Dec 9, 2021
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.
“Indecision may or may not be my problem.” – Jimmy Buffett
After a strong start to the week, investors are taking a step back from buying this morning as futures are firmly negative and have been gradually weakening all morning. Following big losses right after Thanksgiving and then a sharp rebound over the last week, investors can’t seem to make up their minds.
The biggest news item of the day so far has been initial jobless claims which fell to an unheard of 184K which was well below the already low estimate of about 225K. As equities pull back, treasuries have been rallying with the 10-year yield back below 1.5%. The big economic data in the US will come tomorrow with the release of November CPI, but overnight in China, CPI came in weaker than expected on a y/y basis (2.3% vs 2.5% forecast).
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.
What a difference a week makes. Looking at how sector performance has changed over the last week provides a perfect illustration of indecisiveness in the equity market. The first snapshot below is from our Trend Analyzer from a week ago today (through the close on 12/1). At the time, every major index ETF was down at least 2.5% over the prior five trading days with the majority below their 50-day moving averages after trading at or near overbought levels just a week earlier. Mega-cap indices like the Nasdaq 100 (QQQ) and S&P 100 (OEF) were holding up best at the time while small and mid-cap stock indices were down over 7% in the span of just five trading days.
Fast-forwarding just a week, the picture has completely changed. Now, every major index ETF in the Trend Analyzer is up at least 3% over the last five trading days, and the majority are back above their 50-day moving averages. Leading the way higher, the same indices that were down the most have bounced back the greatest while mega-cap indices like the Nasdaq 100 (QQQ) and S&P 100 (OEF) are the only two that are up less than 4% over the last five trading days.
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
Dec 8, 2021
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.
“Change is the investor’s only certainty.” – Thomas Rowe Price Jr.
The pre-market tone for equities was flat to negative early, but a report from Pfizer (PFE) showing that three doses of its COVID vaccine were able to neutralize the Omicron variant sent futures notably higher. That boost has proved to be somewhat temporary, though, as futures have given up half of their earlier gains. With all the volatility we have had in the market lately, at this point, the most constructive activity we could see in markets today would be a quiet session for a change. Yesterday, the Russell 2000 had its 5th straight day of daily moves of more than 2%, and while the index traded back above its 200-DMA on an intraday basis, it wasn’t able to hold on to those levels into the close.
It’s another light day of economic data today as the only report on the calendar is the JOLTS report at 10 AM. Economists are expecting to see total job openings in excess of 10 million.
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.
On the Wednesday before Thanksgiving, the VIX traded as high as 20.96 intraday before closing the session at 18.58. The following Friday, it spiked as high as 28.99 on the emergence of the Omicron variant and continued higher the following week hitting an intraday high of 35.32 last Friday. This week has been another story for volatility, though, as the VIX has been in retreat finishing the day yesterday at 21.82. While still well above where it closed on the Wednesday before Thanksgiving, the VIX is currently within a point of its intraday high on the day before Omicron entered the lexicon.
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
Dec 7, 2021
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 would say that financial markets are very inefficient, and capable of extremes of being completely dysfunctional.” – Jeremy Grantham
Forget about a ‘turnaround’ for now, this Tuesday is looking more like a terrific one as US futures, led by the Nasdaq, are sharply higher following through on Monday’s rally. The opening bell hasn’t even rung yet, though, so there’s plenty of time left in the day. That said, early indications are pointing higher with risk assets all trading higher, although long-term Treasury yields are moving much less higher than you would expect given the move in equity futures. Crypto assets are also in rally mode this morning as bitcoin is back above $50K, and ether is back above its 50-day moving average.
In economic data, the revision to Non-Farm Productivity was lower than expected (-5.2% vs -4.7%) while Unit Labor Costs increased more than expected (9.6% vs 8.3%).
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.
The Russell is indicated to open more than 1.5% higher this morning continuing what has been a volatile run for the small-cap benchmark index. So far during this sell-off from a false breakout, IWM has managed to stay within its prior trading range after falling below both its 50 and 200-day moving averages. In addition to the consistency of much higher than average volume during the last seven trading days, IWM has also had an intraday trading range of more than 2% and averaging more than 3.3% during that span. The last time IWM experienced a run of 2%+ intraday ranges for seven consecutive trading days was back in July 2020.
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
Dec 6, 2021
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 would say that financial markets are very inefficient, and capable of extremes of being completely dysfunctional.” – Jeremy Grantham
US equity futures are tentatively higher this morning with leadership in the Dow while the Nasdaq continues to lag. The economic calendar is empty today, but investors already have an eye out for Friday’s CPI report. Omicron continues to be a concern, and while there’s still a lot more we don’t know than we do know about the latest strain, reports continue to suggest that despite the higher transmissibility, its impact has not been nearly as harsh. In the crypto space, bitcoin has been relatively stable since Sunday following a sharp decline Friday night into Saturday morning.
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.
While companies valued at high multiples to revenues have been hit hard since the emergence of the omicron variant and the FOMC’s hawkish pivot just after Thanksgiving, there’s been a decent amount of disparity in performance among international markets with developed markets falling in the last week while emerging markets actually eked out gains. As shown below in the snapshot of international regional ETFs from our Trend Analyzer, the worst-performing ETF of the group was the MSCI All Country World (ACWI) which fell just over 1%. Moving down the list, at the bottom, the lone ETFs that were positive on the week were related to Emerging Markets. US equities were also a drag on performance last week. While the ACWI was down just over 1%, CWI, which is the MSCI All Country World ex-US Index was only down -0.07% on the week.
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
Dec 3, 2021
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 confuse genius with a bull market.” – Unknown
After five days where the S&P 500 has moved up or down 1%, futures are practically flat this morning as the market tries to catch its breath from all the volatility. The quiet tone may not last long, though, as Non-Farm Payrolls was just released and came in much weaker than expected at just 210K compared to estimates for a gain well in excess of 500K. Despite the weak print, the unemployment rate was much less than expected (4.2% vs 4.5%). In terms of average hourly earnings, month/month growth was 0.3% vs 0.4%. In addition to the jobs data, we’ll be getting ISM Services, Factory Orders, and Durable Goods all at 10 AM. The initial reaction to the jobs number has been slightly positive with Nasdaq futures leading the way.
Last night, the state of New York announced five additional COVID cases related to the omicron variant, and Hawaii announced one case. At this point, all the cases appear to be mild which is encouraging. In South Africa, where the variant was first detected, the number of cases has tripled within the last three days, but thankfully, hospitalizations are not rising nearly as fast. Barely a week after the omicron variant first made headlines, there’s still a lot we don’t know about this variant, but based on data so far, it doesn’t appear to be any worse than other strains.
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.
It’s been quite a week in the markets, so investors probably deserve a quiet day for a change. Check out the carnage that we’ve seen in US stocks since Thanksgiving when news of the Omicron variant first surfaced and then Powell’s hawkish pivot this week. Every major US index ET we track in our Trend Analyzer is down more than 2%, while small caps are down more than twice that. Market cap has really been a factor in market performance this week as the Micro-Cap ETF (IWC) is down close to 6% while mega-cap indices like the Nasdaq 100 (QQQ) and S&P 100 (OEF) are both down less than 2.5%.
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
Dec 2, 2021
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.
“Our liquidity is fine. As a matter of fact, it’s better than fine. It’s strong.” – Kenneth Lay
Good Morning Subscriber,
Today marks the 20-year anniversary of the Enron bankruptcy, and if you think the last few days in the market have been lousy, it was nothing compared to late 2001 when we were in the middle of the dot-com bust, coming out of 9/11, and heading into another rough year in 2002 when Worldcom eventually collapsed as well.
Futures are higher this morning, but traders aren’t even waiting until the opening bell to raise cash as Nasdaq futures have reversed into the red and the Dow and S&P 500 have also given up much of their earlier gains. One of the main culprits behind the weakness this morning is a report from Bloomberg that Apple (AAPL) has told suppliers that demand for the iPhone 13 after the holidays may not be as strong as previously estimated. AAPL had been a bright spot in the Nasdaq over the last few trading days but is trading down over 3% in the pre-market.
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.
Yesterday was an extremely disappointing day for small caps as the Russell 2000 rallied more than 2% intraday only to give it all back and a lot more throughout the trading day. By the time the closing bell rang, the Russell 2000 was down over 2% on the day. Since the Russell 2000 tracking ETF (IWM) launched in early 2000, yesterday was just the 9th time that the ETF saw a similar intraday rally (+2%) only to finish the day down more than 2%. Each of those days is shown as a red dot in the chart below. Despite over 20 years of trading history for IWM, all eight prior occurrences were confined to a two-month period in 2008 (six occurrences) and a three-week period in 2020 (two occurrences).
Unlike yesterday’s reversal, most of the other occurrences came well into market declines. The only exception was on 3/3/20. Interestingly enough, that occurrence also followed a period of sideways trading for the Russell where it broke out of a multi-month range (but didn’t reach a new high) only to reverse and sell-off sharply into the COVID crash. It’s unlikely the Omicron variant will cause the same sort of market turmoil that COVID initially created in early 2020, but the Fed is certainly not going to be nearly accommodative going forward as they have been since early 2020.
This morning, Russell 2000 futures are indicated higher by about 1%, but to put that in perspective, the gain isn’t even enough to bring the index back to where it was trading 15 minutes before the close yesterday.
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
