Jul 1, 2020
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It’s a new quarter for the market, and investors appear to be suffering a bit of a hangover after last quarter’s big gains. ADP Private Payrolls were just released and came in weaker than expected (2.369 million vs 2.900 million). In any other environment, a miss of over half a million payrolls relative to expectations would have been newsworthy by itself, but when you’re dealing in millions, what’s a few hundred thousand between friends?
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, PMI Manufacturing data for June, global and national trends related to the COVID-19 outbreak, and much more.
When we first started putting the table below together this morning, SPY was indicated to open down by over half of one percent, but as of now, the margin of decline has been cut in half. Therefore, we have expanded the table to show all days where SPY opened a new quarter with a downside gap of 0.25% or more. Time will tell, but by the time the opening bell rings, we may not even be at that level.
While first impressions in these quarters weren’t very good, SPY’s performance from the open to close tended to be positive with an average gain of 0.38% (median: 0.42%) and positive returns over 70% of the time. For the rest of the quarter, performance was even better as the SPY averaged a gain of 5.40% (median: 6.94%) with gains over 80% of the time. Also, keep in mind that the largest downside gap to open a quarter was last quarter on April 1st when SPY gapped down over 3.5%. That certainly ended up being an April Fools’ joke as SPY rallied more than 25% from the close on 4/1 through yesterday’s close.
Jun 30, 2020
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We certainly wish we could have more days like yesterday. Although the market didn’t rally enough to erase Friday’s losses, the strong rebound was a moral victory for bulls heading into the final day of the quarter. The rebound also helped to support the idea that last week’s declines were at least in part due to portfolio rebalancing. This morning, futures are mixed with the Dow and S&P 500 indicated modestly lower while the Nasdaq is higher driven by positive earnings reports and guidance from Micron (MU) and Xilinx (XLNX). In terms of data, Chicago PMI and Consumer Confidence will be the key reports to watch.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, European markets and data, global and national trends related to the COVID-19 outbreak, and much more.
It’s not only going to be hard to say goodbye to yesterday but also the last quarter. With a gain of over 18% heading into the last day, the S&P 500 is on pace for its best quarter since the last quarter of 1998. This quarter’s gain comes after last quarter’s swoon of 20%, so YTD the market is still in the hole by over 5%.
Jun 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.
It’s a fresh start to what will be a shortened holiday week with US markets closed on Friday in observance of July 4th. Even with a shorter week, though, there’s a ton of economic data on the calendar with the usual end of the month/early month reports, including a simultaneous release of both Jobless Claims and the Non-Farm Payrolls report on Thursday at the 8:30 Eastern.
After a poor end to the week Friday, things are a little better in the pre-market with futures firmly in the green as Boeing (BA) trades up over 5% on news that it will resume 737 Max certification flights today. That opens up the path for the place to resume commercial flights, so now all the planes will need is passengers.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, European markets and data, global and national trends related to the COVID-19 outbreak, and much more.
Depending on the day it falls on, the days leading up to and after the July 4th holiday have historically been a quiet time for the market as a lot of Americans either take a day or two off before or after the holiday. With most of the country still under some form of social distancing restrictions this year, the typical holiday hotspots aren’t likely to be nearly as bustling this year, so this year’s July 4th is unlikely to be anything even close to resembling normal.
With the usual caveats in place, we would note that the period leading up to July 4th and the Summer months have, in recent history, been pretty positive for the equity market. The image below is from our Seasonality Tool and it shows the S&P 500’s median one week, one month, and three-month returns from the close on 6/29 over the last ten years. With a median gain of 1.32%, the S&P 500’s one-week return over the last ten years ranks in the 93rd percentile versus all other one-week periods throughout the year. One month later, the median return moves up to 2.58% which ranks in the 87th percentile. Three months later, the median gain comes in at just under 4%, which still ranks strong in the 78th percentile versus all other rolling three-month periods throughout the year.
Jun 26, 2020
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After trading near the flat-line just a short time ago, futures have been drifting lower, but even after these declines, the S&P 500 is only poised to erase less than half of its last hour gain in yesterday’s session. Financials are leading the weakness following the release of last night’s stress test results. Looking ahead to today, the only economic data of note is Personal Income (less bad than expected) and Spending (lower than expected) as well as Michigan Sentiment. While it’s not economic data, per se, daily updates from states on the status of COVID are also likely to move markets heading into the weekend.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, a discussion of last night’s stress test results, European markets and data, global and national trends related to the COVID-19 outbreak, and much more.
Outside of the Nasdaq 100, every one of the index ETFs in our Trend Analyzer are down YTD with small caps leading the way. While the Nasdaq 100 is up over 15%, the Russell 2000 is down by almost that amount. When it comes to US indices this year, it’s definitely been a tale of two cities.
The Russell 2000 has been a laggard on the year, but it has formed a nice and steady uptrend off the March lows. At the moment, though, it’s testing that level after just testing it two weeks ago. While there have been plenty of tests of that uptrend line over the last three months, every other time we have retested this trend line it came after the Russell made a higher high. This time, though, the test is coming from a lower high. Definitely keep this chart on your radar as the lower high could be signaling a loss of momentum.
Jun 25, 2020
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Optimism is hard to come by this morning as COVID case numbers are moving in the wrong direction across most of the country. Also, an announcement from Disney that it would delay the re-opening of its California theme park throws the whole timetable of the economic reopening into question.
Jobless claims were just released, and while initial claims fell for a record 12th straight week, they were higher than expected. In the last 12 weeks that claims have declined, they have come in higher than expected nine times! Continuing claims, however, were a bit more positive as they dropped below 20 million for the first time since mid-April. Who would have ever thought that a sub-20 million number would be a good thing? The reaction in the futures market to all this data was negative at first but as we type, they have been quickly recovering. Stay tuned.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, European markets and data, global and national trends related to the COVID-19 outbreak, and much more.
Yesterday was the 20th day since the February peak that the S&P 500 was down 2%+ in a single day. In terms of percentages, that’s 22.22% of all trading days during that period. The table below highlights each of the prior occurrences during that span along with the S&P 500’s performance the following day and week. In recent history at least, the S&P 500 has had a positive bias following these occurrences with an average gain of 1.28% (median: +0.58%) and gains 63% of the time. Over the following week, the average change is not as positive with an average decline of 0.47% (median: +0.57%) and gains just barely half of the time.
One thing to note, though, is that the tide really started to shift after St. Patrick’s Day (3/17). Since then, the S&P 500 has been up the day after a 2% decline eight out of ten times and up the following week nine out of ten times. Before 3/17, the trend was overwhelmingly negative. It’s still early, but hopefully, the bulls’ luck hasn’t run out.
Jun 24, 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.
After a record closing high for the Nasdaq yesterday capping off eight straight days of gains, US equity futures are under some pressure this morning but off their lows from around 5:30 Eastern time. The culprits for the decline this morning are two-fold. First, concerns over rising COVID case counts in parts of the country are raising fears of renewed regional shutdowns in the US. The second and just as impactful catalyst this morning is news of $3.1 billion in proposed new US tariffs on EU imports of olives, beer, gin, and trucks and increased tariffs on aircraft, cheese, and yogurt. The downturn in US futures accelerated at the European open when news of the tariffs first hit the wires.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, a discussion of how current polling sees the outcome of this November’s election, European markets and data, global and national trends related to the COVID-19 outbreak, and much more.
If you’re like us, you’ve heard a lot of talk about how narrow the rally in equities has been lately. The five largest stocks in the S&P 500 account for what seems like a record share of the entire index, and the argument goes that if you don’t own those five stocks, you’re probably underperforming. That’s hardly the case.
Take the Nasdaq 100. Quarter to date, the index is up over 30%, and the five largest stocks in the US, which are all part of the index (Apple, Microsoft, Amazon, Alphabet, and Facebook), have rallied an average of 37% with gains ranging from 25.99% for Alphabet to 45.23% for Facebook, So yes, these five stocks are collectively outperforming the index. What’s also important to note, however, is that of the remaining 95 stocks in the index, 18 have a better QTD performance than all five of them. That doesn’t exactly strike us as a narrow rally.
The table below lists the 18 stocks in the Nasdaq 100 that are outperforming Facebook (the top-performing of the ‘fab-five’) so far this quarter. Leading the way higher, MercadoLibre (MELI) has doubled, while another three stocks are up over 80%.
