The Bespoke Report – 7/14/23 – Everybody Is A Winner
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Bespoke’s Morning Lineup – 7/14/23 – Positive Earnings Cap Off a Positive Week
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.
“You don’t reason with intellectuals. You shoot them.” – Napoleon Bonaparte
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.
For all the talk about how the discourse has become so much more violent in recent years, we have nothing on Napoleon. Shooting people you disagree with??? The only duels these days happen on Twitter.
After a brief scare last week from a stronger-than-expected ADP report, the bull market came back from July 4th vacation this week, and futures are poised for a flat to modestly higher open to close out what has been a very positive week. The only economic reports on the calendar this week are Import Prices at 8:30 (weaker than expected) and Michigan Sentiment at 10 AM. It’s been a busy morning for earnings, and so far, the reports have been positive as all seven of the companies reporting as we write this have reported better-than-expected earnings and five out of seven have topped sales forecasts. So far so good.
European markets are mixed so far this morning with the STOXX 600 essentially flat while France leads the way higher with a gain of 0.3% and Germany lag (-0.2%).
They say a dollar isn’t what it used to be, but it can still have a big impact on equity market performance. Take the recent performance of European stocks. The chart below shows the performance of Europe’s benchmark STOXX 600 index over the last year. After an extended period of sideways trading, the STOXX 600 sold off in late May and ever since has been making a series of lower highs and lower lows. A recent test of the 200-DMA held, but the index is currently bumping up against its downtrend and trying to reclaim its 50-DMA as we close out the week. From a technical perspective, it’s not the greatest picture for European stocks.
If you’re an investor in the US and looking at the performance of European stocks through the lens of the US dollar, you’re seeing an entirely different picture. Instead of lower highs and lower lows, it looks more like higher highs and higher lows as the STOXX just this morning broke above resistance from earlier this year and is now trading at 52-week highs. Technically speaking, the STOXX 600 in dollar-adjusted terms looks a whole lot better. What a difference the dollar makes!
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Bespoke’s Weekly Sector Snapshot — 7/13/23
The Closer – Dollar Drops Out, FANG+ Nears a New High, Industrial Projection – 7/13/23
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we start out with a look at the drop in the dollar and which stocks have benefited the most (page 1). We then dive into the new all time high in mega cap tech (page 2) before pivoting into the latest PPI data (page 3). We then recap the latest budget statement (page 4) followed by a forecast of industrial production based on Fastenal (FAST) sales data (page 5). We close out with a recap of today’s weak 30 year bond reopening (page 6).
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Chart of the Day – A Record 75 Years in the Making: CPI vs PPI Spread
The Bespoke 50 Growth Stocks — 7/13/23
The “Bespoke 50” is a basket of noteworthy growth stocks in the Russell 3,000. To make the list, a stock must have strong earnings growth prospects along with an attractive price chart based on Bespoke’s analysis. The Bespoke 50 is updated weekly on Thursday unless otherwise noted. There were no changes to the list this week.
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The Bespoke 50 performance chart shown does not represent actual investment results. The Bespoke 50 is updated weekly on Thursday. Performance is based on equally weighting each of the 50 stocks (2% each) and is calculated using each stock’s opening price as of Friday morning each week. Entry prices and exit prices used for stocks that are added or removed from the Bespoke 50 are based on Friday’s opening price. Any potential commissions, brokerage fees, or dividends are not included in the Bespoke 50 performance calculation, but the performance shown is net of a hypothetical annual advisory fee of 0.85%. Performance tracking for the Bespoke 50 and the Russell 3,000 total return index begins on March 5th, 2012 when the Bespoke 50 was first published. Past performance is not a guarantee of future results. The Bespoke 50 is meant to be an idea generator for investors and not a recommendation to buy or sell any specific securities. It is not personalized advice because it in no way takes into account an investor’s individual needs. As always, investors should conduct their own research when buying or selling individual securities. Click here to read our full disclosure on hypothetical performance tracking. Bespoke representatives or wealth management clients may have positions in securities discussed or mentioned in its published content.
Bespoke’s Morning Lineup – 7/13/23 – PPI Nears Deflation
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.
“The discipline of writing something down is the first step toward making it happen.” – Lee Iacocca
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.
Equities remain in rally mode again this morning as Dow, S&P, and Nasdaq futures are all firmly positive. Treasury yields are also firmly lower across the curve. The 2-year yield which was over 5% a week ago is now down to 4.67% while the 10-year yield which was over 4% is now down to 3.83%. Much of this really has been the result of benign economic data specifically related to inflation, but for it to continue we’ll need to see companies pick up the baton as they start to report earnings.
This morning’s earnings reports have been generally positive. The two biggest companies to report – Pepsi (PEP) and Delta (DAL) both handily beat EPS and sales forecasts, and PEP even raised guidance to complete the Triple Play. Conagra (CAG) also managed to top EPS forecasts but missed on the top line, while Fastenal (FAST) reported slight misses on both the top and bottom line. As one might expect given the results, both PEP and DAL are up over 2% in the pre-market while the other two are down roughly 2%.
Besides the earnings results this morning, it’s a busy day for economic data with June PPI and jobless claims coming out at 8:30. Initial Claims came in lower than expected at 237K versus forecasts for 250K while continuing claims were slightly higher than expected (1.729 mln vs 1.720 mln). The big report of the morning though was PPI and that came in at 0.1% at both the headline and core levels, which was lower than the 0.2% forecast.
Regarding PPI, as we’ve highlighted in recent months, the spread between consumer and producer prices has widened to historically wide levels. Last month, the spread between the y/y readings of CPI versus PPI widened to 2.9 percentage points which is the highest since at least 2011 when the current incarnation of PPI begins. Following this morning’s release, the spread remained at that record level of 2.9 suggesting that corporate profit margins remain healthy.
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The Closer – On the Brink of Earnings, Core CPI Comedown, Beige Book – 7/12/23
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we begin with a look at the Russell 2,000’s historic streak without a new high before previewing the ramp up of earnings season (page 1). We then dive into the latest CPI data (page 2) before switching over to a look at today’s release of the Beige book (page 3). Next, we show the big jump in petroleum product net exports per the latest EIA data (page 4) before closing with a recap of today’s tailing 10 year note reopening (page 5).
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!