Mar 22, 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.
“Those who have the task of making such policy don’t expect you to applaud.” – William McChesney Martin
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 no economic data on the calendar and there’s little in the way of earnings news to focus on this morning, so for the next six hours, we’ll only have the Fed to worry about. Markets are still overwhelmingly pricing in a 25 bps hike with the current odds at close to 90%. It’s hard to imagine a rate hike given the weakening macro backdrop and the crisis in the banking sector, but those are the numbers, and at this point, there have been little signs of the problems spreading.
The fact that UK CPI just printed its sixth straight month of double-digit y/y increases and ECB President Christine Lagarde was out saying she doesn’t see clear evidence that inflation is trending down doesn’t help the cause of those calling for a pause. Those are trends literally an ocean away, though, and over on this side of the Atlantic, just about every inflation indicator we track has been trending lower. Whatever decision the FOMC makes, it’s safe to assume that there will be no shortage of critics after the fact, and we don’t envy the position that Powell is in.
Heading into today’s rate decision, most sectors have traded down over the last week with Real Estate and Energy leading the way lower. Surprisingly, in the middle of a banking ‘crisis’ Financials isn’t even the worst performing sector as it is down less than 1% over the last five trading days and isn’t even the worst performing sector on a YTD basis. Sure, it’s down over 6.5%, but Utilities and Energy are also both down more than the Financials.
While Financials, Utilities, and Energy have been a drag on the market, Communication Services, Technology, and Consumer Discretionary have been the main drivers of gains this year. Not only are they the only sectors up more than 1% on the year, but they’re also all up over 10%, so these three sectors are basically in a league of their own versus the rest of the field.
Lately, Technology has been the clear leader. It’s only the second-best performing sector YTD, but its further above its 50-DMA than any other sector, and it’s on the verge of breaking out of the sideways range it has been in for the last two months.
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!
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
Mar 21, 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.
“Bank failures are caused by depositors who don’t deposit enough money to cover losses due to mismanagement.” – Dan Quayle
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 been no new news on the banking front this morning, and investors are taking the lack of news as an excuse to rally. US futures are up about 0.80% as treasury yields spike higher. Ahead of tomorrow’s fateful Fed decision, the only economic report on the calendar is Existing Home Sales at 10 AM today.
With an increase of ‘just’ 14 basis points (bps), yesterday broke a streak of seven straight days that the yield in the yield of the 2-year US Treasury had a daily move of more than 20 bps. Another record streak that continued, though, was the fact that the 2-year yield traded with an intraday range of at least 30 bps. Going back to 2000, which is as far back as we have intraday data for the 2-year yield, the current six-trading day streak of 30+ bps intraday moves is now longer than the five-trading day streak in September 2008 after the Lehman bankruptcy.
Not only is the current streak of wide daily ranges a record, but it also included what was a record single-day intraday range. Last Wednesday, the 2-year yield’s intraday range spanned a low of 3.71% to a high of 4.41%. That 70-bps range was a full 10 bps more than the prior record of 60 bps back on 9/19/08. Is that enough action for you?
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!
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
Mar 20, 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.
“You’re finished…When you’re down by half, people figure you can go down all the way. They’re going to push the market against you.” Vinny Mattone, When Genius Failed: The Rise and Fall of Long-Term Capital Management
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 higher last night, futures gave up all of their initial gains and sold off sharply as Asia opened for trading. Shortly after the European open, though, buyers stepped back in and futures have rebounded back to the flat line. Outside of the Credit Suisse/UBS arranged marriage by Swiss Bank regulators that was announced on Sunday afternoon, there really hasn’t been much in the way of market-moving news, and there are no economic reports on the US calendar. Regional banks have been rallying, but First Republic (FRC) is down sharply again after it had its second ratings downgrade in a week.
In the press conference on Sunday discussing the shotgun ‘merger’ between Credit Suisse and UBS, regulators and officials of the banks cited the turmoil in the US banking sector as the reason for Credit Suisse’s demise. There’s always a need for a scapegoat, but to blame regional US banks for Credit Suisse’s downfall is a stretch. For now, let’s put aside the fact that just last week Credit Suisse announced an $8 billion loss in its delayed annual report. The bank noted that “the group’s internal control over financial reporting was not effective,” and its auditor PriceWaterhouse Coopers gave the bank an ‘adverse opinion’ with respect to the accuracy of its financial statements. Well before the SVB failure, Credit Suisse was already a dirty shirt.
Just look at the stock price. From its peak of over $77 per ADR in 2007, Credit Suisse (CS) has been in a long downtrend. After bottoming at just under $19 in early 209, the share price quickly tripled over the last six to seven months, but the bounce was short-lived. By 2012, the share price was back below its Financial Crisis lows and in the ensuing years, any rally attempt quickly ended with a lower high followed by a lower low. The collapse of SVB and stresses on other US banks may very well have been the straw that broke Credit Suisse’s back, but if the bank had proper internal controls in the first place maybe it would have noticed the pile of hay on its back in the first place.
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!
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
Mar 17, 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.
“Being Irish, he had an abiding sense of tragedy, which sustained him through temporary periods of joy.” —William Butler Yeats
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.
President Eisenhower once said that everyone is Irish on St. Patrick’s Day, and most investors probably consider themselves Irish today. Even on a good day like yesterday, they can’t shake the feeling that there’s still more pain to come, especially heading into another weekend. Maybe that just comes with the territory after a year-long bear market, a war in Europe, and the most aggressive Fed tightening cycle since the early eighties. But a banking crisis is only the newest entry on to the growing list of worries.
Futures are in the red this morning and have been drifting lower all morning ahead of a busy day for economic data. European stocks opened higher, and traded up over 1%, but are now in the red. At 9:15, we’ll get updates on Industrial Production and Capacity Utilization for February, and then at 10 AM, we’ll close out the week with Leading Indicators and Michigan Confidence. Leading indicators have been in recessionary territory for months now, and in the Michigan report, the key area of focus will be inflation expectations following the NY Fed’s update earlier this week which showed a significant decline in one- and three-year inflation expectations.
Given it’s St Patrick’s Day, it’s an appropriate time to highlight the stocks deepest in the green this year that investors would be the luckiest to have in their portfolios. The table below lists the 20 stocks in the S&P 500 that are up the most YTD. Topping the list, NVIDIA (NVDA) and Meta (META) have already rallied 70% in the first two and a half months of the year. After these two stocks, eight others are up over 40%, and all 20 are up over 25% on the year. Looking at where each of these stocks is trading relative to their trading ranges, most are at overbought levels, but there are a handful like Tesla (TSLA), Warner Bros (WBD), Royal Caribbean (RCL), and Wynn Resorts (WYNN) that are trading relatively close to or even below their 50-day moving averages.
Usually, when you look at a list of best (or worst) performing stocks in an index, smaller names dominate the list as they are the most prone to large swings in either direction. What stands out about this list is the fact that some of the best performers are also among the largest stocks in the index. The two top performers – NVDA and META – both have market caps of more than $500 billion, and when you take Tesla (TSLA) into account, three of the top four have market caps of greater than $500 billion. Lastly, of the top ten performers, half of them have market caps of over $100 billion. In other words, these are some big leprechauns!
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!
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
Mar 16, 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 Federal Reserve, in close consultation with the Treasury, is working to promote liquid, well-functioning financial markets, which are essential for economic growth.” – Ben Bernanke 3/16/2008
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 quote above could have easily been made this week, but it was actually fifteen years ago today when Bear Stearns, the fifth largest US investment bank, avoided bankruptcy in what was an arranged sale to JP Morgan for $2. While a number of other smaller players in the subprime housing business had already folded, Bear was the first of the major dominoes to go. The emergency takeover of Bear staunched the wound for a time, but it was only a matter of weeks before the cockroaches on bank balance sheets came out from the walls. We all know what happened from there. 15 years to the day later, the question every investor is trying to answer is whether SVB Bank is this generation’s Bear Stearns or just a headline that most will forget all about a year from now.
Futures are mixed this morning as the S&P 500 and Dow are indicated modestly lower while the Nasdaq is in positive territory. European stocks are bouncing ahead of the ECB decision at 9:15 Eastern and on the news that Credit Suisse has taken a $54 billion loan from the Swiss National Bank to improve its liquidity position. US equities aren’t seeing the same lift since they rallied after Europe’s close yesterday on rumors of the SNB loan that European stocks are rallying on now.
The economic calendar is busy this morning as Jobless Claims, Import Prices, Housing Starts, Building Permits, and the Philly Fed all just hit the tape. Jobless Claims on both an initial and continuing basis were lower than expected, Import Prices dropped less than expected, and Building Permits and Housing Starts both came in significantly better than expected. The only report that missed forecasts was the Philly Fed manufacturing which came in at -23.2. Surprisingly, there has been little reaction (so far) in equity futures or the treasury market as attention will now shift to the ECB decision.
What started as a bank run on a regional bank in California last week quickly spread to regional and money center banks around the country and then this week across the Atlantic to European banks. But the weakness in equities hasn’t been confined to just the Financials sector. In the US, the Financials sector is down just over 10% over the last five trading days, but other cyclical sectors have also been pounded as Energy is down 9%, Materials is down 7.5%, and the Industrials sector is down over 5%. Around the world too, equities are down over the last week.
The snapshot below from our Trend Analyzer shows the performance of international regional ETFs. Over the last week, every single one of them is down with declines ranging from a loss of 1.42% for the Global 100 ETF (IOO) to a loss of 7.6% for the Latin America 40 ETF (ILF). Over the last three years, we’ve become all too familiar with the process of disease and virus transmission, and what we’ve seen over the last week is the very definition of contagion. Whether or not it’s just a cold or something worse like the flu will become more apparent in the coming weeks.
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!
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
Mar 15, 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.
“Beware the Ides of March.” – Shakespeare, Julius Caesar
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 down sharply this morning, but surprisingly it has nothing directly to do with issues facing a US regional bank. Today’s weakness is due to a 30% plunge in Credit Suisse as its largest shareholder said it will no longer put additional capital into the bank. Dow futures are down over 600, the S&P 500 is indicated to open down 1.7% and the Nasdaq is holding up better with a drop of 1.4%. It’s been a busy morning for economic data as PPI missed expectations, Empire Manufacturing plunged, and Retail Sales were in line with forecasts. European stocks are down well over 2%, and Treasury yields are plunging. The only risk asset rallying on the day, at this point, is bitcoin.
As we type this, the two-year yield is down over 20 basis points (bps) and below 4% again in what can only be characterized as a turbulent move. If you were on an airplane, you’d be asking for another one of those white bags that they keep in the seat pocket in front of you. Today’s move is on pace to be the fifth straight day that the yield has moved more than 20 bps (up or down) in a single day. To put that move in perspective, the only other time that the two-year yield has had as many 20 bps moves in succession over the last 45 years was in December 1980. Outside of the early 1980s, there has never been another time when the yield on the two-year even moved 20 bps for three consecutive days. Two-year Treasuries have always been one of the most stable assets across the financial spectrum, but they’ve failed on that front lately.
The current moves in the two-year treasury stand out even more when you consider the actual level of yields. Sure, the last year or so has seen yields rise to the highest level since 2007, but in the early 1980s, which was the last time there was as much volatility in two-year yields as there is now, yields were more than double where they are now. Double. The Fed has gotten a lot wrong in their forecasts over the last few years, but one point where Powell was spot on was last August when he said that fighting inflation will “bring some pain”. He should have just come out and said, “Beware the Ides of March.”
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!
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
