Chart of the Day – (Still) Extreme Easing of Financial Conditions
Earnings Rundown: 2/27/24
Bespoke Stock Scores — 2/27/24
Democratic (NANC) Trading Trumps Republicans (KRUZ)
Just over a year ago, a pair of interesting ETFs debuted. The Unusual Whales Subversive Republican (KRUZ) and Democrat (NANC) Trading ETFs seek to track the performance of stock investments of sitting Congressional members. The Republican ETF (KRUZ) would track those investments of Republican members while the Democratic ETF (NANC) would track those of Democrats. As shown below, the past year has seen Democrats come out as winners. The over 30% total return for NANC is almost twice that of KRUZ and is also several percentage points stronger than the S&P 500 ETF (SPY).
Not only is NANC the better performer of the two since inception, but it is also significantly larger. As shown in the chart below, NANC currently has assets under management (AUM) of $27.89 million compared to only $9.35 million for KRUZ. While NANC has consistently held a large AUM since inception, we would note that it really took off in the past few months.
Both of these ETF have hundreds of holdings with KRUZ being the smaller of the two with 488 while NANC has 748. NANC is not only large, but is significantly more top heavy. The top ten holdings of that ETF account for roughly half of its weight, whereas KRUZ’s top ten holdings are just under 20% of its weight.
As always, what conversation about top-heaviness is complete without a mention of the mega-caps. That group of stocks are some of the largest holdings in NANC. Microsoft (MSFT) is the single largest with a 7.44% weighting followed by 6.1% from Amazon (AMZN), 5.1% from Apple (AAPL), and 4.7% from NVIDIA (NVDA). Using our Custom Portfolios tool, below we show the 26 holdings of NANC that currently account for at least 0.5% of weight. Continuing its relentless rise, NVDA is of course the best performing one of those stocks and is deeply overbought alongside most others on this list.
Shifting over to KRUZ, as previously mentioned, weights are distributed a bit more evenly. As such, below we show the 28 stocks with weights that are above 1%. The largest holding is Intel (INTC) at a 2.35% weight. Albeit a big drop down the market cap ladder, HVAC company Comfort Systems (FIX) is the next largest holding at 2.24%. That comes as the stock has experienced an impressive rally of close to 40% in the past month alone. ConocoPhilips (COP) is the only other stock with a weight of more than 2%, while Accenture (ACN) is the next largest at 1.99%. While further down the list in terms of its weight, mega caps also make this list with NVIDIA (NVDA) and Amazon (AMZN) on the board.
Bespoke’s Morning Lineup – 2/27/24 – Equities Modestly Higher, Bitcoin Surges (Again)
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.
“No story has power, nor will it last, unless we feel in ourselves that it is true” – John Steinbeck
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
It’s looking like a modestly positive open for stocks to kick off the day with the Nasdaq leading the way higher, but the real star of the morning has been Bitcoin where prices are up another 4%+ and briefly topped $57,000. The tone in Asia was also positive after some weakness to kick off the week. In China, 30-year yields dropped to a record low of 2.52% as economic concerns weigh on the country even as the ‘national team’ has been buying up stocks. The tone in Europe has been more mixed but still mostly positive.
Here in the US, Durable Goods Orders will be released at 8:30, and then at 10 AM we’ll get the release of the Richmond Fed and Consumer Confidence reports.
Last Thursday, 2/22, was the largest one-day gain for the S&P 500 in over a year, and while breadth was strong, the S&P 500’s advance-decline (A/D) line finished the day at +399 just shy of the threshold for an all-or-nothing day (days where S&P 500’s daily net A/D reading is at or above +400 or at or below -400) . Through yesterday’s close, 38 trading days into the year, the S&P 500 has yet to have an all-or-nothing day this year. If it doesn’t have one today it will go down as the latest into a year that the S&P 500 has gone without an all-or-nothing day since 2017 and the third longest since 2008 when ETF volume exploded in the post-financial crisis period.
While it is uncommon for the S&P 500 to go this long into a year without an all-or-nothing day, the current streak of 43 trading days without one hasn’t necessarily been strong relative to history. As recently as last August there was a longer streak of 49 trading days, and before that, there were multiple streaks that were longer including a 115-trading day streak that ended in February 2018 with the “Volmageddon” episode.
For a closer look at how the market performed following prior moves like we saw yesterday, read today’s full Morning Lineup with a two-week Bespoke Premium trial.
Beauty Stock ELF Beats the King of AI
NVIDIA (NVDA) is up nearly 2,000% over the last five years, but would you believe that there’s another stock — a non-AI stock — that’s up even more?
As shown below, while NVDA is up 1,937% since February 2019, cosmetics-maker e.l.f. Beauty (ELF) has that number beat with an even bigger gain of 2,639%!
While the two are in completely different industries, one thing they have in common is their penchant for reporting earnings triple plays. As a reminder, an earnings triple play occurs when a stock reports earnings and 1) beats analyst EPS estimates, 2) beats analyst sales estimates, and 3) raises forward guidance.
As shown in the snapshot from our interactive Earnings Explorer below, NVIDIA (NVDA) has now reported five earnings triple plays in a row.
e.l.f. Beauty (ELF) has that topped, though, with seven triple plays in a row dating back to August 2022!
If you’re interested in reading about more stocks that have recently reported earnings triple plays, start a Bespoke Institutional (All Access) trial today and access our latest Triple Play Report (thumbnail preview below).
The Closer – Big Issuance, New Home Sales, Treasury Auctions, CoT – 2/26/24
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we discuss a record February for investment grade corporate bond issuance (page 1), a few earnings results after the bell (page 1), some data on manufacturing sentiment (page 1), a detailed breakdown of new home sales data for January (pages 2 & 3), auction recaps for the 2y and 5y UST sales today as well as a preview of the 7y note sale later this week (page 4), and a summary of commitment of traders positioning data from futures markets (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 — 2/26/24
Chart of the Day: Correlations
Crypto Digging Out
After some weakness overnight, prices in the crypto space have seen a significant turnaround today. Bitcoin, for example, has rallied nearly 5% from its lows earlier in the session and is back to new 52-week highs. When the Bitcoin ETFs were first launched back on January 11th, prices immediately dropped by more than 20% in what looked like another sell-the-news event surrounding a Bitcoin milestone. As shown in the chart, though, in just the last month alone, the largest cryptocurrency has rallied more than 25%.
The rally in Bitcoin has also helped to dig it out of the hole it has been in for more than two years. After falling just short of $68,000 per coin in November 2021, bitcoin declined by more than 75%, but after more than tripling in less than 15 months, it is now just a little bit more than 20% from its prior all-time high. Will 2024 be the year?
Even more impressive than the recent rally in Bitcoin has been Ethereum’s run. Over the last month alone, the second-largest crypto has rallied 39%. That’s more than Nvidia (NVDA)! Despite the monster rally over the last month, though, Ethereum remains 35% below its November 2021 high of $4,800.
