Daily Sector Snapshot — 6/14/23
The Triple Play Report — 6/14/23
An earnings triple play is a stock that reports earnings and manages to 1) beat analyst EPS estimates, 2) beat analyst sales estimates, and 3) raise forward guidance. You can read more about “triple plays” at Investopedia.com where they’ve given Bespoke credit for popularizing the term. We like triple plays as an indication that a company’s business is firing on all cylinders, with better-than-expected results and an improving outlook. A triple play is indicative of positive “fundamental momentum” instead of pure fundamentals, and there are always plenty of names with both high and low valuations on our quarterly list.
Bespoke’s Triple Play Report highlights companies that have recently reported earnings triple plays, and it features commentary from management on triple-play conference calls, company descriptions and analysis, and price charts. Bespoke’s Triple Play Report is available at the Bespoke Institutional level only. You can sign up for Bespoke Institutional now and receive a 14-day trial to read this week’s Triple Play Report, which features 28 new stocks. To sign up, choose either the monthly or annual checkout link below:
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Broadcom (AVGO) is an example of a company that reported an earnings triple play recently back on May 17th. As shown below, AVGO’s share price has been trending higher since the October 2022 lows, and it really broke out following its triple play in May.
As shown in the snapshot from our Earnings Explorer below, Broadcom (AVGO) has now reported an earnings triple play for 12 consecutive quarters dating back to September 2020. Talk about triple-play consistency! You can read more about Broadcom and the 27 other triple plays in our newest report by starting a Bespoke Institutional trial today.
Bespoke Investment Group, LLC believes all information contained in these reports to be accurate, but we do not guarantee its accuracy. None of the information in these reports or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. This is not personalized advice. Investors should do their own research and/or work with an investment professional when making portfolio decisions. As always, past performance of any investment is not a guarantee of future results. Bespoke representatives or clients may have positions in securities discussed or mentioned in its published content.
Chart of the Day – More Inflation ‘Tepee’ Charts
Fixed Income Weekly: 6/14/23
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.
In this week’s report, we review the relationship between pre-meeting market pricing and Fed policy decisions.
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 free for the next two weeks!
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Bespoke’s Morning Lineup – 6/14/23 – Time Changes Everything
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.
“They always say time changes things, but you actually have to change them yourself.” – Andy Warhol
Below is a snippet of content from today’s Morning Lineup for Bespoke Premium members. Start a two-week trial to Bespoke Premium now to access the full report.
Futures are mixed this morning, but the Nasdaq is indicated to open higher, and the May read on PPI hasn’t hurt sentiment. Headline PPI fell 0.3% m/m versus expectations for a decline of 0.1%. Ex Food and Energy, they increased 0.2% which was right inline with expectations. On a y/y basis, headline PPI was up just 1.1% compared to forecasts for an increase of 1.5%, and ex Food and Energy, they rose 2.8% versus forecasts for an increase of 2.9%. PPI certainly isn’t as closely followed by markets as CPI, but these numbers suggest that the headwind of inflation pressures continues to wane.
A year ago today, the S&P 500 was just entering bear market territory following what was a sharp sell-off due to the Fed signaling to investors that not only were rate hikes coming, but they were coming in big bites. After a Michigan Confidence report showed consumer inflation expectations were rising more than expected, the FOMC went on to hike rates by an unprecedented 75 basis points for four consecutive meetings.
The snapshot from our Trend Analyzer below shows where the major US equity index ETFs stood relative to their trading ranges as of the close on 6/13/22. Leading the way to the downside, the Nasdaq 100 was down over 30% YTD, but nine indices were down over 20%. The week leading up to June 13th had been especially painful as every index ETF in the screen was down over 7% in the prior week, and most were at least 10% below their 50-day moving averages (DMA) and trading at ‘extreme’ oversold levels.
What a difference a year makes. As we head into the June FOMC rate decision this year, the Fed has signaled that after ten straight meetings where they hiked rates, today will be the first time in over a year that the committee leaves rates unchanged. Instead of inflation expectations surging, this week’s NY Fed Survey of Consumer Expectations showed that one-year inflation expectations are at the lowest level since May 2021, and three-year expectations are actually slightly below their ten-year historical average.
From a market perspective, whereas the S&P 500 was just entering bear market territory at this time last year, it is now just entering bull market territory as the S&P 500 finally closed 20% above its October 12th closing low last Thursday. Contrast the way the snapshot of index ETFs from our Trend Analyzer one year ago looked with the way it looks as of today. Now, the Nasdaq 100 is leading the way to the upside with a gain of over 30%. All but three of the index ETFs are up over 2% in the last week, and most of them are trading at least 5% above their 50-DMAs, and every single one of them are trading at ‘extreme’ overbought levels.
Historically, the market’s reaction to short-term ‘extreme’ oversold levels is very different in magnitude to how it responds to short-term ‘extreme’ overbought levels but given the sharp rally of the last couple of weeks, it shouldn’t be a surprise, if the rally we’ve seen experiences at least a pause for the next several days.
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The Closer – Overbought to the Extreme, CPI Comedown, 30 Year Reopening – 6/13/23
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we kick things off by looking at the extreme overbought readings the S&P 500 is flashing (page 1). We follow up with a look at what performance ahead of Fed days means for Fed days themselves (page 2). We then take a dive into today’s CPI data with a focused look at super core prices (page 3 and 4) before rounding out tonight’s report with a recap of the strong 30 year bond auction (page 5).
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!
Bespoke Stock Scores — 6/13/23
Daily Sector Snapshot — 6/13/23
More Balanced June
Heading into the month of June, stock market performance this year was a clear case of the haves and the have-nots. The chart below shows the performance of S&P 500 sectors on a YTD basis through the end of May. As of 5/31, just three sectors – Technology, Communications Services, and Consumer Discretionary – were outperforming the S&P 500 YTD, and the eight other sectors were not only underperforming the S&P 500’s YTD gain of 8.9%, but they were also all down on a YTD basis.
The flip of the calendar has seen the trend of uneven YTD returns flip as well. Besides the fact that every sector is up on a MTD basis, the number of sectors outperforming the S&P 500’s 4.6% MTD gains are much more evenly split with five sectors outperforming and six underperforming. Surprisingly, one of those sectors lagging behind the S&P 500 is Technology! Uneven market returns have been a key complaint of bears all year. If the pattern of June continues, though, what will they blame next?
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B.I.G. Tips – Fed Day Performance Trends
The FOMC is set to announce its next interest rate policy decision tomorrow at 2 PM ET. After ten straight hikes, futures markets are currently pricing in a 91.9% chance that the Fed will leave rates unchanged for the first time since its January 2022 meeting, according to the CME’s FedWatch Tool.
We do a ton of analysis on historical performance around major market-moving events like Fed days. One data point you may or may not have noticed is that US equities have really struggled on Fed days recently. In fact, the S&P has averaged a one-day decline of more than 1% across the last six Fed days, and as shown in the chart below, those declines have primarily come in the final hour of trading following Fed Chair Powell’s press conferences.
In our newest B.I.G. Tips report for Bespoke Premium and Bespoke All Access subscribers, we provide an in-depth examination of the S&P 500’s performance on past Fed days since 1994. From the market’s resilience on Fed days during the 2022 bear market to the recent late-day slides on Fed days during the current bull, the narrative is as surprising as it is informative. This premium post offers not just important data but insightful charts that visualize the S&P’s average change and intraday paths on Fed days broken down by rate decision. We also explore the love-hate relationship the market has had with Fed Chair Jerome Powell as well as the late-day selling tendencies that have characterized his tenure. Unlock the rest of our newest B.I.G. Tips report with a one-month trial to Bespoke Premium for just $1. With Bespoke Premium, you’ll also receive our pre-market Morning Lineup, our daily Chart of the Day, our weekly Sector Snapshot, and our Bespoke Report newsletter published every Friday. Get started for just $1 today!
