Aug 5, 2025
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“History is a sequence of random events and unpredictable choices, which is why the future is so difficult to foresee.” – Neil Armstrong
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
There wasn’t much in the way of data to speak of at this time yesterday, but the pace of earnings has been strong since last night’s close, and futures are modestly higher ahead of the open with the S&P 500 indicated to open 0.26% higher while the Nasdaq is up 0.40%. The big earnings headliner overnight was Palantir (PLTR), which reported an earnings Triple Play and is trading up nearly 7%. Older economy stocks, however, aren’t faring as well this morning, with Caterpillar (CAT) trading down 3.6%.
The only reports on today’s economic calendar are the Trade Balance at 8:30 a.m. and the ISM Services report at 10:00 a.m. Economists expect the reading to bounce to 51.5, up from 50.8 last month.
Overnight and this morning, global equities have been broadly higher. In Asia, India’s Sensex was the only major index to finish the session lower, while China was up 1% and the Nikkei added 0.6%. Besides follow-through from Monday’s US session, stocks in the region were boosted by positive PMI readings. In Europe, the STOXX 600 was up 0.5% following a mixed batch of PMI readings for the Services sector.
While the equity market reversed much of Friday’s losses on Monday, Treasury yields saw little to no reversal. Take the 10-year yield, for example. After closing at 4.37% last Thursday, the yield plunged to 4.22% on Friday after the jobs report, but on Monday, yields fell even further and finished the day below 4.2%. This morning, yields are slightly higher, but only at the level they closed out last week. At these levels, yields are right near their lowest levels since Liberation Day in early April. The trillion-dollar question for investors now is whether the drop in yields is due to the market pricing in lower inflation or lower economic growth, as they have very different implications for the direction of the equity market.
One sector that should benefit from lower yields is homebuilders. The iShares Home Construction ETF (ITB) has rallied 23% off its April lows, but it is still more than 20% off its 52-week high from last summer, so if the drop in yields was due to lower inflation, the group would presumably have plenty of room for more upside. From a technical perspective, ITB finds itself at an important juncture just below its downtrend that has been in place since last summer’s high, as well as the downward-sloping 200-day moving average. A rally in January failed at that level, but the ETF is heading into the latest test with a more established uptrend in place.
Aug 4, 2025
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“If you have to ask what jazz is, you’ll never know.” – Louis Armstrong
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
The hangover for bulls came before the weekend last week, and they’re looking to start the week in a party mood with futures on all three major averages in the green and indicated to open about 0.5% higher. That’s only enough to erase a third of Friday’s losses, but it’s better than the alternative. Overnight in Asia, stocks were also firmly higher, while Europe’s STOXX 600 is up 0.6%. There’s no real catalyst for the gains this morning, but there’s also little in the way of economic and earnings data, so there’s not a lot of conviction behind the move.
While equities are moving higher, energy prices are down across the board, with WTI crude oil trading down 2% following the OPEC+ announcement that it would proceed with its September output hike of 547K barrels. Metals are fractionally higher across the board, and treasury yields are unchanged to modestly higher. Given the bounce in equities, you would expect to see crypto also rebound; however, both Bitcoin and Ether are still trading right around where they were last Friday.
Right on cue, it seems, the typical late summer seasonal weakness has interrupted a market that had a consistent early summer bid. After a string of record highs, the S&P 500 sold off on an intraday basis every day last week. When the bell rang on Friday, the Nasdaq 100 (QQQ) and S&P 500 (SPY) were both down over 2% for the week, while the ne’er-do-well Russell 2000 (IWM) fell over 4%. As steep as the declines were, though, only two of the fourteen index ETFs shown below finished the week below their 50-day moving averages (DMA), and all fourteen were in neutral territory.
Aug 1, 2025
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“Simple can be harder than complex”– Steve Jobs
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
We almost made it through the week unscathed. The mega-caps reported generally good results, economic data didn’t ruffle any feathers, and Fed Chair Powell held to form and was a downer for stocks, but not by a lot. The only other hurdle was the August 1st tariff deadline, and for a President who thrives on volatility, his actions last night certainly shook things up. In a series of actions, Trump issued new tariff duties ranging from 10% to 41%. We cover this in more detail in the commentary of today’s Morning Lineup, and the actual impact will not be as painful as the headline numbers suggest. For a market that was already starting to act heavy, though, the tariff news pushed futures lower.
Along with weakness in US equities, Asian and European stocks fared even worse, bond yields moved slightly higher, oil prices declined, gold was little changed, platinum and palladium are both down close to 2%, and crypto prices are down sharply with declines of 1.5% in Bitcoin and over 3% in Ethereum.
We’re through most of the earnings data for the week, but on the economic calendar, we still have the July Employment report, ISM Manufacturing, Construction Spending, and Michigan Sentiment. Already this morning, the President has been railing against Powell, and if any of this morning’s data comes in weaker than expected, expect the volume on his Truth Social account to get to eleven quickly.
Hold on to your hats for a second, because the S&P 500 is on pace to not only open lower this morning, but at current levels, the decline would be about 1%. As shown in the chart below, the last time the SPDR S&P 500 ETF (SPY) gapped down 1%+ at the open was in late May, and it hasn’t opened lower since July 14th.
With 13 straight days of gains at the open, the streak that is about to end would be the second-longest in SPY’s history. The only streak that was longer ended in February 1997, and there were only two other streaks that lasted longer than ten days – July 1997 and February 1998. The comparisons always seem to go back to the late 1990s, don’t they?
Jul 31, 2025
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Jul 31, 2025
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“’Deserves’ is an impossible thing to decide. No one deserves anything.” – Milton Friedman
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
With the Fed and the Ms of the mega-caps behind us, we’re just about halfway through what has been a monster week of economic, earnings, and Federal Reserve data. Through yesterday’s close, the S&P 500 was down 0.4% for the week, which wasn’t that bad. If you take into account the overnight gains that followed the monster earnings from Meta Platforms (META) and Microsoft (MSFT), though, we’re up about 0.5%, which is pretty good.
Futures are sharply higher this morning following positive earnings reports from the megacaps. Today and tomorrow will provide a lot more economic data to deal with, though. This morning, it’s Personal Income and Spending, PCE, and jobless claims, while tomorrow’s focus will be the Non-Farm Payrolls report. On the earnings front, it’s the As turn tonight with Amazon.com (AMZN) and Apple (AAPL) on the calendar, so we’ll see if they can keep the positive streak alive.
Despite the positive overnight action in equity futures, Chinese stocks were down sharply, with declines of over 1% while Japan was up 1%. The rally in Japan followed a BoJ rate decision where rates were left unchanged. In Europe, the tone is also mixed with the STOXX down fractionally.
Yesterday, we mentioned that a number of commentators were pointing to negative reactions in the stocks of PayPal (PYPL), Stanley Black & Decker (SWK), United Parcel Service (UPS), and Whirlpool (WHR) as a potential red flag for the economy. We thought those concerns were misplaced, given that these stocks have been disasters in terms of their performance over the last five years. On a combined basis, they also have a market cap of just $156 billion.
Last night, we got reports from Meta Platforms (META) and Microsoft (MSFT). META has a market cap of more than 10 times the four stocks mentioned yesterday, while MSFT’s market cap is more than 20 times larger. As shown in the chart below, both stocks have also been a much better representation of the economy over the last five years.
In the case of META, it’s hard to believe how far this stock has come since its bear market lows less than three years ago. Think about this for a second. At its low on 11/3/22, META closed at $88.91 per share, and earlier this morning, shares were up $86. In other words, META was up almost as much overnight as its entire share price was at the low in November 2022.
Given the massive rally in META, it’s not a big leap to conclude that it has been one of the top-performing stocks since its low in November 2022. As shown on the table below, taking early morning gains into account, the stock is up nearly 780% which is only enough to rank as the fourth-best performing stock during that time. Palantir (PLTR) tops the list with a gain of over 1,800% followed by Nvidia (NVDA) at 1,261%, and then Vistra (VST) with its gain of 805%. Even after rallying 777%, META is still underperforming a Utility stock!
On a final note, while META and MSFT are on pace for big gains today, watch how they trade intraday. Earlier this week, we saw Boeing (BA) rally on good news at the open only to sell off intraday. That’s not a pattern bulls want to see becoming a trend!
Jul 30, 2025
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“Measuring programming progress by lines of code is like measuring aircraft building progress by weight.” – Bill Gates
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Futures are modestly higher this morning after the July ADP report came in better than expected, erasing a streak of three months of weaker-than-expected readings. Q2 advance GDP was also just released and came in stronger than expected (3.0% vs 2.6%). Personal Consumption was weaker than expected (1.4% vs 1.5%) while the inflation data was mixed (lower than expected at the headline, higher than expected on a core basis). While these would be big reports on a normal day, we still have the Fed this afternoon and earnings from Meta and Microsoft after the close.
We’re right in the thick of earnings season, and we’ll see hundreds of more reports between now and the end of the week. From the start of July through Tuesday morning, we’ve already got 461 reports, and of those, 78% exceeded EPS forecasts while 75% have topped sales estimates. Looking forward, 8% of companies reporting have raised their guidance, while just 6% have lowered their estimates. These are all better than average readings, and as you would expect, companies are reacting positively to these reports. Overall, the average opening gap of the companies reporting has been a gain of 0.94%, but from the open to close, we’ve seen selling into strength with an average decline of 0.52% for a full-day gain of 0.41%. On the one hand, the average positive reaction to earnings reports is a good signal, but the weakness from the open to close indicates that investors are taking profits.
Despite the overall positive tone of reports, yesterday we saw multiple stories highlighting four stocks and their negative reaction to earnings as a potential warning sign for the economy and market. Those four stocks were PayPal (PYPL), Stanley Black & Decker (SWK), United Parcel Service (UPS), and Whirlpool (WHR), and all of them were down at least 7%.
Besides the fact that these four stocks have a combined market cap of less than $160 billion, which wouldn’t even be enough to rank in the top 75 companies in the S&P 500, they have all historically had weak reactions to earnings, especially in recent years. The chart below shows each stock’s performance on its earnings reaction days over the last five years. All four have averaged declines of at least 1.6% on their earnings reaction days, and only PYPL has reacted positively more often than it has reacted negatively.
More importantly than the performance on their earnings reaction days, all four stocks have been horrendous performers over the last five years. As shown in the chart below, at one point in the last five years, all four stocks were up at least 40% from where they traded five years ago, but they have erased those gains and more over the last five years. UPS is down 36%, WHR is down 48%, while PYPL and SWK have both lost over half of their value. During this same period, the S&P 500 has rallied 96%. Far from being economic or market bellwethers, these stocks have been among the S&P 500’s worst performers over the last five years! We could highlight any number of reasons why investors should be more cautious heading into the end of summer, but the fact that four stocks that have historically performed poorly on earnings saw weakness yesterday is not one of them.
