their lows, but we’ve now had that happen two weeks in a row. The S&P 500 has now declined at least 1% for four straight weeks while the Nasdaq has been down at least 2.5% for four straight weeks. Since 1971, there have only been four other times where the Nasdaq experienced a similar streak, so this kind of persistent weakness doesn’t occur very often.
When the markets start acting like this, it’s incredibly difficult to make any sense of the day-to-day moves, so for us or anyone to say anything about what to expect in the short-term would be foolish. Long-term investors have experienced worse and the market will eventually turn, but until it does, that root canal doesn’t look all that bad.
The snippet above is pulled from a page from this week’s Bespoke Report newsletter. If you’re not a Bespoke subscriber and you want to read this week’s full Bespoke Report (and access everything else Bespoke’s research platform has to offer), start a two-week trial to one of our three membership levels.
