Aug 3, 2021
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“A wise man will make more opportunities than he finds.” – Francis Bacon
Futures are currently trading pretty much where they were at this time 24 hours ago. Yesterday, the bulls couldn’t hang on as a new multi-month low in the 10-year yield raised concerns that economic growth was weakening. Rates are modestly higher this morning reversing a small portion of yesterday’s decline. Over in Europe, the STOXX 600 is higher and that follows a relatively weak night over in Asia. There’s not a lot of economic data to contend with today (Factory Orders at 10 AM), but the earnings stream which already picked up after the close yesterday will continue in full force today. For the entire week, nearly 30% of companies in the S&P 500 are scheduled to report. Try staying on top of all those reports!
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including a record drop in Spanish unemployment, the latest US and international COVID trends including our vaccination trackers, and much more.
One question we’re often asked is that with the Delta variant pushing COVID case counts higher, is the market being too complacent of the risks? Rising case counts are an alarm, but looking at how the wave has progressed in other areas of the world provides a blueprint that the Delta wave may be severe in terms of transmissibility, but it hasn’t been long-lasting. Additionally, the market is more concerned with consumer behavior and to this point, it appears as though Delta’s impact has not caused much in the way of a change in consumer behavior.
A case in point is airline passenger throughput from the TSA. Yesterday was the fifth straight day since the pandemic began that US airports processed more than 2 million passengers per day. The last time that happened was in mid-February 2020. Included in that 5-day run was the first Saturday since last March that more than 2 million passengers traveled on a Saturday, leaving Tuesday and Wednesday as the only two days of the week that haven’t topped the 2 million level since the pandemic began.
Aug 2, 2021
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“Start every day off with a smile and get it over with.” – W.C. Fields
It’s a new month for investors, and while August has historically been a tough month for bulls, like most months in the last year, futures are indicating a positive start although they’re currently well off of highs from earlier in the session. Over the last 12 months, the S&P 500 has started off the first trading day of the month with a gain ten times. The only exceptions were in January when the S&P 500 kicked off the year with a drop of 1.48% and then in June when it traded down marginally (-0.05%).
The earnings flow so far this morning has been quiet (as it usually is on a Monday morning), but the pace will pick up again this afternoon and throughout the week. On the economic data front, investors will be watching PMI data at 10 AM as well as Construction Spending. In international markets, equities are higher despite mixed to weak PMI manufacturing data. As an example, China’s reading came in weaker than expected and at its lowest reading since February 2020. Despite that weakness, the headline index has been in expansion territory for well over a year now.
COVID data will continue to make headlines in the weeks ahead as the Delta variant accelerates and large cities consider new mask or social distancing mandates. This morning, though, it has been reported that NYC will stop short of requiring masks but strongly encourage their use. Given the national mood, it will take much worse conditions for more draconian measures to be implemented.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, the latest US and international COVID trends including our vaccination trackers, PMI Manufacturing data, and much more.
Stocks are looking to start out the week and month on a positive note, but they closed out July on a down note as the S&P 500 finished down fractionally for the week. Sectors that led the way lower last week were all some of the recent leaders (Consumer Discretionary Communication Services, and Technology). On the upside, investors rotated into Materials, Energy, and Financials which were the only three sectors that were below their 50-day moving averages heading into the week. You never want to see one sector consistently taking up all of the oxygen in the market, so this kind of rotation is exactly the type of action you want to see.
Jul 30, 2021
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“Friends congratulate me after a quarterly-earnings announcement and say, ‘Good job, great quarter,'” Bezos said to Forbes. “And I’ll say, ‘Thank you, but that quarter was baked three years ago.’ I’m working on a quarter that’ll happen in 2021 right now.”
It doesn’t look like July will end on a positive note for the equity markets. While the market was able to get through most of the mega-cap earnings reports relatively unscathed, Amazon.com’s (AMZN) revenue miss after the close Thursday has that stock trading down over 6% in the pre-market, sending Nasdaq futures down more than a full percent. Futures on the S&P 500 and Dow aren’t down by nearly as much, but they’re still firmly lower. AMZN’s weak report and the impact on futures immediately made its impact felt on global markets as well as they all closed out or are closing out the month of July on a down note. Even with today’s weakness, though, it would take a truly disastrous day for the S&P 500 to not finish the month higher which would mark the sixth straight month of gains.
In economic news today, we just got the releases of the Employment Cost Index (lower than expected) and Personal Income and Spending which both topped forecasts. At 9:45, the Chicago PMI will give investors a read on economic activity for the month of July, and then we’ll close out the week’s economic slate with Michigan Confidence at 10 AM.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, the latest US and international COVID trends including our vaccination trackers, and much more.
If there was ever a company that epitomizes playing the long game over the quarterly earnings dance, it’s Amazon.com (AMZN). And while we’re not quite sure that Jeff Bezos could have imagined what’s going on now with the economy and the world today three years ago, it was one of a handful of companies that was ready for it. Today, AMZN is on pace to open down over 6% in what would be the fourth straight quarter that the stock has traded lower in reaction to earnings. Similar to what we highlighted with Apple (AAPL) on Wednesday, just because investors haven’t reacted to the company’s recent reports with excitement doesn’t mean AMZN has been a poor performer. In fact, since the start of last July AMZN is still up 17%. Surely, that doesn’t make it one of the top-performing stocks during that span, but it’s still a respectable performance nonetheless.
Jul 29, 2021
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“It’s all about the journey, not the outcome.” – Carl Lewis
Twenty-five years ago today, Olympian Carl Lewis completed one of the most impressive streaks in US track and field history when, at the age of 35, he won the gold medal in the long jump. That victory marked the fourth straight Olympics in which Lewis stood at the top of the podium for the long jump and the ninth time overall. In winning the long jump for the fourth time, Lewis became the first American since Al Oerter to win back to back to back to back golds in the same event.
With two days left in the month, the S&P 500 is also in the middle of its own streak with six straight monthly gains. That’s far from a record but still pretty impressive nonetheless. Futures are higher this morning as equities look to add to their gains for July, as optimism over a bipartisan infrastructure deal boosts sentiment along with positive words from China regarding its crackdown on tech companies in the country.
There is also a good deal of economic data today with the first read on GDP kicking things off with a big miss (+6.5% vs +8.4%) and both initial and continuing jobless claims coming in higher than expected. At 10 AM, we’ll get Pending Home Sales. During the day, we’ll also have the Robinhood (HOOD) IPO which priced at the low end of the expected range, and then after the close, the headline earnings report will be from Amazon.com (AMZN), which will round out the reports of the ‘big five’ mega-caps. So far, the markets have gotten through these reports relatively well, so just one more day to go.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, the latest US and international COVID trends including our vaccination trackers, and much more.
So far this earnings season, it hasn’t been just the mega-caps that have reported strong results. As shown in the snapshot below, of the 339 companies that have reported since the start of July (through Tuesday), 84% have topped EPS forecasts, 80% have exceeded sales estimates, and a net of 17% have raised guidance. Despite those strong results, companies reporting earnings have gapping down an average of 0.10% at the open on their earnings reaction day. During the trading day, though, buyers have stepped in pushing shares higher by 0.15% for a full day gain of 0.05%. That’s hardly a strong reaction, but at least it’s positive-something we haven’t been able to say consistently over the last couple of earnings seasons.
Jul 28, 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.
“Companies that get confused, that think their goal is revenue or stock price or something. You have to focus on the things that lead to those.” – Tim Cook
With three of the big five reporting earnings after the close yesterday, investors got through the night of earnings relatively unscathed. As we approach the opening bell, Alphabet (GOOGL) and Microsoft (MSFT) are both indicated higher while Apple (AAPL) is just modestly lower. The fact that all three of these stocks rallied sharply into earnings and none are down significantly post-earnings is a pretty encouraging outcome.
There’s not a lot of economic news to contend with this morning, but we will get an FOMC decision on interest rates at 2 PM eastern and a press conference from Chairman Powell at 2:30. Earnings data is still coming in hot and heavy, though, and will be that way right up through Friday morning. So far the results remain extremely strong, but stock price reactions, in aggregate, have been less impressive.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, the latest US and international COVID trends including our vaccination trackers, and much more.
As mentioned above, AAPL is trading 1% lower in reaction to last night’s earnings report. Some may look at that weakness as a sign that the best of times are behind the stock, but we always caution against reading too much into one day’s action. Including last night, AAPL has handily topped EPS and revenue forecasts in each of its last five earnings reports, yet the stock is now on pace to have a negative one-day reaction to earnings for the fourth straight quarter. Last July, AAPL surged 10.5% on the day after its earnings report, but following the last three reports, the stock declined 5.6%, 3.5%, and -0.1%, respectively. Despite this current streak of negative reactions to earnings, though, the stock has rallied 57% over that same time span. Nobody knows what the future holds, but one day does not always make a trend.
Jul 27, 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.
“Learn everyday, but especially from the experiences of others. It’s cheaper!” – John Bogle
Futures are indicated lower this morning as Chinese equities sink on continued fears of government crackdowns on that country’s tech sector. We’ve seen a bit of a bounce off the lows, though, as we get closer to the opening bell in the US. If that sounds familiar, it should since it was the exact same setup we had yesterday. While the issues in China are troubling for investments based in China, it should make US assets more attractive as capital flees that area of the world and looks for a safer home.
The week may have started off quietly yesterday, but the real fun begins today as there are not only a number of economic reports but some of the largest companies in the world will start releasing results. In the case of economic data, Durable Goods came in weaker than expected, but last month’s release was revised higher which somewhat netted this month’s weakness out. Later on today, we’ll get releases on Home Prices, Consumer Confidence, and the Richmond Fed Manufacturing sector.
On the earnings front, after the close, we’ll get reports from Alphabet (GOOGL), Apple (AAPL), and Microsoft (MSFT). On a combined basis, these three companies alone are expected to report combined revenues of about $175 billion! As if these three companies weren’t enough, we’ll also hear from Advanced Micro (AMD), Chubb (CB), Mondelez (MDLZ), Starbucks (SBUX), and Visa (V).
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, the latest US and international COVID trends including our vaccination trackers, and much more.
Yesterday was a big day for the crypto-currency markets, but Amazon’s denial that it would accept bitcoin payments by year-end has resulted in a giveback of some of those gains. Bitcoin’s rally yesterday also coincidentally (or not) stalled out right at the same levels it stalled out at in mid-June, so for people to feel more comfortable going forward, they’ll likely want to see prices trade and stay above $40,000.
In the case of ethereum it’s a similar story as the rally in ether stalled out right near $2,400 which is right where it stalled out earlier this month. The only difference between now and then is that while the last rally also failed at the 50-DMA, this time around, ether has still been able to hold above that level.
