Malaise Among Individual Investors
The misery of 2022 has continued when it comes to investor sentiment. In the latest weekly AAII poll, bullish sentiment declined from 24.3% down to 20.3%. That’s the lowest reading since the end of September and less than five points above the YTD low of 15.8% from mid-April.
As shown in the chart above, there hasn’t been a single week this year where bullish sentiment has been above its historical average of 37.6%, and the only week where sentiment was even close to its historical average was at the start of the year. With just one week left in the year, barring a historic one-week surge, 2022 will go down as the first year in the history of the AAII survey where there wasn’t a single week that bullish sentiment was above average. Talk about malaise. Click here to learn more about Bespoke’s premium stock market research service.
Bespoke’s Morning Lineup – 12/22/22 – Back to Normal
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“Make a game plan and stick to it. Unless it’s not working.” – Yogi Berra
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Today is looking like a back-to-normal 2022 day for US stocks as futures are trading lower. The gains were fun while they lasted. Looking on the bright side, there are only five trading days left in the year. Elsewhere in markets, the 10-year yield is down slightly to 3.65% while oil has been quietly rallying and is now just under $80 per barrel.
The economic calendar is busy today as many reporting agencies try to squeeze in this month’s reports before Christmas. Data released so far hasn’t been particularly market-friendly as revised GDP came in higher than expected (3.2% vs 2.9%) and Core PCE was revised higher (4.7% vs 4.6%). Jobless claims were also strong with initial claims coming in lower than expected (216K vs 222K) and continuing claims also coming in slightly better than expected (1,672K vs 1,675K). If they were to have any impact on Fed policy, none of these reports would suggest less of a hawkish stance.
The more things change, the more they stay the same. Even after two days of gains, sector performance over the last five trading days has been pretty poor and almost exactly in line with performance rankings on a YTD basis. As shown in the scatter chart below which compares YTD performance versus the last week, there has been a clear correlation between the two with an r-squared of 0.78. Heading into year-end, investors are following the game plan of selling their losers and buying the few winners.
Looking at a snapshot from our Trend Analyzer, four of the S&P 500’s eleven sectors are down over 4% in the last week, another four are down more than 2%, two are down over 1%, and only Energy is higher. In terms of where sectors are now trading with respect to their trading ranges, there’s still pretty much of an even split between sectors trading above and below their 50-day moving average with six above and five below. Consumer Discretionary is the only sector in oversold territory. While that may seem like an ominous sign heading into the Christmas season, it’s worth remembering that retailers usually underperform at this time of year. Also, Tesla (TSLA) makes up about 13% of the sector, so the stock’s weakness has been a drag on the overall sector.
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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The Closer – Credit Outperforms, Current Account, CFO Survey, EIA, Auction – 12/21/22
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we start out tonight with a look at the moves in credit markets, the VIX, ags, and FX (page 1). We then dive into the latest inflation numbers from Canada (page 2) as well as the US current account (page 3). Next, we provide a review of the latest CFO survey (page 4) followed by recaps of today’s 20 year bond reopening (page 5) and EIA petroleum stockpile data (page 6).
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Bespoke Baskets Update — December 2022
Daily Sector Snapshot — 12/21/22
Chart of the Day – Record Declines in Existing Home Sales
Bespoke’s Morning Lineup – 12/21/22 – Two in a Row?
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“The graveyards are full of indispensable men.” – Charles de Gaulle
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.
As we get closer to Christmas, the pace of news starts to slow, so that’s why one of this morning’s headlines concerns a Twitter poll. After more people voted that they wanted him to step down as CEO of the social media company, Elon Musk announced that he will step down as CEO of Twitter once he finds “someone foolish enough to take the job!” Elon has also suggested in the past week that no one besides him with the ability to do so would take on the job of leading the company when he noted, “No one wants the job who can actually keep Twitter alive. There is no successor.”
We also had some positive (or not as bad as expected) earnings news after the close on Tuesday with Nike (NKE) trading up over 10% and FedEx (FDX) up close to 5%. Expectations heading into the Q4 earnings season next month have really been negative, but at least these companies are starting off with a good first impression.
On the economic calendar this morning, the only reports scheduled are Existing Home Sales and Consumer Confidence at 10 AM.
Even with US stocks on pace for their second straight day of gains, it hasn’t been a pretty December for stocks. What was an uptrend from the October lows has been broken in a convincing way, and the only hope for chart watchers now is that the June lows hold creating what could turn out to be a reverse head-and-shoulders pattern.
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!
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
The Closer – Shipping Shoes, Housing Blues – 12/20/22
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, after some commentary on tonight’s notable earnings reports (page 1) we take a deep dive into the latest weakness in housing data (pages 2 – 4).
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