Bespoke’s Morning Lineup – 4/16/21 – On the House

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 free trial to Bespoke Premium.  CLICK HERE to learn more and start your free trial.

“It all comes down to interest rates. As an investor, all you’re doing is putting up a lump-sum payment for a future cash flow.” – Ray Dalio

The anti-gravitational pull higher in equities has continued this morning as some modest weakness in futures overnight has reversed with all of the major averages now looking to open in the green.  Housing data has the spotlight this morning, and both Housing Starts and Building Permits topped consensus expectations.  The latter saw only a small beat relative to expectations, while the former exceeded forecasts by more than 100K (1739K vs 1611K). The only other indicator on the calendar between now and the weekend is Michigan Confidence.

Read today’s Morning Lineup for a recap of all the major market news and events including a recap of the biggest overnight events including some key earnings reports, international economic data, as well as the latest US and international COVID trends including our vaccination trackers, and much more.

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We’re already hard at work on this week’s Bespoke Report, but this morning we wanted to provide a quick update to a chart from last week’s report.  The annotated chart below shows the yield on the 10-year US Treasury on an intraday basis over the last 15 trading days.  Along with the move in yields, we’ve also annotated the chart with the releases of some key economic indicators over that time period.  So, let’s recap them for you.

On 3/30, Consumer Confidence saw its biggest beat relative to expectations since at least 2000 and the third largest m/m gain on record.  On 3/31, the Chicago PMI was the strongest since July 2018.  The next day (4/1), the ISM Manufacturing report came in at the highest level in decades.  The equity market was closed for Good Friday on 4/2, but Non-Farm Payrolls came in more than a quarter of a million above forecasts.  The following Monday on 4/5, the ISM Services report, which goes back to the mid-1990s, came in at the highest level on record.  After 4/5, there was a bit of a lull in the data, but last Friday (4/9), PPI saw its largest y/y increase since 2011 while this week’s CPI saw the largest m/m increase since 2009.  Finally, in yesterday’s data dump, Jobless Claims dropped to their lowest level of the pandemic, Retail Sales came in at nearly twice consensus expectations with the second-largest m/m increase on record, and both the Philly and NY Fed Manufacturing indices surged.

With all of this great data following a period where the market was freaking out over interest rates, you could have expected to see a big jump in rates, but instead, we’ve seen the complete opposite with the yield on the 10-year at its lowest level since February.  As Peter Lynch once said, “Nobody can predict interest rates”, or for that matter, “the future direction of the economy or the stock market.”

Bespoke’s Morning Lineup – 4/15/21 – Better Than Expected

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 free trial to Bespoke Premium.  CLICK HERE to learn more and start your free trial.

“Money is made by sitting, not trading.” – Jesse Livermore

Futures have been higher all morning driven by solid earnings results from some of the largest banks.  In addition to the earnings results, we just got a slug of economic data in the form of Jobless Claims, Retail Sales, Empire Manufacturing, and Philly Fed Manufacturing.  As “Crazy Eddie” would say, the results were “Insane”.  With the exception of Continuing Claims, which still came in right near their post-pandemic lows, every other report came in much stronger than expected.  It’s still early, but what could be more impressive than the results themselves is the fact that the yield on the 10-year is actually lower now than it was before the releases.

Read today’s Morning Lineup for a recap of all the major market news and events including a recap of the biggest overnight events including some key earnings reports, international inflation data, as well as the latest US and international COVID trends including our vaccination trackers, and much more.

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As shown on page two of our Morning Lineup, the S&P 500 has been consistently trading in ‘extreme’ overbought territory in recent days (2+ standard deviations above its 50-DMA).  Yesterday marked the 9th straight trading day that the S&P 500 finished the day in this area marking the longest streak since January 2018 and just the 7th streak of nine or more trading days.

Bespoke’s Morning Lineup – 4/14/21 – Banks Bring It

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 free trial to Bespoke Premium.  CLICK HERE to learn more and start your free trial.

“No price is too great for a work of unquestioned beauty and known authenticity.” – J.P. Morgan

We’re still far from the peak of earnings season, but today has been the busiest day of the season so far.  Of the six companies that have reported this morning, all six of them topped EPS forecasts while five out of six beat revenue expectations.  Some of the largest banks and brokerages have been the headline reports this morning with Goldman Sachs (GS), JP Morgan (JPM), and Wells Fargo (WFC) all blowing away forecasts. Of the three, GS is the only one trading meaningfully higher while JPM is actually lower.  As is typically the case with these big beats from the financials, there’s usually a ‘yeah but’.

Besides earnings, the economic calendar is light today with Import Prices the only report on the calendar.  That will leave plenty of time for investors to watch the debut of Coinbase (COIN) to the public markets.  The listing couldn’t come at a better time for the company as crypto-currencies have been on absolute fire with both bitcoin and ether trading at record highs and riding what looks to be their seventh straight day of gains.  In the words of J.P. Morgan, no price these days seems to be too great for crypto assets. They may not have ‘unquestioned beauty’ but they do have ‘known authenticity’.

Read today’s Morning Lineup for a recap of all the major market news and events including a recap of the biggest overnight events including some key earnings reports, European Industrial Production, as well as the latest US and international COVID trends including our vaccination trackers, and much more.

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We’ve been talking a lot lately about the market’s consistent gains during the trading day.  One index which hasn’t been nearly as strong is small caps.  The Rusell 2000 is currently more than 5% from its record high as a number of stocks in the index work off some of the big gains and overbought conditions from earlier this year.  The chart below compares the Russell 2000’s price to its cumulative A/D line over the last year.  Along with lower prices, breadth in the Russell 2000 has also been on the weak side. Would we prefer to see stronger breadth?  Of course.  On the flip side, though, there’s no indication in breadth that suggests material additional weakness underneath the surface.

Bespoke’s Morning Lineup – 4/13/21 – Dozen Dailies

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 free trial to Bespoke Premium.  CLICK HERE to learn more and start your free trial.

“There are only three ways to meet the unpaid bills of a nation. The first is taxation. The second is repudiation. The third is inflation.” – Herbert Hoover

Despite the fact that the FOMC has essentially dismissed any importance of the report, today’s release on March CPI has been one of the most anticipated CPI reports we can remember. The report came in 0.1 percentage point above expectations on both a headline and core basis, and while that’s more than expected, we’ve seen hotter prints relative to expectations.  If you were looking for something that might cause the FOMC to change course, you didn’t get it in this report.  On a side note, it’s a bit ironic that on the same day that CPI takes center stage, bitcoin is up about 5% in price and finally above resistance at $60K.

Futures were already lower heading into the March CPI report on the heels of news that the FDA instituted a temporary pause on the administration of JNJ’s COVID vaccine, but they have since rebounded erasing about half of their declines.

Read today’s Morning Lineup for a recap of all the major market news and events including an overnight recap of market news and events, updates on European sentiment, CPI, as well as the latest US and international COVID trends including our vaccination trackers, and much more.

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For all of April and stretching back to the end of March, when the US equity market has been open it doesn’t go down!  The chart of SPY below shows that the ETF has closed higher than it opened for 12 straight trading days. In the history of the ETF stretching back more than 25 years, there has never been a longer streak of days where it closed higher than its opening price.  For an analysis of how the ETF has performed following streaks of similar duration, sign up for a trial to Bespoke Premium.

Bespoke’s Morning Lineup – 4/12/21 – Low Energy Monday

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 free trial to Bespoke Premium.  CLICK HERE to learn more and start your free trial.

“The person who starts simply with the idea of getting rich won’t succeed; you must have a larger ambition.” – John D. Rockefeller

The new week is starting off on a relatively quiet note, and futures are lower, but activity will pick up quickly as the week goes on.  Besides earnings season, tomorrow we’ll get data on March CPI, and then Thursday’s data slate will include updates on Retail Sales, Jobless Claims, and both the Philly and NY Fed Manufacturing surveys.  Then on Friday, we’ll close out the week with the March updates on Housing Starts and Building Permits.

Read today’s Morning Lineup for a recap of all the major market news and events including an overnight recap of market news and events, updates on Japanese Machinery Tool Orders, China Credit Creation, as well as the latest US and international COVID trends including our vaccination trackers, and much more.

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After a big rally to close out the day on Friday, the S&P 500 finished the week well into overbought territory.  Like the overall index, just about every sector is also in overbought territory except one – Energy.  While every sector was up last week, Energy finished the week down over 4% and is just a bit over 1% above its 50-day moving average (DMA).  Don’t feel too bad for the sector, though.  Even after last week’s decline, the Energy sector ETF is still more than 28% higher from where it started out the year.

Bespoke’s Morning Lineup – 4/9/21 – Quick Turnaround

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 free trial to Bespoke Premium.  CLICK HERE to learn more and start your free trial.

“Slow and steady wins the race.” – Aesop

It’s looking like a modestly positive end to the week with S&P 500 futures slightly higher, but for all of the major indices, current levels are off their overnight highs after Chinese inflation data topped expectations.  That has pushed the 10-year yield higher, and Nasdaq futures lower.  Here in the US, PPI for the month of March was scheduled to be released at 8:30 Eastern, but as of yet, the data hasn’t been released.

Read today’s Morning Lineup for a recap of all the major market news and events including an overnight recap of market news and events, Chinese inflation data, weakening Industrial Production out of Europe, US and international COVID trends as well as our series of charts tracking vaccinations, and much more.

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Slow and steady may win the race, but the turnaround we have seen in the Technology sector has been swift.  Over the five trading days heading into today, Technology, which had been one of the weaker sectors on a YTD basis, has been the best performing sector in the S&P 500 by rallying 5.73%.  The next best performing sector in the S&P 500 has been Communication Services, which is basically dominated by mega-cap tech-like stocks (GOOGL, FB, and NFLX).  As a result of the move in Technology over the last five trading days, the sector has gone from just barely above its 50-DMA and closer to that level than any other sector to the most overbought sector in the S&P 500.

On the downside, the worst-performing sector in the S&P 500 is Energy, which has declined more than 1%, but even after that decline, the sector is still up more than 29% which is more than ten full percentage points than the next closest sector (Financials).