Jan 3, 2023
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“The beginning is always today.” – Mary Shelley
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It’s a new year but it’s looking like the same old market as positive futures drift off their highs into the opening bell. With treasury yields sharply lower, crude oil and natural gas also lower, and foreign equity markets firmly higher to kick off the year, it’s a positive backdrop for equity bulls to start the year. After a quiet week data-wise to close out the year, things will pick up this week with Construction Spending, ISM, and an Employment report all headlining the calendar on this shortened week.
People tend to put a lot of emphasis on first impressions, so what looks like a positive start to the year for stocks should be a welcome sign. With the S&P 500 (as proxied by SPY) poised to gap up 0.45% at the open this morning, it would be the best start to a trading year since 2020 when SPY gapped up 0.52%. If stocks manage to take out that level at the open, it would be the strongest start to a year since 2017 (0.68%). The last time SPY gapped up 1%+ to start a year was in 2013 (1.9%), and that followed a nearly equally strong start to the year in 2012 when SPY gapped up 1.8%.
So, how important are these first impressions in terms of the remainder of the year? For all years since 1994, when SPY had a larger than average opening gap to start the year, its median performance from the open on the first trading day of the year through year-end was a gain of 13.93% with positive returns 82% of the time. That’s nothing to sneeze at, but it’s actually right in line with the historical average for all years since 1994. On the other hand, in the four years when SPY gapped down to start the year (1996, 2014, 2016, and 2019), its median performance for the remainder of the year was 18.3% with positive returns all four times.
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!
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Dec 30, 2022
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.
“Hope smiles from the threshold of the year to come, whispering ‘it will be happier’…” – Alfred Lord Tennyson
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.
In case you missed it last Friday, we emailed out our annual Bespoke Report which covers everything you need to know about the setup for financial markets and the economy heading into 2023. You can read it here.
Bespoke Report 2023
At least we hope next year will be happier! That’s not the case this morning, though, as markets are giving the pulls one last dagger to close out the year. Nasdaq futures are currently down over 1% while the S&P 500 is indicated to open down roughly half of one percent. Besides the fact that the calendar still says 2022, there’s little in the way of catalysts driving the weakness. US Treasury yields are modestly higher on the day while crude oil trades lower. The only economic report on the calendar today is the Chicago PMI which is expected to rebound following last month’s surprise plunge. That index could use a lift as it’s currently in the midst of its largest y/y decline since 1980! From a market perspective, can today’s closing bell come soon enough?
For all the volatility we’ve seen this month, it was surprising to see that the nine 1% days in the S&P 500 (up or down) this month only ranks tied for 10th going back to 1952 when the five-day trading week in its current form started on the NYSE. In fact, even last year just as the S&P 500 was about to peak, the month of December had more 1% daily moves. The other years with more 1% days in December all stand out in market history as some of the most volatile years in market history, including 2008 when there were 15 (more than two-thirds of all trading days in the month) 1% daily moves.
There’s still one trading day left in the year, and if the S&P 500 has another 1% day today it will move 2022 into a tie for 5th place with 1974, 1998, 2000, and 2018 in terms of 1% daily moves in December.
Where December 2022 stands out more, however, is in the number of 1% down days. With six 1%+ declines this December, it already ranks as tied for the third most 1% declines during the last month of the year since 1952. The only years with more were 2008 and 2018 while 1973, 1974, 2000, and 2002 are tied with this year. The only thing positive we can say is that it’s almost over, and hopefully, the new year will be ‘happier’.
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!
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Dec 29, 2022
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“There is no greater sorrow than to recall in misery the time when we were happy.” – Dante Alighieri
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.
In case you missed it last Friday, we emailed out our annual Bespoke Report which covers everything you need to know about the setup for financial markets and the economy heading into 2023. You can read it here.
Bespoke Report 2023
There are just thirteen hours left of trading to go and then we can finally bid farewell to 2022. Futures are positive this morning, but if this year has taught us anything, it is that what happens in the futures market doesn’t often follow through to regular trading. The only economic data on the calendar this morning is jobless claims at 8:30 eastern. Initial claims were right in line with forecasts at 225K while continuing claims increased to 1.71 million, which is the highest reading since February.
Individual investor bullish sentiment increased more than five percentage points but still remains depressed at less than 26%. This week’s results also officially confirm that 2022 will be the first year in the history of the survey (since 1987) that bullish sentiment was below its historical average every week of the year.
Can it get any worse than 2022 has been for the Nasdaq? With the index making a new closing low for the year yesterday, it is very close to going wire to wire on the year with the closing high coming on the first trading day and the closing low occurring right near the last trading day.
The two charts below show when the Nasdaq has made its annual closing highs and lows for every year since 1972. Starting at the top, on average, the YTD high occurs on the 176th trading day, which works out to mid-September. In terms of individual years, the YTD high occurs in Q4 nearly 60% of the time and in Q1 just 18% of the time. Furthermore, there have only been five other years where the YTD high occurred in the first two weeks, and 2008 was the only other year that the YTD high was on the first trading day of the year.
Shifting focus to the YTD low, on average, it occurs on the 90th trading day of the year. Even more notable, though, is the fact that there have only been four other years where the Nasdaq’s YTD low occurred in the final two weeks of the year (2022, 2018, 2000, and 1973). Those are also the only four years in the Nasdaq’s history where it made its YTD closing low in December. In other words, 2022 has been rare in terms of both the timing of the YTD high and YTD low.
Looking at the charts, you’ll also notice that the only other year with a similar setup where the Nasdaq made its YTD high in the opening two weeks of the year and its YTD low in the final two weeks was in 1973. In 1973, the YTD closing low occurred 239 trading days after the YTD closing high, but this year it will be at least 248 trading days separating the two.
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!
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Dec 28, 2022
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“I have no views as to where it will be, but the one thing I can tell you is it won’t do anything between now and then except look at you.” – Warren Buffett (discussing gold)
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.
In case you missed it last Friday while you were out holiday shopping or stuck in an airport. We also emailed out our annual Bespoke Report which covers everything you need to know about the setup for financial markets and the economy heading into 2023. You can read it here.
Bespoke Report 2023
In a year when all the news tended to push stocks lower, it’s nice to see a day with little in the way of news. Equity futures are higher, bond yields are lower, and WTI crude oil is trading just below $80 per barrel after failing to get back above its 50-day moving average yesterday. The only economic data on the calendar today is Pending Home Sales and the Richmond Fed report, and both of those releases are at 10 AM. A lot of people take the last week of the year off, and one group we’re more than happy to see take a break are Fed officials.
Just like any other investment ‘rule’ there are always exceptions, and when it comes to Warren Buffett’s thoughts on gold, most of the time, he would be exactly right. Who would want to own an asset that has little industrial utility and provides no upside in terms if capital appreciation or income? If you want something that just sits there, get a dog.
Every once in a while though, something that just sits there doing nothing may be the best option, and that’s been the case in 2022. With just three trading days left in 2022, the S&P 500 is down close to 20% on the year and long-term US Treasuries are also down by close to a third. Gold hasn’t escaped 2022 unscathed, but with a decline of just over 1%, it’s been the least of all evils in what has been a nasty year for asset classes of all types.
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!
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Dec 27, 2022
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.
“Anything worth doing is worth overdoing.” – Mick Jagger
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.
In case you missed it last Friday while you were out holiday shopping or stuck in an airport. We also emailed out our annual Bespoke Report which covers everything you need to know about the setup for financial markets and the economy heading into 2023. You can read it here.
Bespoke Report 2023
It’s looking like a positive day to start the week…for now. Futures are still higher but off their highs of the overnight session. It’s going to be an exceptionally quiet week for economic data and earnings. Today’s only reports are Wholesale Inventories, the FHFA House Price Index, and the Dallas Fed, and there is nothing in terms of earnings.
Bulls are hoping that today’s rally in futures marks the arrival of the Santa Claus rally where stocks advance to close out one calendar year and into the start of the next. While the last several days of trading leading into the Christmas holiday were disappointing as the S&P 500 gave up both its 200-day and 50-day moving averages, the market is basically trading right in the middle of the range it has been trading in since mid to late April. For the S&P 500 tracking ETF (SPY), the high end of that range is 430 with the low end being around 350. With a mid-point of 390, the S&P 500 is poised to open this morning just below that level at around 385. That’s the good news. The bad news is that when the S&P 500 tried to trade back above its 50-DMA last Wednesday, the rally stalled just shy of that level and that lack of momentum is a clear trait of a weak market.
Unlike SPY which can still be considered ‘rangebound’, the Nasdaq 100’s chart resembles more of a downtrend. While the lows from October are still intact, the index is still just barely 5% above its October intraday low.
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!
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Dec 23, 2022
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“I put my heart and soul into my work, and I have lost my mind in the process.” – Vincent van Gogh
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 the last trading day before Christmas, but a lot of people who make their living in the financial markets are probably feeling a little like van Gogh after this year. Hopefully, they all handle it better than the artist, though, and keep all of their appendages intact. We have another busy day of economic data in-store with Personal Income, Personal Spending, Michigan Confidence, and New Home Sales among the reports on the calendar. Equity futures are firmly in positive territory, crude oil is pushing $80 per barrel, and yields are higher with the 10-year yield trading back above 3.7%.
The last week of the year is considered a positive one for equities, but how positive has it been? Not as strong as you might think. Since 1980, the S&P 500’s average gain during the last week of December has been a gain of 0.41% with positive returns 57% of the time. Surprisingly, there have only been two other years during that span where the S&P 500 was down more than 15% YTD heading into the last week of the year (this year will be the third). In those two years, performance in the final week was mixed. In 2002, the S&P 500 went on to fall another 1.4% in the last week of the year; in 2008, the S&P 500 rallied 4.0%. So, just because the market is down a lot heading into the final week doesn’t necessarily mean it will bounce back or continue falling to close out the year.
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.
