Bespoke’s Morning Lineup – 10/7/22 – Warm Jobs Report

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“You never know what those Cumberland players have up their sleeve” – John Heisman

Morning stock market summary

Below is a snippet of content from today’s Morning Lineup for Bespoke Premium members.  Start a two-week trial to Bespoke Premium now to access the full report.

The above comment was made by coach Heisman during halftime of a game on this day in 1916 when Georgia Tech was beating Cumberland University by a score of 126-0.  Bulls are this year’s Cumberland University as financial assets of all types are in the red YTD, and the classic 60/40 portfolio is having its worst year on record.  This week, they’ve seen a faint glimmer of hope even as the Fed keeps turning up the heat, but it remains to be seen if they can chip away at the bears’ lead.  After taking a 126-point lead at the half, Georgia Tech went on to win 222-0 in what was the most lopsided college football game of all time. The bulls can only hope the next three months don’t play out like the second half of Georgia Tech vs Cumberland and make 2022 one of the most-lopsided years in terms of downside stock market performance.

Today’s employment report isn’t going to help the bull’s cause.  While Non-Farm Payrolls only surpassed expectations by 8K (263K vs 255K), the Unemployment Rate came in at 3.5% versus forecasts for an increase to 3.7%.  Futures, which were higher heading into the report, have reversed those gains and are now indicated modestly lower.

When the economy was cratering during the early days of COVID, once the Federal Reserve and Congress stepped in with massive stimulus, markets looked right through the weakness and rallied.  Two years later, we’ve done a 180.  Heading into today’s Non-Farm Payrolls (NFP) report for September, seven of the eight reports for 2022 have come in better than expected.  Over the course of these eight reports, the initially reported reading was an average of 133K greater than consensus forecasts.  That may not sound like a lot, but prior to COVID, there were only six other NFP reports out of 262 where the actual reported reading exceeded consensus forecasts by more than that amount.

Even as the US employment situation has outperformed expectations this year by an unprecedented margin, stocks haven’t liked it one bit. The table below lists the date of each NFP report this year and summarizes how the initial reading came in relative to expectations along with how the S&P 500 performed on the day (using SPY as a proxy). Of the seven NFP reports that came in better than expected, the S&P 500 gapped lower by an average of 0.48% and finished the day down by an average of 0.55% six out of seven times.  The economy may be doing OK, but once again, the market is looking right through it to one of the most aggressive tightening cycles by the Federal Reserve investors have ever seen.

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The Closer – Jobs Report Seasonals, Factor Function, Pot Surge, Openings – 10/6/22

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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we take a look at the moves in Treasury yields on the back of today’s Fedspeak followed by a review of seasonality of nonfarm payrolls ahead of tomorrow’s release (page 1). We then show some of the record moves in marijuana and related ETFs (page 2). We then check in on performance based on various quant factors (page 3). We finish with a look at the latest job postings data (pages 4 and 5).

See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!

The Bespoke 50 Growth Stocks — 10/6/22

The “Bespoke 50” is a basket of noteworthy growth stocks in the Russell 3,000.  To make the list, a stock must have strong earnings growth prospects along with an attractive price chart based on Bespoke’s analysis.  The Bespoke 50 is updated weekly on Thursday unless otherwise noted.  There were no changes to the list this week.

The Bespoke 50 is available with a Bespoke Premium subscription or a Bespoke Institutional subscription.  You can learn more about our subscription offerings at our Membership Options page, or simply start a two-week trial at our sign-up page.

The Bespoke 50 performance chart shown does not represent actual investment results.  The Bespoke 50 is updated weekly on Thursday.  Performance is based on equally weighting each of the 50 stocks (2% each) and is calculated using each stock’s opening price as of Friday morning each week.  Entry prices and exit prices used for stocks that are added or removed from the Bespoke 50 are based on Friday’s opening price.  Any potential commissions, brokerage fees, or dividends are not included in the Bespoke 50 performance calculation, but the performance shown is net of a hypothetical annual advisory fee of 0.85%.  Performance tracking for the Bespoke 50 and the Russell 3,000 total return index begins on March 5th, 2012 when the Bespoke 50 was first published.  Past performance is not a guarantee of future results.  The Bespoke 50 is meant to be an idea generator for investors and not a recommendation to buy or sell any specific securities.  It is not personalized advice because it in no way takes into account an investor’s individual needs.  As always, investors should conduct their own research when buying or selling individual securities.  Click here to read our full disclosure on hypothetical performance tracking.  Bespoke representatives or wealth management clients may have positions in securities discussed or mentioned in its published content.

Q3 Earnings Season Conference Call Recaps

Bespoke’s Conference Call Recaps provide helpful summaries of corporate conference calls throughout earnings season.  We go through the conference calls of some of the most important companies in the market and summarize key topics covered by management.  These recaps include information regarding each company’s financial results, growth by segment, as well as some aspects of the business that management expects to impact future results.  We also identify trends emerging for the broader economy in these recaps.

Bespoke’s Conference Call Recaps are available at the Bespoke Institutional level only.  You can sign up for Bespoke Institutional now and receive a 14-day trial to read our newest Conference Call recaps.  To sign up, choose either the monthly or annual checkout link below:

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Below is a list of the Conference Call Recaps published during the Q3 2022 and Q2 2022 earnings reporting period.

Q3 2022 Recaps:

Constellation Brands Q2 2023

Nike Q1 2023

Costco Q4 2022

Lennar Q3 2022

Adobe Q3 2022

Oracle — Q1 2023

DocuSign — Q2 2023
DocuSign Earnings Summary

Lululemon — Q2 2022
Lululemon (LULU) Earnings Summary

Recaps published during Q2 2022 are available with a Bespoke Institutional subscription:

Deere Q3 Conference Call — 8/19/22
Cisco Q4 Conference Call — 8/18/22
Target Q2 Conference Call — 8/17/22
Home Depot Q2 Conference Call — 8/16/22
Walmart Q2 Conference Call — 8/16/22
Disney Q3 Conference Call — 8/10/22
The Trade Desk Q2 Conference Call — 8/10/22
Coinbase Q2 Conference Call — 8/9/22
Tyson Foods Q3 Conference Call — 8/8/22
Alibaba Q1 Conference Call — 8/4/22
PayPal Q2 Conference Call — 8/4/22
Starbucks Q3 Conference Call — 8/4/22
Advanced Micro Devices Q2 Conference Call — 8/4/22
Caterpillar Q2 Conference Call — 8/2/22
Uber Q2 Conference Call — 8/2/22
Builders FirstSource Q2 Conference Call — 8/1/22
Apple Q3 Conference Call — 7/28/22
Amazon Q2 Conference Call — 7/28/22
Ford Q2 Conference Call — 7/27/22
Meta Platforms Q2 Conference Call — 7/27/22
Automatic Data Processing Q4 Conference Call — 7/27/22
Alphabet Q2 Conference Call — 7/26/22
Microsoft Q4 Conference Call — 7/26/22
3M Q2 Conference Call — 7/26/22
McDonald’s Q2 Conference Call — 7/26/22
Whirlpool Q2 Conference Call — 7/25/22
PPG Industries Q2 Conference Call — 7/22/22
American Express Q2 Conference Call — 7/22/22
Freeport-McMoRan Q2 Conference Call — 7/21/22
Blackstone Q2 Conference Call — 7/21/22
Tesla Q2 Conference Call — 7/20/22
Baker Hughes Q2 Conference Call — 7/20/22
Netflix Q2 Conference Call — 7/19/22
Johnson & Johnson Q2 Conference Call — 7/19/22
International Business Machines Q2 Conference Call — 7/18/22
Goldman Sachs Q2 Conference Call — 7/18/22
Citigroup Q2 Conference Call — 7/15/22
Blackrock Q2 Conference Call — 7/15/22
JP Morgan Q2 Conference Call — 7/14/22
Taiwan Semiconductor Q2 Conference Call — 7/14/22
Delta Q2 Conference Call — 7/13/22
PepsiCo Q2 Conference Call — 7/12/22
Constellation Brands Q1 Conference Call — 6/30/22
Walgreens Q3 Conference Call — 6/30/22
Nike Q4 Conference Call — 6/27/22
CarMax Q1 Conference Call — 6/24/22
FedEx Q4 Conference Call — 6/23/22
KB Home Q2 Conference Call — 6/22/22
Adobe Q2 Conference Call — 6/16/22
Kroger Q1 Conference Call — 6/16/22
Oracle Q4 Conference Call — 6/13/22
Lululemon Q1 Conference Call — 6/2/22

Bespoke’s Morning Lineup – 10/6/22 – Focus Turns to Jobs

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.

“I hope to let every citizen know what steps he can take without delay to protect his family in case of attack.” – John F. Kennedy

Morning stock market summary

Below is a snippet of content from today’s Morning Lineup for Bespoke Premium members.  Start a two-week trial to Bespoke Premium now to access the full report.

The focus for the rest of the week will be on jobs and Fedspeak with jobless claims today (higher than expected) and the September jobs report coming out tomorrow.  In addition to the hard data, there are at least seven Fed speakers scheduled to speak between now and the end of the trading week.  Last night, Atlanta Fed President Raphael Bostic was relatively hawkish when he noted that the fight against inflation was still in its ‘early days’ and sees the Fed Funds rate rising to around 4.5% by the end of the year and then from there the Fed should assess where the economy is heading.  The path of a hike to 4% or 4.5% and then a pause (rather than a pivot) from there seems to be the Fed’s ‘plan’ at this point.

Investor sentiment this week improved after the market’s rally but with bullish sentiment still below 24% sentiment remains extremely depressed. There’s still a lot going wrong these days.  The prices we’re paying for everything remain higher than we could have ever imagined, relations with China and Russia haven’t been this strained in a generation, a major hurricane just decimated parts of one of the country’s largest states, and by some measures, Americans have never been more miserable.  It stinks out there.

But if you think you have it bad now, we’ve been here before, and it’s been even worse.  Consider yourself lucky that Joe Biden isn’t on TV or TikTok today with a hammer and nails giving you a step-by-step guide on how to build a bomb shelter in the event of a nuclear attack.  That may sound farfetched, but that’s where we were just 51 years ago today when President Kennedy made the comments above in a speech on the threats of an attack. And this was a full year before the Cuban Missile Crisis.  The current geo-political backdrop is far from stable these days, but at least we’re not all learning to build bomb shelters in our basements or know at least where the closest Fallout Shelter is.  Some of you out there may even remember firsthand or through stories from your parents of drills where they would get under their desks in order to protect themselves from nuclear fallout.  A lot of good that would have done.

What a difference a few days can make in the markets.  Equities around the world are gingerly easing themselves out of the bunker from weeks of declines that brought them into oversold territory.  Just over a week ago, on September 27th, every regional equity ETF with the exception of the Latin America ETF (ILF) that we track in our Trend Analyzer tool was in extreme oversold territory, and all but two had been down at least 5% over the prior five trading days. Six were even down over 7%.

Fast forward to the present and every one of these same ETFs has now notched gains over the last week and each one of them has moved out of ‘extreme’ oversold territory.  They’re still oversold and only ILF is not down by double-digit percentages YTD, but you have to start somewhere.  As we noted in Wednesday’s quote of the day, “When nobody wants something, that creates an opportunity.”  Nobody wanted anything to do with stocks – or for that matter, any other asset – as the third quarter ended last week.  Investors have hardly fallen back in love with equities again, but they left a pillow on the couch and the back door unlocked.

Our Morning Lineup keeps readers on top of earnings data, economic news, global headlines, and market internals.  We’re biased (of course!), but we think it’s the best and most helpful pre-market report in existence!

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Fixed Income Weekly: 10/5/22

Searching for ways to better understand the fixed income space or looking for actionable ideas in this asset class?  Bespoke’s Fixed Income Weekly provides an update on rates and credit every Wednesday.  We start off with a fresh piece of analysis driven by what’s in the headlines or driving the market in a given week.  We then provide charts of how US Treasury futures and rates are trading, before moving on to a summary of recent fixed income ETF performance, short-term interest rates including money market funds, and a trade idea.  We summarize changes and recent developments for a variety of yield curves (UST, bund, Eurodollar, US breakeven inflation and Bespoke’s Global Yield Curve) before finishing with a review of recent UST yield curve changes, spread changes for major credit products and international bonds, and 1 year return profiles for a cross section of the fixed income world.

In this week’s report we investigate how risk free rate changes impact other fixed income risk premiums.

Our Fixed Income Weekly helps investors stay on top of fixed income markets and gain new perspective on the developments in interest rates.  You can sign up for a Bespoke research trial below to see this week’s report and everything else Bespoke publishes free for the next two weeks!

Click here and start a 14-day free trial to Bespoke Institutional to see our newest Fixed Income Weekly now!