Aug 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.
“Waiting helps you as an investor and a lot of people just can’t stand to wait.” – Charlie Munger
Heading into the 8:30 data, we were looking at the possibility of the first back to back sub-million readings in jobless claims and the first reading below 15 million in continuing claims since April. Well, you can’t win them all. While continuing claims fell below 15 million to 14.844 million, initial claims surged to 1.106 million for the largest weekly increase since March.
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.
We hear a lot about how top-heavy the market has become and how uneven performance has been, especially since the COVID crisis began. Looking at performance on a group basis, though, doesn’t quite confirm that narrative. After Wednesday’s modest losses, the S&P 500 is down slightly relative to its 2/19 pre-COVID high. Of the 24 S&P 500 industry groups, eleven have outperformed the S&P 500 since 2/19 while thirteen have underperformed. That’s almost an even split right down the middle and exactly what you would expect to see for a stock market that is essentially unchanged over that span.
Leading the way to the upside, two groups stand out among the rest, and they are Retailing and Tech Hardware which have both rallied over 25%. This is where the top-heaviness of the market comes into play as Retailing is primarily Amazon (AMZN) while Tech Hardware might as well be Apple (AAPL). To the downside, though, two groups also standout against all the others. With declines of over 30% since 2/19, both Banks and Energy are lagging every other industry group by at least ten percentage points.
Aug 19, 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 business or in life, don’t follow the wagon tracks too closely.” – H. Jackson Brown Jr.
Yesterday, it was Home Depot (HD) and Walmart (WMT) and today one of each company’s chief competitors released earnings, and they did not disappoint. Lowe’s (LOW) reported a 34.2% increase in comp sales which was basically twice expectations while Target’s (TGT) comp sales came in nearly triple forecasts (24.3% vs 8.6%). Whether they’re the result of stimulus or not, the results were astonishing.
Outside of those big earnings reports, there’s not a lot of data today besides the Fed minutes and Nvidia’s earnings after the close. Futures were higher earlier following on the record closing high from Tuesday but have been drifting lower as we approach the opening bell.
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 S&P 500 just broke a streak of nearly six months without making a new high on a closing basis, but the Nasdaq made its first post-COVID record high more than two months ago on June 8th and since then has made 18 record highs compared to the S&P 500’s one new high yesterday. For the entire year now, the Nasdaq (34) has made 20 more new highs than the S&P 500 (14). Going back to 1980, there have only been three other years where the spread was wider in the first 159 trading days of the year, and they were all in the 1980s. In other words, the gap between the number of record highs for the Nasdaq and S&P 500 hasn’t been this wide in more than 30 years. It’s time for the S&P 500 to play catch up, and don’t even get us started on the Russell 2000.
Aug 18, 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.
“As sure as the spring will follow the winter, prosperity and economic growth will follow recession.” – Bo Bennett
Up until a few minutes ago, the most impressive stats of the morning were the monster comp sales growth numbers from Home Depot (HD) and Walmart (WMT), but the just-released Housing Starts and Building Permits reports for the month of July blew the doors off expectations. Housing Starts were expected to come in at a level of 1.24 million on a SAAR basis but came in more than 200K higher at 1.496 million (highest since February). Building Permits were similarly strong. While economists were expecting the headline reading to come in at a SAAR level of 1.32 million, the actual reading was just under 1.5 million. That was the best reading for Building Permits since January.
If you’re keeping track at home, Retail Sales hit a record high on Friday, and now Housing Starts and Building Permits are back to pre-pandemic levels. Obviously, these strong numbers have been aided by the relief programs put in place in response to the COVID outbreak, but the strength does show that these programs were effective.
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, the most impressive numbers of the morning originally were the same-store sales results from Home Depot and Walmart. Same-store sales at WMT increased by 9.9% while HD sales increased by over 23%. Keep in mind that these numbers cover a period where the US economy is in a recession!
Aug 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.
“The most dangerous people in the world are very smart traders who have never gotten their teeth kicked in.” – F. Helmut Weymar
There’s not a whole lot going on in terms of newsflow to kick off this mid-August Summer week, but futures are higher as convention season kicks off, first with the Democrats and then the Republican party to follow next week. Normally, the selection of a VP candidate and the subsequent convention provides a boost in polling for challenger candidates, but so far Biden hasn’t seen any bounce in his election odds since the VP announcement last week. Granted, he is already ahead in polling, so that could be playing a role, but we’ll see how betting market trends play out over the course of this week.
In economic data, homebuilder sentiment must have been so good that they released it early. The report was supposed to be released at 10 AM eastern but instead came out at 8:07. While economists were expecting the headline reading to come in at 74, the actual reading was tied for a record high at 78. Obviously, homebuilders are feeling good!
Empire Manufacturing for August was just released and, while positive at 3.7, it missed the consensus expectation of 15.0.
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.
If there has been a reliable trend in the market over the last several years, it has been the leadership of the Technology sector. While there have been days or weeks where tech lags and value rallies, more often than not, it all comes back to tech, especially when the market is rallying. So far this quarter, though, tech hasn’t been leading, and it hasn’t even been playing second fiddle. In fact, Technology finds itself in the unconventional position where it is actually underperforming the S&P 500 quarter to date (QTD)! While sectors like Consumer Discretionary (1276%), Industrials (12.63%), and Materials (11.02%) are all up by double-digit percentages, the Technology sector’s ranking in terms of QTD performance is actually 6th out of 11 at 8.77%. What a dog.
Aug 14, 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.
“If most traders would learn to sit on their hands fifty percent of the time, they would make a lot more money.” – Bill Lipschutz
It’s not looking like a positive finish to the week for stocks as Thursday’s modest losses for the S&P 500 look set to continue today. Data overnight from China in the form of Industrial Production and Retail Sales were both weaker than expected. In Europe, Q2 GDP dropped 12.1%, which was in line with expectations while Employment declined 2.8% y/y. One bright spot is that futures are currently well off their lows from 5 AM (all times eastern).
In the US today, we also have a ton of data to contend with starting off with Retail Sales (mixed, headline missed but Control Group better than expected) , Non-Farm Productivity, and Unit Labor Costs at 8:30 (both much higher than expected). Then, at 9:15, we’ll get Industrial Production and Capacity Utilization, followed by Business Inventories and Michigan Sentiment at 10 AM. So, depending on how these reports come in, should shape how we finish the week.
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.
We’ve long been advocates that the days where the importance of transports acting as a leading indicator for the broader market have given way to the semis acting as the new transports of the digital 21st century. Lately, though, it hasn’t mattered which group you track. The chart below shows the relative strength of the DJ Transports and the Philadelphia Semiconductor Index versus the S&P 500 over the last year. For each index, a rising line indicates outperformance versus the S&P 500 while a falling line indicates underperformance. From late 2019 through this past Spring, the two indices moved in opposite directions from each other as semis trended higher, and transports lagged the market. Beginning in May, though, the Transports bottomed out and have started to outperform. With both indices now trending higher versus the market, it seems to be sending a signal that both the physical and digital economies are on the mend.
On a side note, it’s interesting to note that when all hell was breaking loose in the market in March, both the transports and semis saw their relative strength improve heading into the March 23rd low.
Aug 13, 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.
Time is the friend of the wonderful company, the enemy of the mediocre.” – Warren Buffett
For the first time in 21 weeks, jobless claims dropped below a million (963K), which was below consensus forecasts for 1.1 million. Continuing claims also came in lower than expected but by a narrower margin. 963K is still high by all historical comparisons outside of the last several months, but it indicates a continuation of a move in the right direction. Regarding stimulus talks, if it was going to take a sense of urgency to get Democrats and Republicans to come to an agreement, the stock market trading right near record highs and jobless claims back below a million aren’t providing any ammunition.
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, new FHFA fees on mortgage refinancings, trends related to the COVID-19 outbreak, and much more.
Small caps have been outperforming large gaps in recent weeks off the March lows after the Russell 2000 was decimated during the COVID crash. Over just the last week, the Russell 2000 has outperformed the S&P 500 by nearly a full percentage point, but as shown in the chart below, the index still has some catching up to do. Besides the fact that small caps saw their peak relative to large caps earlier in the last decade, they have only erased barely more than half of the underperformance they saw from the S&P 500’s February peak to March trough.
