Daily Sector Snapshot — 1/4/23
Fixed Income Weekly: 1/4/23
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 every Wednesday. 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.
In this week’s report, we discuss relative value in the investment grade credit space.
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 free for the next two weeks!
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Chart of the Day – Good Inflation News in ISM Manufacturing Report
Bespoke’s Morning Lineup – 1/4/23 – Energy and Rates Down, Stocks Up
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.
“Yet we still live in a troubled and perilous world. There is no longer a single threat. There are many. They differ in intensity and in danger. They require different attitudes and different answers.”– Lyndon B Johnson
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.
Investors are waking up to a bit of – dare we say it – goldilocks this morning as commodity prices and treasury yields are both lower and economic data out of Europe has been positive. Service sector PMIs for the Eurozone and each of the largest economies in the region have come in better than expected while some inflation-related reports have come in lower than estimates. Import Prices in Germany for the month of November dropped more than expected (-4.5% vs -1.6%) and French CPI for December unexpectedly declined. In response, futures are modestly higher heading into what is likely to be an eventful day with ISM Manufacturing and JOLTS at 10 AM, and the FOMC Minutes at 2 PM.
It wasn’t a particularly great year for financial assets anywhere across the spectrum in 2022. The only area to buck the trend was Energy. To start off 2023, though, Energy has been among the weakest areas as WTI opened the year with a decline of 3.9% on Tuesday (and is down an additional 3%+ this morning). With that decline, the Energy sector tumbled 3.5% (and is down another 1.5% in the pre-market).
The chart for WTI doesn’t look particularly encouraging. After making a lower high last June, the sector has been in a relatively consistent downtrend for more than six months, and a key trend since that peak has been multiple occurrences where the sector tried to rally back above its 50-DMA but failed. The last week has been the most recent example. After failing to take out its 50-DMA yesterday, WTI’s plunge yesterday was its largest decline to kick off a new year since 2007.
Even as oil prices have plunged from their 2022 highs, Energy stocks have held up impressively well. It was only back in mid-November that the Energy sector made a new high for the year while oil prices were well off their highs. Despite the outperformance, the sector’s technical picture has deteriorated. November’s peak was technically a higher high, but it’s starting to look more like a double-top. The fact that after trading below its 50-DMA in early December, the Energy sector has had multiple failed attempts to trade back above that level is a concern for longs. Like crude oil, Tuesday’s 3.6% decline was the weakest opening-day performance for the sector to start a year since 2007.
Our Morning Lineup keeps readers on top of earnings data, economic news, global headlines, and market internals. We’re biased (of course!), but we think it’s the best and most helpful pre-market report in existence!
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JPMorgan Healthcare Conference Helping
The Closer – McCarthy vs. Jordan, Logistics Update, Positioning – 1/3/23
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we start out tonight with commentary on the election of a new House speaker (page 1), followed by a rundown of the latest supply chain data (pages 2 -4). We finish with a recap of the latest positioning data (pages 5 -7).
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Daily Sector Snapshot — 1/3/23
Chart of the Day – Tech and the Consumer Electronics Show
Bespoke Stock Scores — 1/3/23
Bespoke Market Calendar — January 2023
Please click the image below to view our January 2023 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.
