New York, New York
Updated home-price trends across the country from S&P CoreLogic’s Case Shiller indices came out earlier this week and showed home prices up 5.4% YoY and up about 0.5% MoM nationally through June 2024.
Below is a snapshot of the 20 individual cities tracked by Case Shiller. Notably, New York home prices were up the most of any city on a year-over-year basis at +8.99%. Three West Coast cities followed New York with gains of more than 8% as well: San Diego, Las Vegas, and Los Angeles.
Home prices were up the least over the last year in Portland at just 0.77%, followed by Denver (1.90%) and Minneapolis (2.01%).
Thirteen of the twenty cities tracked made new all-time highs in June. San Francisco is the farthest below all-time highs at -7.06%.
Miami and Tampa — two Florida cities — are still up the most since COVID hit in February 2020 with gains of more than 70%. San Francisco, DC, Portland, and Minneapolis have seen home prices rise the least since COVID, although they’re still all up more than 35%.
Since the brief pullback we saw in 2022 and early 2023, home prices nationally are up just over 11%, and cities like New York, San Diego, LA, Chicago, and Detroit have seen the biggest bounces off their 2023 lows with gains of roughly 15% or more.
Below is a chart showing the year-over-year percentage change in Case Shiller home price indices from June 2023 to June 2024:
Below are price charts for each city and the three composite indices since the start of Case Shiller’s data. Cities highlighted in green are currently at all-time highs. The red line in each chart marks the onset of the COVID pandemic, so you can see how much prices started to jump at that point.
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Bespoke’s Morning Lineup – 8/29/24 – Now What?
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“I want my name back” – Richard Jewell
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
If you missed yesterday’s CNBC segments previewing and then discussing Nvidia’s (NVDA) earnings results, you can catch them by clicking on the image below.
The main event has come and gone, and there are now just two trading days to Labor Day weekend. Even though shares of NVDA are trading lower in response to its earnings report last night, futures are trading higher this morning with even the Nasdaq trading marginally in the green. Besides the weakness in NVDA, a positive report from salesforce.com (CRM) and others has helped to offset some of the weakness.
Besides the busy slate of earnings last night and this morning, the economic calendar was busy at 8:30 with revised GDP, Core PCE, Wholesales Inventories, and Jobless Claims. From an equity market perspective, the results couldn’t have been better as GDP and Personal Consumption came in better than expected, inflation data was weaker than expected, and jobless claims were slightly lower. The only other report on the calendar for the day is Pending Home Sales at 10 AM.
Throughout August, US Treasury yields have declined across the curve, but the short end has seen the steepest declines. After starting the month at 4.26%, the 2-year US Treasury yield has declined 40 basis points to 3.86%, while the 10-yield has dropped just 20 basis points, falling from 4.03% to 3.83%.
Given the steeper declines at the short end of the curve, the spread between the two yields has narrowed considerably and is close to flipping positive from inversion (negative spread). It got close earlier this month during the heightened volatility when the yen carry trade was being unwound, but this would be the closest it has gotten to a positively sloped curve in a ‘normal’ market environment since mid-2022.
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B.I.G. Tips – Earnings Triple Plays Recap: Q2 2024
Today we published our newest Earnings Triple Plays report. During the just-completed Q2 2024 earnings reporting period, there were a total of 126 earnings triple plays out of just under 2,000 individual quarterly earnings reports from US-listed stocks. That’s 28 more than the 96 triple plays we saw during the prior earnings reporting period.
What is a triple play? When a stock reports quarterly earnings, it registers a “triple play” when it beats analyst EPS estimates, beats analyst revenue estimates, and raises forward guidance. We coined the term back in the mid-2000s, and you can read more about it at Investopedia.com. We consider triple plays to be the cream of the crop of earnings season, and we’re constantly finding new long-term opportunities from this basket of names each quarter. You can track the newest earnings triple plays on a daily basis at our Triple Plays page if you’re a Bespoke Premium or Bespoke Institutional member. To read our newest report and see some of the triple plays with intriguing charts at the moment, start a two-week trial to Bespoke Premium!
The Alphabet Portfolio: Single-Letter Tickers
Most stock tickers are made up of either two or three letters. There are 676 possible two-letter tickers and 17,576 possible three-letter tickers, but there are only 26 possible one-letter tickers. Below is a look at current publicly traded single-letter tickers on US stock exchanges.
The most well-known single-letter tickers are probably Citigroup (C), Ford (F), AT&T (T), Visa (V), and US Steel (X). In all, 21 of the 26 letters in the alphabet are currently being used as stock tickers. The letters currently not in use? I, N, P, Q, and Y.
Interestingly, all eleven major sectors are represented in the “Alphabet Portfolio” shown below. Talk about diversified! Industrials and Consumer Discretionary both show up four times, while Financials shows up three times. The remaining sectors either have one or two tickers included.
In terms of the make-up of these 21 stocks, they’re more dividend-heavy. All but four of the single-letter tickers pay a dividend, and their average yield is currently 2.79%. That’s quite a bit higher than the 1.22% the S&P 500 ETF (SPY) currently yields.
In terms of recent performance, while there have been some decent gains this year (B, C, D, J, K, L, R, T), there have also been some stinkers (M, S, U, W, X). On average, this basket of stocks has posted a total return of 4.67% this year, which is well behind the 18.9% that SPY has gained. Over the last three years, the performance disparity widens even more, with single-letter tickers up just 3.1% compared to a gain of 30.4% for SPY. Unfortunately it looks like single-letter tickers = single-digit returns. At least in recent years. It would likely be a much different story if any of the mega-caps had single-letter tickers!
As always, past performance is no guarantee of future results!
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Bespoke’s Morning Lineup – 8/28/24 – The Day You’ve All Been Waiting For
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.
“Virtual reality, all the A.I. work we do, all the robotics work we do – we’re as close to realizing science fiction as it gets.” – Jensen Huang
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
It’s the day we’ve all been waiting for, at least if you were to believe the financial headlines since last weekend. Ever since Friday afternoon, every market-related story has included an obligatory reference to “investors eagerly awaiting earnings from Nvidia (NVDA) on Wednesday after the close”. NVDA’s earnings report has become the world’s most important financial news event. Federal Reserve officials must be getting nervous.
While the hype nearly never lives up to reality, when it comes to being the most important stock in the market, investors may have a point regarding NVDA. Throughout its history as a public company, the stock has averaged a one-day move of +/- 8.1% in reaction to earnings. As shown in the chart below of the 15 most heavily weighted stocks in the S&P 500, that 8.1% move ranks as tied for second (trailing the 8.3% average move in Amazon.com) regarding the most volatile stock. Besides META, the only other stocks that have experienced average one-day moves of more than 5% in reaction to earnings are Tesla (TSLA) and Alphabet (GOOGL).
While NVDA may not be the most volatile of the 15 largest stocks in the S&P 500 when you take into account its $3.2 trillion market cap and 6.7% weight in the S&P 500, its average impact on the S&P 500 in reaction to earnings towers over every other stock in the market. As shown in the chart below, the ‘average’ reaction to earnings from NVDA coupled with its market cap translates into a one-day impact on the S&P 500 of 54 basis points (bps), or 0.54%. The next closest stock based on this measure would be Apple (AAPL) at 33 bps; the only other stock with an impact of more than 25 bps is AMZN.
Now just because NVDA’s average one-day change in reaction to earnings translates to the largest impact of any other stock in the market doesn’t mean the S&P 500 will experience a move of 0.54% tomorrow. As shown in the chart below, there have been plenty of quarters where NVDA’s one-day reaction to earnings has been well less than 8%, including four of the last eight quarters where the one-day reaction to earnings was less than half of the average. Then again, there have also been three quarters during that same span where NVDA’s one-day move in reaction to earnings was well over 10%, including last May when the stock surged 24%! Based on its current market cap, a 24% move in NVDA would equate to a 1.6% move in the S&P 500 – for just one stock!
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Bespoke’s Morning Lineup – 8/27/24 – Stuck
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“We can draw lessons from the past, but we cannot live in it.” – Lyndon B Johnson
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Depending on the index, equity futures are trading within 0.1% above or below unchanged this morning as treasury yields move slightly higher. The only economic reports on the calendar this morning are FHFA House Prices and Consumer Confidence. Besides these two reports, investors continue to look ahead to Nvidia (NVDA) earnings after the bell on Wednesday. It’s hard to remember a time when there was so much anticipation regarding one company’s earnings report, but besides Apple (AAPL) over the years, it’s also hard to remember a stock in recent history that has garnered as much of an iconic status.
For anyone frustrated with the slower momentum in the US economy, consider yourself lucky we’re not Germany. Q2 GDP in Europe’s largest economy and the third largest in the world contracted by 0.1%, which was in line with expectations. The latest quarterly print represents the latest example of an economy stuck in the mud and not going anywhere. Look at the chart below of quarterly GDP in Germany since the start of 2014. For nine quarters, quarterly GDP prints have alternated between gains and losses.
The chart below shows historical streaks where German GDP alternated between growth and contraction, and at nine quarters in a row now, the current streak is unlike anything seen since East and West Germany reunified in the early 1990s. It’s over twice as long as the next longest streak of four quarters. Not only that, but unless there are revisions to prior quarters, the streak will either extend to ten next quarter, or the economy will be in a technical recession (back-to-back quarters of negative GDP)!
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$10,000 in NIKE (NKE)
In today’s “$10,000 in…” series, we’re taking a look at NIKE (NKE).
NIKE, Inc. (NKE) was founded in 1964 as Blue Ribbon Sports by University of Oregon track athlete Phil Knight and his coach Bill Bowerman. Initially, the company operated as a distributor for the Japanese shoemaker Onitsuka Tiger, selling shoes out of Knight’s car at track meets. In 1971, Blue Ribbon Sports rebranded as Nike, named after the Greek goddess of victory, and introduced the iconic “Swoosh” logo. The company rapidly expanded its product line and marketing efforts, becoming a leading athletic footwear and apparel brand. Nike went public in December 1980, with its initial public offering (IPO) marking the beginning of its ascent as a global sportswear powerhouse.
Below is a look at the growth of a hypothetical $10,000 investment in shares of NKE at the start of 1990 (ex any initial trading costs) with dividends re-invested back into company shares. As of 8/26/24, $10k in NKE at the start of 1990 would be worth $1,534,600 today. That’s a gain of more than 15,000%.
While going from $10k up to $1.5 million is nothing to sneeze at, this was actually above $3 million at NKE’s peak in late 2021. Shares are currently in a 52% drawdown and are about where they were trading five years ago in August 2019.
As always, past performance is no guarantee of future results!
We wrote more about NIKE (NKE) and its potential as a turnaround play in a recent Bespoke Chart of the Day. To read it, simply sign up for a trial to one of the two Bespoke membership options shown below. Click here or on the image below to sign up for a two-week trial today!
Record Contractionary Streak for Texas Manufacturing
The Dallas Fed released its latest regional manufacturing survey this morning. At the headline level, the report showed the region’s manufacturing activity was stronger (or less worse) than expected with the index for general business activity rising to -9.7 versus -16.3 expected and -17.5 previously. That is also now the highest reading since January 2023.
Although that result was stronger than expected and relative to the past few years, the index remains in negative territory meaning it was a 28th consecutive month of contractionary readings. As shown below, that now surpasses the 27 months ending November 2009 for the longest streak of contractionary readings in the survey’s history.
Additionally, headed into this month, the spread of the current and future General Business Activity indices was close to a record low meaning that the region’s firms reported much more optimistic expectations for the months ahead than what they are currently observing. Historically, it has been common for expectations to be stronger than current conditions, but not to such an extreme degree as last month. With the increase in the current conditions index concurrent with a 10-point drop in the expectations index in August, the spread has narrowed dramatically, rising from a first-percentile reading into the 13th percentile.
That improvement in General Business Activity occurred with strong breadth across most of the report’s categories. As shown in the table below, for current conditions, every index was higher month over month except for Employment which dropped 7.8 points. Not only were most indices higher, but several of those monthly jumps rank in the top 10% of all MoM moves on record. Thanks to those big increases, four indices went from contraction, back into expansion: Unfilled Orders, Shipments, Production, and Inventories. Again, the actual level of expectation indices has been stronger, but breadth in August was more mixed with half of the categories falling month over month and the other half rising. That being said, the 10-point drop in General Business Activity stood out as an outlier in terms of the size of the decline.
As noted above, multiple indices went from contraction to expansion in August, and most were related to demand. While the new orders index is still in contraction at -4.2, the expectations index for that category has climbed to the strongest level since March 2022. The Unfilled Orders index was even more impressive with the index’s 27.6 point MoM jump ranking as the second largest on record behind September 2005 when it rose by over 30 points. While that is only the first expansionary reading since last September, it’s the highest reading in 25 months. Meanwhile, expectations rose to the highest level since June 2021. In all, the report indicated that conditions are not yet improving, albeit there are some silver linings under the hood.
The Triple Play Report — 8/26/24
An earnings triple play is a stock that reports earnings and manages to 1) beat analyst EPS estimates, 2) beat analyst sales estimates, and 3) raise forward guidance. You can read more about “triple plays” at Investopedia.com where they’ve given Bespoke credit for popularizing the term. We like triple plays as an indication that a company’s business is firing on all cylinders, with better-than-expected results and an improving outlook. A triple play is indicative of positive “fundamental momentum” instead of pure fundamentals, and there are always plenty of names with both high and low valuations on our quarterly list.
Bespoke’s Triple Play Report highlights companies that have recently reported earnings triple plays, and it features commentary from management on triple-play conference calls, company descriptions and analysis, and price charts. Bespoke’s Triple Play Report is available at the Bespoke Institutional level only. You can sign up for Bespoke Institutional now and receive a 14-day trial to read this week’s Triple Play Report, which features 26 new stocks. To sign up, choose either the monthly or annual checkout link below:
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SharkNinja (SN), a home appliance maker, is an example of a company that recently reported an earnings triple play. In fact, the triple play on 8/8 marked its fourth straight. The stock has been strong this year, up 75.6% from where it began 2024. On 8/8, SN shares surged 17% in reaction to the quarterly triple play.
Looking at the snapshot below from our Earnings Explorer, SN could not have asked for a better start since separating from JS Global in July of 2023 and becoming its own publicly traded company. With four consecutive triple plays, the stock has had increasingly positive share-price reactions.
You may very well have an SN product or two in your home given the popularity of the company’s vacuums, blenders, air fryers, ice cream makers, and other appliances. The release of the Ninja SLUSHi for making frozen drinks recently went viral on social media. Cleaning product sales grew nicely while international sales surged 46%, up triple digits in Germany and France specifically. Entry into the premium coffee market with the Ninja Luxe Café is expected to drive further growth, especially in Europe. You can read more about SN and the 25 other triple plays in our newest report by starting a Bespoke Institutional trial today.
Bespoke Investment Group, LLC believes all information contained in these reports to be accurate, but we do not guarantee its accuracy. None of the information in these reports or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. 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.
Bespoke’s Morning Lineup – 8/26/24 – Stronger Durable Goods Orders
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“Forget about style; worry about results. ” – Bobby Orr
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
If you missed Friday’s CNBC segment, you can catch it by clicking the image below.
While futures are higher versus fair value this morning, the magnitude of the gains is minimal at best for the S&P 500 and Nasdaq futures are indicated lower, so listless would be a good description of how things are looking to start the week, and it is the last week of August heading into Labor Day weekend after all. The key events to watch this week are PCE data on Friday and earnings from Nvidia (NVDA) after the close on Wednesday.
Durable Goods orders just hit the tape, and the headline number came in at more than double expectations (9.9% vs 4.0%), but ex Transportation, the report was slightly weaker than expected (-0.2% vs 0.1%).
The snapshot below from our Trend Analyzer shows the performance of various international equity markets on a dollar-adjusted basis. At the top of the list, US stocks have maintained their leadership role despite modest underperformance last week. With a gain of 18.7% YTD, SPY is outperforming the next closest ETF on the list – the MSCI All Country World Index (ACWI) – by nearly 300 basis points, and a primary reason that ETF is the second-best performing ETF on the list is because of the large weighting of US stocks! At the other end of the list, the only ETF on the list that was down last week was the Latin American 40 (ILF), and it is also the only one that’s down YTD. In other words, North and South America account for the best and worst-performing stocks this year. Sandwiched in between the US and Latin America, returns for the rest of the world are remarkably similar with YTD gains in the range of 12.1% (Europe) to 9.2% (Asia Pacific).
Looking more closely at the performance of the best (US) and the worst (Latin American) stocks this year, the chart below shows the YTD performance of both ETFs. While ILF underperformed SPY right out of the gate this year, the bulk of the divergence came in late May through June when SPY saw its YTD gain climb from around 5% to 15% while ILF moved entirely in the opposite direction.
As anyone paying attention knows, though, this year’s underperformance of ILF relative to SPY is simply a continuation of a trend that has been in place for several years. Looking at a 10-year comparison of the performance of the two ETFs, SPY has rallied nearly 240% while ILF has been worse than dead money with a decline of 9.5%.
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