Aug 8, 2024
See what’s driving market performance around the world in today’s Morning Lineup. Bespoke’s Morning Lineup is the best way to start your trading day. Read it now by starting a two-week trial to Bespoke Premium. CLICK HERE to learn more and start your trial.
“If you have someone equal in ability to me I will beat him every time because I will try harder.” – Pete Rose
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Along with NVIDIA (NVDA), Super Micro Computer (SMCI) has been one of the poster-childs of the AI Boom. As shown below, though, the bloom appears to be off the rose. Earlier this year, SMCI shot up to $1,200/share, but since then it has now fallen 60%. Shares are currently trading around $480 in the pre-market this morning.
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Aug 7, 2024
See what’s driving market performance around the world in today’s Morning Lineup. Bespoke’s Morning Lineup is the best way to start your trading day. Read it now by starting a two-week trial to Bespoke Premium. CLICK HERE to learn more and start your trial.
“I’m tired of hearing about money, money, money, money, money. I just want to play the game, drink Pepsi, wear Reebok.” – Shaquille O’Neal, who signed with the Orlando Magic on this day in 1992 after being selected first in that year’s NBA Draft
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Below is an updated look at our 50-DMA spread chart for the S&P that’s featured in our Morning Lineup each day. As shown, yesterday’s bounce barely moved the index higher within its trading range, so we’re still quite oversold here with plenty of upside room to run.
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Aug 6, 2024
See what’s driving market performance around the world in today’s Morning Lineup. Bespoke’s Morning Lineup is the best way to start your trading day. Read it now by starting a two-week trial to Bespoke Premium. CLICK HERE to learn more and start your trial.
“Fear is the most contagious disease you can imagine. It makes the virus look like a piker.” – Warren Buffett
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
After falling 12% on Monday, Japan’s Nikkei bounced back 10% on Tuesday, and US equity futures are currently set to open higher by about 0.75% as of 8 AM ET. As shown below, the carnage from the past few weeks has now left the S&P 500 in extreme oversold territory (>2 standard deviations below its 50-DMA). These are areas where you typically start to see some upside mean reversion, although it’s certainly not a guarantee.
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Aug 5, 2024
See what’s driving market performance around the world in today’s Morning Lineup. Bespoke’s Morning Lineup is the best way to start your trading day. Read it now by starting a two-week trial to Bespoke Premium. CLICK HERE to learn more and start your trial.
“The best laid plans of mice and men often go awry” – Robert Burns
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 Fed decided to hold rates steady once again last week while indicating that it was highly likely to cut rates at its next meeting in September. Since that decision, markets have decided that the Fed got too cute. As shown below, with risk assets plummeting around the world this morning, the odds of at least 50 basis points of rate cuts by the September meeting are now at 100%.
Suddenly the Fed Funds Rate all the way up at 5.25-5.50% looks wildly out of line with where the 10-year and 2-year Treasury yields are trading at around 3.75%.
Aug 2, 2024
See what’s driving market performance around the world in today’s Morning Lineup. Bespoke’s Morning Lineup is the best way to start your trading day. Read it now by starting a two-week trial to Bespoke Premium. CLICK HERE to learn more and start your trial.
“The more you sweat in peace, the less you bleed in war.” – Norman Schwarzkopf
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Welcome to August. Global stock markets have been slapped in the face by a brutal August sell-off driven by weak earnings reports, concerns over the economy, and a generally overbought technical condition. If that wasn’t bad enough, the July employment report was entirely weaker than expected. Non-farm payrolls increased by just 114K vs a 175K forecast. The Unemployment Rate came in 0.2 higher than expected (4.3% vs 4.1%). As if that wasn’t bad enough, both average hourly earnings and the average workweek were weaker than expected. After being down by 1.2% heading into the print, S&P 500 futures are now indicated to open down by over 1.5% while the Nasdaq is down 2.3%. Going the other way are treasury yields where the 10-year yield is below 3.8% and near the lowest level since last July!
As mentioned above, August has started on a poor note, and based on where futures were trading at 8 AM, the S&P 500 was on pace for a decline of 2.5% in the first two trading days of August. Since 1954, only three other years – 1998, 2002, and 2011 – have started weaker. Interestingly, though, in the late 1960s/early 1970s, there was consistent weakness to kick off the month.
In terms of how weak starts to August play out for the rest of the month, buckle up. In 1998, the S&P 500 went on to crater another 10.7% while in 2002, it surged 6.0%. Both of these moves make the 2.8% decline for the rest of August in 2011 seem sleepy.
And for the rest of the year? In 2011, that 10%+ decline fully reversed and turned into a gain of 14.7%, but in 2002 and 2011, the S&P 500 was also up but by less than 2% each time.
Aug 1, 2024
See what’s driving market performance around the world in today’s Morning Lineup. Bespoke’s Morning Lineup is the best way to start your trading day. Read it now by starting a two-week trial to Bespoke Premium. CLICK HERE to learn more and start your trial.
“Run faster, jump higher, reach farther, and you’ll always win!” – Jerry Garcia
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
After a monster rally yesterday, futures are higher again this morning which is impressive considering that Asian markets were lower overnight, and Europe is lower this morning. A rally of over 7.5% in shares of Meta Platforms (META) in reaction to earnings is driving the positive tone, and the company’s plan to keep investing massive amounts into AI has translated to a follow-through rally in shares of Nvidia (NVDA).
Outside of equities, crude oil is trading modestly higher while treasury yields have also reversed a small amount of yesterday’s decline. A lot of these moves could change, though, as the economic calendar is packed between now and 10 AM with Non-Farm Productivity (better than expected), Unit Labor Costs (lower than expected), and jobless claims (higher than expected) all coming out at 8:30. Those reports will be followed by the S&P Manufacturing PMI at 9:45 and then ISM Manufacturing and Construction Spending at 10.
Through the end of July, the S&P 500’s total return over the last year was a gain of 22.1% which is nearly twice the historical average dating back to 1928. Not a bad 12 months! Besides the last year, equity market returns have been consistently above average for years. As shown in the chart below, the S&P 500’s annualized return over the last two years is nearly seven percentage points above the historical average while the annualized return of 15.0% over the last five years towers over the historical average of 10.5%. Stretching out over the last ten years, the gap between the current period and the historical average is not as wide, but at over 2.5 percentage points annualized, it adds up. While a 10.6% annualized return over ten years works out to a gain of 174%, a 13.2% annualized return ends up with a total return of 246%. It isn’t until you go out over the last 20 years that returns fall below average, but the spread is less than half a percentage point.
While it’s been a golden age for equity returns, bond returns have been terrible, but even here there was a little flicker of light. While the one-year performance of long-term US treasuries, as measured by the BofA/Merrill 10+ Year Treasury Index, has been well below average, it was positive which is something we haven’t been able to say much in recent months. Not only that, but monthly returns have also been positive for three straight months, and that’s the longest streak since July 2021.
Returns haven’t just been weak over the last year. Over the last two and five years, annualized returns have been negative and well over 10 percentage points below the historical average. Over the last 10 and 20 years, annualized returns are positive, but still well below the historical average.
Getting back to the fact that long-term treasuries were up in the 12 months ending 7/31, the chart below shows the rolling one-year performance dating back to 1978. July’s positive treading was only the second time in 42 months that the trailing 12-month performance was positive, and there has never been another period when trailing 12-month returns were so consistently negative.
