Dec 18, 2020
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“When you see only problems, you’re not seeing clearly.” – Phil Knight, Shoe Dog
US equities are set up to close out the week on a down note with S&P 500 futures slightly lower but well off their overnight lows. The economic calendar is light today. On the earnings front, we’ve already had reports from Darden (DRI) and Winnebago (WGO), and the only remaining report of any consequence is Nike (NKE) which will be reporting after the close today. Friday afternoon earnings reports are very uncommon, so it will be interesting to see if the company has any notable news to announce when they report.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, a recap of economic data out of Asia and Europe, policy actions by the PBoC, an update on the latest national and international COVID trends, and much more.
Heading into the weekend, equities have had a positive run over the last five days. Small caps have been leading the way with gains of close to 3%, while large caps are up to a smaller degree. A case in point is the Dow ETF (DIA), which is the only major US index ETF that is not up over 1% over the last five trading days. At these levels, all of the index ETFs in our screen are trading at overbought levels with neutral timing scores.
Dec 17, 2020
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.
“An end is only a beginning in disguise.” – Craig D. Lounsbrough
Futures are indicated higher this morning as European equities rally on a plan for a rollout of the COVID vaccine in that region. French President Macron announced that he will be self-isolating due to a positive test for COVID, and as a result, several other EU leaders announced plans to self-isolate after coming into contact with Macron in recent days.
Just-released economic data was mixed with Housing Starts and Building Permits topping expectations, Philly Fed missing forecasts, Initial Jobless Claims higher than expected while Continuing Claims were lower than expected.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, a recap of economic data out of Asia and Europe, an update on the latest national and international COVID trends, and much more.
In what to many seems like the year that would never end, just ten trading days remain in 2020. We’ve mentioned in the past how the month of December has typically been back-end loaded, and that is also evident in a look at the S&P 500’s performance during the last ten trading days of the year. Going back to 1945, the last ten trading days have experienced a median gain of 0.93% with positive returns 73% of the time. Performance in the last ten years has been similar with a median gain of 1.04% and gains 70% of the time.
Dec 16, 2020
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.
“Buying’s easier, selling’s hard – [it’s] hard to know when to get out.” – Seth Klarman
On a day when the FOMC is scheduled to announce a decision on interest rate policy and Congress is attempting to hammer out a stimulus bill, the latest data on Retail Sales is providing ammunition on the part of policymakers to go big. Retail Sales for the month of November were weak on all counts both relative to expectations and on an absolute basis. The headline index, for example, was expected to decline by 0.3% but actually saw a much larger decline, falling 1.1%. Later today, we’ll also get updates to Markit’s Manufacturing and Services Indices, Business Inventories, and Homebuilder Sentiment for the month of December.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, a recap of economic data out of Europe, an update on the latest national and international COVID trends, and much more.
Along with just about every other asset priced in dollars, the price of bitcoin has been on the rebound in recent days, and in early trading today, prices are back above $20,000 to record highs. Again, as we discussed a couple of weeks ago when bitcoin was taking out its highs from late 2017, the latest run to $20,000 hasn’t been accompanied by nearly the amount of hype as there was back in 2017. All those people must be too busy focusing on SPACs.
Dec 15, 2020
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“What the wise do in the beginning, fools do in the end.” – Warren Buffett
After four days in a row of losses, equities are looking to break the streak today. The FOMC begins a two-day policy meeting today, so any news on that front won’t be out until tomorrow. In economic data this morning, Import Prices missed expectations (0.1% vs 0.3%) while export prices were higher than expected (0.6% vs 0.2%). The Empire Manufacturing report for December came in slightly weaker than expected (4.9 vs 5.4), but considering the rising caseloads and concerns over their economic impact, it’s encouraging to see that this reading is still positive at least.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, a recap of economic data out of China, an update on the latest national and international COVID trends, and much more.
What a year it has been for the US Dollar. At the height of the pandemic, flows into the dollar surged as investors sought safety in the uncertainty. At its peak in March, the US Dollar Index surged to its highest level in over three years (January 2017). As concerns over the pandemic eased, though, all of those inflows quickly unwound, and now less than nine months later, the Dollar Index is trading at its lowest level in more than two years (April 2018).
While pot stocks or emerging market currencies have no problem with swinging wildly from multi-year highs to multi-year lows in a matter of months, for an asset like the US Dollar, moves of this magnitude are much less common. The chart below shows the number of days in each year that the US Dollar Index has closed at a two-year high (blue bars) or a two-year low (red bars). Going back to 1973, a period spanning nearly half a century, there have only been three other years where the Dollar Index has closed at two-year highs and two-year lows in the same year. Those years were 1985, 1994, and 2008.
Dec 14, 2020
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“Spend each day trying to be a little wiser than you were when you woke up.” – Charlie Munger
If you were wondering how many times the market can rally on the same news, the answer is at least one more time. Once again today, the market is rallying on news related to the COVID vaccine, which has started shipping in the US and will start going in the arms of Americans around the country this week. It’s a quiet day with no economic news on the calendar, but as has been the case every day lately, we’re also likely to see a number of headlines related to the prospects (or lack thereof) for an additional relief bill.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, a recap of the Japanese Tankan survey, an update on the latest national and international COVID trends, and much more.
With a gain of just over 1%, the S&P 500 is already having a decent month, but if seasonal trends are any indication, the second half should be even better. The chart below comes from our Seasonality Tool and shows the median historical one week, one-month, and three-month performance of the S&P 500 over the last ten years. In terms of the one-week and one-month performance, the median gains of 1.2% and 2.93%, respectively, both rank above the 90th percentile. Looking further out over the next three months, the S&P 500’s median gain of 4.06% is still impressive but doesn’t rank quite as strong in the 79th percentile.
Dec 11, 2020
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“Diplomacy is the art of telling people to go to hell in such a way that they ask for directions.” – Winston Churchill
Lawmakers on both sides of the Atlantic are in intense discussions, but the involved parties in both sets of talks have yet to reach an agreement. Over in the UK, negotiators in the UK and EU have been at a stalemate and European Commission President Von Der Leyden says no deal is the most likely outcome of current talks. Closer to home in the US, lawmakers in Washington haven’t quite told each other to go to hell, but they still can’t agree on the terms of a new round of fiscal relief.
Futures are lower heading into the last trading session of the week as all of the major averages with the exception of the Russell 2000 are set to finish the week lower. Don’t tell that the this week’s latest round of IPOs, though. As noted in today’s Morning Lineup, they’ve been on fire lately.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, a recap of recent IPO performance, an update on the latest national and international COVID trends, and much more.
After yesterday’s rally in the Nasdaq, we wanted to provide a quick update on its intraday performance over the last three weeks. Even after yesterday’s rebound, the Nasdaq remains well below the uptrend it broke earlier this week. Looking forward, that level is likely to act as short term resistance on any bounce.
Similar to the Nasdaq, the S&P 500 also broke its uptrend earlier this week, but not to quite the same degree as the Nasdaq. Like the Nasdaq, though, that former uptrend line is likely to act as a short-term speed bump on any bounce.
Lastly, while most investors wouldn’t touch long-term treasuries at this point, they’ve actually performed quite well over the last few trading days and will likely break this short-term downtrend in today’s trading.
