May 25, 2021
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“Personally, I’d rather have bitcoin than a bond.” – Ray Dalio
Yesterday may have been a day you wanted to own bitcoin over a bond but not today. After one of its best days in years, bitcoin is down over 5% as of now. Right now, it’s flopping around trying to regain its footing and establish a new baseline after last week’s crash. In other news, equity futures are higher, and those 10-year US Treasures that no one wants to own are rallying to push the yield back below 1.6%.
In company-specific news, we’ve seen some positive news related to the re-opening this morning as both United (UAL) and Hawaiian Airlines (HA) had positive comments regarding passenger traffic levels.
Read today’s Morning Lineup for a recap of all the major market news and events including a recap of some positive economic data out of Asia and Europe and the latest US and international COVID trends including our vaccination trackers, and much more.
After multiple attempts at moving back above its 50-DMA, the Nasdaq was finally able to trade and close above that level yesterday as mega caps in the index provide leadership. Call it a moral victory for the index on its attempted journey back to record highs.
Today looks like it may be the Russell 2000’s turn to make a run and stay above its 50-DMA. Including yesterday, the small-cap index has made three attempts to trade above its 50-DMA, and each time, it sold off intraday day closing below that level. In yesterday’s email, we noted that breadth in the Nasdaq has been weak as smaller issues in the index have acted as a drag on the index. The fact that the Russell 2000 hasn’t been able to trade and close above its 50-DMA provides another illustration of that relative weakness. If the Russell can finally reclaim its 50-DMA today, though, that would help shift to a more bullish narrative for small caps heading into the holiday weekend.
May 24, 2021
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“I see life almost like one long University education that I never had — every day I’m learning something new.” – Richard Branson
Outside of the crypto space, it was a relatively uneventful weekend for financial markets. Equities are looking to kick off the week on a positive note with the Nasdaq leading the way higher. Both the economic and earnings calendars are quiet, but the pace will pick up tomorrow.
Read today’s Morning Lineup for a recap of all the major market news and events including a recap of overnight economic and earnings data, a look at the change in total market cap for the crypto universe during the recent sell-off, and the latest US and international COVID trends including our vaccination trackers, and much more.
Heading into the new week and the last week before the unofficial start of the Summer season, we wanted to provide a quick update on the market’s breadth. Starting with the S&P 500, its cumulative A/D line has tracked price very closely with breadth actually holding up modestly better than the price.
May 21, 2021
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“It’s not so important who starts the game, but who finished it.” – John Wooden
While the week came in like a bear, it’s looking to go out like a bull as US equity futures are in the green across the board. The Nasdaq is already in positive territory for the week, and if current pre-market levels hold, the S&P 500 could make it just barely into positive territory, but a win is a win no matter what the score. The economic calendar is relatively quiet to close out the week with flash PMI readings for May at 9:45 and Existing Home Sales at 10 AM. In addition to those reports, four Fed officials are also scheduled to speak throughout the day.
Read today’s Morning Lineup for a recap of all the major market news and events including a recap of overnight economic and earnings data, an updated look at global PMI readings as well as the latest US and international COVID trends including our vaccination trackers, and much more.
With three down days to start, a down week for the Nasdaq was looking like a foregone conclusion on Wednesday. Thursday’s rally changed that script, and instead of the fifth straight week of losses, the Nasdaq is on pace for its first positive week in May. Ever since the index failed to take out its February high in late April, the Nasdaq has been under pressure, but this week’s rally, or more accurately, the rally off Wednesday’s lows has put the 50-DMA into play. Futures are indicated higher this morning which would put the Nasdaq back above its 50-DMA to close out the week, but there’s still six and a half hours of trading left in the week. One encouraging sign is that along with the gain in the Nasdaq, semis have also shown some leadership for a change after weeks of underperformance.
May 20, 2021
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“The typical trader wants to be right on every single trade. He is desperately trying to create certainty where it just doesn’t exist.” – Mark Douglas
Futures are modestly lower heading into the second to last trading day of the week, and the just-released economic data has been a modest disappointment. Initial Jobless Claims came in slightly lower than forecasts (444K vs 450K), but continuing claims were modestly higher (3.751 mln vs 3.63 mln). The Philly Fed Manufacturing report came in at 31.5, which is generally a strong number, but relative to April’s reading (50.2) and expectations (41.0), it was a disappointment.
Read today’s Morning Lineup for a recap of all the major market news and events including a recap of overnight economic and earnings data, as well as the latest US and international COVID trends including our vaccination trackers, and much more.
After big losses early on in the session, yesterday almost finished off as a major reversal day. The Nasdaq came up just shy of finishing the day in positive territory, but the Philadelphia Semiconductor Index (SOX), which traded down over 2% early on in the session, finished the day up just shy of 2%. Yesterday’s reversal also began just as the SOX was testing its lows from last week and the bottom of its six-month trading range. We should know soon enough whether this range will hold.
May 19, 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.
“Age doesn’t matter, unless you’re cheese.” – John Paul Getty
There’s not a lot of economic or earnings data to speak of this morning, but that hasn’t stopped traders from selling. Equity futures are down sharply this morning with tech leading the way lower. Nowhere is the severity of today’s weakness more pronounced than in the crypto markets.
Read today’s Morning Lineup for a recap of all the major market news and events including a recap of overnight economic and earnings data, a graphical summary of the current decline in bitcoin, as well as the latest US and international COVID trends including our vaccination trackers, and much more.
It’s looking like an especially painful day in the cryptocurrency markets today. While the sector has been under pressure for the last couple of weeks now, reports overnight regarding a crackdown by Chinese authorities have given traders another excuse to sell. While bitcoin is down over 10% this morning, other more speculative areas of the sector are down far more.
In the case of bitcoin, today’s decline takes the drawdown from its recent record highs to just over 40%. That’s steep no matter how you look at it, but would you believe that over the last ten years, bitcoin’s average drawdown from a record high on any given day is close to 50%, and on 69% of all trading days during this span bitcoin has been down more than 40% from its record high? One caveat here, though, is that while bitcoin isn’t even trading at its ‘average’ drawdown levels, given the market value, the amount of money ‘lost’ during this sell-off has been much steeper than any prior pullback. Make sure to check out page six of our Morning Lineup for additional charts summarizing the decline.
May 18, 2021
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“You don’t pay taxes; they take taxes.” – Chris Rock
After inflation was the theme last week, this week housing takes center stage. Yesterday it was NAHB sentiment and today we get reports on Housing Starts and Building Permits. Levels for the month of April are expected to come in roughly the same as in March, but we’ll be watching for any signs of a slowdown due to the rising costs of inputs. Outside of these two reports, there is no other data on the docket.
In earnings news, Walmart (WMT) marked the unofficial end to earnings season with a stellar report, and unlike a lot of other companies that have reported positive results and sold off, so far WMT is actually trading higher.
Read today’s Morning Lineup for a recap of all the major market news and events including a recap of overnight economic and earnings data, as well as the latest US and international COVID trends including our vaccination trackers, and much more.
The saying goes, ‘better late than never”, but when it comes to taxes and the delayed deadline for Federal payments most would prefer “better never than late”. Due to the one-month delay and the fact that the 15th of May fell on a Saturday, yesterday (5/17) was the Federal Tax deadline, so if you haven’t filed your return or an extension yet, you are now officially late. You may not be aware, but when it comes to the Federal tax deadline, the last two decades have seen a relatively clear trend of short-term weakness in equities leading up to the tax deadline and strength after.
The chart below shows the S&P 500’s performance in the two after the Federal tax deadline for every year since 2000. In the 21 years before 2021, the S&P 500 has only been down in the two weeks after the tax deadlines five times.
