Apr 13, 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 are only three ways to meet the unpaid bills of a nation. The first is taxation. The second is repudiation. The third is inflation.” – Herbert Hoover
Despite the fact that the FOMC has essentially dismissed any importance of the report, today’s release on March CPI has been one of the most anticipated CPI reports we can remember. The report came in 0.1 percentage point above expectations on both a headline and core basis, and while that’s more than expected, we’ve seen hotter prints relative to expectations. If you were looking for something that might cause the FOMC to change course, you didn’t get it in this report. On a side note, it’s a bit ironic that on the same day that CPI takes center stage, bitcoin is up about 5% in price and finally above resistance at $60K.
Futures were already lower heading into the March CPI report on the heels of news that the FDA instituted a temporary pause on the administration of JNJ’s COVID vaccine, but they have since rebounded erasing about half of their declines.
Read today’s Morning Lineup for a recap of all the major market news and events including an overnight recap of market news and events, updates on European sentiment, CPI, as well as the latest US and international COVID trends including our vaccination trackers, and much more.
For all of April and stretching back to the end of March, when the US equity market has been open it doesn’t go down! The chart of SPY below shows that the ETF has closed higher than it opened for 12 straight trading days. In the history of the ETF stretching back more than 25 years, there has never been a longer streak of days where it closed higher than its opening price. For an analysis of how the ETF has performed following streaks of similar duration, sign up for a trial to Bespoke Premium.
Apr 12, 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 person who starts simply with the idea of getting rich won’t succeed; you must have a larger ambition.” – John D. Rockefeller
The new week is starting off on a relatively quiet note, and futures are lower, but activity will pick up quickly as the week goes on. Besides earnings season, tomorrow we’ll get data on March CPI, and then Thursday’s data slate will include updates on Retail Sales, Jobless Claims, and both the Philly and NY Fed Manufacturing surveys. Then on Friday, we’ll close out the week with the March updates on Housing Starts and Building Permits.
Read today’s Morning Lineup for a recap of all the major market news and events including an overnight recap of market news and events, updates on Japanese Machinery Tool Orders, China Credit Creation, as well as the latest US and international COVID trends including our vaccination trackers, and much more.
After a big rally to close out the day on Friday, the S&P 500 finished the week well into overbought territory. Like the overall index, just about every sector is also in overbought territory except one – Energy. While every sector was up last week, Energy finished the week down over 4% and is just a bit over 1% above its 50-day moving average (DMA). Don’t feel too bad for the sector, though. Even after last week’s decline, the Energy sector ETF is still more than 28% higher from where it started out the year.
Apr 9, 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.
“Slow and steady wins the race.” – Aesop
It’s looking like a modestly positive end to the week with S&P 500 futures slightly higher, but for all of the major indices, current levels are off their overnight highs after Chinese inflation data topped expectations. That has pushed the 10-year yield higher, and Nasdaq futures lower. Here in the US, PPI for the month of March was scheduled to be released at 8:30 Eastern, but as of yet, the data hasn’t been released.
Read today’s Morning Lineup for a recap of all the major market news and events including an overnight recap of market news and events, Chinese inflation data, weakening Industrial Production out of Europe, US and international COVID trends as well as our series of charts tracking vaccinations, and much more.
Slow and steady may win the race, but the turnaround we have seen in the Technology sector has been swift. Over the five trading days heading into today, Technology, which had been one of the weaker sectors on a YTD basis, has been the best performing sector in the S&P 500 by rallying 5.73%. The next best performing sector in the S&P 500 has been Communication Services, which is basically dominated by mega-cap tech-like stocks (GOOGL, FB, and NFLX). As a result of the move in Technology over the last five trading days, the sector has gone from just barely above its 50-DMA and closer to that level than any other sector to the most overbought sector in the S&P 500.
On the downside, the worst-performing sector in the S&P 500 is Energy, which has declined more than 1%, but even after that decline, the sector is still up more than 29% which is more than ten full percentage points than the next closest sector (Financials).
Apr 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.
“I am so far from being a pessimist…on the contrary, in spite of my scars, I am tickled to death at life.” – Eugene O’Neill
If you’re looking at the futures for the S&P 500 and Dow, it’s looking like a flattish to modestly positive start to the trading day, but looking over at futures for the Nasdaq shows an entirely different story as that index is indicated to open up by nearly 1%. Driving the gains in the Nasdaq is the mega caps of Alphabet, Apple, Facebook, Microsoft, and Tesla which are all trading up by 0.75% or more in the pre-market. Given recent moves in the fixed income market, the recent strength of the mega-caps makes sense. Think about it, since the start of April we have seen some extremely strong to even historic levels of economic data points, but the yield on the 10-year US Treasury is actually down MTD. Strong data and lower rates? The mega-caps will take it!
Read today’s Morning Lineup for a recap of all the major market news and events including Japanese purchases of treasuries, German factory orders, US and international COVID trends as well as our series of charts tracking vaccinations, and much more.
Another area of the market where we’re seeing some unwelcome strength is in sentiment. This morning’s release of bullish sentiment from the American Association of Individual Investors (AAII) showed that bullish sentiment surged by the most since November to 56.90%. The last time this reading was higher was way back in early 2018.
Apr 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.
“The discipline of writing something down is the first step toward making it happen.” – Lee Iacocca
CEOs of two of the largest companies in the US are making headlines for recent comments this morning; one in a blog post and the other in his firm’s annual letter.
First, despite disagreement even within the Democratic caucus, Amazon CEO Jeff Bezos came out in support of the Biden Administration’s plan to boost investment in US infrastructure. Realizing the costs involved in such a plan, the Amazon founder noted in a blog post that “we’re supportive of a rise in the corporate tax rate.” While cynics would say that AMZN doesn’t pay corporate taxes so why should it care, we would note that the company has in recent years seen its tax bill go up as it has become more profitable. The rate is still very low, however, as in 2020, the company’s effective tax rate was 9.4%.
The second CEO making headlines this morning is JP Morgan Chase CEO Jamie Dimon. In the bank’s annual letter, Dimon expressed some concerns about potential inflation due to stimulus hitting the economy as it is already starting to rebound. That could lead to higher interest rates ‘making things a little worse’. In terms of equity valuations, he noted that they are high by ‘almost all measures, excect interest rates’. Therefore, higher interest rates to combat inflation could be problematic for the stock market. The high valuations, though, could be justified if the multi-year boom in the economy that he expects ‘could easily run into 2023’ comes to fruition.
Read today’s Morning Lineup for a recap of all the major market news and events including a recap of Composite PMI data for March, US and international COVID trends as well as our series of charts tracking vaccinations, and much more.
After a strong start to the quarter in its first two trading days, US equities took a breather yesterday from what was and still is an extreme overbought condition. As shown in the chart below, the S&P 500 was more than 2.5 standard deviations above its 50-day moving average heading into yesterday’s trading, which was not only the most extreme overbought reading in the last year but also the most overbought level since February 2017. Extreme overbought readings don’t mean that the market has to immediately sell off, but it often suggests that a rally is due for a pause.
Apr 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.
“How did you go bankrupt?”
“Two ways. Gradually, then suddenly.” – Ernest Hemingway, The Sun Also Rises
With little in the way of economic data today and earnings season not really kicking off until next week, it’s a quiet morning. Futures are modestly lower even as the 10-year yield is back below 1.7%. After being closed yesterday, European markets are back open this morning and making up for lost time by rallying in reaction to the strength in the US yesterday.
In SPAC news, NFTs may be the hot trend in the collectible space, but traditional baseball cards are the center of attention this morning as Topps has announced a deal to go public in a merger with Mudrick Capital. The deal for the maker of cards for baseball, most other major sports, and who can forget- Garbage Pail Kids- will be valued at $1.3 billion. You can also bet that at some point, they will be moving into the NFT space. Perhaps the most telling aspect of the SPAC environment these days is the fact that in an interview with Topps Chairman Micheal Eisner, he stressed that the company will be operating as a ‘real’ company.
Read today’s Morning Lineup for a recap of all the major market news and events including the latest Australian Central Bank decision, a recap of SENTIX investor sentiment surveys for April, US and international COVID trends as well as our series of charts tracking vaccinations, and much more.
The market may be quiet this morning, but there have already been plenty of fireworks to start the second quarter. While the two 1% gains came four calendar days apart, this is the first time that the S&P 500 has kicked off a new quarter with back-to-back 1%+ gains since Q2 2009! As shown in the table below, in the post-WWII period, there have only been seven other quarters that kicked off with back-to-back gains of at least 1%.
The table below shows the S&P 500’s performance in the week after each of those prior strong starts as well as its performance over the rest of the quarter. Over each of the time periods, the S&P 500 saw positive returns on both an average and median basis, and while the S&P 500 was up for the remainder of the quarter following each of the last four occurrences, in the three occurrences prior to 1987, it was down over the remainder of the quarter every time.
