Jul 10, 2023
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.
“The pilots I worked with in the aerospace industry were willing to put on almost anything to keep them safe in case of a crash, but regular people in cars don’t want to be uncomfortable even for a minute.” – Nils Bohlin
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.
There’s not a lot going on in equity futures this morning. Overnight, Asia saw mixed trading as Europe is modestly higher. Notable economic data released overnight included a weaker-than-expected inflation reading in China where CPI was unchanged on a y/y basis versus forecasts for growth of 0.2%. In Europe, the July Sentix Investor Confidence Index fell more than expected. There’s not a lot of US data this morning, but there are several Fed officials scheduled to speak (yay).
The second half of 2023 started a week ago, but with a shortened session Monday and a market holiday Tuesday, it wasn’t much of a week even if there was some important ISM and employment-related data. All that can be considered a dress rehearsal for a big and full week of trading as we’ll get CPI on Wednesday, PPI Thursday, and the unofficial start of earnings season on Friday when the big banks like Blackrock (BLK), Citi (C), JPMorgan (JPM), and Wells Fargo (WFC) all report. In the words of Nils Bohlin, the Swedish engineer who was granted the patent for the three-point seatbelt back on this day in 1962, “Don’t forget to buckle up.”
One area where investors are used to being buckled up is in the bitcoin market where volatility is a fact of life. Over the last couple of weeks, though, volatility in that market has dampened. Over the last two weeks, bitcoin’s maximum intraday high was just over $31,500 versus an intraday low of just over $29,500 working out to a range of 6.7%. As shown in the chart below, that narrow of a range in the price of bitcoin has been somewhat uncommon over the last six years or so. It’s a small sample size, but the only period where a sharp sell-off immediately followed this type of narrow range was in late 2018.
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
Jul 7, 2023
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.
“A state of war is not a blank check for the president when it comes to the rights of the nation’s citizens.” – Sandra Day O’Connor
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.
There was little conviction in equity futures heading into the June jobs report this morning. Overnight, Asian stocks were lower as they caught up to the declines from the US yesterday while European stocks attempt to bounce from yesterday’s sell-off. Industrial Production in Germany was weaker than expected falling 0.2% m/m versus expectations for no change, but commentary from ECB officials including de Guindos and Lagarde both implied that more rate hikes are in the cards.
Today’s Non-Farm Payrolls (NFP) report missed expectations by 21K while the Unemployment Rate declined to 3.6% which was right in line with expectations. Average hourly earnings and average weekly hours both came in better than expected, though. As far as revisions go, prior readings were revised lower by over 100K with May’s originally reported level of 339K revised down to 306K. Futures have seen a modest bounce while treasury yields are lower.
The streak is over! With today’s weaker-than-expected report, the record run of better-than-expected NFP reports ended at 14 and came just one month shy of tripling the prior record of five straight better-than-expected reports. It only figures that the streak ended on the same month that the ADP Private Payrolls report crushed estimates and caused just about every investor out there to price in a better-than-expected report as a sure thing. If you’re keeping track, the last three times now that ADP surpassed forecasts by 300K or more, the corresponding NFP report for the same month missed forecasts. On 6/3/21, ADP topped forecasts by 328K, and on the next day, NFP missed forecasts by 116K. On 1/5/22, ADP topped forecasts by 397K, and two days later NFP missed by 251K. Now, this week ADP tops forecasts by 372K, and NFP missed by 21K. Relying on the ADP report as an indicator for the NFP report? What is it they say about insanity and doing the same thing over and over again?
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
Jul 6, 2023
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.
“An absolutely new idea is one of the rarest things known to man.” – Thomas More
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 first three days of Q3 have been an example of stocks not picking up right where they left off in the second quarter. while things started off quiet enough during the shortened session on Monday, yesterday’s session and this morning’s pre-market have traded heavily. This morning the tone has been especially weak as European stocks trade down over 1% on breadth that is skewed 10-1 to the downside. There hasn’t been much data to steer the market, but rising interest rates have been acting as a significant weight.
This morning, there’s much more economic data to contend with. ADP Private Payrolls were just released and came in much higher than expected at 497K versus forecasts for a reading of 220K. Jobless claims were more mixed. Initial Claims came in slightly higher than expected at 248K versus forecasts for 245K and up from a downwardly revised reading of 236K. Continuing Claims managed to come in weaker than expected (1.72 mln vs 1.737 mln). Overall, these reports suggest that any doubts over the health of the labor market can be put to rest, at least for now. Besides these two reports, we’ll get the monthly JOLTS report at 10 AM followed by Non-Farm Payrolls tomorrow. While there’s a lot of employment-related data to contend with don’t forget about the 10 AM release of ISM Services.
With the S&P 500 rallying into bull market territory and new 52-week highs, investors have become bullish. According to the weekly survey of individual investor sentiment from AAII, bullish sentiment jumped up to 46.4% from 41.9%. While bulls are still not in the majority and haven’t been in over two years, this week’s reading was the highest level of bullish sentiment since November 2021. Looking at the chart below, sentiment and the stock market have carved out identical patterns over the last two years indicating that investors’ views of the stock market have been based on how stocks have performed in the moment.
You may think that investor sentiment has always been positively correlated to the stock market’s performance, but that hasn’t necessarily been the case. The chart below shows the rolling two-year correlation between AAII bullish sentiment and the S&P 500 since 2000. While the correlation between the two has usually been positive, the levels have varied widely. In fact, levels like the current reading of +0.50 or more have been uncommon occurring less than 12% of the time since 2000.
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
Jul 5, 2023
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.
“No one ever made a difference by being like everyone else.” – P.T. Barnum
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 starters are coming back on the field this morning after a short session on Monday, and the gains from the quarter’s first trading day are on pace to be more than erased at the opening bell. Weak PMI data for many major economies released overnight and this morning has generally been weaker than expected raising concerns about the health of the global economy. The US economic calendar is quiet today with Factory Orders at 10 AM and FOMC minutes at 2 PM.
After a strong start where the STOXX 600 rallied 6.5% in the first ten trading days of the year, investors around the world hopped on the bandwagon for European stocks. Since those first ten trading days, though, stocks across the Atlantic have essentially flat-lined. In the 121 trading days since those first ten trading days of 2023, the STOXX has only managed to rally 1%, and the technical backdrop for stocks in the region has started to look shaky.
The STOXX 600 traded at new highs for the year in May, but since then has formed a short-term downtrend of lower highs and lows, and in the process, has broken the uptrend that has been in place since last fall’s low. In late June, it made a rally attempt, but that bounce stalled out right at resistance coinciding with that former uptrend as well as the 50-day moving average. To paraphrase PT Barnum, no one ever makes much money by investing like everyone else.
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
Jul 3, 2023
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.
“The essence of America — that which really unites us — is not ethnicity, or nationality, or religion. It is an idea — and what an idea it is: that you can come from humble circumstances and do great things. That it doesn’t matter where you come from, but where you are going.” – Condoleezza Rice
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.
Welcome to the second half! It’s going to be a quiet start to the second half as most people seem to have taken the long weekend for July 4th. There’s been little corporate news to speak of, but we will get the ISM Manufacturing for June and Construction Spending report for May at 10 AM. After that, traders will start packing up for the holiday as equity markets close for trading at 1 PM eastern. Happy July 4th!
For anyone who didn’t follow the College World Series (CWS) this year, it ended up being an experience of extremes in the best of three series. Game one looked pedestrian enough with LSU winning 4-3 over Florida. However, it took 11 innings to get there with each team scoring a single run in three different innings during the first nine and LSU taking the lead in the top of the 11th on a Cade Beloso home run deep over the right field wall. In game two, Florida came back with a vengeance demolishing LSU by 20 runs in a 24-4 final. It was the most runs ever scored in a CWS game and the largest margin of victory since Notre Dame beat Northern Colorado 23-2 all the way back in 1957. The next day, it was LSU doing the thumping in game three and taking the title by scoring 18 runs to Florida’s 4. LSU ultimately took the title, but on both sides, pitching wasn’t a strong suit.
The first half of 2023 and 2022 look a lot like this year’s CWS. Last year, it was the bears on top in what was collectively one of the worst years for financial assets as stocks and bonds were all crushed. This year, it’s been the opposite as stocks have surged and bonds of all types are in the black on a YTD basis. Like game two of the CWS, which had the most lopsided win since 1957, the Nasdaq had its best first half since 1983, the Nasdaq 100 had its best first half ever, and Apple (AAPL) crossed the $3 trillion market cap threshold. Is that enough financial dopamine for you? And if pitching wasn’t the strong suit of this year’s CWS, central to the volatility of the last two years in financial markets has been the Fed, which at times has seemed equally inconsistent.
It hasn’t just been a strong for US stocks either. As shown in the snapshot from our Trend Analyzer below, equity ETFs from around the world all finished the first half in positive territory YTD. Not only that, but the last week of June was also positive for every one of the regional ETFs we track, and they are all above their 50-day moving averages. Talk about a tide lifting all boats.
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
Jun 30, 2023
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.
“Perfection is a theory.” – Mikhail Baryshnikov
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.
It’s been a quiet overnight session in terms of US-centric news, but European stocks have rallied to close out the first half as inflation data for the Eurozone was lower than expected. Headline CPI dropped from 6.1% down to 5.5% on a y/y basis, while core ticked up to 5.4% from 5.3%. Both reports, however, were lower than expected.
The only data on the calendar today is Personal Income, Personal Spending, and PCE inflation data at 8:30. Then at 10 AM, we’ll get the final reading of consumer sentiment from the University of Michigan. Personal Income came in at 0.4% versus forecasts for a gain of 0.3%. Personal Spending was weaker than expected rising just 0.1% versus forecasts for an increase of 0.2%. Headline PCE was right in line with forecasts at 3.8% while Core PCE rose 4.6% which was slightly below the 4.7% forecast.
With the Nasdaq having the third-best first half in its history, it has been as close to a perfect year as one could imagine for the index. The only two years that were better were 1975 (45.5%) and 1983 (37.1%), and with the Nasdaq up 29.9% heading into today, those two years are out of reach. Similarly, the next closest year behind this year is 1991, and back then the Nasdaq was up 27.3% in the first half. Therefore, unless the Nasdaq falls over 2.5% today, its ranking in the third spot seems safe. If this were the NFL, we’d be sitting Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon.com (AMZN), Tesla (TSLA), Nvidia (NVDA), and Meta (META) today. Although AAPL may just get the start so it could cross the $3 trillion threshold.
It has also been a steady year for the Nasdaq as well. So far this year, the maximum peak-to-trough decline for the index has been 8.7%. That doesn’t sound too benign, but it’s well below the 12.5% first-half average dating back to 1972. It’s also the smallest first-half decline since 2017 when it fell just 2.9% in the first half. Looking back throughout the history of the Nasdaq, while years with sub-10% drawdowns in the first half haven’t been very common in the years since 2000 (just 8 in 24 years), prior to that they were much more common with 17 in 28 years.
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
