The Closer – European Fiscal, Tariff Retreat, Equal Weights – 3/4/25
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 lead off with a look the dramatic changes to German fiscal policy (pages 1 and 2). We then check in on the Ag Economy Barometer and tariff news out after the bell (page 3). Next, we review the price action in bank stocks (page 4) and Consumer Discretionary and Staples names (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 – 3/4/25 – Fear & Uncertainty
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.
“The only thing we have to fear is fear itself.” – Franklin D. Roosevelt
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Target CEO Brian Cornell appeared on CNBC earlier, and while we didn’t count, throughout an interview lasting just a few minutes, it seemed like the term “certainty” was mentioned dozens of times, as in there is none. The current market sell-off that’s still less than two weeks old has been driven to this point almost entirely by fears and uncertainty as opposed to actual events. Fears and uncertainty over the economy, fears and uncertainty over interest rate policy, fears and uncertainty over US trade policy, fears and uncertainty over tax policy, fears and uncertainty regarding geopolitical stability. We get it. There’s always uncertainty, but this has been a different level. Like a box of chocolates, you never know what you’re going to get, except that lately they’re all flavors nobody likes (think Orange Cream, Maple Nut Butter, Cherry Cordial, etc).
This morning, you could say we’re getting some certainty as tariffs with China, Canada, and Mexico take effect. These moves are all expected to have an inflationary impact (Cornell noted that produce prices will start rising this week), but that’s not being reflected in crude oil prices and Treasury yields. Equity futures were looking eerily quiet earlier this morning. However, as we approach the opening bell, the tone has steadily weakened as international markets have also moved sharply lower. There’s not much to speak of in terms of economic data today, so unless there are any impromptu comments from the President during the day, the next potential catalyst will be tonight’s address to Congress tonight.
Heading into last week’s earnings report from Nvidia (NVDA), most investors assumed the company would report better than expected results. Based on the company’s past reporting patterns and the comments from the major hyper-scalers when they reported earlier in earnings season, it was also almost a foregone conclusion that the company would raise guidance, especially because they only provide short-term guidance a quarter out. Whatever impact, if any, DeepSeek would ultimately have, it wasn’t going to change short-term spending plans for the coming three months. Given that, in last Wednesday’s email of the Morning Lineup, we mentioned that “How the market reacts to that report could give us a good idea of the market tone as we head into Spring.”
NVDA’s performance since then hasn’t been a good omen, as the stock is down over 13% since its report. As shown in the chart below, NVDA’s price chart, which was already trending lower, now looks like it’s breaking down, and yesterday, the stock closed at its lowest level in close to six months (9/18/24).
The chart below shows every day since the launch of ChatGPT at the end of November 2022 and how many days had passed since NVDA last closed lower than that day’s close. Since the launch of ChatGPT, NVDA has never closed at a 52-week or even a six-month low, and yesterday was the first time it closed even at a 166-day closing low.
Since it comprises about 7% of the Nasdaq, NVDA’s plunge yesterday also took the Nasdaq marginally below its 200-DMA, which is a place it hasn’t been in more than a year – 333 trading days to be exact. The breakdown below its 200-DMA was only the 11th time the index ran more than a year without closing below that level. This just-ended streak ranked as the 7th longest streak of closes above the 200-DMA of all time.
Get Invested: Don’t Get Political
Our “Get Invested” series is a simple yet powerful resource designed to help anyone understand why investing in stocks for the long term is one of the best financial decisions they can make. The slide below from our Get Invested piece is titled “Don’t Get Political.”
Letting political beliefs get in the way of “buy and hold” has been extremely costly to investors. Going back 70 years, $1,000 invested in the US stock market only when a Republican is President would be worth $28,000 today. $1,000 invested only when a Democrat is President would be worth more than double that at $72,000. But that $1,000 would be worth almost $2 million today for those who put politics aside and stayed invested regardless of who’s in charge in Washington DC.
If you have any questions about our Get Invested resource, please email us or give us a call at 914-315-1248. You can view the full piece by becoming a Bespoke client.
Click here to learn more about Bespoke’s wealth management services.
The Closer – Tariffs Confirmed, Bad PMIs, Housing – 3/3/25
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 lead off with an update on the tariff front (page 1) followed by a check up on stock and bond correlation (page 2). Next, we review the latest PMI data in the forms of S&P Global (page 3) and the ISM figures (page 4). We also show what this implies for GDP tracking (page 5). Next, we dive into the latest housing data regarding mortgage debt (page 6) and inventories (pages 7 and 8).
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!
Bespoke Matrix of Economic Indicators
Our Matrix of Economic Indicators provides a concise summary analysis of the US economy’s momentum. We combine trends across the dozens and dozens of economic indicators in various categories like manufacturing, employment, housing, the consumer, and inflation to provide a directional overview of the economy.
To access our newest Matrix of Economic Indicators, start a two-week free trial to either Bespoke Premium or Bespoke Institutional now!
Bespoke Market Calendar — March 2025
Please click the image below to view our March 2025 market calendar. This calendar includes the S&P 500’s historical average percentage change and average intraday chart pattern for each trading day during the upcoming month. It also includes market holidays and options expiration dates plus the dates of key economic indicator releases. Click here to view Bespoke’s premium membership options.
Where’s the Weakness in Discretionary?
Entering the final month of the first quarter, most S&P 500 sectors are sitting on year-to-date gains, although there are two notable exceptions. The Tech sector is currently down 5.29%, which has dragged on broader market performance, given it’s by far the largest sector by market cap. Consumer Discretionary is down an even worse 5.65% year to date, and returns look even worse when compared to the December 17th high. Since then, the sector is down just under 12%. As shown below, using the sector ETF (XLY) as a proxy for the group, that latest correction leaves it in no-man’s-land between the 50 and 200-day moving averages with the recent low finding some support around the November post-election low.
Taking a look under the hood, breadth since that December high hasn’t been that bad. Of the 50 stocks in the sector, half are higher, and half are lower since the high. However, there is a far larger weight in the losers than the winners. Among the decliners are the sector’s largest names: Tesla (TSLA) and Amazon (AMZN). Given that the S&P 500 is weighted by market cap, those declines in the mega caps—namely the outsized 38.4% drop in TSLA shares—have acted as significant drags on broader index performance.
Zeroing in on Tesla (TSLA), the stock peaked a day after the Consumer Discretionary sector, closing at a 52-week high on December 18. Regardless, it’s been a brutal period of selling since then. The stock’s nearly 40% decline saw it crash through its 50-DMA, and in the past few days, it has found support at its longer term 200-DMA.
Again, the S&P 500 and its sectors use a market-cap-weighted methodology, meaning stocks with larger market caps (like Tesla) will have a greater impact on the index than smaller peers. That also makes equal-weight versions of the indices useful in canceling out some of that noise and providing a better look at breadth. As shown below, whereas the market-cap weighted sector ETF (XLY) is down 9.6% from a 52-week high, the equal weight version (RSPD) is down less than 3%. Furthermore, whereas XLY looks like a falling knife, RSPD has just been bouncing sideways along the 50-DMA. The latest lows for RSPD came right at the uptrend line off of last summer’s lows. So all together, while the weakness in the Consumer Discretionary sector may cause some alarms to go off as a sign of stress for the consumer, the current situation is more looking like a lesson in index weighting methodologies and mega-cap volatility.
Bespoke’s Morning Lineup – 3/3/25 – In Like A…
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.
“We so often look so long and so regretfully upon the closed door, that we do not see the ones which open for us.” – Alexander Graham Bell
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Well, at least it’s March. Anyone with a net long position in the stock market was happy to see February end. Although the S&P 500 finished the month down just 1.42%, the Nasdaq was hit with a decline of just under 4%, and nearly all of it came last week as the index declined 3.5%. Remember, it was only seven trading days ago that the S&P 500 closed at a record high!
This morning, equities are looking to build on last Friday’s gains as investors await the release of the February ISM Manufacturing report. In Europe, the STOXX 600 kicked off the week with gains of close to 1%, driven by a 2%+ rally in Germany. Manufacturing PMI readings for the region generally came in better than expected, but the rally in Germany has also been driven by a 10%+ rally in defense contractor Rheinmetall based on expectations that the EU will increase military spending to support Ukraine.
Getting back to last week’s trading, it was mostly positive at the sector level. As shown in the snapshot below, just four out of eleven sectors finished the week in the red. Technology (XLK) was the big loser, falling close to 4%, along with Utilities (XLU), which fell 1.3%. The two other sectors to finish lower were Communication Services (XLC) and Consumer Discretionary (XLY), which each shed around 1%. The losses in these two sectors were driven by mega caps like Tesla (TSLA) and Amazon.com (AMZN) in the Consumer Discretionary sector and Alphabet (GOOGL) and Meta Platforms (META) in the Communication Services sector. Besides these four sectors, most others were up at least 1%, including Financials (XLF) and Real Estate (XLRE), which gained over 2% each.
Relative to their short-term trading ranges, nine out of eleven sectors remain above their 50-day moving averages (DMA), but then there’s Consumer Discretionary and Technology, which both remain at oversold levels.
Get Invested: “Be Greedy When Others Are Fearful”
Our “Get Invested” series is a simple yet powerful resource designed to help anyone understand why investing in stocks for the long term is one of the best financial decisions they can make. The slide below from our Get Invested piece is titled “Be Greedy When Others Are Fearful.”
One of Warren Buffett’s most famous quotes is to “be greedy when others are fearful.” Unfortunately, many anxious investors can’t stomach losses in the stock market, causing them to go to “all cash” at exactly the wrong times. Take large declines, for example. Since WW2, the S&P 500 has fallen more than 15% in nine different quarters. Following every single instance, the index was higher a year later with an average one-year gain of 25.1%. Similarly, the S&P 500 has had two-quarter drops of 20%+ just eight times, and over the next year, the index was up by at least 17% with gains every single time.
If you have any questions about our Get Invested resource, please email us or give us a call at 914-315-1248. You can view the full piece by becoming a Bespoke client.
Click here to learn more about Bespoke’s wealth management services.
Brunch Reads – 3/2/25
Welcome to Bespoke Brunch Reads — a linkfest of some of our favorite articles over the past week. The links are mostly market-related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.
Oh, the Places You’ll Go: On March 2, 1904, Theodor Seuss Geisel, better known as Dr. Seuss, was born. His impact on generations of readers cannot be overstated. Books like The Cat in the Hat and Green Eggs and Ham introduced millions of children to reading through simple vocabulary, rhythmic patterns, and engaging illustrations. Beyond literacy, Dr. Seuss infused his stories with profound social and moral messages. The Lorax warned about environmental destruction long before it was a widespread concern, while Horton Hears a Who! told a story of compassion and the importance of standing up for others. Dr. Seuss’s influence extends beyond the pages of his books. His legacy continues through initiatives like Read Across America Day, which is celebrated annually on his birthday and promotes early childhood literacy. His stories have been adapted into films, TV specials, and stage productions.
A& & Technology
AI cracks superbug problem in two days that took scientists years (BBC)
An AI tool from Google just cracked a microbiology mystery in 48 hours, a problem that took human scientists a decade to solve. Given only a short prompt, the AI independently reached the same conclusion about how superbugs spread, even though the research hadn’t been published anywhere. It confirmed the hypothesis and even suggested four additional ideas, one of which the research team is now pursuing, leading Professor José R. Penadés to call it a game-changer for science. [Link]
Continue reading our weekly Brunch Reads linkfest by logging in if you’re already a member or signing up for a trial to one of our two membership levels shown below! You can cancel at any time.
