Jun 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.
“Never miss a good chance to shut up.” – Will Rogers
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.
Crude oil is getting a little bit of a bounce this morning after Saudi Arabia announced over the weekend that it would cut production by a million barrels per day in July. While prices are up nearly 2%, they are well off their highs of the overnight session as resistance at the 200-day moving average (DMA) kicked in. Equity futures are modestly higher following the lead of Europe where stocks are also marginally higher.
Summer doesn’t officially start for another two weeks or so, but when it comes to doldrums, it doesn’t get much quieter than the data slate for the upcoming week. On the economic calendar, two days this week – Tuesday and Friday – will have no scheduled releases, and on the remaining three days, the only reports of note will be ISM Services and Factory Orders (Monday), Consumer Credit (Wednesday), and Jobless Claims (Thursday). The earnings calendar is equally light as the only two earnings reports on the calendar for S&P 500 companies are JM Smucker (SJM) on Tuesday morning and Campbell Soup (CPB) on Wednesday: soup and jelly. So, not only do we have a minuscule number of companies reporting, but they could also be among the most ‘boring’ stocks in the market when it comes to earnings.
Fed speakers and politicians are always good for a few tape bombs throughout the week, but not this week. The Fed entered its blackout period ahead of the June meeting over the weekend, and with the debt deal getting signed into law, there isn’t much for politicians to talk about either. Who knows what the future will bring, but if the calendar is right, prepare for a quiet week.
With the lack of data to focus on here in the US, this morning we wanted to highlight the overnight release of inflation data in Turkey. If you thought we had it bad with inflation here in the US, Consumer Prices in Turkey rose 39.59% on a year-year basis in May, and as bad as that may sound, it was the seventh month in a row of declines and is now down by more than half from its peak of 85.51% in October. Just as inflation on the way up has been a global phenomenon, inflation on the way down (from varying levels) has also been a global trend.
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
Jun 2, 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 four most dangerous words in investing are: this time it’s different.” – Sir John Templeton
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.
Positive earnings news from the likes of lululemon (LULU) and MongoDB (MDB) plus a positive tone in overseas markets, where many benchmark indices are trading up over 1%, is pushing US equity futures higher ahead of the May jobs report. Reports that China is considering a new round of stimulus measures to support the property market has commodity stocks ripping higher following gains in Thursday’s session as well. The Senate also passed the debt ceiling bill, which will now move to the President’s desk. Its quick movement through Congress is a positive, but at this point, you can only rally on the same news so many times.
Heading into this morning’s jobs report, economists were expecting an increase of 195K non-farm payrolls (down from 253K last month), the Unemployment Rate to increase to 3.5% (from 3.4%), average hourly earnings to increase 0.3% (down from 0.5%), and average weekly hours of 34.4 (unchanged). The actual headline number was much stronger than expected (339K), but the Unemployment Rate was also much higher than expected at 3.7% and the highest since last October. Also, average hourly earnings were in line with forecasts and average weekly hours were weaker at 34.4. While the headline number is a bit of a shocker, given the higher Unemployment Rate, it’s unlikely to have much impact on FOMC policy forecasts.
This time is different, may be a dangerous phrase, but when it comes to economists’ forecasts surrounding the monthly non-farm payrolls report, this period really is like no other we have ever seen. As shown in the chart below, this morning’s release extended the streak of better-than-expected reports to 14 months. For over a year now, economists have been underestimating the rate of job growth in the US economy, and they still haven’t made the necessary adjustments to their modeling. In football, a coach only gets one halftime to make the necessary adjustments, but economists have had more than ten halftimes, and they still can’t get things quite right. If the definition of insanity is doing the same thing over and over and expecting a different result, Wall Street needs an army of psychiatrists.
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
Jun 1, 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.
“When people see some things as beautiful, other things become ugly. When people see some things as good, other things become bad.” – Lao Tzu
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.
Flat on either side of unchanged. That’s where futures stand this morning heading into what is going to be a very busy day for economic data. Things started off with ADP Private Payrolls at 8:15 which came in much stronger than expected at a level of 278K versus forecasts for an increase of 170K. After that, we got updates on Non-Farm Productivity, Unit Labor Costs, as well as Initial and Continuing Claims. Non-Farm Productivity was less bad than feared, falling 2.1% versus forecasts for a decline of 2.5%. Unit Labor Costs were a big bright spot as they only increased 4.2% compared to forecasts for an increase of 6.1%. Jobless claims, meanwhile, were slightly better than expected on both an initial and continuing basis.
We’re still not done yet, though. At 9:45 S&P Manufacturing PMI comes out at 9:45 followed by ISM Manufacturing and Construction Spending at 10 AM.
In Europe, stocks are higher this morning following some positive economic data as most manufacturing PMIs were modestly better than expected but still in contraction. Inflation data also came in lower than consensus forecasts with EU CPI unchanged in May versus expectations for an increase of 0.2%. With that, the y/y change fell to a 14-month low of 6.1% which was the lowest reading since February 2022.
In central bank news, ECB vice president Luis de Guindos noted that the central bank is in the ‘final stretch’ of the current rate-hiking cycle and that hikes in increments of 25 bps are ‘the new norm’. In comments earlier, ECB President Lagarde was more hawkish noting that there is no ‘clear evidence’ that underlying inflation has peaked, and added that she can’t say the ECB is satisfied with the inflation outlook.
It was a tale of many equity markets in May with the great (Nasdaq up 5.8%), the good (S&P 500 up 0.3%), the bad (Russell 2000 down 1.1%), and the ugly (Dow down 3.5%). Comparing the performance difference between the ‘great’ and the ‘ugly’ in May, the Nasdaq outperformed the Dow by 9.29 percentage points which ranks as the 9th widest margin of outperformance for the Nasdaq relative to the Dow in history.
The eight other months where the Nasdaq outperformed the Dow by more than it did in May all occurred in a 35-month span beginning in December 1998 and ending in October 2001. In fact, the Nasdaq outperformed the Dow by more than ten percentage points in back-to-back months twice (Dec 1998 to Jan 1999 and Nov 1999 to Dec 2000). If you think the Nasdaq is in a frenzy now, the period from late 1998 to the early 2000s makes it look like breakfast at Wimbledon.
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
May 31, 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.
“These are the days that must happen to you.” – Walt Whitman
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.
After opening right near their highs of the day and reversing lower throughout the trading day yesterday, equity futures are staring at a weak open this morning. Treasury yields are lower along with crude oil even as the debt ceiling deal moved out of Committee and is set for a full vote. Investors will be watching the Chicago PMI and JOLTS reports later this morning, but overnight, we had some weak economic data out of China and lower-than-expected inflation data out of Germany where the y/y increase in CPI dropped to 6.1% which was actually the lowest reading since last March. Some of these tech stocks have had a huge run in the last several days/weeks, so a pause should surprise no one.
The last 12 months haven’t been the best of times for crude oil, and the last two days have been no different. After a decline of nearly 4.5% to kick off the week yesterday, WTI is trading down over 2.5% this morning putting it within $1 of a 52-week low. A year ago, prices were coming off a peak of just over $130 per barrel after Russia invaded Ukraine but were still firmly in triple-digit territory. Bulls made another attempt to run crude back near the March 2022 high but came up short, and things only got worse from there. Since then, it’s been a steady march lower, and the price of a barrel of crude has nearly been cut in half.
For crude oil bulls, the last two months specifically have been a major disappointment especially when you consider the fact that China’s reopening was supposed to be a major catalyst. First, on 4/2, OPEC announced a surprise production cut. While the news caused a brief spike in prices, the rally stalled out right at the 200-day moving average (DMA) and prices were back at 52-week lows in a month. Then last week, a Saudi minister publicly noted that oil speculators who were betting against crude oil should ‘watch out’. In a bull market, those comments would have caused a buying frenzy, but in a bear market, jawboning has a very short half-life, and it wasn’t even enough to get WTI back above its 50-day moving average.
With crude failing its attempt to break above the 200-DMA back in April, the extended streak of closes below the 200-DMA has extended further. At 190 trading days through today, the current streak is the longest since the 427 trading day streak ending in April 2016. It would take nearly another year to challenge that streak, but the current streak already ranks as the fifth longest since 1984. Not only that but if the current streak lasts another month, it will move into third place overall.
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
May 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.
“I hate the idea of trends. I hate imitation; I have a reverence for individuality.” – Clint Eastwood
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.
House Speaker Kevin McCarthy and President Biden have reached an agreement on the debt ceiling that they can get through the House and Senate and onto the President’s desk within the June 5th deadline. Futures are higher this morning in reaction, but the continued run in tech stocks on the back of NVIDIA’s (NVDA) monster gains last week has the Nasdaq leading the way. NVDA is up about 4% in the pre-market putting it on pace to be the first semiconductor company to reach the trillion dollar valuation threshold. Dow futures are actually modestly lower as anything not tech-related continues to trade heavily.
With Monday being a holiday, we’re kicking off the week with a relatively large data slate this morning as Case Shiller housing data will be released at 9 AM, followed by Consumer Confidence at 10 AM, and the Dallas Fed report at 10:30. The rest of the week will also be busy capped off with the jobs report on Friday.
This morning’s trading is an exact continuation of last week which was an exact continuation of the ‘haves and have nots’ trade that’s been in place all year as the sectors which have been leading this year continued to lead while everything else lagged. The only three sectors that traded higher last week – Technology, Communication Services, and Consumer Discretionary – are also the only three sectors that are up more than 1% on the week (they’re all up over 15%), and the only three sectors trading above their 50-day moving average (DMA). Besides being above their 50-DMAs, all three are also trading in overbought territory with the Technology sector trading at its most overbought levels since 2004!
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
May 26, 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.
“Only two things are infinite, the universe and human stupidity, and I’m not sure about the former.” – Albert Einstein
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.
Futures are off their lows of the morning and trading in positive territory on reports that negotiators in Washington are close to a deal on the debt ceiling that could be voted on next week. Throughout this whole saga, there have been several false alarms, so some healthy skepticism is warranted. Ultimately, the debt ceiling will be raised and this whole charade will be out of the headlines until it comes up again in a couple of years. Next up for the markets is dealing with the surge of issuance that will follow in the coming months.
In the near term, Fridays are likely to get a lot quieter in the coming months, but even though we’re heading into a holiday weekend, there’s still a lot of economic data on the calendar with Personal Income, Personal Spending, PCE, Wholesale Inventories, Durable Goods, and Michigan Confidence. Buckle up. Get ready. And enjoy the first weekend of summer.
Regarding the current state of the market, the picture on the surface looks the opposite of what’s going on below the surface. Starting with the S&P 500, after hitting a high for the year last Friday, stocks have experienced a bit of a pullback this week. If it weren’t for NVIDIA (NVDA) on Thursday, the S&P 500 would probably be heading into today on a four-day losing streak. Still, as shown in the chart of SPY below, we’re only a little more than 1% from the high price for the year, so at this point, the pullback looks like nothing more than a scratch.
At the sector level, though, the picture looks nothing like it does at the index level. Just two sectors are up since last Thursday’s close, and the remaining nine sectors are all down over 1% with five of them down over 2.5%. Not only that but six sectors are trading at oversold levels. The fact that most sectors are oversold, and only three sectors are above their 50-day moving average (DMA) isn’t the picture you would think of if someone told you that the S&P 500 was 1% from its high for the year.
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
