Daily Sector Snapshot — 1/3/24
Fixed Income Weekly — 1/3/24
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.
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 for the next two weeks!
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Bespoke Market Calendar — January 2024
Please click the image below to view our January 2024 market calendar. This calendar includes the S&P 500’s historical average percentage change and average intraday chart pattern for each trading day during the upcoming month. It also includes market holidays and options expiration dates plus the dates of key economic indicator releases. Click here to view Bespoke’s premium membership options.
Chart of the Day – 60/40 As Positively Correlated As Ever
Bespoke’s Morning Lineup – 1/3/24 – Blame Europe
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.
“There are two days in my calendar: This day and that Day.” – Martin Luther
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 not for another month, but it’s starting to feel a bit like Groundhog Day as futures are once again pointing to a lower open on the day. If you’re looking for a scapegoat, the other side of the Atlantic may be a good place to start. The charts below show overnight market action combining intraday trading in Asian and European markets along with US futures. The chart on the left shows overnight trading from Monday night into Tuesday while the chart on the right shows trading overnight into this morning. In each case, the pattern has been the same. Up until Europe opened, there wasn’t much going on, and while stocks on the continent briefly rallied to start the day, sellers quickly came in and overwhelmed any positive sentiment.
This morning in the US, several catalysts could either break the trend or accelerate it. At 10 AM, we’ll get the December ISM Manufacturing report which is expected to come in below 50 for the fourteenth straight month and is the longest streak in over 20 years. Along with that report, the release of JOLTS for November is expected to increase modestly after last month’s much weaker-than-expected report. Besides those two reports, we’ll get the FOMC minutes at 2 PM.
Yesterday may not have been an especially positive start to a year, but it probably wasn’t as bad as the headline declines in the S&P 500 and Nasdaq would suggest. While the Nasdaq’s 1.63% decline was the fourth worst start to a year for the index on record, and the S&P 500’s 0.57% decline was steep in its own right, overall breadth on the S&P 500 was slightly positive (+19), and the equal-weighted S&P 500 was barely down on the day (-0.03%).
At the sector level, things weren’t so bad either. You probably wouldn’t believe it, but four sectors rallied over 1% and two other sectors were up on the day. Outside of Technology (-2.62%) and Industrials (-1.01%), no other sector ETF declined more than 1% on the day.
Yesterday’s best-performing sector was Health Care as the sector ETF rallied 1.76%. While the sector was a big laggard in 2023, it appears to be making up for lost time in the new year as the stock convincingly broke out above the upper end of its 2023 trading range.
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The Closer – Wrong Way, Stumbling Out the Gate, Cash Hoarding – 1/2/24
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we start tonight with a look at the dollar’s surge and Nasdaq’s sharp drop to start the new year (page 1). Switching to the day’s macro data, we then review the latest PMI readings and construction spending figures (page 2). We follow up with an update on cash holdings (page 3) before closing with a rundown of the latest positioning data (pages 4-7).
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Daily Sector Snapshot — 1/2/24
Bespoke Stock Scores — 1/2/24
Chart of the Day: What Drove Performance in 2023?
2023’s Biggest Losers in the Russell 1,000
While broad swathes of the equity market rose in 2023, that is not to say there were not areas of weakness. Of course there were some major spotlight stocks that investors would have completely lost their shirt on like Silicon Valley Bank had they been invested in the beginning of the year, but for those stocks still standing, below we show the 35 Russell 1,000 members that fell by at least 30% during the year. 2021 short squeeze and meme stock darling AMC Entertainment (AMC) was the worst performer on the year in 2023. Price action in the stock was actually pretty flat throughout the year up until the summer. That’s when prices plunged on news that the company would be approved to convert its one year old preferred shares to common stock and a 1-for-10 reverse split. Ultimately, AMC would go on to finish the year with an 85% loss.
One theme popping up in the biggest losers is clean energy. As EV sales decelerated last year, prices of stocks like ChargePoint (CHPT) and Lucid (LCID) hit major speedbumps, falling by 75.55 and 38.36%, respectively. Other clean energy names like Enphase (ENPH) also faced large losses.
A handful of various retailers also made the list like Petco (WOOF), Advanced Auto Parts (AAP), and Dollar General (DG). Dollar General possesses the largest market cap of those stocks, but of all the biggest losers, the vaccine makers were the largest in size. Both Pfizer (PFE) and Moderna (MRNA) fell by over 40%. In the case of PFE, the stock is now below pre-pandemic levels.
