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“Even if you don’t have the authorities – and frankly I didn’t have the authorities for anything – if you take charge, people will follow.” – Hank Paulson

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 were little changed coming into the 8:30 data dump this morning, even as Ged Governor Waller implied that investors should hold their horses regarding rate cuts by saying he needed to see additional evidence of decelerating inflation before thinking about cutting rates.  This morning’s data was generally positive as jobless claims were pretty much right in line with forecasts, while GDP was revised higher.  Inflation data in the form of the GDP Price Index and the core PCE Price Index were either right in line or slightly better than expected. In response to all the reports, futures remain little changed although they may have seen a slightly positive bump.

It may be the last trading day before a long weekend, but one thing you may want to stick around to watch for is whether the S&P 500 can squeak by with a double-digit percentage gain for the first quarter. Through yesterday’s close, the S&P 500’s quarter-to-date gain was 10.04%, so any gain today will make it two straight quarters of double-digit percentage gains.  Any decline, however, of even more than a point in the S&P 500 will put the quarter just shy of a 10% gain.

Taking an optimistic approach, the table below shows the performance of the S&P 500 following every prior period where the S&P 500 was up at least 10% since WWII. For each period, we show the S&P 500’s performance following the end of the second double-digit percentage quarter. The following month tended to see some weakness with a median decline of 0.75% and gains just three out of seven times.  Three months later, returns shifted positive with a median gain of 1.67%, but none of the streaks extended to a third quarter of double-digit gains.  Six months later, performance was also positive with gains more than two-thirds of the time, and one year later, the S&P 500’s median gain was 9.55% with positive returns all but once. The only time the S&P 500 wasn’t up over the next year was following the occurrence in Q4 2010, and that decline was just 0.002%.

Whether the market finished up 10% or more for the quarter, barring a very bad day, it will be the fifth straight positive month for the S&P 500, but one area of the market that hasn’t contributed much to this month’s rally is the mag 7. Through yesterday’s close, two of the seven stocks in the group were down month to date, and five were underperforming the S&P 500. That’s been an uncommon trend since the bull market kicked off in late 2022. The last time the S&P 500 was up in a given month and five of the seven mag 7 stocks underperformed the index was in October 2022.

Read today’s entire Morning Lineup.

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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.

“If my answers frighten you, then you should cease asking scary questions.” – Jules Winnfield, Pulp Fiction

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

After three straight days of losses for the S&P 500, futures are higher this morning along with gold and bitcoin while oil and treasury yields are modestly lower. There’s no economic data on the calendar, and the only earnings reports of note are from Carnival (CCL), Cintas (CTAS), and Unifirst (UNF). CTAS and UNF are both in similar industries (uniform rentals for staff) but reported different results. While CTAS reported better-than-expected EPS and raised guidance, UNF missed forecasts and lowered guidance.

Can the market rally without Apple? For years you’ve heard this question asked within broader market conversations. It’s been especially the case in more recent years as Apple (AAPL) has been the largest company in the world and at one point last year even accounted for over 7% of the entire S&P 500. Just as the question has been asked, though, the market has answered. Over the last 200 trading days, the S&P 500 is up 21%, and during that time, shares of AAPL have dropped over 6%.  As shown below, the 27.2 percentage point performance gap between the two ranks as the widest since October 2013.  Looking over even a shorter time frame, over the last 100 trading days, the S&P 500 is up over 24% while AAPL is down fractionally.  In the entire period since the iPod was first launched in late 2001, this current period is the first time that the S&P 500 has been up 20% or more over a 100-trading day period while AAPL was down.

The chart below compares the performance of AAPL over a 200-trading day period (x-axis) to the performance of the S&P 500 over that same span (y-axis) for all periods since 2002. The shaded area represents periods where the S&P 500 was up 20% or more, and during those, AAPL’s median performance was a gain of 43% compared to the current period’s decline of 6%.  More broadly, in the 715 trading days since the start of 2002 when the S&P 500’s trailing 200-day performance was over 20%, shares of AAPL were also higher 94% of the time.  Looking at it from the reverse perspective, in all periods since 2002 when AAPL was down over a 200-trading day period, the S&P 500’s median performance during that same span was a decline of 9.3% with gains less than 32% of the time. In other words, the market can rally without AAPL, but it usually doesn’t.

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