The Closer – Bond Selloff, SPY Sputters, Yuan Down – 4/8/25
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we begin with a note on the sell off in bonds and commodities (page 1) and then a look at the intraday reversal in equities (pages 2 and 3). We then dive into the selloff in the Chinese Yuan (page 4 and 5).
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!
Daily Sector Snapshot — 4/8/25
Biggest Jumps in Dividend Yields
While the tariff situation has created a great deal of uncertainty and stock prices have crashed in tow, one silver lining is that dividend yields have at least ticked up. Currently, the S&P 500’s dividend yield of 1.64% is the highest it has been since November 2023. For the average member that pays a dividend, it has seen a 33 bps increase in its yield, up to 2.58%. Additionally, there are 59 S&P 500 members that now have a higher yield than the 10-year Treasury. Of course, the impact of tariffs could materially impact earnings and hence their ability to pay a dividend at all, but holding that conversation aside, below we show the S&P 500 members that have seen the largest increases in their dividend yields since the sell-off began on February 19. Of all members of the index, there are 34 to have seen a full percentage point increase in their yields as a result of the declines since the S&P’s high. The largest increase has come from Dow (DOW) which now yields over 10% after falling over 30% since 2/19. That is also the single highest yield of all S&P 500 members. Of the rest of the list below, there are another five stocks that now rank in the top ten highest yields: LyondellBassell (LYB), Pfizer (PFE), Franklin Resources (BEN), APA Corp (APA), and United Parcel Services (UPS).
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Chart of the Day – Health Care in the ICU
Bespoke’s Morning Lineup – 4/8/25 – End of the Streak?
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.
“Learn to use your emotions to think, not think with your emotions.” – Robert Kiyosaki
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
The wild ride of market moves continued overnight as the Nikkei 225 rallied 6% after falling more than 7% on Monday. That’s just the ninth time in the last 45 years that the index has rallied 5%+ after falling more than 5% in the prior session. Along with those days, there have only been two other days when the Nikkei fell more than 5% after rising 5% in the previous session. The Nikkei’s move was extreme, but we’ve seen volatile back-and-forth action in equity markets worldwide this week.
This morning, futures are building on some of yesterday’s intraday strength in US stocks on optimism that several countries are looking to make a trade deal with the Trump Administration. This doesn’t mean deals will happen, but at least conversations are taking place which buys some time for a pause in the selling. With this optimism, US equity futures are indicated higher, and that would end what has been a streak of nine straight days where the SPDR S&P 500 ETF (SPY) opened the day lower. In yesterday’s Chart of the Day, we covered that streak and how the market has historically performed following prior streaks of similar or longer durations, so make sure to give that a look.
They call the CBOE Volatility Index (VIX) a gauge of the stock market’s psychological state, and higher levels indicate a more emotional state for the market. Yesterday, the market got as emotional as a high school senior looking for a prom date. It closed at an extraordinarily high level of 46.98, but intraday it briefly traded above 60, which it has only done on 52 other trading days since 1990!
The chart of the S&P 500 below shows every time the VIX traded above 60 on an intraday basis since 1990. The only other times were in Q4 2008, during Covid in 2020, and one day last August. In retrospect, these periods turned out to be good buying opportunities although the market remained volatile in the short-term. Following the occurrences in Q4 2008, for example, the S&P 500 didn’t bottom until early March, but on an internal basis, that marked the low as most stocks bottomed in Q4 2008. Like a child, markets sometimes find themselves in a tantrum or emotional spiral, but more often than not, a pause, and a deep breath are enough to get things to calm down.
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!
Daily Sector Snapshot — 4/7/25
Chart of the Day: Nine Straight Lower Opens
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.
