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.

“To hell with facts! We need stories!” – Ken Kesey

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

The long-awaited Fed decision day has arrived, and despite an Atlanta Fed GDPNow forecast for growth of 3.4% in Q3, stronger-than-expected retail sales in August, still relatively low (but admittedly rising jobless claims), and higher-than-normal inflation, the Fed will likely cut rates this afternoon. That’s not to say there is no justification for a rate cut. Continuing jobless claims remain elevated, job growth has practically evaporated, and both the manufacturing sector of the economy and housing remain weak. Additionally, other secondary indicators, such as heavy truck sales, have been particularly weak. There are very few people who would say that the Fed should not be cutting rates today, but given how fast sentiment towards rate cuts has shifted, it’s hard to argue that the President using the bully pulpit of the White House hasn’t at least played in role in shifting the conversation.

Heading into today’s session, equity futures are modestly negative along with treasury yields, crude oil, gold, and crypto. Housing Starts and Building Permits were also just released, and both reports missed expectations by a relatively wide margin, providing more justification for a cut today.

Overnight in Asia and this morning in Europe, equity markets had mixed returns. CPI in the Eurozone came in lower than expected, while it was hotter than expected in the UK. On a y/y basis, CPI for the Eurozone came in slightly lower than expected at 2.0% compared to forecasts for 2.1%.

As we head into this afternoon’s expected rate cut from the Federal Reserve, US stocks have been in rally mode, but they’re not alone, at least from the perspective of a US investor. The snapshot below from our Trend Analyzer shows where various global ETFs closed yesterday relative to their short-term trading ranges. The S&P 500, as measured by the SPDR S&P 500 ETF (SPY) is up 1.5% over the last five trading days and closed yesterday in ‘extreme’ overbought territory (more than 2 standard deviations above its 50-DMA), but it’s not the only one and certainly not the best performer. Of the ETFs shown in the spotlight, three have outperformed the US over the last week, and SPY is the worst performer on a YTD basis.

A look at one-year price charts of all six ETFs shows that they’re all either at or right near 52-week highs heading into today’s session. The only difference is the slope of their advances heading into those highs. The MSCI Emerging Markets ETF (EEM) and the Latin America 40 ETF (ILF) have been moving almost vertically over the last couple of weeks, while the FTSE Europe ETF (VGK) has been moving in more of a sideways range.

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 beautiful thing about learning is nobody can take it away from you.” – B.B. King

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

We’re looking at another positive start to the market this morning, with futures modestly higher and the Nasdaq leading the way as mega-caps continue to lead the way. This morning’s economic calendar includes Retail Sales and Import Prices at 8:30, Industrial Production and Capacity Utilization at 9:15, and then Business Inventories and Homebuilder Sentiment at 10. After that, pretty much all of the focus will shift to tomorrow’s announcement from the FOMC, where rates are widely expected to be cut 25 bps.

This morning’s gains follow what was mostly a positive session in Asia. The highlight of the region was South Korea, where the Kospi rallied more than 1% for its 11th straight daily gain. In Europe, the tone isn’t as positive as the STOXX 600 trades down 0.2% even as the ZEW survey of economic sentiment unexpectedly increased, although Industrial Production for the Eurozone rose less than expected (0.3% vs 0.4%).

Like the major indices, semiconductor stocks have been lurching to new all-time highs, and when the semis are rallying with the overall market, it’s usually a good sign. After several successful tests of the 50-day moving average (DMA) in the summer, the Philadelphia Semiconductor Index (SOX) finally broke out above resistance last Wednesday.

The breakout to new highs also ended a streak of more than a year during which the index had not traded at an all-time high. At 291 trading days, it was the fifth-longest drought without a new high in the SOX’s history, dating back to 199,4, and the sixth-longest that lasted longer than a year. The longest streak was nearly 4,500 trading days ending in January 2018, and the second-longest ended less than two years ago in December 2023 at 488 trading days.

In the process of breaking out to new highs, the SOX has also traded higher for eight straight trading days, trailing the Nasdaq 100’s streak by a day. That eight-day streak is tied for the longest streak since October 2017, when it went more than two weeks in a row without trading lower. The longest streak was three weeks long, ending in early June 2014.

Over the course of the SOX’s eight-day streak, the index has rallied 8.1%, which comes in modestly ahead of the median gain of 6.9% during the first eight days of all 18 streaks and the sixth best overall.