The Closer – High Yield, CPI, AI Bear – 3/12/25
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we begin with a look at high yield fixed income (page 1) followed by a review of today’s CPI data (page 2). Next, we look over the charts of each sector (pages 3 – 5) in addition to a look into the latest rotation surrounding AI stocks (pages 6 and 7).
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Bespoke’s Morning Lineup – 3/12/25 – Going the Other Direction
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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.
The Closer – Retracement, Catalysts & Contributions, JOLTS – 3/11/25
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we take a look at market technicals and breadth as the S&P gets closer to a 10% correction. We begin with a technical breakdown of the latest retracement in addition to the catalysts for the moves (pages 1 and 2). We also shown the rotation under the surface (page 3) and which stocks have contributed the most to the decline (page 4). We finish with an update on investor sentiment (page 5) and today’s JOLTS data (page 6).
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Q4 2024 Earnings Conference Call Recaps: Dick’s Sporting Goods (DKS)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers Dick’s Sporting Goods’ (DKS) Q4 2024 earnings call.
Dick’s Sporting Goods (DKS) is the largest omnichannel sports retailer in the US. The company operates over 850 stores under its flagship brand and specialty banners like Golf Galaxy and Public Lands. DKS delivered a strong Q4, with comps up 6.4% and full-year sales hitting a record $13.4 billion. Growth was fueled by expansion in premium footwear (28% of sales), investments in e-commerce, and store renovations. The company is aggressively scaling its House of Sport and Field House concepts, aiming for 75-100 locations by 2027. Digital investments include RFID technology and a growing retail media network. Management emphasized resilient consumer demand despite macro uncertainty, noting 7 million new customers in 2024. Tariffs are still a wildcard, but sourcing diversification limits exposure. Looking ahead, 2025 comps are guided at 1-3%, with a $1B CapEx plan focused on store growth, tech, and supply chain enhancements. Despite beating estimates, shares were down around 7% on 3/11…
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Big Swings for Small Business
This morning’s release of small business sentiment from the NFIB showed another month-over-month decline in the headline Optimism Index. The politically sensitive survey has shown that the headline index has managed to remain well above pre-Election levels, though the past two months have marked a dramatic drop. The index was at a high 105.1 in December thanks to a record increase after the election. In the two months since then, the index is down 4.4 points, which, as shown in the second chart below, makes February the 10th largest 2-month decline on record.
In the table below we show the readings for each category of the report including the 10 inputs to the optimism index in addition to the eight other indices. As shown, the latest drop has brought the index down from an 85th percentile reading to a 66th percentile reading. Breadth was notably weak with only three inputs rising month-over-month while the rest fell. Other categories were mixed with three increases, three declines, and two unchanged readings.
As previously noted, historically the NFIB survey has been sensitive to politics. The survey has shown small businesses to be more optimistic when Republicans are in power whereas sentiment has been weaker when Democrats are in power. As we discussed in today’s Morning Lineup, some categories like labor indicators appear less sensitive. Expanding on this, below we have constructed indices within the report that are centered around observed or actual changes to the businesses (which in theory could be less politically sensitive) and expectations or plans (which would be more sensitive).
As shown, both indices got a boost after the election although plans and expectations saw a significantly larger jump, meaning small businesses’ hopes were perhaps ahead of what was actually happening within their firms. Just as fast as it rose, that expectations index has pulled back sharply in the past couple of months. As a result, expectations continue to outpace actuals, although to a smaller degree than at the end of 2024.
In addition to the various categories of the report, the NFIB also has an Economic Policy Uncertainty index. This index tends to rise the most during election years, and given we are only a few months out from the election, this index has remained near historically elevated levels. As shown in the second chart below, the move over the past several months has been extremely volatile. The move in the past two months is similar in size to the two-month period leading up to last fall’s election. Prior to that, the only moves of this size were observed in the summer of 2022 and in early 2016 before that.
Elsewhere in the report, there were other mixed signals which could cause some uncertainty outside of politics. The higher prices index ticked up meaningfully with a 10-point jump resulting in the highest reading since May 2023. However, the percentage of firms reporting inflation as their single biggest problem has fallen massively to only 16% versus a recent high of 25% last summer.
For the cohort of businesses that reported lower earnings, inflation was the second most common response accounting for 10% of respondents. That is still well below the past few years’ range, and plays second fiddle to sales volumes, which rose to 16% to match last October and November 2023 for the highest reading since March 2021.
Another big move in last month’s report had to do with capex. While ‘actual changes to capex’ was flat on the month, credit availability rose another point to continue its massive improvement from the past few months.
Perhaps as a result of that greater ease for credit or perhaps to front run any potential tariff impact on the heavily exposed auto industry, we would also note that February saw a historic surge in the percentage of firms reporting capex spend on vehicles.
Q1 2025 Earnings Conference Call Recaps: Vail Resorts (MTN)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers Vail Resorts’ (MTN) Q2 2025 earnings call.
Vail Resorts (MTN) is the leading operator of ski resorts in North America, owning and managing 42 mountain resorts across the US, Canada, and Europe. The company generates revenue through lift tickets, season passes (Epic Pass), lodging, dining, ski rentals, and retail sales. With the Epic Pass network, Vail has transformed the ski industry by prioritizing pre-committed revenue, stabilizing earnings despite weather volatility. The company serves both destination travelers and local skiers, offering luxury and high-volume resort experiences. The company provides insight into consumer travel demand, discretionary spending, and winter tourism trends. MTN benefitted this quarter from stable season pass sales and improved early-season conditions. However, destination visitation patterns continue to shift later in the season, impacting Q2 metrics. Local visitation remained strong, but total ski visits were down 2.5% season-to-date. A focus was its $100M cost-efficiency plan, expected to be fully realized by fiscal 2026. Vail raised Epic Pass prices by 7% and offered credits to Park City guests affected by the patrol strike. International demand at Whistler remains weaker, though bookings have improved. Investments in lift infrastructure, AI-driven guest services, and digital innovations continue. On mixed results, MTN shares rose around 6% by midday on 3/11…
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Q1 2025 Earnings Conference Call Recaps: Oracle (ORCL)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers Oracle’s (ORCL) Q3 2025 earnings call.
Oracle (ORCL) is a leader in enterprise software, cloud computing, and database solutions for businesses, governments, and organizations worldwide. The company’s core offerings include cloud infrastructure (OCI), multi-cloud database services, and AI-powered enterprise applications. Oracle’s dominance in databases, combined with its growing role in AI and cloud services, positions it as a key player in the race against hyperscalers like AWS, Google, and Microsoft. ORCL reported a record $48 billion in new bookings, pushing remaining performance obligations (RPO) to $130 billion, up 63% YoY. Cloud infrastructure revenue increased 51%, outpacing hyperscalers, while GPU consumption revenue nearly tripled amid soaring AI demand. ORCL’s AI Data Platform is set to integrate OpenAI and xAI models with its databases. Multi-cloud partnerships grew 10x YoY, with 40 new cloud regions planned. Project Stargate, Oracle’s massive AI training venture with NVIDIA and OpenAI, has yet to contribute to RPO but is expected to be a major driver. Capex will double to $16 billion in FY25 to meet demand. CEO Safra Catz expects even faster growth in FY26 and FY27. ORCL shares sank 4% at the open on 3/11 on worse-than-expected results and soft guidance…
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Bespoke’s Morning Lineup – 3/11/25 – Nasdaq Drawdowns
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.
“A man who has made no enemies is probably not a very good man.” – Antonin Scalia
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 getting the pulp kicked out of them yesterday, bulls are looking to regroup this morning, and futures are marginally higher ahead of the opening bell, with the S&P 500 and Nasdaq both indicated up about 0.50%. Now, if you put any trust in those numbers, where have you been for the last three weeks? That’s not to say the market can’t squeak out an up day today, but lately, there has been little correlation between where futures look an hour before the opening bell versus where they finish the day.
Earlier this morning, small business sentiment from the NFIB came in weaker than expected for the second month. The only other report on today’s calendar is the January JOLTS report at 10 AM. In political news, the House is expected to vote on a continuing resolution to fund the government. While there is optimism that the vote will pass to help avoid a shutdown this weekend, the higher hurdle will be the Senate, where 60 votes are required to pass.
President Trump is also scheduled to meet with several CEOs at a meeting of the Business Roundtable today, so we’ll see what, if any, headlines come out of that meeting. The market’s main concern up until this point has been that the deteriorating levels of confidence on the part of consumers and businesses would translate into actual declines in activity. That remains to be seen in actual data, but Delta (DAL) may be showing hints of that effect starting to happen as the company cut guidance last night noting “the recent reduction in consumer and corporate confidence caused by increased macro uncertainty”. This morning, we’re also getting similar comments from several other airlines citing weakness in Q1 but expecting a rebound later in the year. CEOs at the meeting will voice their concerns to the President, so we’ll see how much he listens.
The Nasdaq Composite moved firmly back into correction territory yesterday as the drawdown from its December high reached 13.4%. Looking at the chart of the index over the last year shows an interesting pattern where it made numerous unsuccessful attempts to break above its December high in the last few months. After failing again less than three weeks ago, the Nasdaq ran out of gas and has collapsed to its lowest level since September 11 of last year.
No one can tell you when this decline will run its course, and it will depend on several factors. The only thing we can do at times like this is look back at history for a guide to see the range of possible outcomes. The chart below shows Nasdaq drawdowns from all-time highs since its inception, with the red line showing the level of the current decline. Believe it or not, the Nasdaq has been further from an all-time high than it currently is on 49% of all trading days, a lot of which were during the dot-com bust. That’s one extreme period we all hope is in the cards!
The Closer – Equal Weight Outperforms, Breadth Surprise, SCE – 3/10/25
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we recap the brutal day on wall street including the drop in retail risk and private equity names (page 1), how valuations have shaped up (page 2), the break below the 200-DMA (page 3), and the massive outperformance of equal weight indices versus market cap weighted versions (page 4). We also review the not-so-bad breadth in spite of today’s declines (page 5). We also take a deep dive into the latest New York Fed Survey of Consumer Expectations (page 6 – 8).
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Bespoke’s Consumer Pulse Report — March 2025
Bespoke’s Consumer Pulse Report is an analysis of a huge consumer survey that we run each month. Our goal with this survey is to track trends across the economic and financial landscape in the US. Using the results from our proprietary monthly survey, we dissect and analyze all of the data and publish the Consumer Pulse Report, which we sell access to on a subscription basis. Sign up for a 30-day free trial to our Bespoke Consumer Pulse subscription service. With a trial, you’ll get coverage of consumer electronics, social media, streaming media, retail, autos, and much more. The report also has numerous proprietary US economic data points that are extremely timely and useful for investors.
We’ve just released our most recent monthly report to Pulse subscribers, and it’s definitely worth the read if you’re curious about the health of the consumer in the current market environment. Start a 30-day free trial for a full breakdown of all of our proprietary Pulse economic indicators.
