Bespoke Stock Scores — 6/25/24
Bespoke’s Morning Lineup – 6/25/24 – Futures Higher Ahead of Housing and Confidence Data
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.
“We do not inherit the Earth from our Ancestors, we borrow it from our Children.” – Crazy Horse
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 being led higher by the Nasdaq as Nvidia (NVDA) looks to rebound from its three-day decline of over 10%. After a quiet day of economic data yesterday, today’s calendar looks a little busier with the Chicago Fed National Activity Index which was just released and came in better than expected at +0.18 versus expectations for a decline of 0.3. Still to come, the FHFA House Price Index will be released along with the Case Shiller numbers at 9 AM followed by Consumer Confidence and the Richmond Fed at 10 AM.
Fed Governor Michelle Bowman (a voting member of the FOMC) spoke in London this morning. She noted that it may become appropriate to “gradually lower the federal funds rate” if “incoming data indicate that inflation is moving sustainably toward our 2% goal” but she went on to qualify that statement with the comment that “we are still not yet at the point where it is appropriate to lower the policy rate.” She even left the door open for future increases in the fed funds rate “should progress on inflation stall or even reverse”. While most of her comments were in line with recent commentary from other Fed officials, she took a hawkish turn when she said “I don’t see any rate cuts for 2024”.
With the caveat that market pricing of future levels in the fed funds rate has been extremely inaccurate over the past year, we wanted to look at where traders are positioned ahead of future meetings based on the CME’s FedWatch tool. Starting with the next meeting, a rate cut at the July meeting is basically off the table as the market is priced for an 89.7% likelihood that rates will be left unchanged.
The Fed has historically shied away from changing rates in the months leading up to a Presidential election, but for the September meeting, there is a slightly better than two in three chance of a cut at that meeting.
Two days after this November’s election, the FOMC will conclude another meeting, and hopefully, we’ll know who came out ahead in the Presidential election. If the Fed has historically avoided changing rates leading up to an election, the market expects them to make up for lost time at the November meeting. Not only is there a nearly 80% likelihood of at least one rate cut by then, but the market has also priced in a 30% chance that the fed funds rate will be at least 50 basis points lower. Then, for the December meeting, the market is pricing in better than a 50/50 chance of at least two 25 bps rate cuts and only a 4.7% likelihood of Bowman’s view that there will be no rate cuts by the end of the year.
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 – CEO Performance, Earnings, NVDA Collapse – 6/24/24
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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 performance of stocks based on various attributes of the CEOs like gender, whether or not they are a founder, tenure, compensation, and more (pages 1 and 2). We then preview upcoming earnings and look at the dive in NVIDIA’s (NVDA) stock price (page 3). We then preview this week’s Treasury auctions (page 4) before closing out with a rundown of the latest positioning data (pages 5 – 8).
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!
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
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.
“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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