Mar 19, 2025
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“The world keeps ending but new people too dumb to know it keep showing up as if the fun’s just started.” – John Updike
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
To view last night’s CNBC segment which covered Nvidia’s (NVDA) AI conference and the broader market weakness, click on the image below.
As investors wait on the FOMC’s interest rate decision (or lack thereof), the Summary of Economic Projections (SEP), and the press conference from Chair Powell, US equity futures have a modestly positive bias heading into the opening bell.
Besides the FOMC, there are no major economic or earnings-related reports on the calendar, but one newsworthy item just coming across the tape is comments from Bank of America (BAC) CEO Brian Moynihan saying that as of Monday, consumers have put 6% more dollars into the economy this year than they did over the same period last year. Wait. What? Haven’t these recent consumer sentiment surveys been suggestive of the consumer falling off a cliff? As Moynihan commented, “the economy is holding up better than people think”.
Uncertainty is everywhere you look as any index that attempts to measure it has surged in the last couple of months. Within today’s FOMC statement and SEP, we’re likely to see more of that. The Fed releases its SEP four times a year, and in the last release back in December we started to see some of that.
In addition to updating their forecasts for GDP Growth, the Unemployment Rate, Inflation, and the expected level of the Fed Funds rate in the coming years, in each SEP, members of the FOMC also note their level of uncertainty about each of their forecasts along with whether the risks to their projections are weighted to the upside, downside, or not at all.
Back in December, FOMC members noted big increases in the level of uncertainty about PCE inflation on both a headline and core basis and almost unanimously agreed that the risks to inflation were to the upside. That was a big shift to September when most participants thought inflation risks were ‘broadly balanced’. Since those projections back in December, the country’s tariff policy has only grown murkier, so don’t expect any improvement in these readings today.
Back in December, levels of uncertainty regarding GDP Growth and the Unemployment Rate weren’t nearly as high. For most members of the FOMC, risks to GDP growth and the Unemployment Rate were ‘broadly balanced’. However, given the plunging levels of sentiment in various measures of consumer and business confidence plus the rapidly declining levels of forecasted growth in models like the Atlanta Fed GDP Now, it’s hard to imagine that FOMC members are any more confident about expected economic growth and the state of the jobs market going forward.
Mar 18, 2025
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“Though the people support the government; the government should not support the people.” – Grover Cleveland
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 lower this morning, but since the S&P 500 is coming off its first back-to-back positive days since the February peak, bulls can’t get greedy – although a three-peat would be nice! In that two-day rally, the S&P 500 gained 2.8% for its best two-day gain since the days after the election. That was when the markets had a much more optimistic view of what Trump 2.0 would mean for stock prices. Ironically, the S&P 500 closed the day before Election Day 2024 at 5,712, and yesterday it closed at 5,675, so the market has essentially gone nowhere despite all the highs and lows during the last 4.5 months.
The chart below shows the S&P 500’s performance during the current bull market that began in October 2022 with red dots showing each two-day gain of over 2.5%. Early in the bull market, these types of moves were common, but their frequency over the last 18 months has been much less common.
Mar 17, 2025
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“I’ve had great success being a total idiot.” – Jerry Lewis
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Shhhhh. Don’t tell anyone, but as we type this the S&P 500 and Nasdaq are indicated to open slightly higher today. That doesn’t mean the day will finish that way (or even that the market will open higher at 9:30). Still, if, somehow the S&P 500 manages to close higher today, it would be the first time in President Trump’s second term that the index closed higher on the last trading day of one week as well as the first trading day of the next!
There are a few important economic reports on the calendar this morning with March Empire Manufacturing and February Retail Sales both hitting the tape at 8:30 while Business Inventories and Homebuilder Sentiment will come out at 10 AM. Retail Sales will be a key report to watch for clues as to whether the President’s herky-jerky tariff policy, which has weighed on sentiment, has impacted consumer activity. The Empire Manufacturing report will be one of the first clues as to whether business sentiment has gotten worse in March.
In Europe this morning, stocks are broadly higher with the STOXX 600 up 0.5%. That follows a positive night in Asia as China reported better-than-expected growth figures in terms of Retail Sales and Industrial Production. As expected, Chinese authorities also announced a “Special Action Plan” to stabilize the stock market and increase domestic consumption.
St Patrick’s Day is often associated with luck, although that hasn’t necessarily been the case for the market. Over the last 50 years, the US equity market has been open for trading on St Patrick’s Day 36 times, and its median performance on those days has been a gain of 0.23% with positive returns 61% of the time. The best St. Patrick’s Day performance during that stretch was in 2020 when the S&P 500 rallied a hair under 6% (5.99%) while the worst performance was in 1980 when it fell 3.01%. More recently, performance has been stronger with the S&P 500’s median performance since 2009 being a gain of 0.66% and positive returns 73% of the time.
Looking at the S&P 500’s performance during St. Patrick’s Day week, there has also been a modestly positive tone. For this analysis, we calculated the S&P 500’s performance from the Friday before St. Patrick’s Day to the Friday after, and in those years when it fell on a Friday, we used the performance from the Friday before to that Friday. Over the last 50 years, the S&P 500’s median performance during the week has been a gain of 0.80% with positive returns 58% of the time. The ‘greenest’ week for the market during this period was in 2003 (+7.5%), and the second strongest week was in 2022 (+6.2%). To the downside, the two weakest St Patrick’s Day weeks were both in the last ten years. In 2020, the S&P 500 fell just under 15% even as it rallied almost 6% on St. Patrick’s Day. Talk about volatility! 2018 was another year where the luck of the Irish wasn’t evident in the market as the S&P 500 fell 5.95%.
Mar 14, 2025
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“I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.” – Albert Einstein
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
At least it’s Friday. Less than eight hours from now, investors will get a 48-hour window where the market can’t trade lower, and boy, could we use it! Check out the image below from our Trend Analyzer through yesterday’s close. Of the 14 index ETFs in the snapshot, they’re all down YTD, every one of them was down at least 3% since last Thursday’s close, they’re all at least 6% below their 50-day moving averages, and each one is also at ‘extreme’ oversold levels (2+ standard deviations below their 50-DMA). If this isn’t a correction (or worse), we don’t know what is.
There’s a positive tone in the futures market this morning, but that has been the case multiple other times in the last few weeks, only to see the gains disappear during the regular session. The only economic report on the calendar today is the University of Michigan Sentiment Index, which has shown some notable weakness lately. Results of the survey have also been highly skewed based on the political leanings of each respondent, as Americans increasingly experience different realities based on their political leanings.
Besides the Michigan report, we’re also likely to get any number of headlines out of Washington regarding trade. Thankfully, the threat of a government shutdown doesn’t loom now that Democrats in the Senate will allow the Republican funding bill to come to a vote on a simple majority basis.
Mar 13, 2025
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“All life is, is a series of consecutive risks joined together with hairs stood on end.” L. Ron Hubbard
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Hell, meet the last three weeks in the market. After hitting a record high on 2/19, the S&P 500 has seemingly done nothing but trade lower, and the Nasdaq has been even weaker. As bad as the last three weeks have been, though, they pale compared to the same three weeks five years ago. You may already be aware, but just as the S&P 500 peaked this year on 2/19, it also peaked on 2/19 of 2020, and in the three weeks that followed the 2020 peak, the S&P 500 plunged over 19%. Now, that’s bad! In the three weeks since this year’s high, the S&P 500 is ‘only’ down 8.6%.
Back then, we were dealing with fears and uncertainty of a collapse in the entire global economy from a virus we knew very little about. As much uncertainty as there is now regarding the economy and global trade relations, it’s nothing like five years ago. However, just like back in Covid when the markets started to recover once it saw that the worst fears of a complete economic catastrophe would not be realized, this episode will continue until signs emerge that a full-blown trade war won’t be realized. When we get there is anyone’s guess, but it will look obvious in hindsight.
The chart below shows the S&P 500’s rolling 15-day rate of change since 1953, with the red line showing the weakest reading of the current period which was a decline of 9.3% through 3/12. This current episode of weakness is far from the most extreme reading ever. There were much deeper drawdowns back during Covid, the Financial Crisis, and after the 1987 crash, to name a few. The current period does, however, rank in the 98th percentile relative to all other periods since 1953. Even just looking at the last ten years, there were deeper 15-day declines in 2022, 2020, late 2018, early 2016, and August 2015. While you may recall the causes behind some or most of these episodes, we would bet that the vast majority of people would not know the catalyst behind each of them off the top of their heads. The odds are (hopefully) that ten years from now, most people looking back at this decline will not remember what had the market so concerned.
This morning, market fears remain at the forefront. Both the S&P 500 and Nasdaq are set to give back about half of yesterday’s gains. Investor sentiment also remains very weak. The weekly poll from the American Association of Individual Investors (AAII) showed that bearish sentiment was above 55% for the third straight week. The only other time since 1987 that bearish sentiment was above the ‘speed limit’ was in the three weeks ending March 4, 2009.
The main economic report of the day was the February PPI, which came in weaker than expected. Despite the weaker reading, equity futures have barely budged. Perhaps recent comments from President Trump threatening 200% tariffs on all European alcohol imports are weighing more on sentiment.
Mar 12, 2025
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“It must be the policy of the United States to support free peoples who are resisting attempted subjugation by armed minorities or by outside pressures.” – Harry Truman, 3/12/47
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Can we squeeze out a positive day in the market? The S&P 500 finished the day down 0.76% yesterday, but it almost seemed like a positive day in some ways. That’s how miserable the last three weeks have been for bulls! This morning, US futures were firmly in the green heading into the February CPI report. That report came in weaker than expected, providing a further boost- at least for now.
78 years ago today, President Harry Truman asked Congress to appropriate $400 million to provide economic, military, and political assistance to democratic countries facing the threat of communist forces. His proclamation set in motion the journey of the US on the path from isolationism to a leader on the global stage, taking an active role in pushing back against the growth of the Soviet Union during the Cold War. Whether the US became too active in global affairs in the ensuing eight decades is up for debate. However, whatever direction US foreign policy has headed over the last eighty years, it appears to be going the other way now.
Focusing more on the short-term, the S&P 500 peaked three weeks ago today. In the 14 trading days since then, the S&P 500 has declined 9.3%, and all eleven sectors have posted declines. On the downside, just three sectors – Communication Services, Technology, and Consumer Discretionary – are underperforming the S&P 500. Health Care has held up better than any other sector with a decline of less than 1%, but Real Estate and Consumer Staples have also held up relatively well.
With a decline of nearly 15%, the Consumer Discretionary sector has been the worst performing sector in the market, and the bulk of that decline has been the result of mega-cap stocks in the sector like Tesla (TSLA) and Amazon.com (AMZN). These declines have pushed the sector’s margin of underperformance versus the S&P 500 over the last three weeks to historical extremes.
The chart below shows the 15-day performance spread between the Consumer Discretionary sector and the S&P 500 since 1990. Just recently, it had underperformed the S&P 500 by over eight percentage points, which was an extreme reached just a handful of other times in the last 35 years. As extreme as the underperformance has been in the last three weeks, it has mostly been a reversal of the extreme outperformance the sector experienced late last year.
