The Bespoke Report – 9/23/22 – Hike It ‘Til You Break It

This week’s Bespoke Report newsletter is now available for members.

There’s no sign of a let-up in Fed tightening plans this week, leaving investors to ask the question: how much further does the Fed have to hike before the economy breaks? Yet another FOMC press conference with novel arguments for hawkishness leads to the inescapable conclusion that the FOMC will keep tightening until something breaks. So far nothing has, though catastrophic price action in interest rates, a disastrous week for UK assets on the back of a new fiscal package, and a ripping US dollar are all the sorts of events that would lead to a breakdown in the financial system that might cause the Fed to hold off. We discuss all the implications for markets as well as sector-level analysis of the US and Europe, a look at seasonality, a review of falling inflation in the Great White North, comprehensive analysis of US economic data from this week, and much more in this week’s Bespoke Report.

To read this week’s full Bespoke Report newsletter and access everything else Bespoke’s research platform has to offer, start a two-week trial to one of our three membership levels.

Bespoke’s Crypto Report — 9/23/22

Bespoke’s Crypto Report contains numerous technical, momentum, and sentiment charts for bitcoin, ethereum, and other key cryptos.  Page 1 of the report includes our weekly commentary on the space and attempts to identify any new trends that are emerging.  The remaining pages include important overbought/oversold levels to watch, charts on historical drawdowns and rallies, seasonality trends, futures positioning data, Google search trend shifts, and more.  Our weekly Crypto Report is produced so that followers of the space can more easily stay on top of price action, technicals, seasonality, and sentiment.

Sign up for a monthly or annual subscription to Bespoke Crypto to receive our weekly Crypto Report and anything else we publish related to cryptos.  Note: If you’re currently a Bespoke Premium, Bespoke Newsletter, or Bespoke Institutional subscriber, you’ll need to subscribe to Bespoke Crypto as an add-on to receive access.  The weekly Crypto Report and any additional crypto analysis is not included with our Premium, Newsletter, or Institutional memberships.  You can sign up for Bespoke Crypto and receive our Crypto Report in your inbox weekly using the monthly or annual checkout links below.  If you sign up for the annual plan, the first year of access is 50% off!

Bespoke Crypto Access — Monthly Payment Plan ($49/mth)

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Bespoke Investment Group, LLC believes all information contained in this service to be accurate, but we do not guarantee its accuracy. None of the information in this service or any opinions expressed constitutes a solicitation of the purchase or sale of any securities, commodities, or cryptocurrencies. This service contains no buy or sell recommendations. This is not personalized advice. Investors should do their own research and/or work with an investment professional when making portfolio decisions. As always, past performance of any investment is not a guarantee of future results. Bespoke representatives or clients may have positions in securities discussed or mentioned in its published content.

Q3 Earnings Season Conference Call Recaps

Bespoke’s Conference Call Recaps provide helpful summaries of corporate conference calls throughout earnings season.  We go through the conference calls of some of the most important companies in the market and summarize key topics covered by management.  These recaps include information regarding each company’s financial results, growth by segment, as well as some aspects of the business that management expects to impact future results.  We also identify trends emerging for the broader economy in these recaps.

Bespoke’s Conference Call Recaps are available at the Bespoke Institutional level only.  You can sign up for Bespoke Institutional now and receive a 14-day trial to read our newest Conference Call recaps.  To sign up, choose either the monthly or annual checkout link below:

Bespoke Institutional – Monthly Payment Plan

Bespoke Institutional – Annual Payment Plan

Below is a list of the Conference Call Recaps published during the Q3 2022 and Q2 2022 earnings reporting period.

Q3 2022 Recaps:

Costco Q4 2022

Lennar Q3 2022

Adobe Q3 2022

Oracle — Q1 2023

DocuSign — Q2 2023
DocuSign Earnings Summary

Lululemon — Q2 2022
Lululemon (LULU) Earnings Summary

Recaps published during Q2 2022 are available with a Bespoke Institutional subscription:

Deere Q3 Conference Call — 8/19/22
Cisco Q4 Conference Call — 8/18/22
Target Q2 Conference Call — 8/17/22
Home Depot Q2 Conference Call — 8/16/22
Walmart Q2 Conference Call — 8/16/22
Disney Q3 Conference Call — 8/10/22
The Trade Desk Q2 Conference Call — 8/10/22
Coinbase Q2 Conference Call — 8/9/22
Tyson Foods Q3 Conference Call — 8/8/22
Alibaba Q1 Conference Call — 8/4/22
PayPal Q2 Conference Call — 8/4/22
Starbucks Q3 Conference Call — 8/4/22
Advanced Micro Devices Q2 Conference Call — 8/4/22
Caterpillar Q2 Conference Call — 8/2/22
Uber Q2 Conference Call — 8/2/22
Builders FirstSource Q2 Conference Call — 8/1/22
Apple Q3 Conference Call — 7/28/22
Amazon Q2 Conference Call — 7/28/22
Ford Q2 Conference Call — 7/27/22
Meta Platforms Q2 Conference Call — 7/27/22
Automatic Data Processing Q4 Conference Call — 7/27/22
Alphabet Q2 Conference Call — 7/26/22
Microsoft Q4 Conference Call — 7/26/22
3M Q2 Conference Call — 7/26/22
McDonald’s Q2 Conference Call — 7/26/22
Whirlpool Q2 Conference Call — 7/25/22
PPG Industries Q2 Conference Call — 7/22/22
American Express Q2 Conference Call — 7/22/22
Freeport-McMoRan Q2 Conference Call — 7/21/22
Blackstone Q2 Conference Call — 7/21/22
Tesla Q2 Conference Call — 7/20/22
Baker Hughes Q2 Conference Call — 7/20/22
Netflix Q2 Conference Call — 7/19/22
Johnson & Johnson Q2 Conference Call — 7/19/22
International Business Machines Q2 Conference Call — 7/18/22
Goldman Sachs Q2 Conference Call — 7/18/22
Citigroup Q2 Conference Call — 7/15/22
Blackrock Q2 Conference Call — 7/15/22
JP Morgan Q2 Conference Call — 7/14/22
Taiwan Semiconductor Q2 Conference Call — 7/14/22
Delta Q2 Conference Call — 7/13/22
PepsiCo Q2 Conference Call — 7/12/22
Constellation Brands Q1 Conference Call — 6/30/22
Walgreens Q3 Conference Call — 6/30/22
Nike Q4 Conference Call — 6/27/22
CarMax Q1 Conference Call — 6/24/22
FedEx Q4 Conference Call — 6/23/22
KB Home Q2 Conference Call — 6/22/22
Adobe Q2 Conference Call — 6/16/22
Kroger Q1 Conference Call — 6/16/22
Oracle Q4 Conference Call — 6/13/22
Lululemon Q1 Conference Call — 6/2/22

Bespoke’s Morning Lineup – 9/23/22 – Not Another Friday

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.

“Price is what you pay. Value is what you get.” – Warren Buffett

Morning stock market summary

Below is a snippet of content from today’s Morning Lineup for Bespoke Premium members.  Start a two-week trial to Bespoke Premium now to access the full report.

Down and down she goes, where she stops, nobody knows.  Global equities are tanking this morning as interest rates surge at what, in some cases are unprecedented rates. In Europe’s STOXX 600, just 19 stocks are currently higher on the day, and the UK government’s 5-year gilt has seen its yield surge by nearly 100 bps this week alone.  Over at least the last 30+ years, there has never been that large of an increase in the 5-year gilt yield in such a short period of time.  Fixed-income markets around the world are caught in an upward spiral of yields that most of the traders trying to navigate them have never seen.  Alongside the surge in rates, stocks are flushing, and while the magnitude of the decline is not as severe as the move in fixed-income markets, good luck convincing anyone to step up and buy on a Friday against a backdrop where the Federal Reserve is getting exactly what it wants. If today’s declines hold at 1% for the S&P 500, it will be the twelfth 1% to close out a week this year which would already rank as the sixth most since at least 1952 and there are still another 14 weeks left in the year.

With the 2-year yield surging another 7 basis points (bps) on Thursday and another 13 bps this morning, it is trading more than 2.5 standard deviations above its 50-day moving average (DMA).  Since 1976, there have only been 288 other trading days where the 2-year yield finished the day more than 2.5 standard deviations above its 50-DMA, and six of those occurrences have been in the last nine trading days!

The 2-year yield is also on pace to finish the day at ‘overbought’ levels (more than 1 standard deviation above its 50-DMA) for 24 straight trading days.  As shown in the chart below, though, overbought closes for the 2-year yield have been a regular occurrence lately, and there have been two other streaks this year that have lasted considerably longer.  Maybe a better question is how often this year has the two-year yield not finished a trading day at overbought levels?

The answer to that question is less than 25%.  Of the 182 trading days this year, there have only been 41 where the two-year yield closed the day less than one standard deviation above its 50-DMA.  Flipping that around, the yield has finished the day at overbought levels 77.6% of the time.  Going back to 1977, there has never been another year where there was a higher percentage of days that the two-year yield finished the day at overbought levels.  The only two years that were even close were 1978 (72.7%) and 1994 (71.6%). There’s still a quarter of the year left, so this percentage could decline, but at the current pace, the pace of relentless increase in the two-year yield has been unprecedented.

Our Morning Lineup keeps readers on top of earnings data, economic news, global headlines, and market internals.  We’re biased (of course!), but we think it’s the best and most helpful pre-market report in existence!

Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.

The Closer – Yield Surge Continues, Real Estate Collapse, Current Account Reverses – 9/22/22

Log-in here if you’re a member with access to the Closer.

Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we start out tonight with a look at 10 year yields around the globe (page 1).  We then pivot over to a look at the Real Estate sector and how its yields stack up to those of other sectors (page 2).  Afterward, we take a look at real yields (page 3). Turning to macro data, we then update our Five Fed Manufacturing Composite with the addition of the Kansas City Fed (page 4) and the latest current account data (page 5). Turning back to real rates, we finish with a look at today’s 10 year TIPS reopening (page 6).

See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!

Gold to Silver Ratio Plummeting

In spite of it being considered a safe haven asset and inflation hedge, gold has had a rough year with a nearly 10% decline year to date. The yellow metal has consistently traded below its 50-DMA over the past few months while the 200-DMA is fairly flat.  Over the past several days, gold has been trending sideways right near 52-week lows.

Silver has not avoided declines and like gold has largely remained below its moving averages. However, its sideways action in recent days has proven a bit more constructive.  Unlike gold, silver rallied in the first half of September moving back above its 50-DMA in the process. Since then, there has not been a massive degree of follow-through, but it has managed to hold above that moving average.

For the past year and a half, gold has generally outperformed silver as shown in the uptrend of the ratio of the two metals since early 2021. However, the underperformance of gold in recent weeks has led the ratio to pivot sharply lower. Over the past 15 days, the ratio has fallen 11%; the first double-digit decline since February 2021.  Looking back through the early 1990s, there have only been a handful of other periods in which the gold-to-silver ratio has fallen by a similar degree or more in the same span of time. Outside of last year, the only other occurrences in the past decade were 2013, 2016, and 2020. Click here to learn more about Bespoke’s premium stock market research service.