May 1, 2025
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“AI is transforming everything we do” – Mark Zuckerberg
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
We had to earnings reports from mega-caps after the close last night, and both Meta Platforms (META) and Microsoft (MSFT) delivered. Both stocks are trading sharply higher in response to the reports, as META rallies over 6% and MSFT is on pace to gap up over 9%, which would put the stock on pace for its most positive gap higher in reaction to earnings since 2009.
The pace of earnings isn’t the only thing picking up, either. It will be another busy morning for economic data with jobless claims at 8:30, followed by the ISM Manufacturing report and Construction Spending at 10 AM. Given the weakness in soft economic data and the April regional Fed manufacturing surveys, don’t expect much positive from the ISM Manufacturing report. Still, claims will be an important report to watch as they have been very well-behaved up until now. This morning’s release, however, came in higher than expected on both an initial and continuing basis, with most of the increase in initial claims coming from New York. One week does not make a trend, but this will be even more important to watch next week.
There’s been a lot of talk about the potential for permanent damage to ‘brand America’ given the President’s brash tone towards long-time allies and the haphazard implementation of his tariff policy. The jury is still out on that one, but when it comes to investor sentiment, we were surprised to see today that the weekly survey from the American Association of Individual Investors (AAII) showed an increase in bearish sentiment this week (55.6% up to 59.3%), even as the survey week came just as the S&P 500 was up over 1.5% on back to back to back days and has also been riding a seven-day winning streak. Normally, bearish sentiment declines as the market recovers, but for now at least, investor sentiment seems to be scarred (or scared) from the sharp declines earlier in the month.
Wednesday’s session was a fitting end to a dramatic month. Just as the S&P 500 recovered from a decline of over 10% intra-month and almost erased it all by month end, in yesterday’s trading, the S&P 500 erased an intraday decline of more than 2% to finish the day in positive territory. The last time that happened was at the bear market lows in October 2022.
From a technical perspective, yesterday’s reversal occurred right where it was supposed to. After breaking its downtrend from the February highs last Friday, the SPDR S&P 500 ETF (SPY) pulled back to that former trendline and bounced. Now, if it can maintain that momentum in the next couple of days and break back above the 50-day moving average, the technical picture would look much more encouraging. With futures up over 1% this morning, that 50-DMA will likely come into play today.
Reversals like yesterday’s aren’t all that common. Since its inception in 1993, there have only been 44 other days when SPY was down at least 2% intraday but finished the day higher. As shown in the chart below, these types of reversals occurred frequently during bear markets, with several during the dot-com bust and even more during the Financial Crisis, and even a few during the 2022 bear market. They haven’t been exclusive to bear markets, though, as there were more than a few scattered throughout bull markets and shallower market corrections.
Apr 30, 2025
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“There are no lines in nature, only areas of colour, one against another.” – Edouard Manet
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
April may only have 30 days, but this one feels like it was the longest month in a long time. Liberation Day was on April 2nd, but it seems like months ago. Maybe that’s because we have seen market moves that usually take months to play out compressed into just a matter of weeks. Thankfully, things have started to calm down, but you can never be sure if we’re past the worst or just in the eye of the storm.
Regarding economic data, the month is closing out with a whirlwind, and it started with the ADP Payrolls report which came in weaker than expected. While economists were expecting growth of 125K payrolls, the actual reading came in at just under half that at 62K. ADP was just the first of many, though, with the first read on GDP, the GDP Price Index, Core PCE, Personal Consumption and the Employment Cost Index all coming out at 8:30. GDP showed a slightly larger than expected decline (-0.3% vs -0.2%) and Personal Consumption was higher than expected, but the inflation readings came in much higher than expected which has pushed equity futures sharply lower and yields sharply higher.
As if these reports weren’t enough, we still have Personal Income and Personal Spending at 10 AM. That’s just economic news, too. Don’t forget that we’re in the thick of earnings season, and after the close today, the focus will be on Meta (META) and Microsoft (MSFT).
Did anything happen this month? Heading into the last trading day of the month, the S&P 500 is down less than 1%, five sectors are up, and six are down. At the surface, it sounds like an uneventful month, but it was anything but. The scatter chart below shows the performance of the S&P 500 and sectors on a month to day basis through April 8th and then from the close on April 8th through yesterday’s close. It has been a wild ride!
Along with the S&P 500, six sectors fell more than 10% through 4/8 and then rallied more than 10% since. Through 4/8, all eleven sectors fell at least 6.2% (Consumer Staples) and as much as 17.9% (Energy), and since then, every sector has rallied at least 4.6% (Health Care) and as much as 16.4% (Technology). In most cases, the biggest losers in the first eight days of the month have been the biggest winners since although Energy has been the exception, as its bounce was meager relative to the size of its plunge.
After all the noise, Technology is leading the way higher with a gain of 1.2%, followed by Communication Services (0.9%), Consumer Discretionary (0.8%), and Utilities (0.5%). On the downside, there are still plenty of losers, and the magnitude of the losses is much larger than the winners. Energy has been the big outlier with a decline of over 10% while Health Care (-4.7%), Materials (-2.7%), and Financials (-2.4%) are all still down over 2%. It hasn’t been a great month for the market, but it could have been a LOT worse.
Apr 29, 2025
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“If you’ve made your own hell, then only you have the power to escape it.” – Willie Nelson
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
April was on track for being one of the most volatile months on record, but it’s closing out on a quiet note. While yesterday’s move in the S&P 500 was the smallest since the S&P 500 peak, equity futures are even quieter this morning as they indicate an unchanged market at the open. It’s been a busy overnight session for earnings, but the big reports from Apple (AAPL), Microsoft (MSFT), Amazon.com (AMZN), and Meta (META) are still to come.
The big economic reports of the morning will be Consumer Confidence and JOLTS. The former is an April number, so it will give us a good idea of how the month’s craziness has impacted sentiment.
Here’s something you don’t see often. The S&P 500 Technology sector ETF (XLK) is up nearly 11% over the last five trading days, but it’s still down over 10% YTD and more than 1% below its 50-day moving average (DMA). Like Tech, the Consumer Discretionary sector ETF (XLY) has rallied more than 9% and is still down nearly 12% YTD and more than 1% below its 50-DMA.
More broadly, it’s been a phenomenal five trading days for US equities- except for the Consumer Staples sector (XLP). Don’t shed too many tears for Consumer Staples, though, it’s still up 2.5% YTD. For the most part, the sector has done exactly what it’s supposed to do: underperform when the market rallies and outperform when the market declines. Putting it all together, while five sectors have rallied over 5% in the last week, and all but one have essentially rallied at least 3%, ten out of eleven sectors remain below their 50-day moving average, and all eleven sectors remain in neutral territory.
Apr 28, 2025
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“As sure as time, history is repeating itself, and as sure as man is man, history is the last place he’ll look for his lessons.” – Harper Lee
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
After five straight weeks where the market has essentially gapped down 1% or more at the open to start a week, futures are surprisingly muted this morning, with the S&P 500 indicated to open fractionally lower (~0.10%). The subdued tone comes as there has been no change to the trade situation between the US and any of its trading partners. You can say no news is good news, but the longer we go with no news, the more anxious the market will become. In Europe, stocks are starting the week positively with the STOXX 600 up nearly half a percent, Germany and France lead the way higher, while Spain and Italy lag.
This will be an important week for economic and earnings-related news outside of trade-related news. On the earnings front, a third of the companies in the S&P 500 are scheduled to report, including Apple (AAPL), Microsoft (MSFT), Amazon.com (AMZN), and Meta (META). The pace of economic data will be just as busy. While Dallas Fed is the only report on the calendar today, on Tuesday, we’ll get Consumer Confidence for April and JOLTS for March. On Wednesday, we’ll get ADP for April and the first read of Q1 GDP, followed by jobless claims and April Manufacturing PMI for April on Thursday. Then Friday, the week closes out with the April Employment report. After all these reports, we should have a much better read on how all the uncertainty over trade has impacted the economy.
After rallying as much as 12.4% month to date and rising above $3,500 per ounce last week, gold prices have significantly pulled back in the last four trading days. This morning, the price is little changed, trading right around $3,300 per ounce. While still up nearly 6% for the month, the magnitude of the gain has been more than cut in half.
When gold last hit a 52-week high on Tuesday (4/22), it pulled back sharply lower intraday and finished the day more than 2.5% from its intraday high. Since the mid-1970s, it was just the 33rd time that its price hit a 52-week high but finished the day down more than 2.5% from the intraday high. The chart below shows every prior occurrence with a red dot. While these types of reversals were evident at prior peaks, they were also scattered throughout longer-term uptrends. The most recent occurrence before last week was almost exactly a year earlier in mid-April of last year, and we all know what gold has done since then. In other words, it’s hard to put too much significance into any one day’s reversal.
Looking at gold’s performance relative to other commodities, it certainly has been doing its own thing lately. Year to date, both gold ETFs are up over 25% and finished the week more than 8% above their 50-day moving average after pulling back from extreme overbought levels. Most other commodity-related ETFs are either down or up by mid-single-digit percentages. Gold has its reasons to rally relative to other commodities, but as it rallied above $3,500 last week, its price became extremely extended.
Apr 25, 2025
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“I always tell the truth. Even when I lie.” – Al Pacino
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 yesterday’s interview on CNN’s OutFront, click on the image below.
After three strong days for stocks following the plunge to start the week, the week looks to be ending on a down note following the publication of an interview by Time magazine with President Trump. The interview took place on Tuesday, so the comments are for intents past their shelf life based on the White House news cycle, but they reinforce the notion that when it comes to this Administration, policy is a moving target.
Earnings news was mixed overnight, but the most high-profile report came from Alphabet (GOOGL), and the stock is trading up in response. The only economic report on the calendar is Michigan Confidence. Investors will be watching the inflation expectations component of that report. Even as it has become incredibly polarized based on political leanings, the general trend has been higher, which the Fed doesn’t want to see.
Day-to-day volatility in the market has picked up since late February, and the historic 9.5% rally from April 9th sticks out like a big middle finger. That big gain also overshadows a nearly impressive run of three straight daily gains of 1.5% or more in the S&P 500. Outside of the big gain on 4/9, any of these days would have qualified as among the best days in the last six months, but having them occur on a back-to-back-to-back basis is extraordinary.
As impressive as the daily gains have been, yesterday’s rally only took the S&P 500 back to levels it opened at right after the Liberation Day ceremony in the Rose Garden and then the level it traded up to on 4/9. For bulls to breathe easier, we’ll need to see the market maintain its momentum and break above this resistance, which happens to coincide with the downtrend line from the February high.
Apr 24, 2025
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“The lack of a sense of history is the damnation of the modern world.” – Robert Penn Warren
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
After two days of solid gains, US equity futures are lower this morning but off their lows as the S&P 500 is indicated to open down 0.31%. After the last several trading days, though, investors could probably use a breather, as four of the last five trading days have seen gains or losses of at least 1.5%. Overnight, Asian stocks were mixed but mostly higher, even as the Chinese government pushed back on claims from the US Administration that the two sides are talking to de-escalate the trade war between the world’s two largest economies. In Europe, equities are seeing very modest losses.
Outside of equities, Treasury yields are lower with the 10-year trading down to 4.34%, oil is 1% higher, gold is rebounding after Wednesday’s sharp decline, and Bitcoin is down 1% but still over $92K.
Earnings news since yesterday’s close has generally been positive, but a negative reaction to IBM’s results has the stock trading down 7%, which is contributing to a more than 100-point decline in the Dow.
On the economic calendar, we’ll get Durable Goods Orders and Jobless Claims 8:30, followed by Existing Home Sales at 10 and the KC Fed regional manufacturing report at 11. Of these reports, jobless claims will be the most important to watch for any signs of weakness due to the impact of tariffs.
While the last two trading days have been strong for US stocks, performance over the last five trading days has been weak, lagging the rest of the world. As shown in the snapshot below, the SPDR S&P 500 ETF (SPY) is down 0.41% over the last five trading days, which keeps it over 5% below its 50-day moving average (DMA) and down over 8% for the year. Relative to other regional international ETFs, SPY is the only one down YTD, and along with Emerging Markets (EEM), the only one below its 50-DMA as well.
The weakness in US stocks has been extremely evident in investor sentiment. This week’s survey from the American Association of Individual Investors (AAII) showed that bearish sentiment declined from 56.9% to 55.6%, but that still extends the streak of readings where bears were at 50% or more to a record nine weeks. In the entire history of the survey dating back to 1987, there have only been three other periods where bears were at 50% or more of total respondents for even five straight weeks.
