Nov 23, 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.
“You live and you learn. At any rate, you live.” – Douglas Adams
It looks like the market has another case of the Mondays. Unlike ‘typical’ Mondays, this Monday represents the third straight week that Americans are waking up to positive news related to vaccines. As one might expect given the headlines, futures are higher with reopening stocks leading the way. Stay at home stocks, on the other hand, are predictably trading lower. In both cases, though, the headlines seem to have a diminishing impact as the magnitude of the moves in all of these asset classes are smaller than the initial vaccine news from earlier this month on November 9th.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, Markit PMI data, trends related to the COVID-19 outbreak, and much more.
The CDC may be recommending that Americans stay at home rather than travel this Thanksgiving, but if recent air travel statistics are any indication, the advice isn’t necessarily being followed. The chart below shows the seven-day average y/y change in the number of passengers traveling through TSA checkpoints since the crisis began. On the one hand, passenger traffic is down an average of 61.2% relative to the same time last year. While that’s a big drop, it’s actually the least negative reading we have seen since March when the crisis began. Furthermore, yesterday’s passenger throughput was 1.048 million which was the highest single-day reading since March 16th and just the third day since then that there were more than 1,000,000 air passengers in a single day (Friday and 10/18 were the two others).
Nov 20, 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.
“I used to be indecisive but now I am not quite sure.” – Tommy Cooper
Depending on the index, futures are trading at either end of the flatline this morning, but that’s an improvement over where things stood last night. Following Treasury’s decision last night for the FOMC to returns funds from the emergency lending programs, futures initially traded lower, but shortly after the open in Asia, sentiment started to improve, and the losses were steadily erased.
In terms of data today, there’s nothing besides COVID to speak of as the economic calendar is blank and there’s very little in the way of earnings reports. With next week being Thanksgiving, maybe the market will have a few quiet days ahead of it. Or then again, maybe not!
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, economic data in Japan, trends related to the COVID-19 outbreak, and much more.
While it seems like there has been a lot going on in the markets for the last two weeks, the reality is that we’ve essentially been rangebound. Below we show the intraday charts of the S&P 500 and Nasdaq over the last 15 trading days. Beginning with Pfizer’s positive vaccine news before the open on 11/9, the S&P 500 and Nasdaq have essentially been on a treadmill with a number of swings up and down, but really nothing to show for any of it.
Investors just can’t seem to make up their minds at this point between placing more emphasis on the shorter-term concerns on the impact of rising case counts or the positive long-term impacts of viable vaccines. Decisions. Decisions. One thing we are sure of is that there’s nothing wrong with some healthy consolidation to digest the big gains from earlier in the month and work off overbought conditions in the process, so this is perfectly normal.
Nov 19, 2020
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“Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value.” – Warren Buffett
Futures are lower again this morning, but what was looking like it would be a pretty rough day in the market when Europe opened has steadily improved in the last few hours. It’s a busy day for economic data today with initial and continuing jobless claims and the Philly Fed report coming out at 8:30. Initial claims came in higher than expected (742K vs 700K) while continuing claims were a bit lower (6.372 million vs 6.4 million). Regarding the Philly Fed report, manufacturing activity came in stronger than expected falling to just 26.3 from 32.3 versus expectations for a decline to 22.5).
At 10 we’ll get the latest reads on Leading Indicators and Existing Home Sales, and finally, at 11 AM we’ll get the November read on manufacturing in the Kansas City Federal Reserve district. Once we get those reports, though, that will be it for the week in terms of economic data.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, employment data in Australia, trends related to the COVID-19 outbreak, and much more.
The S&P 500 is on pace for its third straight day of declines today, and while rising numbers of COVID cases have been cited as a culprit, that’s been the case for weeks now, so why did the market finally decide to focus on it now? Another factor to consider is the fact that the market has seen an enormous rally this month, and heading into this week the S&P 500 was trading at ‘extreme’ overbought levels.
The chart below comes from page two of the Morning Lineup and shows the S&P 500’s daily overbought/oversold reading over the last year. Following Monday’s rally, the S&P 500 closed more than 2.3 standard deviations above its 50-day moving average which was the most overbought reading for the index since July 2018. Whenever markets get that extended it doesn’t necessarily mean that they have to trade lower from there, but it usually indicates that a period of consolidation is in order so that the market can catch its breath.
Nov 18, 2020
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“If the only tool you have is a hammer, you tend to see every problem as a nail.“ – Abraham Maslow
What was looking like a negative session for equities late last night steadily improved overnight, and futures are firmly in positive territory as the open nears. Sentiment was already improving, but Pfizer’s (PFE) announcement that its vaccine was actually 95% effective instead of 90% helped the positive tone. Also, the latest data on Housing Starts and Building Permits was inline to modestly better than expected.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, European economic data, trends related to the COVID-19 outbreak, and much more.
The big news outside of equities this morning is in cryptocurrencies as bitcoin’s price topped $18K for the first time since late 2017. After breaking out of its uptrending channel a few weeks back, bitcoin hasn’t looked back.
From a long-term perspective, bitcoin is now just $600 from its record high closing price, which would set the stage for a pretty textbook breakout if it occurs.
Given its attractiveness as a store of value, we like to compare bitcoin’s price to the price of gold. The last time bitcoin’s price was this high, gold was considerably lower, so one bitcoin would buy close to 15 ounces of gold. Today, the ratio is considerably lower at just under 10 ounces. So, there’s a way to go before the ratio gets back to record highs, but the recent move has taken the ratio back above its most recent peak in 2019.
Nov 17, 2020
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“There are decades where nothing happens; and there are weeks where decades happen” – Vladimir Ilyich Lenin
Futures are lower this morning after investors take profits following a torrid rally since the start of the month. Home Depot (HD) reported earnings this morning, and despite strong results, the stock sold off on the news, and that helped contribute to the weaker tone in futures. Walmart (WMT) also reported earnings, and that’s having a modestly positive reaction in the pre-market as earnings season winds to a close.
Earnings season may be winding down, but there’s plenty of other factors for investors to contend with today as there’s a busy slate of economic data, including Retail Sales, Import Prices, Industrial Production, Capacity Utilization, Business Inventories, and Home Builder Sentiment. If that’s not enough for you, there’s also plenty of Fedspeak to deal with as well
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, Singapore trade data, trends related to the COVID-19 outbreak, and much more.
It’s been a strong month for the US equity market, but sometimes putting numbers on the totals helps to put it in perspective. Within the Russell 3000, which encompasses large, mid, and small caps stocks, the average performance of the stocks in the index this month is a gain of more than 15%. 15%! In most years, that’s considered a good year, and it’s only been eleven trading days!
In terms of sectors, Energy is leading the way as stocks in the sector are up an average of 24.6% followed by Communication Services, where the average performance of stocks in that sector has been a gain of just over 20%. Outside of those two sectors, Real Estate (19.6%), Industrials (18.4%), and Financials (16.1%) are the three only other sectors with average returns ahead of the Russell 3000. One sector notably absent from the list of outperformers is Technology. That sector normally tops the list during periods of market strength, but the average performance of stocks in that sector so far this month is 2.5 percentage points behind the market at 12.8%- not too shabby. With stocks in the Utilities sector averaging a gain of 9.7%, it’s at the back of the back, but it’s hard to consider that weak.
Nov 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.
“In investing, what is comfortable is rarely profitable.” – Robert Arnott
This week has kicked off looking very similar to last week as futures are surging on news of positive date related to a COVID vaccine. Last week it was Pfizer (PFE), but this morning it was Moderna (MRNA). Even the timing of the news announcements was similar! The MRNA news is very good as the headlines suggest the vaccine is more effective and can be stored in less extreme temperature conditions. What’s also important to note, however, is that futures were already considerably higher before the news, so the animal spirits were already out before the headlines.
In economic news, this week will be a relatively busy one on the data front, but the only report today was Empire Manufacturing for November which came in weaker than expected (6.3 vs 13.5). Also, don’t forget that earnings season will wind down this week with Walmart (WMT) reporting tomorrow.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, trends related to the COVID-19 outbreak, and much more.
Outside of the Nasdaq 100, last week was a positive one for every other major index ETF in our Trend Analyzer screen of major US indices. While QQQ was down just over 1%, the S&P 500 (SPY) was up over 2%, and small caps (IWM) surged over 6%. Those are impressive gains no matter how you look at it, but they also leave the majority of US indices at not only short-term overbought levels but ‘extreme’ overbought levels (at least 2 standard deviations above the 50-DMA). Again, this does not mean that equities have to trade lower from here, but from a timing perspective, conditions are poor.
