Mar 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.
The market was hoping for more than a statement from the G7 this morning, but that’s all it got for now. As a result, positive action in the futures market quickly headed south. Things have bounced back quite a bit from the initial reaction as current indications suggest a modestly weaker open…for now.
Read today’s Bespoke Morning Lineup for the latest on Biden’s surge in the political polls ahead of Super Tuesday, news on coronavirus, and the latest stock-specific events.
The S&P 500 is already up over 4% MTD, and if yesterday’s gains don’t hold it would mark a truly momentous milestone for the S&P 500. That’s because we have already seen two straight months where the S&P 500 was up over 3% MTD but finished down in a given month. In the entire history of the S&P 500, there have only been four periods of back to back months where we have seen similar reversals with the most recent occurrence back in January and February of 2009. In case you were curious, there were only three other months in between these two periods where we saw a similar reversal in a single month (October 2009, January 2010, and November 2010).
Looking at the prior back to back monthly negative reversals, the S&P 500 was higher six months later three out of four times. The only negative period was in May and June of 1973 when the S&P 500 fell 6.4% over the next six months and 17.5% over the next year.
Mar 2, 2020
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Will they or won’t they cut rates? That is the question this morning as futures fluctuate massively overnight, trading in a range of over 4%. US Treasury rates are at record lows, the dollar is down and gold is up. It’s going to be another crazy week!
Read today’s Bespoke Morning Lineup for the latest stock-specific events, news on coronavirus, and the changing dynamics of the Democratic Presidential primary process.
The charts below are from page two of the Morning Lineup and as you can see, the moves last week were practically off the charts. The S&P 500 is more than three standard deviations below its 50-DMA, more than 85% of S&P 500 stocks are oversold, and equities are underperforming treasuries by their widest margins in nearly a year.
Feb 28, 2020
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Futures are lower once again this morning as the S&P 500 is now on pace for its 7th straight day of declines. The VIX also continues to rise as it traded above 47 earlier this morning. That’s a level that hasn’t been seen since February 2018. Given the lack of precedent for events related to the Covid-19 shock, there’s just no way to know where this collapse in stocks will end even though numerous market indicators have reached levels that would suggest a bounce is overdue.
Read today’s Bespoke Morning Lineup for the latest stock-specific events, the latest on the coronavirus, and a look at some positive economic data out of Europe.
There’s been a lot of talk in the last week that political factors like the rise of Bernie Sanders in the polls have been an overlooked factor impacting the market this week. People citing this factor have pointed to the weakness in the Health Care sector this week. We’re not sure what data these people are looking at, but the Health Care sector has been one of the better-performing sectors this week. It’s also one of just four sectors that’s not down 10% week to date!
When it comes to where sectors are trading relative to their trading ranges, it doesn’t get much more oversold than things are right now. The chart below is from page two of the Morning Lineup and as you can see, all but two sectors (Technology and Utilities) are more than three standard deviations below their 50-day moving averages.
Feb 27, 2020
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Equities still can’t find a floor as the newsflow on the spread of the coronavirus outside of China hasn’t shown any signs of improvement. What’s even more disconcerting is that the news headlines haven’t been all that bad yet either. Right now, it’s the fear of what could happen that’s driving the markets rather than what is actually happening. Meanwhile, just about every global equity market is trading lower right now, but China was actually up!
In economic data this morning, the only major outlier was a better than expected report on Durable Goods Orders. Jobless claims were higher than expected (219K vs 212K) but still not showing any early signs of stress in the labor markets.
Read today’s Bespoke Morning Lineup for a recap of the carnage in global equity markets overnight, the latest on the coronavirus, and a look at how the European economy was looking heading into the outbreak.
The S&P 500 is poised to open down another 1.5% this morning and that will bring the index ever so closer to reaching the 10% threshold for a correction. This current decline is already the steepest for the S&P 500 since the Q4 2018 near bear market, and if we reach the 10% threshold it will be the seventh such period since March 2009 where the S&P 500 dropped more than 10% from a bull market high. One notable aspect of this drop, though, is how fast it has happened which is very similar to the speed in which we dropped in early 2018 as well.
Feb 26, 2020
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Investors are searching for a waypoint on the path of the coronavirus outbreak, and global futures have been all over the place with S&P 500 futures trading in a range of over 2% from their highs last night to their lows this morning. Currently, futures are indicating a slightly higher open, but those levels can and likely will change by the time you read this.
Read today’s Bespoke Morning Lineup for the latest on the impact of the coronavirus, how the outbreak is impacting economic data, and the latest stock-specific news.
Given the magnitude of the declines over the last several days, it’s hard to believe that many major US indices still aren’t oversold relative to their 50-day moving averages. In fact, despite falling more than any other major index ETF over the last five trading days, the Nasdaq 100 (QQQ) is still above its 50-DMA!
Feb 25, 2020
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Futures are attempting a turnaround this morning, but the bounce is tepid at best. That’s especially true when you consider the magnitude of yesterday’s move. Unfortunately, clarity on the coronavirus will only come with time, and that’s one thing even the Fed can’t control.
Read today’s Bespoke Morning Lineup for the latest on the impact of the coronavirus, where it’s starting to show up in economic data, and the latest stock-specific news.
Yesterday was certainly one of those days where investors threw out everything including the kitchen sink. That was not only the case in the US but also in Europe. While just 13 stocks in the S&P 500 finished up on the day yesterday, for the STOXX 600, which includes stocks from all over the continent, only six stocks finished the day higher. That combined reading of just 19 stocks was the tenth weakest single-day breadth reading for the two indices going back to 1998. The table below lists each of the prior days where the total number of advancing issues between the S&P 500 and the STOXX 600 was below 20. Prior to yesterday, the last time breadth was as weak or weaker was back in August 2015 and before that 2011.
