Jun 29, 2021
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“Some people get rich studying artificial intelligence. Me, I make money studying natural stupidity.” – Carl Icahn
Futures have been mixed for most of the morning, and while they were closer to the flatline earlier, we’ve seen some strengthening in the Dow futures and weakening in the Nasdaq as some of yesterday’s moves are reversing a bit. Today’s notable economic data point will be Consumer Confidence, and the only Fed speaker on the calendar is Richmond Fed President Thomas Barkin at 9 AM. Also just released, CPI in Germany declined to 2.1% y/y which was in line with forecasts. Lastly, in the financial sector, we’ve seen a number of dividend hikes and buyback announcements following stress test results yesterday. The results were largely expected, but two of the more notable dividend moves were Morgan Stanley (MS), which doubled its payment, and Citigroup (C) which left its payout unchanged.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, an update on the Delta variant, notable economic data from Asia and Europe, the latest US and international COVID trends including our vaccination trackers, and much more.
The S&P 500 and the Nasdaq have regularly been making new all-time highs in recent days, but that hasn’t been the case for many of the other major averages. Below we highlight the six-month price charts of a number of major US index ETFs. Outside of SPY (S&P 500) and QQQ (Nasdaq 100), none of the other four have hit new highs in at least a month. To be fair, the four indices that haven’t hit new highs are trading very close to new highs, so it’s not as though they are all breaking down, but as the third quarter kicks off, traders will look for some additional participation from the small and mid-cap areas of the equity market.
Jun 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 free trial to Bespoke Premium. CLICK HERE to learn more and start your free trial.
“In spite of the cost of living, it’s still popular.” – Kathleen Norris
Good Morning Subscriber,
It’s a quiet start to the new week with US futures mixed, treasury yields modestly lower, and crypto assets rallying. The economic calendar is also pretty quiet today with Dallas Fed Manufacturing the only release on the calendar. We will get some commentary throughout the day from Fed speakers, though, so those have the potential to cause some ripples in the market as they hit the wires. Overnight in Asia, the Chinese central bank said that the economy continues to improve and show signs of stability. In Europe, the trend has been modestly lower with Travel and Leisure stocks experiencing the largest declines while defensive catch a bid.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, an update on bitcoin and crypto technicals, the latest US and international COVID trends including our vaccination trackers, and much more.
Today brings the start of a new trading week but also marks the beginning of the sprint to the finish of Q2. With just three trading days left in the second quarter of 2021, the S&P 500 has already rallied 7.75% in what has been another impressive quarter. With stocks up strongly heading into quarter-end, there’s always a concern that the quarter will close off on a weaker note as portfolio managers look to rotate out of equities in order to get their weightings more in line with their target allocations. While rebalancing like this invariably does occur, long-term performance numbers do not suggest that it has a significant impact on market returns in the final days of the quarter- at least not when the gains are in the high single-digit percentage range and above.
The scatter chart below compares the S&P 500’s QTD returns up until the last three trading days of the quarter (x-axis) and compares that to the S&P 500’s performance in the last three trading days of the quarter. If there was an inverse relationship between QTD performance and returns in the last three trading days, you would expect to see dots higher up towards the left side of the chart and trending lower as you move right. As shown, that type of pattern is minimal at best.
On the right side of the chart, the shaded area represents all quarters where the S&P 500 was up over 5% heading into the last three trading days of the quarter, and we have enlarged that area in the lower chart. While the strongest quarter (Q1 1987) saw the S&P 500 decline 3% in the last three trading days of the quarter, other than that, the dots are scattered all over the place in no meaningful pattern. Of the 305 prior quarters since 1945, the S&P 500’s performance in the final three days of the quarter was a gain of 0.12% with positive returns 58% of the time. In the 113 quarters where the S&P 500 was up at least 5% heading into the final three trading days, though, the S&P 500’s average change to close out the quarter was a gain of 0.005% with positive returns 50.4% of the time. So there is some negative drag, but it’s minimal.
Jun 25, 2021
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“Beating the competition is relatively easy. Beating yourself is a never-ending commitment.” – Phil Knight
Futures are modestly higher this morning for both the Nasdaq and S&P 500 as investors look to close out an already positive week for stocks on a good note. Economic data released this morning was mixed, but important readings in inflation were either in line with or slightly below expectations. The only other report on the calendar is Michigan Confidence at 10 AM, plus a number of FOMC speakers throughout the day.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, updates on economic data from Asia and Europe, the latest US and international COVID trends including our vaccination trackers, and much more.
Dow futures are leading the charge this morning, but if it weren’t for Nike (NKE), they’d actually be modestly low. After a blowout report last night, NKE is indicated to open up by over 13% to record highs, breaking its trend of lower highs that had been in place since earlier in the year in the process.
Jun 24, 2021
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“Altogether too often, people substitute opinions for facts and emotions for analysis.” – Andrew S. Grove
The Nasdaq is looking to make it four in a row today as US futures are higher across the board. Optimism on a possible breakthrough in infrastructure negotiations as well as some dovish commentary from the BoE are providing catalysts for today’s move. There’s a very big slate of economic data on the calendar, though, as well as a number of Fed officials scheduled to speak, so investors will have to navigate through all of these throughout the day. Early data released so far have generally been in line to weaker than expected, and the yield on the 10-year US Treasury is still below 1.5% down to 1.48%.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, updates on confidence data from Europe and Canada, the latest US and international COVID trends including our vaccination trackers, and much more.
We’ve seen the pattern below for the semiconductor index in a lot of areas of the market lately, especially the ones that were big winners last year. The Philadelphia Semiconductor Index isn’t far from its record highs in April, but it has essentially been in a sideways range for the last six months, a period in which it has traded in a relatively narrow range of 21.4%. As the group looks to bounce from here, if it can’t break out to new highs, or even stalls out short of its high a few days ago, look for technicians to start calling out a loose head and shoulders pattern.
Semiconductor stocks have become less volatile as the group has matured, but even the recent range is on the low side of the historical average. As shown in the chart below, the current six-month range for the stock is the narrowest since October 2018.
Jun 23, 2021
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“The only constant in the technology industry is change.” – Marc Benioff
Change may always be afoot when it comes to technology, but for the Nasdaq, there hasn’t been much change over the last two days as the index rallied 111 points (+0.79%) on both Monday and Tuesday! Even more ironic when it comes to change is that yesterday Microsoft (MSFT) became just the second US company to ever have a market cap of more than $2 trillion. Microsoft has seen a lot of change over the last two decades, but just like back in the late 1990s and early 2000s it remains right near the top of the list when it comes to being one of the most valuable companies in the world.
Futures are pointing to a modestly higher open this morning while the 10-year yield is exactly unchanged. Besides updates on PMI readings from Markit, New Home Sales will be released at 10:00 AM eastern, and there’s a number of Fed speakers on the calendar.
Read today’s Morning Lineup for a recap of all the major market news and events, an update on the Delta variant, overnight economic data, and the latest US and international COVID trends including our vaccination trackers, and much more.
With the Nasdaq up over 1.5% in the first two trading days of the week, the Technology sector traded at a new record high yesterday taking out its highs from April. Since the October lows, Technology has underperformed the broader market but it has been trading in a steady uptrend with higher highs and higher lows.
Jun 22, 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.
“If you’re feeling good, don’t worry. You’ll get over it.” – Yogi Berra
Bulls look like they have a little more gas in the tank after yesterday’s big rally as futures are modestly higher. Crypto assets are another story, though, as bitcoin just broke through $31,000 and went tight through $30,000 after that. Treasury yields are modestly higher, but the 10-year yield still remains below 1.50%. There’s a decent amount of Fedspeak today with Mester, Daly, and Powell all on the calendar to speak between now and the end of the day. In terms of economic data, the only two indicators on the schedule are Existing Home Sales and Richmond Fed.
Read today’s Morning Lineup for a recap of all the major market news and events, an update on the decline in crypto assets, overnight economic data, and the latest US and international COVID trends including our vaccination trackers, and much more.
Yesterday’s rally in the S&P 500 saw the strongest breadth in terms of the advance/decline line (+459) since April 2020. Noth only was breadth notably strong, but it followed a Friday where breadth was notably weak (-401). With the net A/D reading on both days coming in above +400 or below -400, they both qualified as ‘all or nothing days’. All or nothing days in the market are uncommon enough, but it’s not often that you see a negative all or nothing day immediately followed by a positive one. The last time it happened was in early March 2020 just as the market was in the middle of the COVID crash, and there have only been 36 occurrences since 1990.
For the entire year so far, yesterday’s all-or-nothing day was just the sixth such occurrence so far this year putting 2021 on pace for 13. That’s a far cry from last year’s total of 43, and if the pace keeps up, it would go down as the second-lowest number of all or nothing days for a given year since 2007. The only other year during that span with fewer was 2017. One thing to remember, though, is that while the pace so far this year has been slow, as the last two trading days have shown, all or nothing days often tend to show up in bunches.
