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“One of the most helpful things that anybody can learn is to give up trying to catch the last eighth—or the first. These two are the most expensive eighths in the world.” – Edwin Lefèvre, Reminiscences of a Stock Operator
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Here in the US this morning, US futures are biased to the downside as markets digest what is expected to be the second week in a row of gains. Earnings season has continued on a bullish note with positive earnings from the banks and financials last week and then strong reports from Netflix (NFLX), 3M (MMM), Charles Schwab (SCHW), and P&G (PG) this week. Next week will be an even bigger test as the pace of reports will only increase and megacaps like Meta Platforms (META), Microsoft (MSFT), Apple (AAPL), and Amazon.com (AMZN) will all report.
If you’re still reading this, congratulations because that means you survived the ‘December crash’. The S&P 500 declined 4.3% from its December high to early January, which was admittedly accompanied by the weakest short-term period of market breadth since at least 1990. The rally that kicked off Monday has now fully erased the declines, and the bull market has gone on to live another day (or week, month, year, etc.). For many investors, the pullback felt especially painful even if it was modest in magnitude. As shown in the chart below, since the bull market began in October 2022, there were five other periods when the S&P 500 experienced a decline that was both larger in magnitude and longer in duration.