The Closer – Poetic Price Action, Internals, Delinquencies – 4/7/25
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 commentary regarding the immense volatility in today’s session and the catalysts that drove those swings (page 1). We then dive into the just how few stocks are trading above their 200-DMAs (page 2) in addition to decile breakdowns of other factors (page 3). We then close out with a look at the dollar and credit (page 4) and the latest mortgage delinquency data (page 5).
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!
Country ETFs since “Liberation Day”
Since President Trump’s second term began with the Inauguration on January 20th, the S&P 500 ETF (SPY) is down 16.5% compared to a 6.2% drop for the all world ex US ETF (CWI). A ten percentage point gap in performance in less than three months is significant. It’s early, but the rest of the world is solidly beating US markets so far under Trump 2.0.
Below is a table showing the performance of 45 country ETFs available to US investors since the close last Wednesday just before the President’s Rose Garden announcement of reciprocal tariffs that were orders of magnitude higher than the market expected.
The average country ETF is down exactly 10% in the two and a half trading days since Trump’s “Liberation Day,” and the only two down less than 5% are India (INDA) and Turkey (TUR).
Of the G7 countries, the US (SPY) has been the third worst with a drop of 11.2%. The UK (EWU) and Italy (EWI) are down more at -13.3%, while Germany (EWG), Japan (EWJ), Canada (EWC), and France (EWQ) have fallen a little bit less than the US.
Norway (ENOR), Greece (GREK), Poland (EPOL) and China (MCHI) are the four country ETFs down more than 14% since last Wednesday’s close, while Vietnam (VNAM) — a country punished with a 45% tariff even though they only tariff the US roughly 5% — is down a tad less than SPY with a drop of -11%.
Rollercoaster
Late last week and over the weekend, there were multiple predictions calling for more volatility. For instance, CNBC’s Jim Cramer drew parallels with “Black Monday”. Most investors probably haven’t even had lunch yet, but already it’s looking like a session for the history books. As we noted in a post on X, there have already been multiple mid-single-digit swings in both directions. As shown below, with the declines the S&P 500 (SPY) briefly dipped into bear market territory which we discussed the implications of in last Friday’s Bespoke Report.
Again, it’s not even noon but the opening move in addition to the declines last week has been enough to earn accolades. For starters, SPY has now had negative downside gaps (open lower than the prior day’s close) nine sessions in a row. Since SPY began trading in the early 1990s, there have only been four other such streaks. The most recent streaks were clustered around 2015 and 2016 while the other occurrence was way back in January 1995.
Not only has there been such consistency to the downside at the open, but the moves have been very large. For four straight sessions now, SPY has gapped down at least 1% which is a new record. Within that streak was a 1.05% decline last Wednesday, a 3.4% drop Thursday, a 2.4% decline Friday, and a 3.2% decline today. The only other streaks of 1% gaps down that even lasted for three days occurred in September and December 2008 and later in March 2020.
As noted earlier, there have already been some wild swings intraday. As a result, the intraday trading range has blown out to epic proportions, and again, it’s not even lunchtime. As shown below, today’s intraday high-low spread for SPY has been 8.58%. In the ETF’s entire history, there have only been 20 other trading days with as wide of a range. The most recent of these before today was during the COVID Crash. The China currency devaluation in August 2015 was another relatively recent example of a huge intraday range although it wasn’t quite as big as today, and before that, there were multiple instances around the time of the Great Recession, July 2002, August 1998, and October 1997.
Bespoke’s Morning Lineup – 4/7/25 – More Pain
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.
“By 1864 Wall Streeters had spies in the Confederate high command and could learn southern battle plans before colonels in the Army of Virginia did.” – Mike Wallace
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Futures are sharply lower again this morning, although off their overnight lows, as investors look for signs of a break in the selling vortex. You’ll hear all sorts of opinions as to when and where the market will bottom out, but they’re all guesses, so ignore them. No one knows at this point. You could make the argument that President Trump can end this as fast as he started it, but that’s not guaranteed either. The longer markets remain in their current state, the more control he loses as other issues and factors start to pop up, and the more likely it is that this decline stretches out into a more prolonged decline. What’s that old Warren Buffett quote about what happens when the tide goes out?
How bad have things gotten? Just now on CNBC, there was an interview with a former Federal Reserve official and two topics of conversation were whether we were entering another Smoot-Hawley-type era and if the dollar had the potential to lose its reserve currency status. In the past, bringing up either of these issues would get you laughed off the set, and now they’re both legitimate topics to bring up, from a former Federal Reserve official no less!
The one thing the President has working for him is that foreign markets are starting to feel just as much, if not, more pain than the US. The day after the tariff announcements on Wednesday, US markets significantly underperformed foreign markets, but on Friday, the declines were more equally distributed. Today, at least so far, it is foreign markets that are generally feeling the most pressure. The more foreign markets underperform the US, the more likely it is that foreign countries come to the bargaining table. On the other hand, seeing foreign stocks underperform could only embolden the President more.
Futures are currently down around 2%, so we wanted to provide an update on where this decline stands relative to history. At current levels, the S&P 500 would be down 12.85% over a three-trading day span, which ranks up there as among the worst since late 1952 when the five trading day week in its current form started. At these levels, the decline is right around the worst of the three-day declines experienced during Covid and the Financial Crisis, and the only one that was meaningfully worse was the 1987 crash. This is a decline of historical proportions.
The chart below shows every prior three-day decline of 10%+ with a red dot. Outside of the three periods mentioned above, the only two others were in 1998 (Russia’s Debt Default) and 2011 (US debt downgrade). One period that didn’t make the cut was the 9/11 attacks. In the four trading days when the market re-opened after those attacks, the S&P 500 declined around 12%, but it never reached a double-digit percentage decline in three days.
Given the market is coming off one of its worst two-day declines in history, you wouldn’t expect to see many stocks on the list of winners from Thursday and Friday, but we were surprised to see that not a single stock in the S&P 500 was up on both Thursday and Friday of last week.
On Thursday, 95 stocks in the S&P 500 finished higher on the day as investors tried to initially distinguish between winners and losers from Liberation Day, but Friday was more about investors coming to the realization that there wouldn’t be much in the way of winners from Trump’s plans. As shown in the table below, of the 34 stocks that traded 2%+ higher on Thursday, they were all primarily defensive in nature and names you turn to when you’re expecting a market or economic decline.
On Friday, just 14 stocks in the S&P 500 finished the day higher. 11 of them were from the Consumer Discretionary sector, and eight were either homebuilders or related to the housing sector. While these stocks traded higher on Friday, they have all been weak for months now, and the one-day rally was a bounce in reaction to the yield on the 10-year which plunged below 4%. Other winners included Lululemon (LULU), Nike (NKE), Target (TGT), and Dollar Tree (DLTR) which all fell 10% or more on Thursday in their immediate reaction to Liberation Day.
Turning back to the market macro, not even considering today’s weakness, the S&P 500 and most sectors all had their worst two-day periods since March 2020 last week. Think back to the way you felt in the Spring of 2020. While the two periods are incredibly similar in terms of the rampant levels of uncertainty, the causes of the uncertainty came from very different directions. In March 2020, people had no idea how Covid would impact the economy, how long it would last, or how to control it. Today, the cause of the uncertainty is incredibly under control and could be turned off just as fast as it was turned on. Whether that happens before it’s too late is the biggest question mark, and financial markets increasingly view the switch being turned off or at least dialed back as unlikely.
Brunch Reads – 4/6/25
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.
The Golden Sponge Cake: On April 6, 1930, in River Forest, Illinois, James Dewar, a baker for Continental Baking Company, noticed that the machine used to make strawberry shortcake sat idle outside of strawberry season. Dewar wanted to put the machines to good use and came up with the idea of injecting sponge cakes with cream filling, so they no longer depended on the strawberry growing season. The first version used banana cream but later switched to vanilla during a banana shortage in WWII. Dewar would name his newly invented snack the Twinkie, which was inspired by a billboard for Twinkle Toe Shoes. The rest, as they say, is history.
AI & Technology
Something Bizarre Is Happening to People Who Use ChatGPT a Lot (Futurism)
A new study by OpenAI and MIT Media Lab found that the heaviest ChatGPT users are showing signs of addiction. They are obsessing over the bot, feeling withdrawal, and even treating it like a friend. Surprisingly, users who engage in emotional or personal conversations with the chatbot are less likely to form unhealthy attachments than those who use it for work or brainstorming. The longer people use it, the more emotionally entangled they tend to get, especially if they’re lonely or lacking social support in real life. [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.
The Bespoke Report – 4/4/25 – “Houston, We Have a Problem”
To read our weekly Bespoke Report newsletter and access everything else Bespoke’s research platform offers, start a two-week trial to Bespoke Premium. There are weeks and then there are weeks. This past week was one that people will be talking about for years to come, and we cover it in this week’s Bespoke Report. Give it a read!
Bespoke’s Morning Lineup – 4/4/25 – Thank You Sir, May I Have Another
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.
“There is nothing more corrupting, nothing more destructive of the noblest and finest feelings of our nature, than the exercise of unlimited power.” – William Henry Harrison
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
There’s nothing to say this morning except it’s bad out there. Yesterday was an awful day and today isn’t looking much better. In some cases, it’s even worse given the scope of the declines in other areas of the market outside of US equities. Foreign equities are plunging, credit spreads are blowing out, commodities are sharply lower, the VIX is above 45, and the 10-year treasury is comfortably below 4%. The President and his administration wanted lower yields, and they got them. Whether they intended to get here the way we did, we don’t know. We’ve seen a lot over the years, but nothing quite like this.
Yesterday’s nearly 6% decline in the Nasdaq was the largest since March 2020 and the 47th decline of 5%+ in the index’s history. The charts below show the Nasdaq’s daily change over time (top chart) while the second chart shows each occurrence of a 5%+ decline over time. A large share of these declines came during the dotcom bust as there were 20 in the two years from 2000 to 2001 alone while another ten were in 2008.
The Closer – Blood Bath, Small Cap Bear, Dollar Drop – 4/3/25
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, after a brutal session on Wall Street, we begin with a rundown of performance across assets (page 1) including a look at the Russell 2,000 entering a bear market (page 2) and the historic daily decline in the US dollar (page 3). We then dive into the conflicting signals in the latest labor market data (pages 4 and 5) before finishing with an update on the housing market (page 6).
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!
Q1 2025 Earnings Conference Call Recaps: Lamb Weston (LW)
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 Lamb Weston’s (LW) Q3 2025 earnings call.
Lamb Weston (LW) is one of the world’s leading producers of frozen potato products, best known for supplying French fries and related items to restaurants, food service distributors, and retailers across North America and internationally. With deep relationships in the quick-service restaurant (QSR) space and strong product innovation (like fridge-stable fries and cheese-filled potato bites), LW offers a unique window into global food service demand and consumer dining behavior. The company’s success hinges on agricultural planning, global logistics, and its ability to anticipate shifts in food consumption trends. This quarter reflected solid volume growth amid a tough macro backdrop. Volume rose 9% as the company regained lost ERP-transition customers and won new contracts, including a national rollout with a large QSR chain. Still, restaurant traffic remains weak. US QSR burger traffic fell 6% in February. Elevated inventories prompted line curtailments, hurting gross margins through higher cost absorption. A partnership with AlixPartners is driving a company-wide transformation, targeting cost, operational, and strategic improvements. Meanwhile, potato acreage was reduced due to soft demand, and tariff risks loom though near-term impacts are minimal. The stock resisted the broader selloff and rose more than 10% on 4/3 with better-than-expected results…
Continue reading our Conference Call Recap for LW by becoming a Bespoke Institutional subscriber. You can sign up for Bespoke Institutional now and receive a 14-day trial to read our newest Conference Call Recap. To sign up, choose either the monthly or annual checkout link below:
Bespoke’s Morning Lineup – 4/3/25 – The Pendulum Swings the Other Direction
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 signing of this act is a momentous occasion in the world’s quest for enduring peace.” – Harry Truman
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
77 years ago today, President Truman made the comments above about his signing the Economic Assistance Act, better known as the Marshall Plan, into law. The Marshall Plan’s primary purpose was to help Western and Southern European countries recover from World War II by rebuilding cities and industries devastated by the war, removing trade barriers between European countries, and creating a more conducive environment between Europe and the US.
By almost all accounts, the Marshall Plan was a big success. But just one day shy of 77 years later, President Trump declared “Liberation Day” and signed an executive order instituting new punishing tariffs on countries around the world. While the tariffs were referred to as reciprocal, the levels were shocking and sent stocks plunging after hours.
Arguments can be made that other countries have been ripping the United States off by charging high levels of tariffs to US exporters. Unlike the Marshall Plan, though, which was meant to aid international economies and foster open trade between countries (even if they placed the US at a disadvantage), last night’s executive order did the opposite. The tariffs enacted by “Liberation Day” will enact a slew of protectionist policies for domestic industries and restrict international trade. If the Marshall Plan was a helping hand to the rest of the world, “Liberation Day” is a big middle finger.
What’s most ironic about last night’s tariff announcements and the rhetoric we’ve heard since Trump came into office is that while the President says he is acting to help US companies, it’s the US stock market that is down the most. The table below shows the performance of the ETFs that track the ten largest global economies. For each one, we show their YTD performance through yesterday’s close and then where they’re trading this morning. Heading into yesterday’s tariff announcement, the US was already the worst performing of the ten largest global economies, and since the announcement last night, the S&P 500 is off 3.4%, as measured by SPY, while none of the other nine ETFs are down as much.
With global markets lower and US futures sharply lower, the S&P 500, as proxied by the SPDR S&P 500 ETF (SPY), is on pace to break below the lows from earlier this week. The next level of potential support is the post-Labor Day September lows and then the lows from last August. That said, markets are rudderless at this point as the level of tariffs outlined last night will only exacerbate consumer and investor concerns about the outlook and create more uncertainty.
Today’s decline will be SPY’s seventh straight downside gap at the open. That ranks as the longest streak since early 2016 and is only one of only seven streaks with as many or more consecutive days of negative selling pressure at the open. The longest streak was ten days in August 2015.
