Apr 21, 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.
Bespoke’s Quote of the Day: “In trading, you have to be defensive and aggressive at the same time. If you are not aggressive, you are not going to make money, and if you are not defensive, you are not going to keep the money.” – Ray Dalio
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As shown below, the 8 largest US stocks are all in the red so far this month for an average decline of 8.2%. The rest of the stocks in the large-cap Russell 1,000 are only down an average of 8 basis points.
The FANG+ Index is made up of 7 of the 8 largest stocks listed above (excluding BRK/B), but it also includes Netflix (NFLX), Alibaba (BABA), and Baidu (BIDU). Since April 4th, the FANG+ index is down 17%, and it’s down 28% from its highs.
Below we show how the FANG+ index has performed versus the S&P 500 since 2/19/20 – the peak day for the US stock market before the COVID pandemic hit. FANG+ stocks exploded higher in late 2020 and peaked versus the S&P in early 2021 with an outperformance spread of more than 70 percentage points. That outperformance has been eroding rapidly since last November and the spread is only +15 percentage points now.
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Apr 20, 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.
Bespoke’s Quote of the Day: “Companies rarely die from moving too fast, and they frequently die from moving too slow.” – Reed Hastings
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.
We certainly aren’t going to see rotation into the Communication Services sector at the open this morning with Netflix (NFLX) trading down 25% on earnings. Based on where NFLX shares are trading pre-market, the stock will be in a 63% drawdown from its high just last November. As shown below, this is the fourth time since going public in 2002 that NFLX will have experienced a drawdown of at least 60%.
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Apr 19, 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.
Bespoke’s Quote of the Day: “When something is important enough, you do it even if the odds are not in your favor.” – Elon Musk
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As earnings season ramps up, today we took look at how stocks have historically reacted to earnings reports from a seasonal perspective. The chart below shows the average one-day stock price reaction to earnings reports by month over the last 20 years. This data comes from our Earnings Explorer database that includes one-day share price reactions of more than 150,000 individual quarterly earnings reports dating back to 2001. As shown below, the average company that has reported quarterly earnings in the month of April has gained 34.2 basis points (+0.34%) on its earnings reaction day. That makes April the most bullish month for stocks reporting earnings. Conversely, August and September have been the two worst months to report earnings. Stocks that have historically reported quarterly numbers in August have averaged a one-day decline of 34.2 basis points (-0.34%) on their earnings reaction days. Stocks reporting in September have averaged an even bigger decline on their earnings reaction days (-0.41%). (For companies that report earnings in the morning before the open, its earnings reaction day is that same trading day. For companies that report earnings in the evening after the close, its earnings reaction day is the next trading day.)
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Apr 18, 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.
Bespoke’s Quote of the Day: “The difference between death and taxes is death doesn’t get worse every time Congress meets.” – 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.
Below is a table we highlight each year showing the S&P 500’s performance in the weeks leading up to and the weeks immediately following Tax Day. As shown, over the last 20+ years, the weeks before Tax Day have been much weaker for the market than the weeks after. This year has been no different thus far with the S&P falling more than 3% in the two weeks leading up to Tax Day. Now we just need the trend of gains in the two weeks following Tax Day to hold as well!
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Apr 14, 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.
“You only get out of it what you put into it. If you are a sheep in this world, you’re not going to get much out of it.” – Greg Norman
As bad as you think you think you have it right now with the weakness in the stock and bond market this year, just consider yourself lucky you weren’t in Greg Norman’s shoes 26 years ago today at Augusta. Actually, at this point in the day, as the birds chirped, the morning dew on the fairways glistened in the sun, and the scent of azaleas filled the air, Norman probably had a pretty big smile sitting on a six-stroke lead over Nick Faldo heading into the final round of the Masters. When the round started, though, the path got a lot rougher. Norman started with a bogey on the first but got back on track with a birdie on two. Then, after a par on the third, Norman bogeyed the par-three fourth and then bogeyed again on the par-four eighth.
One over for the front nine wasn’t bad, but coming out on the back nine, Norman put up bogey, bogey, and double-bogey on 10, 11, and 12 and finished the round with a six over 78. What looked like a Sunday formality for Norman turned into one of the biggest collapses in Masters history as Nick Faldo countered with an epic 67 and was fitted for the green jacket in the clubhouse. 26 years later, Norman’s round is still considered the worst collapse in Masters history; almost like the golf equivalent of the 1987 crash (or at least Marlboro Friday). As a columnist for the Tampa Tribune described it, “For Greg Norman’s lifetime, for yours, for mine, for eternity, wherever golf is played and remembered, in pro shops, pawnshops, locker rooms, card rooms, bars, churches, in Augusta, Ankara, and Alaska, the 1996 Masters will be recalled simply as the one Greg Norman blew.” See, things aren’t so bad.
Even with that collapse, most of us would change places with Greg Norman in a second. Winston Churchill once said, “Success consists of going from failure to failure without loss of enthusiasm.” And while Norman never went on to win another major and only managed to win a handful of other tournaments, he went on to enjoy an extremely successful professional career in clothing, golf course design, wines, real estate, and a number of other endeavors. In other words, he adapted to and capitalized on the environment he found himself in. Similarly, the stock market is always evolving. While a certain approach works in one environment, as circumstances change, investors need to adapt and capitalize on the opportunities that present themselves.
Economic data this morning was mixed with Initial Jobless Claims coming in slightly ahead of forecasts while Continuing Claims were weaker. Headline Retail Sales were just shy of forecasts while the reading ex-autos and gas came in at 1.1% compared to forecasts of an increase of 0.9%. The reaction from futures has been muted as a lot of traders may already be starting their holiday weekend early.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including the latest US and international COVID trends.
Sometimes we look at an indicator and just say, “Whoa”. That was out reaction this morning when we saw the latest sentiment survey from the American Association of Individual Investors (AAII). After dropping to an already depressed level of 24.7% last week, this week’s reading plummeted to 15.8%. To find a lower reading you have to go back even further than Greg Norman’s collapse at the Masters. The last time there were fewer bullish investors in the AAII survey was in September 1992 when Boyz II Men topped the charts with “End of the Road”. While the period from 1992 through 1994 wasn’t the best time period for the stock market, it certainly wasn’t the end of the road either.
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Apr 13, 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.
“We remain optimistic on the economy, at least for the short term – consumer and business balance sheets as well as consumer spending remain at healthy levels – but see significant geopolitical and economic challenges ahead due to high inflation, supply chain issues and the war in Ukraine. – Jamie Dimon
Earnings season basically kicked off this morning as JPMorgan Chase (JPM) reported first-quarter results and is trading down 2% in reaction to the release. While top-line numbers were basically in line with forecasts, bottom-line EPS missed consensus forecasts ending a streak of seven straight quarters where the company topped EPS results. While this may sound like an ominous signal, we would note that despite topping EPS forecasts, the stock has traded lower on its earnings reaction day for six straight quarters.
The quote above is from this morning’s earnings release from JPM, and you better get used to it as we think it is likely to be a major theme of the Q1 earnings season. Consumer balance sheets remain strong coming out of COVID (for now) due to increased savings and a flood of stimulus payments but faced with higher costs and geopolitical uncertainty, there is a major disconnect between how consumers feel and the current health of their checking accounts.
Equity futures are basically flat this morning after a much stronger than expected PPI and some relatively hawkish FOMC commentary from Bullard and Barkin, but they were much higher overnight and have been drifting lower all morning as investors simply can’t find much in the way of positive news to grasp lately.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including the latest US and international COVID trends.
This morning we wanted to play a little game to test your chart reading abilities and see how good of a technical analyst you are. Take a look at the chart below. It’s a one-year stock chart of a US company in the period spanning January 2016 through January 2017. Looking only at the chart pattern do you think the stock was higher or lower one year later? Make a decision and click on one of the buttons below to find out if you picked the right trade (the answer will appear in a new tab). Good luck!
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