The Closer – Meme Stocks, CPI, EIA – 5/15/24

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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we begin with a look at the latest earnings and action in meme stocks (page 1) before pivoting into a recap of the latest CPI print (pages 1 and 2). We then provide an updated look at the latest petroleum stockpile figures (page 3).

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Fixed Income Weekly — 5/15/24

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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No New Orders and No Spending in the Empire State

Among this morning’s data releases was another weak NY Fed manufacturing report.  The Empire State Manufacturing Survey’s headline reading came in at -15.6. That compares to -14.3 for April and expectations of an improvement to -10. That miss relative to forecasts means the indicator has been weaker than expected three months in a row.  The last streak of weaker-than-expected readings that lasted as long was in the first quarter of 2022.

The negative reading in the headline index indicates a contraction in the Northeast’s manufacturing economy that came with weak breadth among the report’s categories.  Only three categories for current conditions are currently expanding: Prices Paid and Received and Inventories.  Most other categories are in the bottom quintile of historical readings.

One of the weakest areas of the report has been New Orders.  The January report saw this category fall to one of the weakest readings on record. While things have improved since then with little change in May, the current reading remains in the sixth percentile of all months. Perhaps more impressive is that this was the eighth month in a row with a contractionary reading in this index. As shown in the second chart below, that is one month away from tying the record of nine months in a row set in 2008/2009 and again in 2015/2016.

In addition to the ugly new orders picture, one area that is just as bad is spending plans.  Overall, expectations indices are a bit more of a mixed bag, but the indices for number of employees, capital expenditures, and tech spending are historically low with readings ranging in the 3rd to 12th percentiles.  Averaging across these three indices shows that the region’s manufacturers have some of the most pessimistic spending plans for labor or capital in the survey’s history. The reading edged up only slightly in May and sits roughly 0.1 point above the post-pandemic low set one year ago.  On the whole, that reading is in the bottom 6% of readings.

Bespoke’s Morning Lineup – 5/15/24 – Light CPI

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.

“The world has been very well served with low tariffs and free trade.” – Darren Woods

Morning stock market summary

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

April CPI was just released, and the headline reading came in at 0.3% which was lower than consensus forecasts for an increase of 0.4%. Core CPI was right in line with forecasts as were both the year/year readings for headline and core. That’s the good news.  The less good news was that both Empire Manufacturing and Retail Sales came in weaker than expected. Equity futures have rallied sharply in reaction to the news and treasury yields are lower.

On the same day that CPI came in lighter than expected, copper prices, which we will discuss in a report later, are just the latest commodity to rally to an all-time high after prices have gone parabolic in the last few weeks.

With respect to the market, the S&P 500 is firmly back at overbought levels and at 1.3 standard deviations above its 50-DMA, it hasn’t been this overbought since April Fools’ Day. Is that a good or a bad sign?

Read today’s entire Morning Lineup.

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The Closer – AI Update, PPI & CPI, Best of Breed – 5/14/24

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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we start out with a brief update on our AI Basket as well as a recap of the PPI data (page 1).  We then check in on the Dow Transports (page 2) before providing an update of our Best of Breed Basket (page 3 and 4).  Next, we check in on Boeing (BA) deliveries (page 5) and job postings (pages 6 and 7). We cap off the report with a preview of tomorrow’s CPI print (page 8).

See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!

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