Mar 18, 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.
“Faced with the choice between changing one’s mind and proving that there is no need to do so, almost everyone gets busy on the proof.” – John Kenneth Galbraith
After yesterday’s FOMC rate decision and Powell press conference, investors appeared to be comfortable with the Fed’s plan going forward. That sent treasury yields lower and equity futures higher. After sleeping on it, though, investors are having second thoughts. This morning equity futures are in the red with the Nasdaq especially feeling the pain, and Treasury yields are surging. In fact, Nasdaq 100 futures are currently well over 1% lower and threatening to take out their lows from Wednesday morning.
Economic data today was relatively busy with Jobless Claims and the Philly Fed just coming out and Leading Indicators scheduled to come out at 10:00 AM. Initial and Continuing Claims both missed expectations coming in higher than expected. Philly Fed was an enormous beat relative to expectations with the headline reading coming in at 51.8 and one of its highest readings ever and the best since 1973. Prices Paid was also extremely elevated, though, so that won’t help quell concerns over inflation.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, an update on economic data out of Asia and Europe, a recap of all the major central bank announcements since the close yesterday (there were a lot!), the latest US and international COVID trends including our series of charts tracking vaccinations, and much more.
The chart below encapsulates the drama in markets that surrounded the FOMC meeting. Yesterday, yields were sharply higher ahead of the meeting and started to come back in leading up to and after the announcement. Overnight, though, the rally in Treasuries and drop in yields subsided, and this morning, no one wants anything to do with US Treasuries as the 10-year yield has risen well above yesterday’s high and 1.7% to its highest levels since January of last year.
Mar 17, 2021
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PELLEY: Fair to say you simply flooded the system with money?
POWELL: Yes. We did.
Ten months ago, Fed Chair Jay Powell appeared on 60 Minutes to explain the Federal Reserve’s unprecedented response to the COVID pandemic and assure Americans that the Fed would be there at the ready to provide whatever financial support the economy needed. As the exchange between Pelley and Powell above indicates, Powell was pretty blunt in his explanation. Today, market participants eagerly await the Fed Chair’s explanation for how the Committee plans to proceed now that the US appears to be coming out from the other side of the pandemic. It’s much easier to throw money at a problem than it is to take that money back when the problem starts to go away, so it’s pretty safe to assume that the Fed Chair will be a lot more nuanced with his comments today than he was last May.
It may be St Patrick’s Day, but there’s not a lot of green on the screens today as US equity futures (especially the Nasdaq), commodities, Treasuries, and even bitcoin are all mostly flat to lower on the day. Housing Starts and Building Permits were just released, and following yesterday’s weaker than expected homebuilder sentiment report for March, these reports (based on February data) both came in significantly weaker than expected. Despite the miss, though, US Treasury yields haven’t pulled back, so there’s been no relief for the Nasdaq.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, an update on economic data out of Asia and Europe, the latest US and international COVID trends including our series of charts tracking vaccinations, and much more.
To say the balancing act the FOMC finds itself in is delicate would be an understatement. An intraday chart of the 10-Year US Treasury Yield versus Nasdaq 100 futures provides an excellent example. Just after 6 AM eastern treasury yields spiked higher and the pavlovian response in the equity futures markets was to hit the bids sending futures sharply lower. Powell sure has his work cut out for him this afternoon!
Mar 16, 2021
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“Change is the law of life and those who look only to the past or present are certain to miss the future.” – John F. Kennedy
In what seems like a change of pace from recent weeks, Nasdaq futures are leading the way higher this morning as it is actually the only one of the major indices indicated to open higher on the day. Futures weakened modestly following the release of the February Retail Sales report, and the 10-year yield is still slightly lower. The headline Retail Sales readings came in well below consensus forecasts, but mitigating factors like the storms that hit the midwest and a big upward revision to January’s report helped to soften the blow. Next up on the economic calendar is Industrial Production and Capacity Utilization at 9:15 Eastern and then Business Inventories and Homebuilder Sentiment at 10 AM.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, including a recap of moves in the rates market overnight, an update on inflation data out of Europe, Australian Housing and Central Bank data, economic sentiment, the latest US and international COVID trends including our series of charts tracking vaccinations, and much more.
Yesterday, we highlighted the fact that semis have been lagging the broader market rally. Despite the weakness, the SOX had a positive start to the week yesterday and actually managed to close back above its 50-DMA for the first time since late February. It’s a start.
Lastly, if you didn’t catch it yesterday, make sure to check out yesterday’s CNBC segment with Paul Hickey discussing markets and the state of business travel in the future.
Mar 15, 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.
Capital isn’t scarce, vision is.” – Sam Walton
Small-cap stocks are looking to continue a big streak today with the Russell 2000 looking to extend its current winning streak to seven straight days. Right now, the streak’s prospects aren’t looking great as Russell 2000 futures, along with the Nasdaq, are marginally lower as Treasury yields rise.
The economic calendar is quiet today with Empire Manufacturing the only major report on the calendar. While consensus estimates called for a headline reading of 13.0, the actual print came in at 17.4, which was the highest level since October 2018.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, including a recap of moves in the rates market overnight, an update of moves in the Asian and European market, Chinese economic data, an update on the latest national and international COVID trends, including our series of charts tracking vaccinations, and much more.
Below, we show the intraday charts of the S&P 500, Nasdaq 100, Russell 2000, and the Philadelphia Semiconductor Index (SOX) over the last four weeks. For the first three indices, last week was a big one as they put an end to their streaks of lower highs last week. The one outlier was the SOX. It too rallied last week but not by nearly enough to break its own downtrend. For an index that historically acts as a leading indicator for the broader market, the relative underperformance of the SOX isn’t ideal.
Mar 12, 2021
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“If you work really hard, and you’re kind, amazing things will happen.” – Conan O’Brien
With US Treasury yields rising overnight, tech stocks are under pressure this morning, while DJIA futures are higher as shares of Boeing (BA) are taking off in the pre-market. At current levels, the 10 and 30-year US Treasuries are on pace to close at post-pandemic highs in terms of yields. The only other report on the calendar this morning is Michigan Confidence at 10 AM.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, including a recap of moves in the rates market overnight, an update of moves in the Asian and European market, European Manufacturing, an update on the latest national and international COVID trends, including our series of charts tracking vaccinations, and much more.
Overall breadth in the market has and continues to be strong. This morning’s example comes from the percentage of S&P 500 Industry Groups trading above their 50 and 200 moving averages. Starting with the percentage of Industry Groups above their longer-term 200-DMA, that reading currently stands at just above 90%. During the recent equity market sell-off, that reading dropped down to as low as 75.0% but has rebounded back towards its recent highs.
Relative to the shorter-term 50-DMA, the breadth reading isn’t quite as strong but still stands at a healthy two-thirds and is up from under 50% during the recent sell-off. Obviously, this is a more volatile reading, but the longer it churns around the 50% level, the more likely it is that we see these lower readings start to drag down the strong readings in the percentage of groups above their 200-DMA. Not much of a worry yet, but something to watch going forward.
Mar 11, 2021
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“The key to making money in stocks is not to get scared out of them.” – Peter Lynch
The Dow is looking to make it five in a row today as equity futures are higher across the board. Weekly jobless claims came in lower than expected on both an initial and continuing basis, and are also both at or near their lowest levels of the pandemic. Futures were already higher this morning, but dovish comments from ECB President Lagarde have boosted the mood even further.
Trends related to COVID continue to show improvement on both a national and international basis, as vaccine doses continue to pile up across the country. Also, news from Pfizer (PFE) suggesting strong (94%+) real-world effectiveness of its vaccine based on a study in Israel only makes the outlook for once those doses are administered more broadly even more optimistic.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, including a recap of Asian and European markets, the latest ECB rate decision, Japanese bond flows, an update on the latest national and international COVID trends, including our series of charts tracking vaccinations, and much more.
Looking at the chart of QQQ, it’s in a bit of limbo heading into today. Last week, the index appears to have successfully tested support at its peak from last September. Despite the bounce, QQQ still remains below its 50-DMA, and even after what is on pace to be a 2% gap at the open, it will still be trading below its 50-DMA. Large-cap tech still has some catching up to do!
