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.

“Being Irish, he had an abiding sense of tragedy, which sustained him through temporary periods of joy.” – WB Yeats

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 were planning on a slow summer Friday, renewed tensions in the Middle East have damaged those plans this morning. Equity futures are off their overnight lows, but the S&P 500 is still indicated to open down by about 1%. The real action is obviously in the energy markets as crude oil trades sharply higher.

The US Oil Fund ETF (USO) is trading up over 7.5% in the pre-market, which would put it on pace for the sixth-largest opening gap to the upside since the ETF’s inception in 2006. It would also be just the 24th time that USO gapped up over 5%. In terms of the prior 7.5% gaps higher, USO continued higher from the open to close for a median gain of 2.1% and positive returns four out of five times. However, by the close of the following day, USO was down a median of 1.6% from the initial gap higher with declines three out of five times, and a week after that opening gap, it was down four out of five times for a median decline of 2.2%. Historically, at least, these sharp gaps higher haven’t had a lot of follow-through.

As far as the price of oil is concerned, this morning’s gap higher has helped to confirm what was already a break of the downtrend that had been in place since mid-January. It also cleared what could have been a formidable level of resistance in the $75 range.

As luck would have it, today is also Friday the 13th, and while the day has unlucky connotations, in terms of market performance, it has been anything but. Since its launch in 1993, the S&P 500 ETF’s (SPY) average daily change has been a gain of 3.9 bps, with gains 53.6% of the time. Fridays, however, haven’t been as positive as SPY’s average performance is unchanged, with gains 52.1% of the time. On the 53 prior Friday the 13ths, though, SPY’s median gain was 20 bps with gains 60% of the time, and on the four prior times that there has been a Friday the 13th in June, SPY’s median gain was 57 bps with gains three out of four times. Will investors buy the dip again and keep the positive June Friday the 13th vibes going?

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 will never apologize for the United States of America. Ever. I don’t care what the facts are.” – George H.W. Bush

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 some modest losses on Wednesday, US equity markets remain weak this morning as S&P 500 and Nasdaq futures are indicated to open down by about 0.5%. In comparison, the Dow is even weaker with declines of about 0.70%. The added weakness in the Dow stems from an 8%+ decline in Boeing (BA) following news of an Air India 787 crash shortly after takeoff. Whether the tragedy was a Boeing issue is far from certain, but given the company’s troubles over recent years, investors aren’t waiting for details over what happened.

After yesterday’s weaker-than-expected CPI, investors are now focused on the May PPI and weekly jobless claims. PPI came in weaker than expected, but more concerning was jobless claims. Initial claims came in at 248K which was unchanged from last week’s revised reading and was the highest level since last October. Continuing Claims were more concerning as they shot up to 1.956 million and was the highest level since 2021. In response, equity futures have seen little in the way of moves, but yields have moved lower.

Investor sentiment has improved as stocks have recovered in the last several weeks, but based on the results of the AAII weekly sentiment survey, complacency has yet to set in. In this week’s survey, bullish sentiment improved from 32.7% to 36.7%, which is hardly an elevated reading. At the other end of the spectrum, just over a third of investors are still bearish (33.6%)/

In looking at the 52-week high list the last couple of days, we thought we stepped into a time machine seeing IBM on the list. The stock broke above resistance last week and continued to run higher all week, consistently closing higher than it opened.

With the gains this week, yesterday was IBM’s 9th straight day of trading higher. A nine-day streak may not sound all that impressive, but over the last 50 years, there have only been seven other streaks of nine or more days. Strangely enough, though, of the now eight streaks of nine or more positive days in a row, four have occurred in the last two years, while the prior 48 only had four!

The chart below shows where each of the prior streaks occurred on IBM’s historical chart. While two of the streaks were followed by steep declines in the days, weeks, months, and even years ahead, these streaks haven’t been indicative of any definitive forward trend.

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.

“Too many people miss the silver lining because they’re expecting gold.” – Maurice Sendak

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 have been some positive developments in the US-China trade talks as Commerce Secretary Howard Lutnick said that both parties agreed to a consensus in trade talks that now only have to be agreed upon by President Trump and Xi.  The President just truthed that the deal is ‘done’. Despite the positive headlines, futures have been drifting lower as the terms of the deal really only bring us back to where we were after the Geneva meeting, so this drama is anything but done, even if things are moving in the right direction.

Markets are also a bit anxious heading into the release of the May CPI report. Will this be the month that the impact of tariffs starts to show up in the data, or will we once again hear that it’s a ‘next month’ story?

The S&P 500 closed within 2% of an all-time high yesterday, and overall breadth has likewise been strong. Let’s start with the cumulative advance/decline. The S&P 500’s cumulative A/D line has already hit a new high since “Liberation Day”, and after a brief dip in late May, it has rebounded right back within a hair of its high. If the market takes out its February high, it would be good to see breadth confirming the move.

One big contributor to the strong breadth in the market is the Technology sector, which has already taken out its late May high in the last few days, reaching a new high yesterday.

While the S&P 500 and Technology have seen new highs in terms of breadth as they wait for new highs in price to follow, the Industrials sector has been the opposite, as price has already made a new high, while breadth remains just shy. Back in late May, the sector’s cumulative A/D line just barely missed making a new high, and after a brief dip in late May, is now back on the rebound as it looks to take out those highs once again.

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.

“Too many people miss the silver lining because they’re expecting gold.” – Maurice Sendak

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

We’re not sure if it’s the summer doldrums setting in early or that investors needed a breather after the craziness of the last several months, but for the second morning in a row, the action in futures has been quiet. This morning, S&P 500 futures have been moving on either side of the unchanged line while the Nasdaq is set to open slightly higher.

US and Chinese officials are in London again this morning for the second day of trade talks, and the economic calendar is quiet with NFIB Small Business Sentiment being today’s only report. That came in better than expected, rising from 95.8 to 98.8 in May. Overnight, in Asia, Australia and Japan were higher while Hong Kong and China declined.

When it comes to the mega-cap stocks in the S&P 500 with market caps of more than or around a trillion dollars, an increasingly evident trend is that the group no longer trades as a block, where each member’s performance is no longer in line with the others. This can be seen in the year-to-date performance of the nine stocks listed below. While the average performance of the nine stocks on a YTD basis is basically unchanged (-0.01%) and the median is a gain of 5.37%, the performance of each stock ranges from 18.5% (Meta Platforms-META) to a decline of 23.6% (Tesla–TSLA). Even over the last 12 months, while all nine stocks have experienced positive returns, the magnitude of the gains ranges from 4.3% for Apple (AAPL) to a gain of 69.6% for Broadcom (AVGO). Even with every stock trading higher, they have hardly traded in unison.

Where we have seen a group of stocks trade much more in unison is at the other end of the market cap scale. The table below shows the nine stocks in the S&P 500 with the smallest market caps and how each has performed YTD and over the last 12 months. On a YTD basis, all nine stocks are lower with an average decline of 20.7% (median: -19.35). Just as notable is that the range of returns has been much closer than the largest stocks in the S&P 500. Whereas more than 42 percentage points separates the best and worst performances of the nine largest stocks in the S&P 500, for the nine stocks with the smallest market caps, the spread is just 23 percentage points. So, while the rising tide hasn’t impacted each of the nine largest stocks equally, the nine smallest stocks have been weighed down by a more similar anchor.

In terms of performance, while there may have been some concerns over the performance of the mega-cap stocks in recent months, they’re still doing much better than the nine smallest stocks.

Even on a relative strength basis, the nine stocks with the smallest market caps in the S&P 500 have consistently underperformed. Earlier this month, they even made a new low relative to the mega caps.