The Bespoke Report – 10/18/24 – 99 Problems, But the Market Ain’t One
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Bespoke’s Morning Lineup — 10/18/24
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“If machines are going to take jobs away from the worker, then he will need to find something else to do. Perhaps he’ll get back to the soil. But we must care for him during the period of change. We must keep him away from red literature, red ruses; we must see that his mind remains healthy.” – Al Capone
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 S&P 500 is up a half a percent, the Nasdaq 100 is down a half a percent, and the small-cap Russell 2,000 is up 2.2% on the week as we get set for Friday trading. But S&P 500 and Nasdaq futures are trading up about a half a percent ahead of today’s open on the back of strong earnings results from Netflix (NFLX) after the close yesterday.
As shown below, the S&P remains elevated relative to its normal trading range and its 10-day advance/decline line has just ticked slightly back into overbought territory as well.
The Closer – Small Caps, Hurricane Effects, Remodeling – 10/17/24
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we start with a look into the outperformance of small cap stocks (page 1). We then review the latest manufacturing data from regional Fed banks (page 2) before switching over to a look at hurricane impacts on jobless claims (page 3). After reviewing the latest EIA data (page 4), we finish with a rundown on homebuilder and remodeler sentiment (page 5).
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!
Bespoke’s Morning Lineup — 10/17/24 — TSM Rights the Ship
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.
“Nothing’s worse than a guy who loses fair and square and then whines about it.” – Evel Knievel
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Retail sales, jobless claims, and the Philly Fed report all came in better than expected a few minutes ago at 8:30 AM ET, and we’ll have more coverage of these indicators later today.
After major chip-equipment manufacturer ASML spooked the Tech world earlier this week with a weaker than expected earnings report, Taiwan Semi (TSM) has helped to right the ship this morning with an earnings triple play (beat EPS, beat sales, raised guidance). The stock is reacting to the news extremely positively in pre-market trading. Shares are currently set to open higher by 9.1%, which would mark a new all-time high for the stock. As shown below, a 9.1% gap higher for TSM this morning would also be its most positive open following an earnings report since at least 2012.
Small-cap indices have been charging higher over the last week with the Russell 2,000 (IWM) up nearly 4% and the Micro-Cap ETF (IWC) up 6%. As shown below, small-cap index ETFs are currently the most overbought, then mid-caps, then large-caps. The Nasdaq 100 ETF (QQQ) is actually down over the last week, but its price is still slightly overbought.
The Closer – Earnings, Commodity Check, China – 10/16/24
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we lead off with a look at the latest earnings (page 1) followed by a check up on commodities (page 2). We then review today’s import and export price indices (page 3) before closing out with an overview in the streak of volatility in China and Bitcoin price action (page 4)
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!
Bespoke’s Morning Lineup — 10/16/24
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 took the two most expensive aspirins in history.” – Wally Pipp
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 S&P 500 saw a downside intraday reversal yesterday after European chip-equipment manufacturer ASML reported weaker than expected numbers. As shown below, SPY is currently trading well above its 50-day moving average and is about $16 above key support. We’ll be treating any downside move as simple mean reversion until the point at which support at the $563.5 level breaks.
The semiconductor ETF (SMH) fell more than 5% yesterday on the ASML news, resulting in a large red bar on the ETF’s chart. Remember that even though the broad market has been chugging along making new high after new high recently, the semis — the Transports of the 21st century — have yet to do so.
The Closer – Semi Slide, Freight Update, SCE – 10/14/24
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we kick off with a look at the reversal in the semis in addition to the outperformance of the Dow Transports (page 1). We then update freight volume data from Cass (page 2) before diving deep into the latest Survey of Consumer Expectations from the New York Fed (pages 3 – 5).
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!
Bespoke’s Morning Lineup — 10/15/24
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 always performed out of fear of failure – and that’s a tough way to play. It was as if my back was to the wall and I was constantly surrounded by very dangerous people that were not friendly to me.” – Keith Hernandez
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Major US banks and brokers are in the news once again this morning as all three that reported earnings ahead of today’s open (BAC, C, GS) beat both top and bottom line estimates. Coming into today, this space is already trading extremely overbought, but share prices are rallying again in the pre-market in reaction to the positive earnings news.
As shown below, since earnings season began last week, the “big six” of the banks and brokers are up an average of 6.7% based on where shares are trading in the pre-market this morning.
The Closer – Semis, AI Breakouts, Positioning – 10/14/24
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we lead off with a look at the new high for NVIDIA (NVDA) and performance of the rest of the semis (page 1) followed by a dive into some interesting charts of AI Basket members (pages 2 and 3). We finish with our weekly rundown of positioning data (pages 4-7).
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!
The Bull’s Biggest Hits and Misses
The bull market turned two years old over the weekend, so we wanted to take a quick moment to highlight some of the S&P 500’s biggest winners and losers over the last two years. Since the S&P 500’s closing low two years ago, 73 stocks in the S&P 500 have rallied at least 100% while just 71 are down. The table below lists the 19 stocks that have rallied at least 200%, and below that we list the 24 stocks that have declined at least 25%.
AI has been a leading theme of the bull market, so most people already know that NVIDIA (NVDA) — with its ten-bagger — tops the list in terms of performance. Even the big gains in Super Micro (SMCI) and Vistra (VST) probably won’t surprise many people, but looking through the list, some names will likely be eye-openers. Take General Electric (GE). Wasn’t that an also-ran from the 1990s? After two decades in a ‘penance’ working off the financial engineering before 2000 and some questionable leadership and strategic decisions, GE has gotten a new lease after breaking up into three units. Its aerospace unit, which trades under the old ticker GE, has rallied more than 350% during this bull market, and even the two other spin-offs, GE Vernova (GEV), which consists of its electric power business, has doubled, while GE Healthcare (GEHC) is up 50%. Besides GE, other names that may come as a surprise to investors are Royal Caribbean (RCL), Axon Enterprises (AXON), Howmet Aerospace (HWM), and KKR. At the sector level, Technology leads the list with seven of the 19 names listed while Consumer Staples, Energy, Materials, Health Care, and Real Estate aren’t represented at all.
Of the 24 stocks that have declined at least 25%, seven come from the Consumer Staples sector, including Walgreens Boots Alliance (WBA) and Dollar General (DG), which are both down over 60%. Health Care is the second most represented sector with six stocks, while Materials is the only other one with more than two stocks on the list. Overall, eight sectors are represented, with Consumer Discretionary, Financials, and Real Estate being the only ones missing.
Moderna (MRNA) and Pfizer (PFE) were two of the biggest winners during Covid as investors couldn’t get enough of the stocks given their exposure to the vaccine. Now that Covid is well in the rearview mirror and jabs of the treatment have slowed to a trickle relative to the rates of 2021, investors want little to do with these former market darlings.
The lists of winners and losers during this bull market illustrate the importance of first-mover advantages. In the table above, streaming pioneer Netflix (NFLX) ranked 15th in performance with a gain of 227%. Contrast that to names like Paramount Global (PARA) and Warner Brothers Discovery (WBD) below. In 2021, these companies and others were convinced by NFLX’s streaming success that launching their own services would be a breeze. However, as the years have passed, the competitive nature of the streaming market has become apparent. There’s a limit to how many services consumers are willing or able to pay for.
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