Chart of the Day – Full Service Dispersion
Best and Worst Performers Since 8/5
The large-cap S&P 500 and Russell 1,000 are both now up more than 10% since the summer low made on August 5th. They’re also trading back to new all-time highs today.
Within the Russell 1,000, the average stock in the index is up 10% as well, meaning breadth has been strong. This is different from what we saw in the first half of the year when the mega-caps pretty much drove all of the market’s gains.
We’ve seen some pretty massive moves higher in individual stocks since August 5th. There are 137 stocks in the Russell 1,000 up more than 20% since then (just 32 trading days), and there are 21 stocks up more than 40%. Below is a list of those 40%+ gainers.
As shown, buy-now-pay-later stock Affirm (AFRM) is up the most since 8/5 with a gain of nearly 88%. App-maker AppLovin (APP) is up the second-most at +83.8%.
Language-learning app Duolingo (DUOL), online real estate search site Zillow (ZG), and fast-casual Mediterranean menu company Cava (CAVA) round out the top five with gains of more than 56%.
Other notables on the list of big winners recently include Palantir (PLTR) with a gain of 53%, Five Below (FIVE) at +45.4%, SharkNinja (SN) at 44.9%, and RH at 41.1%.
While more than 87% of stocks in the Russell 1,000 are up since 8/5, there are 123 stocks that are in the red, including the 26 listed below that are down more than 10%.
Trump Media (DJT) is the Russell 1,000 stock down the most since 8/5 with a drop of 44.7%. Wolfspeed (WOLF), elf Beauty (ELF), New Fortress (NFE), and Dollar General (DG) round out the list of the five biggest losers, and other notable names on the list include Dollar Tree (DLTR), Sirius (SIRI), Celsius (CELH), Moderna (MRNA), Walgreens Boots (WBA), Ally Financial (ALLY), and Birkenstock (BIRK).
Below is a look at the average performance of Russell 1,000 stocks since 8/5 broken out by sector. Four sectors have seen average gains in a tight range between 12.3-12.8%: Real Estate, Technology, Financials, and Consumer Discretionary. On the weaker side, the average Energy stock is up just 3.1% since 8/5.
Below is a look at the average year-over-year percentage change of Russell 1,000 stocks by sector. Over the last year (since 9/19/23), the average Russell 1,000 stock is up 23.8%, but stocks in the Financials sector have done by far the best with an average gain of 34.5%. Notably, the AI-heavy Technology sector ranks third behind Financials and Industrials. Energy stocks, on the other hand, are only up an average of 1.9% YoY.
Going Ex-Dividend
Just over a tenth of the stocks in the S&P 500 are going ex-dividend in the next two weeks, and below is a list of the stocks going ex that have dividend yields that are higher than the yield of the S&P 500 (~1.28%).
As a reminder, to capture a quarterly dividend payment, investors need to own shares as of the close on the day prior to the ex-dividend date. If the ex-dividend date is 9/20/24, for example, you’d need to own shares as of the close on 9/19/24 to capture the dividend.
Some of the highest yielding stocks going ex-dividend in the next two weeks include Eversource Energy (ES), Philip Morris International (PM), Franklin Resources (BEN), US Bancorp (USB), Host Hotels (HST), and Realty Income (O).
Some of the largest, most well-known stocks going ex-dividend in the next two weeks include the aforementioned Philip Morris International (PM), Medtronic (MDT), Mondelez (MDLZ), Deere (DE), Cisco (CSCO), and Comcast (CMCSA).
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Bespoke’s Morning Lineup – 9/19/24 – Breaking Powell’s Law of Gravity
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 did everything adults would do. What went wrong?” – William Golding. Lord of the Flies
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Historically, when the Fed started a rate-cutting cycle, equity market performance on the day of the first cut was very positive with an average one-day gain of 1.30%. Even that positive bias, however, wasn’t enough to counter the negative pull of the market on Fed days during current chair Powell’s tenure since 2018. As shown in the chart below, on Fed days under Powell, there has been a clear negative bias for equities in the final hour of trading, which was again on display yesterday. Even after rallying as much as 0.8% after the statement’s release communicating a 50 bps rate cut, stocks drifted lower and finished with a decline of 0.24% right near the day’s lows.
The negative pull of Powell’s law of gravity may have pulled stocks lower yesterday, but this morning, the S&P 500 is indicated to open sharply higher with the S&P 500 ETF trading up over 1.5% in early trading. If these gains hold through the opening bell, it would be the 16th time since 1994 that SPY has gapped up over 1% on the day after a Fed meeting (scheduled or unscheduled). In the chart below of SPY, we show each of those prior occurrences using blue (when there was no change in rates on the Fed day) and red dots (when there was a cut in rates). Of the 15 prior gaps higher, just four followed a day when the FOMC cut rates. Three of those were after the 2007 peak and through the Financial Crisis while the fourth was in early March 2020 during the early days of the Covid Crisis.
The Closer – FOMC, Residential Construction, EIA – 9/18/24
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we begin by discussing today’s Fed decision (page 1) and the market reaction to the rate cut (page 2). We then dive into the latest residential construction figures (page 3) before closing out with a recap of today’s EIA release (page 4).
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Daily Sector Snapshot — 9/18/24
Bespoke Baskets Update — September 2024
Chart of the Day: Assets After Easing
Fixed Income Weekly — 9/18/24
Searching for ways to better understand the fixed income space or looking for actionable ideas in this asset class? Bespoke’s Fixed Income Weekly provides an update on rates and credit each week. We start off with a fresh piece of analysis driven by what’s in the headlines or driving the market in a given week. We then provide charts of how US Treasury futures and rates are trading, before moving on to a summary of recent fixed-income ETF performance, short-term interest rates including money market funds, and a trade idea. We summarize changes and recent developments for a variety of yield curves (UST, bund, Eurodollar, US breakeven inflation, and Bespoke’s Global Yield Curve) before finishing with a review of recent UST yield curve changes, spread changes for major credit products and international bonds, and 1-year return profiles for a cross-section of the fixed income world.
Our Fixed Income Weekly helps investors stay on top of fixed-income markets and gain new perspectives on the developments in interest rates. You can sign up for a Bespoke research trial below to see this week’s report and everything else Bespoke publishes for the next two weeks!
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Bespoke’s Morning Lineup – 9/18/24 – It’s Finally Here
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“It’s good to be in something from the ground floor. I came too late for that and I know. But lately, I’m getting the feeling that I came in at the end. The best is over.” – Tony Soprano
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 a quiet morning as investors await this afternoon’s Fed decision. Overnight in Asia, equities were generally higher with the Nikkei up half of one percent while Hong Kong rallied more than 1%. The tone is more subdued in Europe as stocks are experiencing measured declines. In commodities, crude oil briefly dipped below $70 per barrel but has recouped some of its losses and is now down just 1.5%.
On the economic calendar, it’s a housing-centric day. Weekly mortgage applications were just released and showed an impressive increase of 14.2%. Refinances also surged 24% to the highest level and share of total applications since early 2022. The only two other reports on the calendar for today are Building Permits and Housing Starts at 8:30.
The day you’ve finally been waiting for is finally here! After several false starts by the market, the Fed will finally cut rates this afternoon. The only question is by how much. As of this morning, futures markets put the odds at a 50 bps cut at 65% meaning it really could go either way, and while certainly not unprecedented, we can’t remember a time when there has been so much uncertainty regarding which direction the Fed would take this close to a report. This afternoon’s cut will end a streak of 288 trading days where the fed funds rate has been unchanged at a range of 5.25% to 5.50%. While it’s nowhere near the record streak of 1,756 trading days from the Financial Crisis through late 2015, it does rank as the sixth-longest streak without a change since at least 1971. It’s about time they get back to work!
This period has been more extreme regarding how long it has been since the Fed last cut the Fed funds rate. At 1,134 trading days (over four years), it will end what ranks as the second-longest period without a cut in rates since at least 1971. Again, the only period that was longer was the 10+ years from late 2008 through July 2019, and only one other streak (mid-2003 through September 2007) lasted longer than four years.
