Aug 5, 2020
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Quote of the Day: “There is a time to go long, a time to go short, and a time to go fishing.” – Jesse Livermore
Markets are set up for another positive day as US equity futures are firmly in positive territory following some strong economic data out of Europe that followed a weak Services PMI reading out of China. The ADP Private Payrolls report for July was just released and came in well short of expectations, rising 167K compared to forecasts for a gain of 1.2 million. That’s a pretty big miss, but this employment data has been pretty difficult to forecast lately.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, key earnings and economic news in Europe and the US, trends related to the COVID-19 outbreak, and much more.
Gold is trading up over 1% this morning and putting the $2,000 level further in the rearview mirror. Today’s gain represents the 13th positive day for gold in the last 14 trading days as investors rotate into the asset class as a store of value.
In a world that has gone increasingly digital in the last several years, bitcoin has served as a form of digital gold. In the last year, though, bitcoin hasn’t done nearly as well as physical gold. As shown in the chart below, the front-month gold contract is up nearly 40% over the last year while bitcoin is barely unchanged.
Aug 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.
Quote of the Day: “Wall Street sells stocks and bonds but what it really peddles is hope.” – Jason Zweig
We have a quiet day of economic data to contend with, but there should be plenty of drama concerning the ongoing discussions in DC over additional stimulus. Futures have been drifting lower all morning after peaking right before the European open. Earnings news continues to impact individual stocks as the overall market reaction to these reports has been positive.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, key earnings and economic news in Europe and the US, trends related to the COVID-19 outbreak, and much more.
The S&P 500 traded to its highest levels since February yesterday, but one breadth measure uncharacteristically lagged. As shown in the chart below, the S&P 500’s cumulative A/D line hasn’t made a new high since 7/22. While it’s nowhere near breaking down at his point, it is a trend worth highlighting as this measure has consistently led price over the last few years.
Aug 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.
Quote of the Day: “I have talked to the heads of almost every single one of these firms in the last 72 hours, and Ben Bernanke has no idea what it’s like out there. None. And Former St. Louis Fed. President Bill Poole has no idea what it’s like out there. My people have been in this game for 25 years and they’re losing their jobs, and these firms are going to go out of business, and he’s nuts! They’re nuts! They know nothing! … This is a different kind of market, and the Fed is asleep.” – Jim Cramer 8/3/07
We’ve got no cases of “the Mondays” to deal with this morning as US equity futures have been rallying all morning and trade near their highs of the session on positive economic data out of Europe (first expansionary manufacturing PMI reading in 18 months) and a slowing of Covid cases in the US. The S&P 500 is poised to open at levels it hasn’t traded at since 2/24, while the Nasdaq is indicated to open up just under 1%. That may sound like a good move for the Nasdaq, but keep in mind that the index has rallied more than 1% on seven of the last eight Mondays. That’s impressive!
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, key earnings and economic news in Europe and the US, trends related to the COVID-19 outbreak, and much more.
The Fed may have been asleep back in August 2007, but they have gone out of their way to not make the same mistake this time around. The floodgates have been busted wide open with liquidity. At the time of Jim Cramer’s rant thirteen years ago today, the Fed Funds rate was over 5%. Today, it’s not only at zero, but the Fed has been actively purchasing government, agency, and corporate debt. The Fed of 13 years ago was downright prudish compared to the Fed today.
Cramer’s rant also came right near the market peak and was quickly followed by one of the largest equity drawdowns in US stock market history. By March 2009, the S&P 500 was down more than 50% as much in the way of personal retirement savings, many banks and corporations, and the entire financial system were nearly wiped out.
In the stock market, though, time often acts as the best elixir. It took four years for investors to get back to even from the time of Cramer’s now-famous comments. Longer-term, though, investors have been rewarded for staying the course. Through last Friday, the S&P 500 was up just under 200% versus where it was 13 years ago, and on an annualized basis, that works out to over 8.5%.
Jul 31, 2020
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Quote of the Day: “The person who is the star of previous era is often the last one to adapt to change, the last one to yield to logic of a strategic inflection point and tends to fall harder than most.” – Andrew Grove
The big four of Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), and Facebook (FB) all reported last night, and with the exception of Alphabet, they all came through with very strong reports. The big event is now behind us, and next week the economy will get added attention with both the ISM Manufacturing and Non Manufacturing reports as well as the July Non-Farm Payrolls report. Earnings and economic data. We can’t wait!
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, key earnings and economic news in Europe and the US, trends related to the COVID-19 outbreak, and much more.
We doubt Andy Grove ever had Intel, the company that in the 1990s he transformed into the world’s largest semiconductor company, in mind when he wrote the above words. However, with the company announcing last week that it would delay the rollout of its 7nm manufacturing process and missing the boat on yet another industry shift in the semiconductor sector, the words couldn’t be more applicable today. While Intel was basically “the semiconductor industry” in the 1990s, today its dominance is a shell of its former self. The stock is down nearly 20% YTD and trading closer to 52-week lows than 52-week highs.
While Intel flounders, the rest of the semiconductor sector has been going in the opposite direction. Intel is the worst-performing stock in the Philadelphia Semiconductor Index (SOX) this year, but the average YTD performance of the 30 stocks in the index has been a gain of over 15%. Similarly, since the March lows, the average stock in the SOX is up over 65%. INTC? It’s down over 3% and the only stock in the index down during that time. Talk about falling harder than most.
Jul 30, 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.
Quote of the Day: “The secret to investing is to figure out the value of something – and then pay a lot less.” – Joel Greenblatt
Did traders who bought Eastman Kodak (KODK) in the $2s last week figure out Greenblatt’s “secret” to investing?
Well, we got that over with. We have all just experienced what will likely be the worst quarter of economic growth in our lifetimes. At least it better be! Q2 Advance GDP was just released, and while economists were forecasting an annualized decline of 34.5%, the actual reported number was a bit better at -32.9%. In any other environment, a GDP report that was 1.6 percentage points better than expected would be extraordinary, but when you’re dealing with numbers in the 30s, it’s no big deal. In other economic news, Initial Jobless Claims were better than expected, but Continuing Claims came in considerably higher.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, key earnings and economic news in Europe and the US, trends related to the COVID-19 outbreak, and much more.
Since the Nasdaq’s most recent peak on 7/20, it should come as no surprise that Technology has been a laggard. As shown in the chart below, the sector has been the worst performer falling over 2%. Interestingly enough, the only two other sectors that are down during this period are Telecom Services and Consumer Discretionary, and these declines are also due primarily to weakness in large-cap names like Amazon (AMZN), Alphabet (GOOGL), and Facebook (FB). Outside of these three sectors, every other sector has rallied since the close on 7/20, and all but one of them (Health Care) are up over 1%. So, while the S&P 500 has been bogged down by Tech and other mega-cap “tech-like” stocks, other areas of the market have been holding up just fine. Sectors like Real Estate, Energy, Consumer Staples, and Financials are all up 2.5% or more.
Jul 29, 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.
Quote of the Day: “Someone’s sitting in the shade today because someone planted a tree a long time ago.” – Warren Buffett
From a business perspective, it’s typically not a great thing when the center of attention on a given day turns to D.C. Unfortunately, that’s the case today for three reasons. First, after each side has outlined its opening demands for the next round of stimulus, Republicans and Democrats will not attempt to work out an agreement. Second, the FOMC. Today at 2 PM the Fed will release their latest decision on interest rates and monetary policy followed by a 2:30 press conference from Chair Powell. If that’s not enough, throughout the day we’ll also have the CEOs of Amazon (AMZN), Alphabet (GOOGL), Apple (AAPL), and Facebook (FB) testifying before the House antitrust committee. Besides members of Congress looking to create a good soundbite for their constituents back home ahead of this Fall’s election, don’t expect much to come from these hearings.
In other news, the flow of earnings has generally remained positive this morning while the pace of economic data will be relatively slow.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, key earnings news in Europe and the US, trends related to the COVID-19 outbreak, and much more.
In yesterday’s Consumer Confidence report, besides the fact that overall levels of confidence pulled back a bit, sentiment towards the stock market became less optimistic. In each month’s survey, respondents are asked whether they expect stock prices to rise or fall.
In this month’s survey, the percentage of consumers expecting stock prices to decline rose from 29% up to 38.1%. While that’s below the recent peak of 40.6% seen back in March, it’s still elevated relative to readings over the last few years. What’s even more notable about this elevated reading is that it’s incredibly uncommon to have this elevated of a reading with the S&P 500 within 5% of an all-time high. While there are a number of anecdotal stories suggesting frothiness in the market, surveys of average Americans like this one suggest that there’s still no shortage of apprehension.
