Bespoke’s Morning Lineup – 1/6/25 – Looking For Follow Through
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“.– …. .- – / …. .- – …. / –. — -.. / .– .-. — ..- –. …. – -.-.–” – Samuel Morse
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
How many times have you looked at your cell phone already today? It’s probably the first thing you did today. Whether you looked up scores, stock quotes, messages, or even got some work done, the fact that you are reading this right now all traces back to a meeting in Morristown, NJ 187 years ago where Samuel Morse demonstrated his idea of sending electrical impulses over a wire that could then be translated into text, or as he called it, the Telegraph. While that meeting in 1838 was the first telegraph demonstration, the first official telegram wouldn’t come for another six years in May 1844 when Morse sent a message from Washington, DC to Baltimore. Even though he was the first person to ever send a message over wires which ultimately led to the mass proliferation of content, if he were alive today looking at all that the telegraph has spawned, Morse would probably be at a loss for words. His thoughts would probably echo the message he sent in that first telegram, “What hath God wrought!”
Friday’s 1.26% rally was the best day for the S&P 500 since 11/6, the day after November’s election. It was also the third 1%+ daily gain in that span. The other two days were a 1.10% gain on Christmas Eve and a 1.09% gain on 12/20. While there continues to be a near constant focus on the Fed, we think it’s notable that two of the three best days since the election have come when Congress passed the continuing resolution to keep the government open and last Friday when Mike Johnson was re-elected speaker on the first vote.
While Friday’s gains sent the bulls home in an optimistic mood, it wasn’t perfect. After briefly trading back above its 50-DMA, the market pulled back in the afternoon and finished slightly below that level. It was the fourth day in a row that the S&P 500 made a run towards its 50-DMA, but also the fourth day in a row that it finished off its intraday highs. As we start the trading week, the S&P 500 is poised once again to trade back above that level, so now all it needs to do is hold it. Until then, the burden of proof is on the bulls.
Brunch Reads – 1/5/25
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.
Five Dollar Days: On January 5th, 1914, Henry Ford announced a $5 per day minimum wage for workers at his Ford Motor Company. Believe it or not, that more than doubled the wages of factory workers, and in addition, the workday was also reduced from nine to eight hours. At the time, the auto industry was booming, but working conditions in factories were grueling. Assembly line workers were responsible for repetitive and physically demanding tasks. The hours were long, and the pay was inadequate, as reflected by the high turnover. Workers were quitting weeks or, in some cases, even days into their hiring.
The key to solving the problem, in Ford’s eyes, ended up also being beneficial to him. He could retain his workers with generous wages and better hours which caused less issues with training new hires, but it also enabled his employees to afford the cars they built. That meant Ford could increase demand for his Model T by tapping into the growing middle class, which expanded with new wage increases. By treating labor more as an investment than a cost, Ford demonstrated that higher wages could improve the company’s financial performance.
Health & Wellness
The No-Hunger Games: How GLP-1 Medication Adoption is Changing Consumer Food Purchases (SSRN)
GLP-1 drugs like Ozempic and Wegovy are changing how people shop and eat, with grocery spending dropping by 6% overall and even more for higher-income households. People are ditching processed snacks and stocking up on fresh produce and healthier options instead. Even fast-food runs are taking a hit, especially at breakfast and dinner, which could mean big changes ahead for the food industry. [Link]
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The Bespoke Report – 1/3/25 – Finally, a Bounce
This week’s Bespoke Report newsletter provides an update on everything going on in markets as we kick off the new year. To read this week’s Bespoke Report newsletter and access everything else Bespoke’s research platform offers, start a two-week trial to Bespoke Premium.
Daily Sector Snapshot — 1/3/25
Bespoke’s Morning Lineup – 1/3/25 – Shiny Objects
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.
“I wouldn’t sell the Yankees for anything. Owning the Yankees is like owning the Mona Lisa. You don’t sell it.” – George Steinbrenner
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Futures are trading higher this morning, but based on the last few days of trading that hasn’t meant much as the S&P 500 has had trouble holding on to early gains. Since Christmas, the S&P 500 has traded down for five straight trading days. Losing streaks of five or more trading days straddling the new year are extremely uncommon. The only other time that the S&P 500 has had a five or more day losing streak that started in one year and went on to the next was in 2014/2015 when it also traded down five days in a row from 12/31/14 through 1/6/15. Two big events today that could determine whether the losing streak continues are the ISM Manufacturing report at 10 AM and the House Speaker vote. While the speaker vote is not necessarily a crucial event, if Johnson can get voted in, it could suggest that the GOP will act in a more unified front in the legislative season ahead.
Yesterday was a relatively volatile day for the S&P 500. The ETF that tracks the index (SPY) traded up about 0.90% early in the session before trading down as much as 0.95% later in the session and ultimately before finishing with a marginal decline of 0.22%. It was a noisy day with little to show for the bulls or bears by the end of the day!
As far as regular investments go, equities have provided among the best returns to investors over the long term. Let’s look at how the S&P 500 has performed during the last 51 years. Had you invested $10,000,000 in the S&P 500 at the start of 1973, you’d have $2.15 billion including dividends. Talk about the power of compounding!
Against at least one asset class, though, equity returns have been pedestrian. That asset class is professional sports and more specifically, the New York Yankees. 52 years ago today, an investor group led by George Steinbrenner bought the Yankees from CBS for $10 million. According to Forbes, the New York Yankees are currently worth $7.55 billion. By all accounts, $10 million turning to over $2 billion in just over 50 years is great, just not when you compare it to the Yankees. While we don’t have annual team values, when you overlay a point-to-point change in the valuation of the Yankees on the S&P 500, the move for equities doesn’t look quite as impressive.
Does this mean equities are a bad investment? Hardly. The increase in the value of professional sports teams over the last 50 years has been a unique situation that an average investor would have never had access to. Equities, meanwhile, are one of the most accessible and liquid investments available. Also, no matter how good the results of any investment turn out, the grass is always greener somewhere else. After all, while Steinbrenner and his heirs have had an annualized gain of just under 14% from their investment in the Yankees, since its IPO in the early 1980s, Apple (AAPL) has had a total annualized return of closer to 20%, and forget about Bitcoin! That’s why investors are always chasing shiny objects.
The Closer – Never Been as Bad of Breadth – 1/2/25
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we lead off with a look into the extraordinary outperformance of growth relative to value (page 1) in addition to the historically weak breadth observed in December (page 2). We then check in on mortgage origination data (page 3) and construction spending (pages 4 and 5).
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Bespoke Market Calendar — January 2025
Please click the image below to view our January 2025 market calendar. This calendar includes the S&P 500’s historical average percentage change and average intraday chart pattern for each trading day during the upcoming month. It also includes market holidays and options expiration dates plus the dates of key economic indicator releases. Click here to view Bespoke’s premium membership options.
Bespoke’s Weekly Sector Snapshot — 1/2/25
Chart of the Day – Best and Worst S&P 500 Members
Bespoke’s Morning Lineup – 1/2/25 – A Tale of Two Timeframes
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.
“Self-education is, I firmly believe, the only kind of education there is.” – Isaac Asimov
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Happy New Year! After the terrible end of the year for equities, US stocks are on pace to start the year on the right foot. Both the S&P 500 and Nasdaq were indicating gaps up of over 1%, which would have put the S&P 500 on pace for its best opening day since 2013, but they have since pulled back a bit and are both up just under 1%. While US stocks are on pace to start positively, the same can’t be said for international markets. Chinese stocks traded down over 2% after the Manufacturing PMI reading for the world’s second-largest economy came in weaker than expected and just barely in expansionary territory. That decline was the worst opening day for Chinese stocks since 2016.
In Europe, the tone isn’t nearly as weak, but equities in the region are mixed as the STOXX 600 trades modestly lower. The Eurozone Manufacturing PMI decelerated slightly from 45.2 to 45.1. Meanwhile, concerning inflation, ECB President Lagarde commented “We have made significant progress in 2024 in bringing down inflation and hopefully 2025 is the year when we are on target.”
In the US, the only economic reports on the calendar are jobless claims at 8:30 (better than expected on both an initial and continuing basis), the final Manufacturing PMI from S&P for December at 9:45, and then Construction Spending at 10 AM. The ISM Manufacturing Index will be released tomorrow.
December wasn’t a good month for bulls, and the last several days were bad to a historic degree. The chart below shows the performance of the S&P 500 from the close before Christmas to year-end with the S&P 500 down 2.6%. As shown in the chart below, that ranks as the worst performance for the closing days of the year since at least 1952 and the 12th year during that span that it fell over 1%.
