Futures had been drifting higher this morning, but a ton of economic data was just released and it wasn’t good.  PPI missed on the headline but was stronger than expected at the core.  Retail Sales for December were much weaker than expected, and Jobless Claims also came in considerably higher than expected.  Jobless Claims have now been steadily drifting higher with the four-week moving average reaching its highest level in over a year and leading to the question, have we seen the low in jobless claims?  Read all about overnight events around the world and this morning’s news in today’s Morning Lineup.

Bespoke Morning Lineup – 2/14/19

With all the strength we have seen in equities so far this year, it’s pretty amazing that there has been practically no movement in the long-end of the Treasury curve, as the 10-year yield remains below 2.7% this morning.  With little changes in long-term rates, the yield curve (the spread between the yield on the 10-year and 3-month US Treasuries) remains below 30 basis points and is actually flatter now than it was at the end of December.  As we have repeatedly mentioned in the past, though, flat yield curves aren’t necessarily a bad thing for US equity prices or a negative signal for the economy.  It isn’t until the curve inverts (and then starts to re-steepen) that you have to start raising your guard.

Lawmakers in DC have reportedly come to an agreement on keeping the government open, and the President has agreed to go along with it.  Can you believe it?? Elsewhere overnight, there is some optimism on US-China trade talks, while economic data in Europe continues to stink up the joint. Read all about overnight events and this morning’s news in today’s Morning Lineup.

Bespoke Morning Lineup – 2/13/19

Yesterday was a pretty momentous day for the stock market.  Not only did the S&P 500 close back above its 200-DMA (barely), but the percentage of stocks hitting new highs also reached its highest point since December 3rd, before the big whoosh lower.  With the rally, though, the percentage of stocks that are short-term overbought has reached its highest level since January 26th of last year.  That by no means suggests we are due for a repeat of what happened following that last reading, but does indicate that short-term technicals are getting a bit stretched and that the market may need to pause and catch its breath.

Deal or no deal?  That is the question for today as Congressional negotiators have apparently reached an agreement on averting a government shutdown.  Now the only question is whether or not the President will go along with it.  We’ll be on the lookout for the tweet!  US equity futures are trading higher on the news, and while yesterday’s last hour did not see a big rally, it was the eighth straight day of gains in the final 60 minutes of trading!  Read all about overnight events and this morning’s news in today’s Morning Lineup.

Bespoke Morning Lineup – 2/12/19

Small business optimism came in significantly weaker than expected today falling from 104.4 down to 101.2.  That 3.2 point decline was the largest m/m drop since June 2015.  While a big drop is concerning, the temporary factor of the government shutdown probably played a large role.  Also, looking at a long-term chart, peaks in the NFIB index haven’t exactly been the best timing indicators of a recession.

On a shorter-term basis, though, the recent declines in the NFIB optimism index are notable in the fact that this month’s reading is now the lowest since November 2016.  In other words, nearly all of the boost in small business sentiment since the 2016 election has worn off. That right there is probably the number one reason the shutdown ended in late January!

Futures have been drifting up all morning and the S&P 500 is currently on pace to open about 40 basis points higher.  Meanwhile, the US Dollar Index is on pace for its 8th straight day of gains as there hasn’t been a down day for the greenback since the Fed’s pivot to a more dovish stance.  Chinese equities also returned from the New Year’s holiday with strong gains.  Read all about overnight events and this morning’s news in today’s Morning Lineup.

Bespoke Morning Lineup – 2/11/19

Stocks are set to open in the green this morning, but as anyone following things has no doubt noticed this year, the real action for investors has been during the last hour of trading.  The chart below shows the rolling 25-day percentage of days where the S&P 500 was positive in the last hour of the trading day.  As of Friday’s close, the percentage ticked up to 80%, which is a level not seen since early 2017.  Since 2009, the 80% level is a level that has only been reached or exceeded a few times.

A very rough night in Asia (2% declines on the Nikkei) and weak earnings in Europe have equities on the eastern side of the Atlantic lower and credit spreads wider.  Commodities are basically treading water on high volume, with oil down but products up, while the USD is at session lows along with UST yields.  There’s no economic data in the US today, but there were a ton of earnings reports for investors to deal with overnight.  Read all about it in today’s Bespoke Morning Lineup.

Bespoke Morning Lineup – 2/8/19

Barring a big rally today, the chart below is the one practically every technician will be brooding over this weekend.  After rallying but coming up just shy of its 200-DMA on Tuesday, the S&P 500 has seen two straight days of declines and is on pace for a third down day today.  The failure of bulls to get the S&P 500 above this level on the first attempt is not the end of the world, but it doesn’t help short-term sentiment either.

Overnight trade has not been kind to the US equity markets with the S&P 500 set to open down over half a percent and near session lows. Rates are at session lows as well with the US 10-year yield down for the third session running, while US credit spreads are widening out having made new lows for the current move tighter in spreads since January over the past week. In energy markets, WTI is down over 1%. EM assets generally overnight were weak, down almost 1% thanks to global risk asset weakness.

Data today includes initial claims and consumer credit from the Federal Reserve on an otherwise quiet day. Scheduled Fed speakers today include Kaplan (Dallas, 9:15), Clarida (Vice-Chair, 9:30), and Bullard (St. Louis, 7:30 PM).  Read all about it in today’s Bespoke Morning Lineup.

Bespoke Morning Lineup – 2/7/19

A week ago yesterday, the FOMC surprised markets with an even more dovish than expected policy announcement.  One would normally expect the dollar to sell-off following a more dovish than expected FOMC, and while we saw a sharp decline in the dollar on the day of the FOMC meeting, since then it has traded higher every single day.  With today’s early strength, the index is on pace for its sixth straight day of gains and is now well above levels it was trading at before last week’s FOMC meeting.

The dollar has been strong over the last week, but from a longer-term perspective, it still remains in a downtrend.  Yesterday’s bounce brought the Bloomberg US Dollar Index back above its 200-DMA, but it still has yet to break above resistance just under 1,200 at its 50-DMA.  So, keep an eye on that level as a sustained rally in the dollar after last week’s Fed pivot would be quite a surprise for financial markets.