The Closer – Yields, Fair Value, Freight – 8/17/26
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- Today the 30y yield topped 5.30% intraday, the highest level for the longest-term risk-free rate since 2007. That may sound ominous, but with some context the historical analogue gets even more interesting.
- While overall foreign fixed income flows have been modest over the past few years, equities have seen massive buying.
- While S&P 500 futures have the first net long positioning since March 2025, the Nasdaq 100 is t the most net short positioning since October 2020.
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Daily Sector Snapshot — 8/17/26
Chart of the Day: Bull Dogs
Memory: The Sector With No Memory
There’s an old Saturday Night Live sketch called “Mr. Short-Term Memory,” and it featured Tom Hanks playing a character who developed severe amnesia after a pear fell on his head. The memory loss was so severe that Mr. Short-Term Memory would walk into a room and immediately forget where he was and why.
Like Mr. Short-Term Memory, the equity market is often described as having no memory, and nowhere has that been more evident lately than, fittingly, in the memory sector.
Memory stocks were all the rage for much of 2025 and the first half of 2026, with demand hitting a fever pitch in the second quarter. The month of July saw these stocks come crashing down to earth, as investors quickly forgot why they couldn’t get their hands on shares of these companies fast enough. In August, the switch flipped again, and now investors can’t seem to figure out why they sold these stocks in July in the first place!
After more than tripling – yes, tripling – from the original launch date in early April to its late June high, the Roundhill Memory ETF (DRAM) crashed more than 44% in barely a month into its late July low. Since then, the ETF has rallied 37%, taking it back above its 50-day moving average (DMA) for the first time since 7/14. Despite that rally off the lows, DRAM is still down 23.8% from its closing high, meaning that it would have to rally over 30% just to get back to those highs again.
The table below shows how DRAM’s 10 largest holdings have performed relative to their Q2 highs and their summer lows. Every single one of them fell at least 30% from their Q2 highs to the summer lows, and every single one of them has also rallied back at least 20% from their lows. Despite those rallies, though, all but one of DRAM’s 10 largest holdings are still below their Q2 high. The one exception is Nanya Technology, which trades in Taiwan.
Meanwhile, three stocks are still down at least 43% from their Q2 highs, meaning that they would all have to rally at least another 75% to get back to those highs. Now, that would be a memorable rally!
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52-Week Highs Outnumber Lows in an Overbought Market
The net percentage of S&P 500 stocks at 52-week highs has stayed above zero for 38 straight trading days, meaning new highs have continued to outnumber new lows. The ongoing streak now matches the 38-day run that ended on January 16, 2026, making it the longest since a 72-day streak ended on November 14, 2024. Even that, though, was well short of the record 222-day run that ended on September 17, 2021.
The index has also closed more than two standard deviations above its 50-DMA eight times in the last ten trading days. That’s the highest share of extremely overbought readings in 10 days since June 20, 2023.
That strength has been especially persistent in Financials, which closed at least one standard deviation above its 50-DMA for the 45th straight session on Friday. The current streak is tied for the seventh longest since 1990.
The streak for Financials would need to extend another 16 trading days to break the record of 60, which ended in December 1996. Since a 57-day streak ended in March 2004, Financials has reached 45 consecutive overbought days only three times, in 2018, 2024, and now. Prior streaks were frequently followed by short-term weakness, with six of seven showing declines one week later and five lower after a month. Results improved farther out, with five of seven higher six months and one year later.
You can find more sector research like this in Bespoke’s Daily Sector Snapshot.
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Cracker Barrel (CBRL) Recovers Entire Logo Losses Within a Year
Below is a snapshot of 30 restaurant stocks sorted by year-to-date performance. The average stock on the list is up 16.5% on the year, about three percentage points better than the cap-weighted S&P 500 (SPY) but right in line with the equal-weight S&P 500’s (RSP) gain of 16.3%.
There’s some wide performance disparity across the restaurant space, as is usually the case. Eleven of the stocks listed are up 20%+ YTD, while nine are down 10%+.
Two restaurant stocks have separated themselves from the pack this year with gains of more than 120%: Cheesecake Factory (CAKE) and Cracker Barrel (CBRL).
We highlighted CAKE in a post earlier this month, so below is a look at the price chart for Cracker Barrel (CBRL), this year’s other big winner in the restaurant space.
A year ago this week, Cracker Barrel’s (CBRL) CEO Julie Masino announced a company rebrand that included a logo change. The rebrand faced immediate backlash that even President Trump commented on, and within a few weeks, Masino had fully backtracked on the rebrand strategy.
As shown below, shares were more than cut in half from the time the rebrand was announced last August through the end of 2025. But remarkably, shares have now recovered the entire decline one year later!
At the end of July, it was announced that Masino was stepping down as CEO. Her replacement is former Bloomin’ Brands (Outback Steakhouse) CEO David Deno.
With shares back to where they were before the logo controversy began, it’s Deno’s turn now.
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European Country ETFs vs. the U.S.
US stocks crushed the rest of the world for a 15-year period coming out of the Financial Crisis, but we’ve seen the rest of the world actually outperform the US over the last 18+ months. A lot of the outperformance for international equities has come since the Tariff Tantrum in early 2025.
Below is a chart showing total returns for the US (SPY) versus the rest of the world (CWI) going back to Election Day 2024. Through last Friday, CWI was up 50.5% versus a gain of 39% for SPY.
The US outperformed for the first few months of this snapshot, but the rest of the world has held the lead since mid-April 2025.
Below we focus in on European country ETFs and how they’ve done so far in 2026. Heading into this week, nearly all of Europe is trading in overbought territory, but there has been plenty of performance disparity.
Against the US (SPY), there’s a 50/50 split of outperformers versus underperformers when it comes to year-to-date performance.
The UK (EWU), Sweden (EWD), Switzerland (EWL), France (EWQ), and Germany (EWG) are the underperformers versus SPY, with Germany up the least at +3.9%.
Poland (EPOL), the Netherlands (EWN), Austria (EWO), Spain (EWP), and Italy (EWI) are the outperformers, with Poland, the Netherlands, and Austria the clear leaders, all up roughly 25% YTD.
Poland (EPOL) traded sideways from mid-April through late June, but it has gained 16%+ off the late-June lows to move into first place among the group. (You can monitor the chart for EPOL here or download a Custom Portfolio of our European ETF basket here. To use our Custom Portfolio tool, simply start a Premium or All Access trial at our Member Plans page.)
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Bespoke’s Morning Lineup – 8/17/26 – Hovering Near Highs
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“I generally avoid temptation unless I can’t resist it.” – Mae West
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Outside of the Dow, where futures are modestly lower, S&P 500 and Nasdaq futures are both higher, with the Nasdaq leading the way, looking at a gain of 0.45%. Despite no signs of tensions breaking down in the Middle East, crude oil prices are basically unchanged, and Treasury yields are slightly lower.
Asian stocks started the week mostly higher, with Japan up 0.7% while Chinese stocks rallied more than 1% despite weak economic data from both countries. South Korean markets were closed for a holiday, but the big news from that region was an action from President Trump to scale back joint U.S.-South Korea military exercises, citing ‘expenses’ and that country’s lack of material assistance with the war in Iran. It’s also an olive branch to North Korea to potentially get that country to provide less military assistance to Russia’s war with Ukraine.
In Europe, trading is much more subdued with the STOXX 600 up 0.1%, and the only country up or down more than 0.2% is Italy (+0.4%).
Earnings season is winding down, but on the economic calendar, Empire Manufacturing for August just hit the tape and doubled expectations to the upside (20.6 vs 10.0), while homebuilder sentiment, which is expected to tick down slightly from July, will hit the tape at 10 AM.
The S&P 500 eked out a fractional gain last week after breaking out to new highs in the week before. As earnings season winds down and August goes on, don’t be surprised if market activity starts to really slow down. That would probably be the best we could hope for given all the geopolitical issues simmering around the world.
The S&P 500 may have rallied to new highs last week, but the Nasdaq, which has been a long-term leader, has been lagging in the short term. While the index has broken its downtrend from the June highs, it remains more than 1.5% below that all-time high heading into the new week of trading. Besides that, the 50-day moving average has also started to slope downward, indicating the lack of upside momentum in the index.
We call semiconductors a leading indicator of the economy and the market, and the current picture isn’t particularly positive from a short-term perspective. The Philadelphia Semiconductor Index (SOX) is in worse shape than the Nasdaq. Not only has the slope of its 50-day moving average turned lower, but the index is still trading below that level. While it broke out above its June downtrend last week, the SOX is now boxed in between that former resistance and the 50-DMA, which it failed to clear on the upside last Thursday. The one caveat, though, is that the SOX’s Q2 rally was so far divorced from reality that some cooling off was inevitable. Taken together, Q2 and Q3 still leave the index in relatively good shape.
Bitcoin used to be considered a measure of risk tolerance in the market, but with all the excitement going on in the AI space, who needs crypto? Bitcoin remains stuck in a stubborn downtrend that has been in place for a full year now. For the last couple of weeks, the downtrend line and 50-day moving average have been acting as monkey bars that Bitcoin keeps riding along from below. It’s been a disappointing year for crypto, and the only selling point it has actually lived up to is being an uncorrelated asset.
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Brunch Reads – 8/16/26
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.
Sports Illustrated: On August 16, 1954, the first issue of Sports Illustrated arrived on newsstands with Milwaukee Braves third baseman Eddie Mathews on its cover. The 144-page magazine cost 25 cents and combined reporting on baseball, boxing, and track with articles about horse racing, hunting, and other recreational sports. Publisher Henry Luce, who had already helped build Time, Life, and Fortune, believed sports had become important enough to support a national weekly magazine. Many of his colleagues disagreed, viewing sports as too seasonal and its fans as an unattractive audience for major advertisers.
The skeptics initially appeared to have a point. Sports Illustrated struggled to define its audience and failed to turn a profit for more than a decade. Its fortunes improved after André Laguerre became managing editor in 1960 and focused more heavily on major spectator sports, particularly professional football. The magazine paired timely reporting with long-form writing and color photography, giving readers something television could not. By the 1970s, appearing on its cover had become a mark of national prominence, and Sports Illustrated had established itself as the country’s leading sports magazine.
Markets & Investing
Anthropic Tries to Shore Up Investor Confidence Ahead of Blockbuster IPO (WSJ)
Anthropic is preparing for a September or early October IPO that could be the largest ever, after demand for Claude Code helped push annualized revenue above $47 billion in May. Investors are questioning whether cheaper Chinese models and growing opposition to AI infrastructure could slow that growth, but Anthropic is betting that more capable models and expansion into healthcare and biology will keep demand rising. [Link]
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The Bespoke Report – August Awakening – 8/14/26
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Nearly all of the major US equity indices we track have made it back to new highs as the stock market has had about as good of a first half of August as you could ask for. In this week’s Bespoke Report newsletter for subscribers, we highlight a number of data points that bulls can hang their hats on, but there are also a few readings that warrant caution.
Along with our unique market analysis, we also dive into this week’s economic data and what it means for the rest of 2026 and beyond. Did this week’s inflation data and a number of readings on the consumer change any opinions at the Fed? Is the three-headed monster of rates, oil, and the dollar causing us to worry? You’ll have to read the full report to find out! Simply start a trial to any of our membership levels to give it a read over your weekend coffee. We hope you enjoy it!
