Sep 8, 2020
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“Invest for the long haul. Don’t get too greedy and don’t get too scared.” – Shelby M.C. Davis
It looks like traders were a little late to realize that it was September. After two days of gains to kick off the month, things have gotten a bit dicier in the last several days, and today is not looking good at all, especially for Technology. In economic news, the calendar is light today with the only release being the NFIB Small Business Optimism index. That report was better than expected but hasn’t had much of an impact on sentiment.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, market performance in the US and Europe, trends related to the COVID-19 outbreak, and much more.
The Nasdaq 100 is poised to open down more than 3% this morning putting it back in the territory of a 10% correction. One positive (for now) is that the Nasdaq 100 tracking ETF (QQQ) remains above Friday’s intraday low of 271.80 as well as its 50-DMA, which is lower than that ($269.19). These will be two levels to watch throughout the trading day today.
Sep 4, 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.
“The eyes are more exact witnesses than the ears.” – Herclitus
Yesterday was an ugly day, although many people we spoke with were surprised that both the S&P 500 and Nasdaq had similar but larger reversals back in June, so it’s not as though the move was unprecedented. There’s no arguing the market was a bit frothy, especially in large-cap tech, heading into Thursday’s rout, so some mean reversion is to be expected.
In the short-term, the worst may not be over for big-tech. It remains the most overbought sector of the market, and continued tensions with China, the latest being reports that the country will increase support for its domestic semiconductor industry, only adds to the tensions.
In Europe, the region is seeing its second straight day of disappointing economic data. The focus for the short-term in US markets, though, is the August Non-Farm Payrolls report. Economists were expecting 1.35 million jobs, the Unemployment Rate is expected to drop back below 10% to 9.8%, and average hourly earnings are expected to remain unchanged. The actual results were much stronger than expected. While job creation was only slightly better than expected (1.371 million), the Unemployment Rate dropped to 8.4%, and Average Hourly Earnings increased 0.4%.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, market performance in the US and Europe, trends related to the COVID-19 outbreak, and much more.
As mentioned above, even after yesterday’s sell-off, many sectors remain overbought. In fact, the only sectors not trading more than a standard deviation above their 50-day moving averages (DMA) are Utilities, Health Care, and Energy. Energy is also the only sector currently trading below its 50-DMA, while Technology is still trading 7.2% above its 50-DMA, which ranks third of the eleven sectors just slightly behind Communication Services (+7.24%) and Consumer Discretionary (+7.23%).
Sep 3, 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.
“Drunkenness is not romantic; it’s a form of temporary insanity. And hangovers are the body’s way of asking, ‘What were you thinking?”
― Susan J Anderson
After an absolutely insane move where its stock rallied more than 75% on nothing really more than news of a stock split, shares of Tesla (TSLA) are in the middle of a hangover as the stock is on pace for its third straight daily decline of roughly 5%. Shares of Apple (AAPL) also ran up during August, in part on its stock split announcement, but the rally wasn’t nearly as large and wasn’t solely based on the split announcement. It too is experiencing a bit of a reality check in the last two days as well.
US futures have been somewhat weak this morning as large-cap tech stocks see some mean reversion. Over in Europe, equities are trading higher following yesterday’s strong afternoon rally in the US. Economic data in Europe, in the form of Services PMI indices for the month of August, came in weaker than expected with sizable pullbacks relative to July data. Europe was reportedly in much better shape with respect to the COVID pandemic, but that hasn’t translated to better economic data. At least not yet.
In the US, economic data came in better than expected across the board. Productivity was stronger than expected and Unit Labor Costs came in lower than estimates. Jobless claims were the headline report, and they came in lower than expected at 881K versus forecasts of 950K. Continuing claims were also lower than consensus forecasts (13.254 mln vs 14.0 mln).
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, market performance in the US and Europe, economic data out of Europe and Asia, trends related to the COVID-19 outbreak, and much more.
In last Friday’s Bespoke Report, we highlighted the recent underperformance of the semiconductors relative to the S&P 500 and how it was at a one-month low even as the S&P 500 hit record highs. This week, we have started to see a reversal of that trend as semis have had two very strong days. In the process, that mini-trend of lower highs that has been in place for the last few weeks has been broken. While economic headlines in the form of weaker PMIs for the Services sector raise some concerns regarding the health of the recovery, semis are starting to show a healthier picture.
Sep 2, 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’m totally used to deflation. Deflation is finished.” – Richard Fisher
Does somebody want to tell the market that the calendar says September? After the strongest first-day of September for the S&P 500 since 2010, global equities are in rally mode again today with Europe up nearly 2% and S&P 500 futures trading higher by over half of a percent.
ADP Employment for August just came out, and the headline reading missed expectations by a mile (428K vs 1,000K). While that’s a big miss, we would note that last month’s report was an even bigger miss relative to expectations (1,67K vs 1,200K), and even after that big miss, the NFP report two days later exceeded expectations by nearly 300K (1,763K vs 1,480K).
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, market performance in the US and Europe, trends related to the COVID-19 outbreak, and much more.
With a rally of 0.75% yesterday, the S&P 500 kicked off the month with its best start to a September since 2010. Gains of this magnitude are not particularly common for the start of September. Since 1928, yesterday was just the 23rd time that the S&P 500 kicked off September with a gain of more than 0.50%. The table below highlights each of those occurrences along with the performance of the S&P 500 for the remainder of the month. In the 22 prior occurrences, the S&P 500 saw a median gain of 1.27% for the remainder of the month with positive returns 59% of the time. That may not sound like all that big of an advance, but for all months of September, the median performance from the close on the first trading day of the month has been a decline of 0.10% with gains slightly less than half of the time.
Sep 1, 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.
“Although it’s easy to forget sometimes, a share is not a lottery ticket… it’s part ownership of a business.” – Peter Lynch
With the stock split announcements from Apple (AAPL) and Tesla (TSLA) over the last month, we have been reminded by many market experts that stock splits don’t matter as they have no impact on company fundamentals. That’s obviously true, but tell shareholders or short-sellers of AAPL and TSLA that stock splits don’t matter. Since each company announced their respective stock splits since the end of July, they have seen their market caps increase by a combined roughly $700 billion! AAPL is now bigger than the entire Russell 2000, and Tesla is just one General Motors (GM), or $30 billion, from having a larger market cap than Berkshire Hathaway. AAPL’s market cap has been boosted by a blowout earnings report along with the stock split, but the $190 billion in market cap that TSLA has added has come on essentially no substantive news other than the split.
It’s a new month, but we’re seeing more of the same in markets this morning as the Nasdaq is set to open higher while the DJIA lags. The dollar is lower, and commodities are higher. In economic news, PMI data around the world showed modest increases in August with the majority of countries showing manufacturing gauges in expansion territory.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, market performance in the US and Europe, economic data out of Europe and Asia, trends related to the COVID-19 outbreak, and much more.
In a month where just about everything went up, the US dollar was lower in August as it has now been for five straight months. This current losing streak is the longest for the US Dollar Index since the six-month period ending in August 2017. Before that only longer streak was a ten-month streak ending in May 2003. Between those two streaks, there were three other five-month losing streaks. In the history of the US Dollar Index, there have only been a total of nine streaks that were longer and eight streaks that were as long. With the Dollar Index already down pretty sharply to kick off September, a six-month losing streak could certainly be in the cards. Better buy those imported goods while you can still afford them!
Aug 31, 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.
“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” – Albert Einstein
The last day of August and the first day of the week are on pace for gains, but futures are trading off their highs from earlier this morning. It was a busy weekend on the political scene as polling and betting markets continue to show a much tighter Presidential race and race for control of the Senate as well. What does that mean? Even more political ads for the next two months than you would have expected!
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, market performance in the US and Europe, economic data out of Asia, trends related to the COVID-19 outbreak, and much more.
2020 has definitely been the year or large-cap Nasdaq stocks. Besides rallying more than 35%, the Nasdaq 100, which tracks the Nasdaq’s largest stocks, has traded higher on more than 64% of all trading days so far in 2020. We’ve been updating the chart below throughout the summer, and it shows the percentage of up days for the Nasdaq 100 by year. While 2020 has often been near the top of the rankings, through 167 trading days, no other year in the Nasdaq 100’s history (since 1985) has had a higher percentage of positive days. The only years that have even been close were 1995 (63.5%) and 2017 (63.5%).
