Aug 18, 2021
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“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” – Sam Walton
US equity futures are trading down slightly ahead of the open after major indices finished yesterday solidly in the red.
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.
Also, make sure to check out our Daily Sector Snapshot.
Home Depot (HD) finished down 4.27% yesterday following its Q2 earnings report. As shown below, the move lower left the stock just a hair below its 50-day moving average. For now, a double top looks to be in place for HD, so the technicals will not turn positive again until new highs are made.
Home improvement competitor Lowe’s (LOW) actually fell more than Home Depot (HD) in reaction to HD’s weakness yesterday. LOW finished yesterday down 5.8%, pushing its share price below prior lows made in mid-June.
Investors who sold LOW yesterday on the weakness for HD are kicking themselves this morning, because LOW just reported its own earnings triple play by beating EPS estimates, beating sales estimates, and raising guidance. Pre-market, LOW shares are trading up 4%.
Want to see more charts and analysis ahead of today’s open? This morning we’re covering earnings reports from Target (TGT) and Lowe’s (LOW) and the recent negative action in restaurant stocks as COVID cases rise across the country. Start a two-week trial to Bespoke Premium and read today’s full Morning Lineup.
Aug 17, 2021
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“All animals are equal, but some animals are more equal than others.” – George Orwell, Animal Farm (published on this day in 1945)
Chinese equity ETFs are trading down more than 2% this morning on continued regulatory concerns out of the country. US equity futures are lower as well as both Walmart (WMT) and Home Depot (HD) are set to open down following their earnings releases. These reports mark the unofficial end to the Q2 reporting period, which we will recap further later this week. Retail Sales were just released and missed expectations with weakness in Autos contributing to the decline.
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.
Also, make sure to check out our Daily Sector Snapshot.
The two most overbought sectors at the moment are the two most defensive sectors — Utilities (XLU) and Consumer Staples (XLP). Utilities have been on an absolute tear lately with XLU now 5.5% above its 50-DMA.
At the same time, the relative strength of the Consumer Discretionary sector just hit new lows.
Want to see more charts and analysis ahead of today’s open? This morning we’re covering earnings reports from Walmart (WMT) and Home Depot (HD), the recent underperformance of small-caps, weakness for Chinese ADRs, and chart patterns for the mega-cap Tech stocks. Start a two-week trial to Bespoke Premium and read today’s full Morning Lineup.
Aug 16, 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.
“Governments never learn. Only people learn.” – Milton Friedman
The pictures all over the news were disheartening this weekend with the Taliban increasingly taking control of Afghanistan as city after city, including Kabul, surrenders to the militant group at a pace that foreign policy ‘experts’ could never have imagined. In the words of one commentator this weekend, “The battle was over before it even began.” The Taliban has gained control of the country’s borders, so the only way out now is the Kabul airport which has been flooded with people seeking to exit, including the US embassy. There have been reports of shots fired at people running to the airport, and pictures of desperate Afghanis and foreign nationals climbing onto moving planes shows the desperation among those seeking an exit. What ultimately unfolds in the country is anyone’s guess at this point, but after nearly 20 years of involvement, it doesn’t look like the US has much to show for its efforts. From a market perspective, this weekend’s events are certainly having some impact this morning, and while there may be long-term macro implications down the road, these kind of immediate reactions are usually short-lived.
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.
Also, make sure to check out our Daily Sector Snapshot.
We don’t normally use technical analysis on things like interest rates, but we noticed that the recent bounce in the 10-year Treasury yield stalled out right at its 50-day moving average before pulling back quite a bit on Friday after the weaker-than-expected Michigan Confidence release. Remember, sectors like Financials and Industrials have been trading right inline with moves in the 10-year Treasury yield recently.
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Aug 13, 2021
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“I was never afraid to go back to Pittsburgh and work in the steel mills.” – David Tepper, when asked where his “preternatural confidence” when making trades comes from.
In the early 1910s, Harry Brearley of Sheffield, England was trying to help the British army solve the problem of erosion on gun barrels. On this day in 1913, his mixture of 12.8% chromium with molten iron produced what turned out to be a rust-less metal. Stainless steel was born, and it would go on to revolutionize modern manufacturing.
Dow futures are higher this morning as index member Disney (DIS) is set to gap higher by more than 5% on a strong earnings report released after the close yesterday. “New economy” stocks like DoorDash (DASH) and AirBnB (ABNB), on the other hand, have thus far failed to impress investors with their earnings reports. Both companies are set to gap quite a bit lower.
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.
Also, make sure to check out our Daily Sector Snapshot.
We referenced steel above because this is a group that has rallied nicely over the last couple of weeks on infrastructure news (and a general bounce in cyclicals). The Steel ETF (SLX) is a way to play the entire group, and as shown below, it just managed to make a new closing high on Wednesday before pulling back a bit yesterday.
Want to see a broader list of infrastructure stocks or more charts and commentary? Start a two-week trial to Bespoke Premium and read today’s full Morning Lineup.
Aug 12, 2021
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“If I knew I’d live this long, I would have taken better care of myself.” – Mickey Mantle
On this day in 1974, Yankees icons and close friends Mickey Mantle and Whitey Ford became the first teammates inducted into the Baseball Hall of Fame on the same day. Twenty years later on August 12th, 1994, MLB players would go on strike, resulting in the World Series not being played for the first time in 90 years.
Investors are awaiting weekly initial jobless claims due out at 8:30 AM ET. Ahead of the print, the 10-Year Treasury yield is up 2 bps to 1.35%. Financials have lit fire this month as the 10-Year yield has risen more than 20 bps from a low of 1.12% on August 4th. The Financials ETF (XLF) and big banks like Morgan Stanley (MS), Goldman (GS), and JP Morgan (JPM) should continue to trade in line with bond yields.
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.
Also, make sure to check out our Daily Sector Snapshot.
As mentioned earlier, long-dated Treasury yields have risen sharply over the last week or two, which means bond prices have traded lower. Below is a snapshot of the fixed income ETFs in our Trend Analyzer tool that have fallen the most over the last week (see the entire screen here). As shown, even after the big pullback, most of these ETFs remain above their 50-day moving averages. They could bounce right off of support at their 50-DMAs and yields could go right back to falling again. However, there’s also still plenty of room for these to fall before they reach oversold or extreme oversold levels. If bond ETFs keep falling, Financials stocks should keep rallying.
The Financials sector had been in stuck in a rut for the past few months, but the huge rally this week actually left the sector at a new all-time closing high yesterday. This closing high “confirms” the sector’s uptrend, and the bull market can continue on. We’ll be watching to see if the sector can leg significantly higher and establish a new trading range. Of course, that will likely depend on the direction of Treasury yields.
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Aug 11, 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.
“Blessed are the young, for they shall inherit the national debt.” – Herbert Hoover
US equity futures are bouncing a bit after the headline monthly CPI released at 8:30 AM ET came right inline with expectations.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including activity in Washington DC, key earnings reports out of Europe and the latest US and international COVID trends.
Also, make sure to check out our Daily Sector Snapshot.
While the S&P 500 has been making new highs in a steady uptrend for the last couple of months, international equities have yet to really break out of their sideways ranges. That is, until this week. As shown below, the Bloomberg World equities index has just broken out to new highs above what proved to be a pretty stiff resistance level. This is a positive technical development.
As we have highlighted numerous times in recent weeks and months, international equities have been underperforming US equities for more than a decade, and at some point we expect this trend to reverse in a secular fashion.
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