Daily Sector Snapshot — 6/24/24
Semis (SMH) Smoked
The theme of the past couple of weeks has been the S&P 500 pressing higher in spite of weak breadth. Today, the script has flipped, as the S&P 500 is down only a few basis points even though breadth is strongly positive with advancers outnumbering decliners better than 3 to 1. The decliners are being led by a key area of the market: the semis. With the likes of NVIDIA (NVDA) down 5% on the day (and down 14% since last Tuesday’s high), the semiconductor ETF (SMH) is testing the uptrend that has been in place since its April lows.
Since its closing high last Tuesday, SMH is down 7.2%. As shown above, although it’s a significant decline, it’s only a small dent in what has been an incredible rally over the past year. In fact, the ETF is still trading in overbought territory relative to its 50-DMA even after its recent decline. That still does not steal from just how large of a drop it has seen. In the chart below, we show the rolling 3-day percent change in the ETF since its inception in 2000. As shown, there was an even larger drop of 9.1% leading to the April bottom, but the current drop still ranks in the 2nd percentile of all 3-day moves on record.
Chart of the Day: US Approaches 50% of World Market Cap
Bespoke’s Morning Lineup – 6/24/24 – Bitcoin Tries to Hold the Sixties
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“A champion is someone who gets up when he can’t.” – Jack Dempsey
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
US futures are pointing to a flat to slightly negative open this morning on what is going to be a quiet day of economic data. The only report on the calendar is the Dallas Fed Manufacturing report at 10 AM which is expected to come in slightly less worse than last month’s reading of -19.4. European markets started the week on a strong note with no specific news to act as a catalyst, but that doesn’t diminish the fact that the STOXX 600 is up a respectable 0.5%.
Like many stocks, Bitcoin has also found itself treading water for the last several months trying to hang on to the gains from the late 2023/early 2024 rally. This morning, prices are down another 4% near the $60,000 level. After peaking above $70,000 in March, prices have been drifting lower in a sideways range, and if the April lows in the $57,000 range don’t hold, it could be a long summer.
From a longer-term perspective, $65,000 seems to be a level that Bitcoin just can’t shake. In early 2021, it briefly flirted with that level and then quickly erased more than half of its value. Later that year, it got there again and managed to stay there for a few days before crashing over 75%. It took two years and a few months to get back there again, and this time Bitcoin managed to hang around $65,000 again and even take out $70,000, but that level has failed to hold again.
While the recent pullback in Bitcoin looks steep on an absolute basis, relative to its history, 17% is nothing. The chart below shows historical drawdowns in Bitcoin from a record high, and the average since 2011 has been 48%, meaning that on a little less than half of all days since 2011, Bitcoin has been down 50% or more from a prior all-time high.
To continue reading the rest of today’s morning note, where you’ll find much more analysis of global equities and economic readings released this morning, read today’s full Morning Lineup with a two-week Bespoke Premium trial.
Brunch Reads – 6/23/24
Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read 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.
“Su Su” (“Keep Fighting”): On June 23rd, 2018, a Thai soccer team, the Wild Boars, made up of boys aged 11 to 16, became stuck in the Tham Luang cave complex with their 25-year-old coach. The team was exploring a cave the coach had previously visited when monsoon rains flooded the tunnels, blocking their exit. For 18 days, an international team attempted to rescue the team. With no food, the team survived on the water that dripped from the cave walls for nine days until divers could get food and water to them. The rescuers also installed an air pipe after oxygen levels dropped to dangerously low levels. Fortunately, the entire team survived after capturing global attention.
AI & Technology
Amazon-Powered AI Cameras Used to Detect Emotions of Unwitting UK Train Passengers (WIRED)
New documents reveal that Amazon’s facial recognition software was used in UK train stations to scan passengers’ faces, predicting their age, gender, and emotions, potentially for future advertising purposes. Over the past two years, eight stations, including major ones like London Euston and Waterloo, tested AI surveillance for safety and crime reduction. This included detecting trespassers, overcrowding, and antisocial behavior. Civil liberties group Big Brother Watch expressed concerns over the lack of transparency and public consultation. [Link]
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The Bespoke Report – 6/21/24 – The Holiday Card Market
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Daily Sector Snapshot — 6/21/24
This Week’s Can’t-Miss Analysis — 6/21/24
We publish a lot of market-related content each week, and we want to make sure you don’t miss the most important topics. Below are some charts and tables we view as “can’t miss” from the last week.
Breadth continued to be a major topic of discussion this week. In Tuesday’s Morning Lineup, we highlighted that seven of the last twenty trading days saw the S&P 500 close higher on the day even though there were more stocks in the index down on those days than up. A stretch like this hasn’t occurred since August 2020, when the mega-caps were rallying because of a theory that they would be the main beneficiaries of COVID lockdowns.
While the S&P 500 keeps making new highs, in Thursday’s Morning Lineup, we noted that Technology is the only major sector making new highs along with the index. Most sectors haven’t made new 52-week highs in a month or longer, highlighting the thinness of the recent rally.
To continue reading the rest of this week’s “Can’t-Miss” analysis, which includes another dozen or so important market-related topics, start a two-week trial to Bespoke Premium today! With a two-week trial, you’ll also receive our daily research in your inbox as it gets posted. Go ahead and give it a try by signing up at this link.
Before you go…
Check out Bespoke co-founder Paul Hickey’s appearance on CNBC if you missed it earlier this week. Click here or on the image below to view. Also, don’t miss our latest Conference Call Recaps and Triple Plays Report available with a trial!
Have a great weekend!
Bespoke’s Morning Lineup – 6/21/24 – June Swoon?
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“Saying that you don’t care about privacy because you have nothing to hide is no different from saying you don’t care about freedom of speech because you have nothing to say.” – Edward Snowden
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
From where markets stand now, equities would finish the week with gains, after breadth in the S&P 500 came in positive yesterday for the third day in a row. That may not sound like much, but the last time the S&P 500’s A/D line was positive for three or more days was in the first week of May. To stay positive on the week, though, we’ll have to get through flash PMIs for the Manufacturing and Services sectors 15 minutes after the opening bell and then Leading Indicators and Existing Home Sales at 10 AM. In Europe this morning, flash PMI readings generally were weaker than expected while UK Retail Sales rose more than expected. Equities on that side of the Atlantic are down between 0.5% and 1%, but the losses still aren’t enough to fully erase the week’s gains.
You’ve probably heard a lot lately about how the end of June can be a tough time for the equity market, and below we show how the numbers have played out since 1980. Usually, the S&P 500 declines from the close on 6/20 through month-end. The S&P 500’s median change during the period has been a decline of 0.09% with positive returns just 44% of the time. Even in years when the S&P 500 was up sharply YTD heading into the last days of June, performance was still on the weak side as the S&P 500’s median change from the close on 6/20 through month end was a decline of 0.23% with gains just 43% of the time.
The silver lining? Over the last four years, the S&P 500 has been up during this period each time, and in the last three years, it has rallied 3.1%, 3.0%, and 1.4%, respectively. As strong as certain seasonal tendencies can be over time, there are always exceptions.
To continue reading the rest of today’s morning note, where you’ll find much more analysis of global equities and economic readings released this morning, read today’s full Morning Lineup with a two-week Bespoke Premium trial.
The Closer – 5 Fed, Construction, CFOs & AI – 6/20/24
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we begin with an update of our 5 Fed Manufacturing Composite (page 1) followed by updates of the current account (page 2), residential construction (pages 3), and the latest CFO survey (pages 4 – 6). After a review of the latest petroleum stockpile data (page 7), we finish with a rundown of the 5y TIPS reopening (page 8).
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