Bespoke’s Morning Lineup – End of the Nightmare?
Is this the end of the long national nightmare? This morning’s release of the June PPI came in slightly higher than expected on both the headline and core readings, and that has sent US Treasury yields slightly higher moving the yield curve (10-year vs 3-month) out of inverted territory (for now). Just when everyone had written off inflation forever, CPI and PPI both came in higher than expected.
Read today’s Morning Lineup to get caught up on news and stock-specific events ahead of the trading day and a further discussion of overnight events in Asia and Europe.
Bespoke Morning Lineup – 7/12/19
As mentioned above, the yield curve has briefly moved out of inverted territory for the first time in 35 trading days. There’s still an entire trading day left to go, but if this trend holds, it’s the story of the day.
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Bespoke’s Morning Lineup – Fed Flood
If you thought yesterday was a busy day of Fed headlines, you ain’t seen nothing yet! In addition to another round of testimony from Fed Chair Powell in front of the Senate today, five other Fed officials are on the calendar starting with Williams at 11:10 AM and ending with Kashkare at 5:00 PM. In addition, we’ll also get jobless claims (221K expected) and CPI at 8:30 AM. There’s not much in the way of earnings news today, but that will all change next week, so check out our Earnings Explorer for a look at companies scheduled to report.
Read today’s Morning Lineup to get caught up on news and stock-specific events ahead of the trading day and a further discussion of overnight events in Asia and Europe.
Bespoke Morning Lineup – 7/11/19
One thing we have grown accustomed to with this market is for breadth, as measured by the S&P 500 cumulative A/D line, to lead price action higher, so we were a bit surprised yesterday to see that even as the S&P 500 made a new intraday high (but didn’t make a new high on a closing basis), the cumulative A/D line remains off its highs. As shown in the chart below, the cumulative A/D line is only slightly below its prior highs, so it’s way too early to start calling this a divergence, but it’s just something that stuck out to us when we were going through the charts last night.
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Bespoke’s Morning Lineup – Powell Delivers
Investors will have to contend with a ton of headlines related to the Federal Reserve over the next two days. Beginning today with Powell’s testimony in front of the House Financial Services Committee, we will also hear from Bullard at 1:30 and the Minutes from June’s meeting at 2 PM. Then tomorrow, another six Fed officials are on the calendar. Suffice it to say, that in the next 36 hours markets should have a much better idea of what the FOMC plans to do at its July 31st meeting, although the fact that futures are already pricing in 100% certainty of a cut suggests that markets are already pretty confident in their views.
Just released text of Powell’s testimony is being met with a positive reaction from the markets as the Chairman said that uncertainty continues to weigh on the outlook.
Read today’s Morning Lineup to get caught up on news and stock-specific events ahead of the trading day and a further discussion of overnight events in Asia and Europe.
Bespoke Morning Lineup – 7/10/19
Futures have seen a nice rebound in reaction to the just-released Powell comments, and one section of the equity market that could really use a lift is small caps. On a relative strength basis, small caps are right at their lowest level of performance versus the S&P 500 since the end of the Financial Crisis in 2009.
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Bespoke’s Morning Lineup – Triple Digit Three-Peat
The Dow is on pace to post triple-digit declines in the opening minutes of trading for the third straight day, and that comes on the heels of several days where US large-cap stocks hit all-time highs. One drag on the DJIA this morning is 3M (MMM), which was downgraded at RBC Capital. Weakness in Europe is also helping to drag down sentiment in the US as BASF cut guidance last night, and the British pound is at a two-year low.
Read today’s Morning Lineup to get caught up on news and stock specific events ahead of the trading day and a further discussion of overnight events in Asia (including a horrendous MTO report in Japan) and Europe.
Bespoke Morning Lineup – 7/9/19
Brazilian equities are one area of the emerging markets space that has continued to break out this week as the benchmark Ibovespa approaches 105,000 for the first time ever. Sentiment on the country has really improved of late as a result of optimism concerning the outlook for an overhaul of the country’s social security system.
Even in dollar terms, Brazilian equities are breaking out. In just the last three days, the dollar-adjusted Ibovespa also broke out to new 52-week highs. If dollar weakness going forward continues, Brazilian equities should present strong returns from the perspective of US investors.
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Bespoke’s Morning Lineup – July 4th Hangover Continues
After five straight days of gains and a number of record highs for the S&P 500 heading into July 4th, the post-holiday hangover for bulls continues this morning as US equities are poised for a second straight day of declines. The economic and earnings calendars are light today, so it could end up being a quiet summer day of trading as markets gear up for Powell testimony later this week and the start of earnings season next week.
Read today’s Morning Lineup to get caught up on news and stock specific events ahead of the trading day and a further discussion of the Deutsche Bank news over the weekend.
Bespoke Morning Lineup – 7/8/19
Friday’s better than expected jobs report put a dent in the narrative for rate cuts as far as the eye could see. However, while the market is now pricing in less than a 5% probability of a 50 bps rate cut at the July meeting versus something closer to a one-three chance at this time last week, there is still 100% certainty that the FOMC will cut rates by 25 bps at the July meeting. So, it’s not as though cuts have been taken off the table.
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Morning Lineup – Tap. Tap. Tap. Is this Thing On?
Trading desks are sparsely staffed this morning, and if you are reading this either at the office or on your way to work, we feel your pain. Questions we ponder on a day like today are why is the day before July 4th a shortened session, but the Friday after isn’t?
Anyways, the big June payrolls report is right on tap and should go a long way in letting us know if the futures markets have been correct in anticipating at least a 25 bps rate cut at the end of July.
In other news…it’s a summer Friday sandwiched between a holiday on one side and the weekend on another. There really isn’t much.
Read today’s Morning Lineup to get caught up on news and stock specific events ahead of the trading day and everything you may have missed since Wednesday’s close.
Bespoke Morning Lineup – 7/5/19
Believe it or not, today is only the 6th time in the last 45 years that July 5th has fallen on a Friday, but like today, each of the prior Friday, July 5ths also featured Non-Farm Payrolls (NFP) reports. In the two charts below, we have grouped the five prior events (1985, 1991, 1996, 2002, and 2013) based on whether the reported Non-Farm Payrolls reading that day was better or worse than expected.
Overall, market performance has generally been positive on these five days as the S&P 500 has seen an average gain of 0.65% with positive returns four out of five times, and on two of the five days, equities closed early on the day.
Out of the five NFP that fell on Friday, July 5th, three were weaker than expected. As shown in the first chart below, the S&P 500 finished the day higher on all three days with gains ranging from 0.2% all the way up to 3.67% on 7/5/02.
On the two days where NFP were better than expected, returns weren’t as positive. In 2013, the S&P 500 rose 1.02% when NFP came in ahead of forecasts, but in 1996, when the unemployment rate fell a surprising 0.3% percentage points and hourly wages saw their largest m/m percentage increase in 13 years, investors were spooked that the strength would lead to more hawkish rate policy from the FOMC. While a strong report of that magnitude is pretty much out of the question today, a significant beat relative to expectations is unlikely to be met with a positive reaction from the market.
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