Bespoke’s Weekly Sector Snapshot — 3/5/26
Chart of the Day: Forced Deleveraging Works Both Ways
Bespoke’s Morning Lineup – 3/5/26 – Back to Basics
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“The world makes much less sense than you think.” – Daniel Kahneman
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The S&P 500 crept into positive territory for the week, which was incredible given the circumstances, but futures are set to erase those gains at the open. Both the S&P 500 and Nasdaq are indicated to open down by 0.25%. The biggest driver of weakness is crude oil, where prices are up another 3% to $77. It’s simple at this point: the more crude oil rises, the bigger a headwind it will be for equities.
In Asia, stocks were higher across the board, with the biggest gains coming from South Korea, where the KOSPI rallied 9.6% following the 12% decline on Wednesday. Talk about a rational market! In Europe, the tone is less positive. While markets in the region started the day higher, they have been giving up those gains as the UP open approaches and are now all broadly looking at modest declines.
It’s been a busy morning for economic data, and most of it was better than expected. Initial jobless claims were slightly weaker than expected, and continuing claims were modestly higher. Import Prices were lower than expected, while both Non-Farm Productivity and Unit Labor Costs came in higher than expected.
We’re less than a week into the war in Iran, but it’s never too early to see what trends within the equity market may be starting to emerge. At the sector level, you would expect to see a rush into defensive areas as investors rein in risk at the expense of cyclicals. So far, we’ve seen nearly the opposite play out. While the S&P 500 is up so far this week, which is surprising in itself, the four sectors outperforming the market are Technology, Consumer Discretionary, Energy, and Financials. If you had asked most people what sectors would outperform the market following a full-scale breakout of war in the Middle East, the only one of those four sectors that would come to mind is Energy.
The sectors you would expect to outperform in the event of war would be defensives like Utilities, Consumer Staples, and Health Care. But guess what? They’re three of the four worst-performing sectors with declines of at least 1% each! While the S&P 500 is surprisingly higher this week, the rally is primarily due to the 1%+ gain in the Technology sector. On an equal weight basis, the index is down 1.04%, and 60% of its components are down MTD.
At the individual stock level, the list of winners is mostly devoid of defensive stocks. Instead, it’s littered with stocks that were recently considered some of the hottest growth stocks in the market before falling on hard times in late 2025 and earlier this year. Of the 15 top-performing stocks in the S&P 500 since the war broke out, their average YTD change in the first two months of the year was a decline of 22.2%, and ten of them were in the red. The two top-performing stocks – Coinbase (COIN) and Palantir (PLTR) – were both down over 20% in the first two months of 2026. While PLTR, with its military contracts, benefits from geopolitical instability, it’s hard to look at most of the other non-Energy stocks and see the obvious reason as to why they would benefit.
While the list of winners is mostly stocks that were down sharply YTD, all but one of the stocks on the list of losers were up YTD heading into March. Their average YTD gain was 8.1%, and seven were up by double-digit percentages. Leading the way lower, AES was up 20%+ YTD heading into March, but it has given most of that back in the first few days of March. Behind AES, cruise operators Norwegian Cruise Line (NCLH) and Carnival (CCL), along with Paramount Skydance (PSKY), are the only other stocks down by double-digit percentages. The declines in NCLH and CCL make sense given the geopolitical uncertainty, but the drop in PSKY is company-specific and tied to the merger with Warner.
Looking both at sector and individual stock performance since the war broke out, it seems as though investors have taken a back-to-basics approach, focusing on what had been working rather than what was working at the time that hostilities broke out. Whether that’s due to trade unwinds and short-covering given the heightened uncertainty or a reversion to tech remains to be seen, but in the early going, market performance and internals have done what they always do – surprise nearly everyone.
The Closer – Korea Crushed, Beige Book, Trucking – 3/4/26
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- Korean stocks have fallen close to 20% in the past three days; one of the largest declines on record.
- The Beige Book has seen a drop off in the number of mentions of tariffs, uncertainty, and layoffs.
- The situation in Iran has sent diesel prices exploding higher when trucking per mile prices are already rising rapidly.
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Q4 2025 Earnings Conference Call Recaps: Brown-Forman (BF/B)
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 Brown-Forman’s (BF/B) Q3 2026 earnings call.
Brown-Forman (BF/B) is one of the largest American-owned spirits companies, best known for Jack Daniel’s Tennessee Whiskey, the world’s most widely sold American whiskey. Its portfolio spans bourbon, tequila, rum, gin, and a growing ready-to-drink segment, with products sold in over 170 countries. Brown-Forman reaffirmed its full-year fiscal 2026 guidance despite a challenging backdrop, projecting a low single-digit organic net sales decline trending toward the stronger end of the range. The US spirits market remains in low single-digit decline, though management pointed to modestly improving Nielsen trends over the past two months as a potential green shoot. Canada remains a major drag, with organic net sales down nearly 60% as American products stay off most provincial shelves. Jack Daniel’s Tennessee Blackberry has been a standout, ranking as the second largest new spirits product by value in Nielsen, while New Mix is being tested across seven to eight US states. Management flagged 100–150 basis points of gross margin compression over roughly two years from barrels produced during the early 2020s, and pushed back firmly against expectations of industry-wide price cuts. Despite better-than-expected results, BF/B shares fell as much as 8.3% on 3/4, though shares rebounded some intraday…
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Q4 2025 Earnings Conference Call Recaps: Best Buy (BBY)
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 Best Buy’s (BBY) Q4 2026 earnings call.
Best Buy (BBY) is the largest US specialty retailer of consumer electronics, computing, mobile phones, appliances, and related services, operating over 1,000 stores alongside a major e-commerce platform. With $13.8 billion in Q4 revenue and more than 80,000 employees, the company serves as a bellwether for consumer technology spending, replacement cycles, and the real-world commercialization of AI hardware. Management reported Q4 comparable sales down 0.8%, below estimates, but delivered better-than-expected profitability, with an adjusted operating income rate of 5% and EPS of $2.61. The dominant theme was rising memory component costs, pressuring computing supply and pricing. Management outlined a five-point mitigation playbook and framed the guidance range of -1% to +1% comps around varying severity of constraints. Best Buy Ads hit $900 million in collections (up 7%), with 10% growth guided for FY27, while Marketplace reached $300 million in Q4 GMV. AI was discussed, with new partnerships with OpenAI, Google, and Meta positioning BBY for agentic commerce. The company plans to open six new stores, its first domestic expansion in over a decade, and expects FY27 to be the last major Ads/Marketplace investment year before material profit contributions in FY28-29. Shares rallied 7.1% on 3/3 in reaction to the report…
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Daily Sector Snapshot — 3/4/26
Chart of the Day – Running for Rotation
Q4 2025 Earnings Conference Call Recaps: Target (TGT)
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 Target’s (TGT) Q4 2025 earnings call.
Target (TGT) is one of America’s largest general merchandise retailers, operating nearly 2,000 stores within 10 miles of 75% of the US population. The company specializes in six core categories: apparel, home, beauty, food and beverage, hardlines, and essentials. Management was candid on the call that recent performance “has not met expectations” and outlined a more than $2 billion incremental investment plan that includes $1 billion in CapEx for 30+ new stores and 130+ remodels, and $1 billion in P&L spending on store labor, marketing, and technology. The company is funding this partly by lapping roughly $500 million in one-time tariff and inventory costs from 2025 and $200 million in savings from headcount reductions. Guidance calls for about 2% net sales growth and adjusted EPS of $7.50–$8.50. Management highlighted accelerating sales trends in February, food and beverage growing at 8%+ annually since 2019, and same-day delivery surpassing $14 billion. Tariff uncertainty remains a key variable. TGT reported an EPS beat on weaker revenue as the stock rose 6.8% on 3/3…
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Six-Month Short Interest Swings
Below is an updated look at changes in short interest levels for Russell 3,000 stocks over the last six months. The average Russell 3,000 stock currently has 7.5% of its float sold short. That’s up 0.7 percentage points from six months ago at the end of August 2025.
The Pharma, Biotech & Life Sciences group has the highest average short interest as a percentage of float (SIPF) at 13%, followed by Consumer Discretionary Distribution & Retail (11.5%) and Media & Entertainment (10.7%).
The average stock in the Software & Services group is down 17.1% over the last six months, the worst of any group, and the average Software stock’s SIPF now sits at 9.3%. That’s up 1.3 percentage points from six months ago, which is elevated but not the most extreme jump across the 25 industry groups. Media & Entertainment has seen the biggest jump in SIPF at 2.4 percentage points.
Unsurprisingly, less volatile groups like Utilities, REITs, Insurance, and Banks have the lowest short interest levels.
Below is a table highlighting the 30 stocks in the Russell 3,000 that currently have the highest short interest levels (as a percentage of float).
Conservative media outlet Newsmax (NMAX) is at the top of the list with nearly two-thirds of its float sold short, followed by AirSculpt Tech (AIRS) at 61% and FLEX LNG (FLNG) at 54.4%.
Most of the stocks on the list of heavily shorted names have market caps below $10 billion, but some of the names you may know include Groupon (GRPN), Hims & Hers (HIMS), Beyond Meat (BYND), SoundHound AI (SOUN), Dave & Buster’s (PLAY), and Lucid (LCID).
Both Hertz (HTZ) and Avis (CAR) are near the top of the list as well, while robotics company Richtech (RR) and small nuclear reactor company NANO Nuclear (NNE) also make appearances.
Below is a list of the 30 Russell 3,000 stocks that have seen the biggest increase in short interest over the last six months. Newsmax (NMAX) tops the list with SIPF jumping from 14.5% to 66.1%, followed by FLNG, MNPR, ACHC, and KALV. Other notables on the list include AMC Entertainment (AMC), Credit Acceptance (CACC), Duolingo (DUOL), Primo Brands (PRMB), and Asana (ASAN).
Looking just at software stocks, below are the stocks in the group that have seen the biggest jumps in short interest over the last six months.
Cleanspark (CLSK), Asana (ASAN), Dropbox (DBX), Daily Journal (DJCO), and Rackspace (RXT) top this list. Other names include SailPoint (SAIL), RingCentral (RNG), Bentley Systems (BSY), and Gartner (IT).
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