May 9, 2025
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“If it’s in the papers, it’s in the price.” – Bill Miller
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Yesterday was the last big day for earnings season with roughly 200 companies posting Q1 numbers. For the next couple of weeks until Walmart (WMT) and NVIDIA (NVDA) wrap things up, we’ll see fewer than 30-40 reports per day.
While we saw a large percentage of companies cutting or pulling guidance in the early weeks of this earnings season in mid-April, things have taken a much more positive turn this month. The big uptick in positive guidance that we’ve seen so far in May has been enough to flip the guidance spread (% of companies raising minus lowering guidance) positive for the full earnings season. Of the 1,551 companies that have reported since the season began on April 10th, 6% have raised guidance versus 5% that have lowered. At the same time, 70% of companies have beaten consensus analyst EPS estimates, while 64% have beaten sales estimates. Q1 has basically been an average to slightly better-than-average earnings season during a period where market volatility and “uncertainty” raged due to President Trump’s tariff policy. In terms of share-price reactions, the average stock that has reported has averaged a one-day gain of 0.34% in reaction to the news. That’s very positive relative to history as well.
May 8, 2025
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“Wise and humane management of the patient is the best safeguard against infection.” – Florence Nightingale
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
US equity futures are up roughly 1% ahead of today’s open after President Trump announced that a trade deal between the US and UK would be announced shortly. Along with the tariff news, yesterday the market managed to not trade lower after Fed Chair Powell’s press conference as it normally does.
We’ve gotten a huge number of earnings reports this week as well, and the results have been largely positive. So far in May, we’ve seen a positive reversal in guidance trends. In April, we were seeing many more companies lowering guidance than raising guidance, but that has flipped this month. Of the nearly 800 companies that have reported month-to-date, 69 have raised guidance compared to just 45 that have lowered guidance. You don’t expect to see such positivity when there’s such an “extremely elevated level of uncertainty” as Fed Chair Powell described in his FOMC comments yesterday.
Based on where it’s trading in the pre-market, the S&P 500 ETF (SPY) is set to test last week’s highs when it opens this morning.
May 7, 2025
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“Inspiration is a guest that does not willingly visit the lazy.” – Pyotr Tchaikovsky
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
While European markets are trading lower, equity futures in the US are higher by about 50 basis points this morning on positive trade talks with China.
As shown below, this week’s declines have yet to do much technical damage, but we’ll likely need a positive close today for the S&P to remain above its 50-day moving average. Right now, price is sitting in between the 50-DMA (below) and the 200-DMA (above), and the next stop on the upside will be a re-taking of the 200-DMA.
Weakness in the final hours of the trading day on Fed Days has been a hallmark of Powell’s tenure as Fed Chair. That’s actually in contrast with what we’ve seen for markets recently. The S&P is currently flat since “Liberation Day” back on April 2nd, but as shown below, we’re only flat because of intraday strength. Since 4/2, the S&P (SPY) has averaged an opening gap lower of 0.27% each day followed by an average gain of 0.28% from the open to the close.
May 6, 2025
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“I’d rather be dead than sing ‘Satisfaction’ when I’m 45.” – Mick Jagger, 1975
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
After breaking a nine-day winning streak yesterday, the S&P 500 is trading down roughly 0.75-1.00% pre-market as the rally takes a breather. As shown below, 10-day advance/decline lines for many key sectors are at their most overbought levels of the past year, so downside mean reversion here should be totally expected.
While futures are lower, we’d note that it has been a strong week for earnings so far with thirteen companies raising guidance versus just three that have lowered guidance. There have also been nine triple plays already this week.
A few weeks ago we published a Chart of the Day that featured stocks that have consistently reported earnings triple plays in the past few years that also appear to be less exposed to tariffs. As shown below, many of the stocks that we highlighted have had very nice runs over the last week:
May 5, 2025
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“This period has been… It’s really nothing. This is not a very dramatic bear market or anything of the sort.” – Warren Buffett (on recent market weakness)
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
The S&P 500 has quickly clawed its way back from post-Liberation Day losses, closing on Friday above pre-Trump Rose Garden levels.
The S&P enters the week on a nine-trading day win streak, which it hasn’t done in more than 20 years! As shown in the second chart below, forward returns following prior nine-day win streaks have been weaker than average over the next week and month as well as longer-term over the next six and twelve months.
May 2, 2025
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“The jungle is dark but full of diamonds” – Arthur Miller, Death of a Salesman
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Futures are pointing to another positive session this morning, even as the market has received earnings reports from Amazon.com (AMZN) and Apple (AAPL) tepidly. Overnight in Asia, major averages finished the week on a higher note as Japan and Hong Kong traded up more than 1% while China was closed. Even though its markets were closed, Chinese officials said they are assessing whether to conduct trade negotiations with the US after they say the Trump administration has reportedly reached out multiple times to start talks.
After yesterday’s holiday, European stocks picked up right where Asia left off as the STOXX 600 rallies more than 1%, putting it on pace for a weekly gain of 2.5%. The region’s Manufacturing PMI for April came in higher than expected at 49.0 versus forecasts for a reading of 48.0. It’s still in contraction territory, but a better-than-expected report is a better-than-expected report. On the trade front, the EU commissioner of trade commented that the bloc could buy more US goods to narrow the trade deficit between the two regions.
Here in the US, while futures are higher, where we close will depend on the April Employment report. After a weaker-than-expected ADP report and an uptick in jobless claims yesterday, there are some heightened concerns of a weaker report. The actual print came in better than expected, though. Non-Farm Payrolls were stronger than expected (177K vs 133K) while the Unemployment Rate was right inline with expectations at 4.2%. Average hourly earnings rose slightly less than expected (0.2% vs 0.3%), but average weekly hours came in slightly higher than expected (34.3 vs 34.2). In response to the report, both treasury yields and equity futures have moved higher.
The equity market’s historical comeback continued yesterday as the S&P 500’s 0.63% rally propelled it back above its 50-day moving average (DMA) for the first time in over two months and a streak of eight gains in a row. While the index’s short-term downtrend has been broken, it still faces upside resistance at the 200-DMA and the mid-March high when it last failed to rally back above that long-term moving average.
