Jul 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 free trial to Bespoke Premium. CLICK HERE to learn more and start your free trial.
“People don’t pay attention until they have to.” – Meredith Whitney
In yesterday’s email, we noted that “Lower interest rates are good for equity prices, but when the pace of the downside move picks up steam, equity investors take pause.” This morning, we are seeing that trend play out in real-time. As treasury yields continue to plunge, equity investors are reading the rally in the bond market as a sign of weakness ahead and taking profits now. The S&P 500 is currently indicated to open down about 1.25%, and in a sign of just how uniform the decline has been, both the Dow and Nasdaq futures are also in the red by about the exact same amount.
Naturally, all sorts of catalysts are being blamed for the decline ranging from the growing threat of the Delta variant, a weaker than expected economic recovery, or lack of an infrastructure deal. Sometimes, though, the market doesn’t need an excuse to sell off and it just needs to let off some steam.
In economic news, the only major data point of the day is initial jobless claims which came in 23K above forecasts (373K vs 350k). Continuing claims, however, managed to fall more than expected falling to a post COVID low of 3.339 million.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, a discussion of growth in the Delta variant, economic data from around the world, the latest US and international COVID trends including our vaccination trackers, and much more.
There was a time not long ago when a number of sentiment indicators showed a healthy degree of skepticism on the part of investors. That time is no longer. One indicator we don’t highlight on a regular basis is the TD Ameritrade Investor Movement Index (IMX). Calculated by TD Ameritrade, the IMX is designed to measure individual investor sentiment based on what investors are actually doing in their brokerage accounts.
Back near the 2020 lows, the IMX index dropped to its lowest level since early 2012 and while it bounced with the overall market when the S&P 500 was back at all-time highs last September, it was much slower to recover and well below its record highs from late 2017. Since the start of this year, though, investor sentiment has really started to surge, rising from 5.49 last November to a record 9.08 in June. In the eleven years that TD Ameritrade has been publishing this index, it has never seen as sharp of a surge as it has over the last several months.
Jul 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 free trial to Bespoke Premium. CLICK HERE to learn more and start your free trial.
“Truly brilliant marketing happens when you take something most people think of as a weakness and reposition it so people think of it as a strength.” – Reed Hastings
While still higher versus yesterday’s close, US futures have given up some of those gains as the continued decline in long-term treasury yields picks up the pace. The yield on the 10-year US Treasury currently trades below 1.31% which is now lower than at any other point since 2/19. Lower interest rates are good for equity prices, but when the pace of the downside move picks up steam, equity investors take pause.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, a discussion of growth in the Delta variant, economic data from around the world, the latest US and international COVID trends including our vaccination trackers, and much more.
With the Russell 2000 down more than 1% over each of the last two trading days, small caps have really been lagging their large-cap peers. That underperformance continues a trend we have seen over the last several weeks where the S&P 500 has been increasingly outperforming the Russell 2000 on a daily basis. Over the last 50 trading days, the S&P 500 has outperformed the Russell 2000 56% of the time. That matches a number of other periods as the highest frequency of outperformance over a 50-trading day period since late March 2020. What makes the current period different, though, is that if the S&P 500 outperforms the Russell 2000 on any of the next three trading days, the current period will move into the lead as the highest consistency of large-cap outperformance since the end of March 2020. Just as large-cap tech was in the penalty box from early March through the end of Q1, now it appears as though small caps have found themselves in their own timeout.
Jul 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 free trial to Bespoke Premium. CLICK HERE to learn more and start your free trial.
“The best time to plant a tree was 20 years ago. The second best time is now.” – Chinese Proverb
Happy Tuesday! If you were off yesterday, we hope you had a good long holiday weekend. There’s not much in the way of fireworks going on in the US equity markets this morning as futures are little changed. The only major item of note is the plunge in shares of the Chinese ride-hailing company, DIDI, after Chinese authorities ordered the removal of its app from various platforms in China. The only economic data of note for today is the ISM Services report at 10 AM. Anything could happen, but based on the current setup, we could be in for a quiet week.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, a discussion of the latest services sector PMI data, other economic data from around the world, the latest US and international COVID trends including our vaccination trackers, and much more.
We’ve talked a lot about the equity market’s impressive ability over the last several months to rotate between sectors and styles without causing too much in the way of a ripple in the overall market. The snapshot of major index ETFs below shows a great example of this rotation as last week’s leaders were the YTD laggards and the laggards were the YTD leaders. Two cases in point? With a decline of 2.43% last week, the Russell Micro-Cap ETF (IWC) remains the top-performing index ETF YTD even as it was the worst-performing ETF of the week. Conversely, even after its 2.63% gain last week, the Nasdaq 100 ETF (QQQ) is still up less than any of the other ETFs in the screen.
The scatter chart below shows the rotation in another way. Starting out at the top left, we have QQQ as the worst-performing index ETF YTD but the best performer last week. From there, as you move to the right, YTD performance increases while performance over the last week gets progressively worse.
Jul 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 free trial to Bespoke Premium. CLICK HERE to learn more and start your free trial.
“My dream is of a place and a time where America will once again be seen as the last best hope of earth.” – Abraham Lincoln
On a Friday before a holiday weekend, you would expect things to be quiet, and that’s exactly the way things are now ahead of the June jobs report. The release of that report will likely cause some ripples, but don’t expect much in the way of movement after the first couple of hours of trading as traders head for the exits to start the holiday weekend early. Have a Happy July 4th!
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, a discussion of the latest round of OPEC talks, economic data from around the world, the latest US and international COVID trends including our vaccination trackers, and much more.
July 4th is typically a good time of year for the equity market, and the chart below showing the performance of the S&P 500 from the Friday before to the Friday after July 4th illustrates that point. Since 1945, the S&P 500’s median gain during the four trading day stretch has been a gain of 0.88% with positive returns 71% of the time. Last year was an especially strong July 4th week for the market as the S&P 500 surged 4.02%, ranking as the second-best July 4th week since 1945 (2010 was the best at 5.42%).
We have also highlighted years where the S&P 500 was up over 10% heading into the July 4th week in red. When equities were already up double-digits heading into July 4th, performance was even better with a median gain of 1.06% and positive returns 86% of the time (19 out of 22 times).
Jul 1, 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 free trial to Bespoke Premium. CLICK HERE to learn more and start your free trial.
“The difficulty lies, not in the new ideas, but in escaping from the old ones.” – John Maynard Keynes
Like a lot of mornings recently, we’re seeing a mixed picture in futures trading. Today it’s the Dow and S&P 500 futures that are trading in positive territory while the Nasdaq is modestly lower. It’s a busy day for economic data with Jobless Claims just coming out (initial claims lower than expected and a post-pandemic low) and then Manufacturing PMIs coming out at 9:45 and 10:00 AM as well as Construction Spending also at 10. Also, be on the lookout for reports of June auto sales which will be released throughout the day.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, a look at Manufacturing data for the month of June, the latest US and international COVID trends including our vaccination trackers, and much more.
In a post yesterday, we highlighted the fact that 2021 was one of only a small number of years where the S&P 500 never experienced anything more than a 5% pullback from a closing high in the first half of the year. Over the last 25 years, the only other year that saw such steadiness in the first half of trading was 2017, and in the S&P 500’s history, there have only been 14 other years where the largest pullback through June 30th was less than 5%.
The chart below shows the performance of the S&P 500 during the second half of each prior year where the first half’s largest pullback was less than 5%. Of the 14 years shown, the S&P 500 tended to see positive returns in the second half with gains in 13 of the 14 years shown for a median gain of 10.2%. The only down second half was in 1986 when the S&P 500 fell 3.5%.
Jun 30, 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 free trial to Bespoke Premium. CLICK HERE to learn more and start your free trial.
“There’s not many things less important than the score at halftime.” – Bill Self
After a weak open in Europe, US futures sold off earlier but have been clawing their way back ever since. The weakness in Europe has mainly been on concerns of the spread of the Delta COVID variant as well as weak manufacturing data out of China. As shown in our economic indicator charts in today’s Morning Lineup, many global manufacturing gauges have clearly shown signs of peaking out in terms of their growth rates. That’s not a surprising trend as base effects start to wear off, but it has helped to keep a bid under the treasury market. What is one of the more surprising aspects of the current quarter, though, has to be the fact that with the long-term US Treasury ETF (TLT) rallying 6.1% this quarter, it is actually outperforming the Dow, and underperforming the S&P 500 by less than two percentage points.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, a look at the explosive move in Tin, notable economic data from Asia, Europe, and North America, the latest US and international COVID trends including our vaccination trackers, and much more.
In a post yesterday, we noted the breakout to new highs in the semiconductor sector after a four-month period of consolidation. On a relative strength basis, the sector has also picked up the pace over the last six weeks. The chart below shows the relative strength of the Semiconductor ETF (SMH) versus SPY over the last year. SMH’s peak on a relative basis began in mid-February just when the sector’s trading range peaked. For the next three months, the sector significantly underperformed the S&P 500, and it wasn’t until May 13th – the day after the April CPI report – that the sector’s underperformance troughed. Since then, semis have bounced back in a big way, and over the last two trading days have finally broken the downtrend that has been in place since that mid-February peak. New highs and a broken downtrend? It’s been a big week for semis.
