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.

Where the Poppies Blow: In Flanders Fields is one of the most iconic war poems ever written, capturing both the sorrow and the resolve born from the battlefield. Penned by Lieutenant Colonel John McCrae on May 3, 1915, the poem reflects the haunting beauty of red poppies growing among soldiers’ graves in Flanders, a region ravaged by World War I. McCrae, a Canadian physician and soldier, was inspired to write the poem shortly after presiding over the funeral of a fellow soldier and friend who died in the Second Battle of Ypres.

The poem begins with the image of poppies swaying between the graves, moves into a remembrance of the fallen who “lived, felt dawn, saw sunset glow,” and ends with a direct plea to the living: “Take up our quarrel with the foe.” That final call to action transformed the poppy into a lasting symbol of remembrance and helped fuel a sense of duty and sacrifice during the war.

Travel & Transportation

Virginia will use technology to slow chronic speeders’ cars—and other states are rushing to join in (Fast Company)
As the federal government retreats from traffic safety enforcement, a surprising number of state legislatures are pushing forward with bills requiring Intelligent Speed Assist (ISA) for the most extreme speeders, drivers clocked at 100+ mph. These systems can either warn drivers or physically prevent further acceleration, and the proposals are tailored to target high-risk individuals. With bipartisan traction from DC to Georgia, advocates see this as a rare moment of political alignment that could reshape how the most dangerous drivers are held in check. [Link]

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It’s been exactly a month since “Liberation Day” on April 2nd when President Trump announced massive reciprocal tariffs on the rest of the world.  At its intraday low on April 8th, the S&P 500 ETF (SPY) was down 14.7% from its closing level on April 2nd.  Since that low, SPY has now rallied 17.4%, and as of this morning, SPY has fully recovered all of its post-Liberation Day declines.

Below is a look at the performance of key index and sector ETFs since the close on Liberation Day (4/2).  Technology (XLK) is now the best performing sector since 4/2 with a gain of 2.9%, followed by the Nasdaq 100 (QQQ), Semis (SMH), and Industrials (XLI).  On the downside, the Energy sector (XLE) has been by far the biggest laggard with a decline of 12.7%.

We’d note that even though the stock market has fully recovered its post-Liberation Day drop, investor sentiment remains extremely bearish.  This week marked a record 10th consecutive week where AAII Bearish Sentiment was above 50%.  The prior record was seven straight weeks back in 1990.  Will the bulls finally re-emerge next week?  We won’t find out until next Thursday when the weekly AAII numbers get posted.

Back in early 2023, we created the Bespoke AI Basket to track key stocks in the space.  We broke the basket into two sub-groups: one for AI Infrastructure stocks and one for AI Implementation stocks.  The AI Infrastructure basket contains stocks that power the AI Boom like NVIDIA (NVDA), while the AI Implementation basket contains stocks like Meta (META) that are implementing AI to boost the user experience and increase margins and productivity.

As shown below, the AI Implementation basket has outperformed the AI Infrastructure basket since the end of 2022 by quite a wide margin.

There have been periods of significant out- and underperformance for each basket, however.  Below is a look at the ratio between the AI Infrastructure and AI Implementation baskets.  When the line is rising, AI Infrastructure is outperforming, and vice versa.

The first half of 2024 saw AI Infrastructure outperform quite dramatically, but since mid-2024 for about the last year now, AI Implementation stocks have been outperforming.  Are we now due for a reversal that sees AI Infrastructure start to bounce again?

Each night in our post-market macro note, The Closer, we provide a snapshot of recent performance for our AI Baskets along with a couple of pages that showcase all of the individual stocks that make up the baskets.  It’s a helpful way to stay on top of the AI Boom and find new ideas (if you’re looking).

If you’re not yet a Bespoke subscriber, you can start a trial to Bespoke Institutional and gain access to our nightly Closer by clicking here.

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