Equity futures are indicating a slightly lower open this morning, but they are well off their overnight lows.  Earnings continue to be a big driver of individual stock moves, and while the video-game makers are down sharply, a number of software stocks are getting a boost following their reports.  GM, which just reported now, also handily exceeded forecasts and is trading up nicely on the news.  Read all about it in today’s Bespoke Morning Lineup.

Bespoke Morning Lineup – 2/6/19

We first highlighted it last week when the S&P 500’s cumulative A/D line made a marginal new high, but given the moves in recent days, we feel it warrants mention again.  As the S&P 500 has broken through resistance around the 2,630 level, cumulative breadth has really taken off as well, easily breaking away from its prior high.  Strong breadth indicates broad participation, and that’s exactly what we have seen so far this year as small caps have led the gains, and even the S&P 500 equal-weight index is outperforming the cap-weighted index by over 2% YTD.

US equity futures are indicating a higher open this morning ahead of a light economic calendar.  Overnight, China was closed for the New Year’s holiday and Europe is firmly in the green.  While futures are higher, tech is a notable laggard following poorly received results from Alphabet (GOOGL) and lowered guidance from Seagate (STX).   Read all about it in today’s Bespoke Morning Lineup.

Bespoke Morning Lineup – 2/5/19

After a slow start to the week Monday, investors once again started to buy stocks between the opening and closing bell as the S&P 500 finished the day up nearly 0.7% while the Nasdaq rose over a full percentage point.  With the steady gains we have been seeing lately, the percentage of stocks in the S&P 500 trading at overbought levels continues to tick higher.  As of yesterday’s close, a net of 51.4% of the stocks in the S&P 500 are trading at overbought levels (>1 standard deviation above 50-DMA), and that’s the highest reading since late January 2018 when the percentage reached 63.4%.  Now, that was high!

If you thought last night’s game was a snoozefest, pre-market trading hasn’t been any better as futures have been trading on either side of unchanged all morning.  We’re still right thick in the middle of earnings season, though, so the pace of news is likely to pick up later today, especially when Alphabet (GOOGL) reports after the close.  Read all about it in today’s Bespoke Morning Lineup.

Bespoke Morning Lineup – 2/4/19

Speaking of earnings season, they don’t get much better than the one we are in right now.  At least in terms of how the stocks of companies reporting are reacting.  The average performance of stocks on their earnings reaction days so far this earnings season has been a gain of 1.12%.  If this pace keeps up for the remainder of the reporting period, it would be the best earnings season in terms of stock performance since the early stages of the bull market.  That’s pretty impressive.

Futures are right around unchanged this morning as investors await the monthly Non-Farm Payrolls report for January.   Despite the lackluster trading in futures, Chinese equities had a very strong night, and there was a ton of economic data released around the world overnight.  Read all about it in today’s Bespoke Morning Lineup.

Bespoke Morning Lineup – 2/1/19

You don’t need us to tell you that change comes fast in the markets (as well as business in general).  The last several weeks are a perfect example, and we don’t even have to go as far back as December to illustrate that.  The chart below shows how the S&P 500’s YTD performance stacked up to all other years since 1928 for each trading day so far in 2019.

The year started off innocently enough on January 2nd, when the S&P 500 was up slightly, putting the start to the year right in the middle of the pack at 38th place relative to all other years.  Things changed quickly, though, after the close on the 2nd when Apple (AAPL) lowered guidance.  On January 3rd (the second trading day of the year), the S&P 500 declined 2.5%, putting the YTD loss at 2.35%.  That swoon quickly sent the rank of the S&P 500’s YTD change two days into the year at 87th out of 91, or the 5th worst of all time! Equities quickly rebounded from there on the January 4th, sending the YTD ranking back up to 37th out of 91.  From there, the YTD performance steadily improved and by the close yesterday, the S&P 500 was off to its 7th best start to a year (after 21 trading days) of all time.  Quite a change from four weeks earlier!

The point here is that while equities and other asset classes usually do tend to follow trends, those trends can and will change, and when they do it often happens quickly.  Therefore, just as it wouldn’t have been a good idea to pack it in and go home and January 3rd thinking it would be a horrible year, now that the S&P 500 is off to its 7th best start to a year in history doesn’t necessarily mean investors can put things on ‘auto-pilot’ from here.

After the FOMC came through in a big way for the bulls yesterday, equity futures are quiet this morning.  Over in the Nasdaq, things are looking brighter as an 11% rally in Facebook (FB) following its earnings report last night has the stock on pace for its best earnings reaction day in three years! In more global macro data, the President is busy on Twitter this morning discussing the topic of Chinese trade and saying that no deal will be made until he personally meets with Chinese President Xi in the “near future.”   Jobless Claims were just released and saying they surged would be an understatement, as they rose from 200K up to 253K, the highest weekly reading since September 2017! Read today’s Bespoke Morning Lineup for more on what’s driving the markets this morning.

Bespoke Morning Lineup – 1/31/19

It wasn’t long ago that the market would seemingly go months on end without a daily move of 1% let alone 2%. With the help of the Fed’s dovish turn yesterday, though, the Nasdaq rallied over 2%, making it the 24th time in the last 100 trading days that the index moved up or down 2% in a single day.  That works out to an average of more than once a week!

The chart below shows the historical 100-day rolling total of occurrences where the Nasdaq saw an up or down move of 2%+.  The current level of 24 is now the highest total we have seen since early 2012, and only the fourth such period in the index’s history.  Granted, the period in the late 1990s/early 2000s lasted a long time and saw a much higher frequency of 2% at its most extreme points, but these periods of large day to day moves are still relatively uncommon.  Just as interesting is how the period from 1972 through the mid-1990s saw so little in the way of big daily moves.  But once the late 1990s rolled around, the beast was awoken.

Big earnings from Apple (AAPL) last night after the close and Boeing (BA) this morning have pushed the Dow futures sharply higher.  While the gains aren’t as large in the S&P 500 and Nasdaq, they are also both pointing in the right direction for bulls.  Now, all we have to do is get through this afternoon’s rate decision from the FOMC and the subsequent press conference. The number one wish from the bulls for Fed Chair Powell?  Stick to the script and end the record streak of declines on FOMC days since he became the Chair!   Read today’s Bespoke Morning Lineup for more on what’s driving the markets this morning.

Bespoke Morning Lineup – 1/30/19

Even as the equity market has recovered in January, the percentage of consumers who are bullish on the market declined to 30.9%, which is the lowest reading since July 2016.  Even more extreme, the percentage of consumers who are negative on stock prices increased to 38.6%, which is the highest reading since December 2012!

Like a lot of sentiment measures, this reading from the Consumer Confidence report also tends to be contrarian in nature.  The last time the spread was this skewed to the bearish side was in February 2016, and if you don’t remember, that was right around the lows of the 2015/2016 market correction.