Jun 13, 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.
“You have the right to remain silent. Anything you say can, and will, be used against you in a court of law.” – Every Episode of every Law & Order series
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Whether through firsthand knowledge or watching any TV show or movie involving an arrest, every American is familiar with Miranda rights. While it seems like a basic principle of US law enforcement, it wasn’t until this day in 1966 that the Supreme Court ruled that every person arrested in the United States must be informed of their basic right to remain silent and have an attorney before any police interrogation can take place. Now if only a lot of other people would exercise their right to remain silent.
Futures aren’t silent this morning, and they just got a pop higher as both jobless claims and PPI came in weaker than expected. Initial jobless claims surged to the highest level since last August. PPI came in weaker than expected at both the headline and core levels. On a y/y basis, they are up 2.2% and 2.3% respectively relative to expectations for a level of 2.5%. Based on this morning’s PPI and yesterday’s CPI, the Fed’s statement is less than 24 hours old, but it’s turning stale quickly.
With Apple’s (AAPL) move back near the top of the market cap leaderboard, we wanted to highlight the continued divide between the top three stocks in the S&P 500 and the rest. The snapshot below of our Trend Analyzer shows where each of the top three stocks in the S&P 500 – Apple (AAPL), Microsoft (MSFT), and Nvidia (NVDA) – as well as the S&P 500 Equalweight ETF (RSP) closed yesterday relative to their short-term trading ranges. While all three of the top three closed at ‘extreme’ overbought levels (2+ standard deviations above their 50-DMAs), RSP remains in neutral territory and is down slightly over the last five trading days. Besides that disparity, the YTD performance and 50-day moving average spreads of the top three stocks look nothing like the YTD performance and 50-DMA spread for RSP.
The charts of the top three also look much different than RSP (and it’s not just because we shaded RSP in gray). As shown below, all three of the largest stocks hit all-time highs yesterday while RSP has been stuck in a range since the peak in March.
To continue reading the rest of today’s morning note, where you’ll find much more analysis of global equities and economic readings released this morning, read today’s full Morning Lineup with a two-week Bespoke Premium trial.
Jun 12, 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.
“Mr. Gorbachev, open this gate. Mr. Gorbachev, tear down this wall.” – Ronald Reagan, 6/12/1987
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Today is the biggest day of the week for data, and the “first act” just hit the stage as CPI came in weaker than expected. At the headline level, CPI was unchanged while Core CPI increased 0.2% versus forecasts for a gain of 0.3%. Year/year Core CPI came in at 3.4%, the lowest level since April 2021. Futures have surged in reaction. It’s hard to believe that a week ago this morning, the market was all worried about stagflation with weaker economic data (Chicago PMI and ISM Manufacturing) and stubborn inflation. After last Wednesday’s ISM Services report, a strong headline employment report, and today’s CPI report, stagflation has been pushed off the stage as Goldilocks cries, “Make room for me!”
It’s not a Presidential election, but for the first time in four years, the Federal Reserve will announce an interest rate decision on the same day as a monthly CPI report. Since 1998, there have only been 17 other days where both events happened on the same day, and in the chart below, we show the S&P 500’s performance each time. Overall, returns have been positive with a median gain of 0.56% and gains just over three-quarters of the time. The best day for the S&P 500 on these days was in December 2008 when the S&P 500 rallied 5.14% while the worst performance was the most recent occurrence on 6/10/20 when the S&P 500 declined 0.53%. Ironically, the best day came in the middle of one of the deepest bear markets in a generation while the worst day was in the early stages of the post-Covid surge.
The table below shows the performance of the S&P 500 and all eleven sectors on each of the 17 prior days. We also show the Fed’s interest rate decision for each meeting. Of the 17 occurrences shown, the Fed cut rates twice, raised rates four times, and kept rates on hold eleven times. On the eleven days when the Fed left rates on hold, the S&P 500’s median gain was also 0.56% with gains just over 80% of the time. The two best-performing sectors on these days were Technology (1.10%) and Materials (1.01%) with gains of 91% and 82% of the time, respectively.
To continue reading the rest of today’s morning note, where you’ll find much more analysis of global equities and economic readings released this morning, read today’s full Morning Lineup with a two-week Bespoke Premium trial.
Jun 11, 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.
“Government has no wealth, and when a politician promises to give you something for nothing, he must first confiscate that wealth from you” – John Wayne
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 record highs for the S&P 500 and Nasdaq yesterday, there’s a negative bias this morning as European stocks are lower given the political uncertainties most notably in France where there were even rumors overnight that Macron would resign. The only economic report on the calendar today was small business sentiment from the NFIB which came in better than expected. However, given tomorrow’s CPI report and the Fed Decision in the afternoon, we wouldn’t expect too much conviction today.
Apple (AAPL) finally unveiled its AI strategy yesterday and judging by the stock’s reaction, investors weren’t impressed. While the stock was down marginally just before the conference started, it sold off even more once it started and more details started coming out. When the closing bell rang, the stock was near its lows and down just under 2% for the day.
The chart below shows the performance of AAPL on the first day of its WWDC conference each day since 2007 when the iPhone was first launched. Yesterday’s 1.9% decline ranks as tied for the third-worst performance on the first day of the WWDC conference during that span. The only two years where the first-day performance was worse was in 2007 (3.5%) and 2008 (-2.1%). While that ranking sounds ominous, we would also note that the stock has almost always traded lower on the first day of its WWDC conference (just four positive days in the last 18 years). Longer-term, from the close on the first day of the conference through year-end, the stock has been higher 70% of the time, and from the close on the first day of the conference to the start of the next year’s conference, AAPL stock has been higher more than 75% of the time. In other words, first impressions of the WWDC conference haven’t usually been correct.
To continue reading the rest of today’s morning note, where you’ll find much more analysis of global equities and economic readings released this morning, read today’s full Morning Lineup with a two-week Bespoke Premium trial.
Jun 10, 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.
“Being the richest man in the cemetery doesn’t matter to me. Going to bed at night saying we’ve done something wonderful… that’s what matters to me.” – 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.
Today’s the day Apple (AAPL) investors have been waiting for as the company will finally announce a detailed AI strategy. The company has been criticized for being slow to the game, but, as has been widely pointed out by analysts for months now, it has a reputation for being late to the game regarding new technologies. Where they succeed is by watching everyone’s first bets at a technology and then raising the stakes.
Futures are lower to kick off the week, and the economic calendar is sparse today with the NY Fed’s Survey of Consumer Expectations the only report on the calendar. The weak tone in futures originated in Europe, where EU election results showed significant gains for the populist far-right parties. Between the elections in Mexico and India last week and the EU elections over the weekend, politics has been making its way to the headlines lately. Thankfully, we won’t have to deal with that here in the US this year…
Last week was tough for commodities as just about all of the commodity-related ETFs in our Trend Analyzer declined at least 1% and in many cases much more. The one notable exception was the US Natural Gas Fund (UNG) which surged nearly 15% making it the only ETF in the group that finished the week at oversold levels. Before we all go getting on the UNG bandwagon, though, even after last week’s gain, it is still one of just two ETFs in the group that’s down on the year.
Over the last year, UNG has been a long painful ride lower. A year ago, the ETF was trading in the high 20s/early 30s, and earlier this year it was in the low teens before rallying back to $20 on Friday. Even after that gain, though, the ETF remains stuck below its 200-DMA which is a boundary line that it has been comfortably residing for the last year.
Over the last year, there have only been six trading days where the ETF has closed above the 200-DMA. As shown in the chart below, this is a very low level, but it’s hardly unprecedented. There have been multiple times where the ETF spent years below its 200-day moving average.
From a long-term perspective, UNG has been burning money for 15 years. On a reverse split-adjusted basis (there have been two 1-4 reverse splits since 2017), the ETF was above $3000 versus $20 today- a decline of more than 99%!
To continue reading the rest of today’s morning note, where you’ll find much more analysis of global equities and economic readings released this morning, read today’s full Morning Lineup with a two-week Bespoke Premium trial.
Jun 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.
“Tell me a musician who’s got rich off digital sales. Apple’s doing pretty good though, right?” – Prince
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 recent market trend in non-farm payrolls reports has been positive. Over the last nine months, the headline report came in stronger than expected seven times, and the S&P 500 has been higher eight times on the day of the report. Even including the one day that the S&P 500 was down on a “Payrolls Friday”, its average change on the day of the report was a gain of 0.63%, and the Financial sector has been positive on the day of the report for nine straight months.
We’ve been discussing weak market breadth for a couple of weeks now, including yesterday’s Closer report where we compared the weakness in the cumulative advance/decline (A/D) line to the new high in the S&P 500. Another example is the fact that while yesterday was the only day this week that the S&P 500 was down (and barely at that), the S&P 500’s net A/D line has been negative in three of the last four trading days.
While weak breadth has become especially pronounced in recent days, the trend is not new. Look at the chart below which shows the performance of the S&P 500 market cap-weighted index versus its equalweight counterpart over the last two years. While the S&P 500 has rallied 30.3%, the equalweight index is up by just a little more than a third of that (11.3%).
Below we show the rolling two-year performance spread between the two indices over time. At the current level of 19 percentage points, the spread has reached its widest level in nearly 24 years (6/30/00) putting it in the 95th percentile relative to all other two-year periods since 1992. The last time the spread was this wide, it came just ahead of what ended up being a period of massive long-term underperformance for the cap-weighted index. That being said, the period during which the cap-weighted index had outperformed leading up to that lasted for years.
To continue reading the rest of today’s morning note, where you’ll find much more analysis of global equities and economic readings released this morning, read today’s full Morning Lineup with a two-week Bespoke Premium trial.
Jun 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.
“You get your ass on the beach. I’ll be there waiting for you and I’ll tell you what to do. There ain’t anything in this plan that is going to go right.” – Col. Paul R. Goode, June 1944
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
As expected by everyone, the ECB just cut rates by 25 bps in its latest policy decision. Still, within its statement, it made some hawkish comments noting that “domestic price pressures remain strong as wage growth is elevated, and inflation is likely to stay above target well into next year.” The statement added, “The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner. It will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim.” In looking at their words versus actions, there’s the appearance of a wide disconnect, but actions always speak louder than words. We’ll be looking for more color in the 8:45 press conference.
Looking at the moves in financial markets over the last several minutes, you wouldn’t have even noticed there was a major policy decision from a major central bank. Equity futures have seen little reaction and remain modestly higher, while the dollar is little changed, and yields are modestly higher. In the US, Non-Farm Productivity came in higher than expected while Unit Labor Costs were a bit lower. That’s all good news, but jobless claims did come in slightly higher than expected on both an initial and continuing basis.
Even accounting for last Thursday’s 0.6% decline, the last week of trading has seen stocks put in healthy gains as the S&P 500 rallied 1.7% and hit a record high yesterday. The rally has also been broad-based. As shown in the snapshot below, every sector except for Energy has notched gains, and surprisingly, Technology has not been the leader. It’s basically the only other sector that isn’t up 1%. Leading the way higher, Real Estate, Health Care, and Communication Services have rallied more than 2.5%. Five out of eleven sectors finished yesterday at overbought levels while seven are above their 50-day moving average, and only Energy is oversold.
The Energy sector has been in a steady and well-defined downtrend since its high in early April, and if the sector is going to see at least a short-term bounce, now would be the time as the sector closed yesterday right near the bottom end of that channel after bouncing right near its 200-DMA.
Not surprisingly, the Energy sector has been tracking the performance of crude oil which has also been weak. The sector broke its uptrend in early May, and after failing multiple times to get back above that uptrend line in the middle of the month, crude saw extreme weakness to close out the month. While the price decline has been bad for energy stocks, it has been great news for drivers. According to AAA, the national average price of a gallon of gas has dropped below $3.50 for the first time since March 18th and is down over 5% from its April high.
To continue reading the rest of today’s morning note, where you’ll find much more analysis of global equities and economic readings released this morning, read today’s full Morning Lineup with a two-week Bespoke Premium trial.
