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“It took two decades and two hundred million words to convince people the bridge was feasible.” – Joseph Strauss, Chief Engineer of Golden Gate Bridge

Morning stock market summary

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

If the action in Europe and pre-market futures is any indication, we’re on pace to o-fer the week. That would extend the losing streak for the S&P 500 to five days and the Nasdaq and Russell 2000 to six.  Before we get ahead of ourselves, though, there’s still a full day of trading left ahead, and how we end the day will in large part be impacted by the 8:30 release of Non-Farm Payrolls and the 10 AM release of ISM Services.

After closing within 0.30% of its record high last Thursday, the S&P 500 has embarked on what is now a four-day losing streak.  We got so close, and yet now those record highs seem so far away (even if we are still within 2% of that record). The fac that the S&P 500 traded at a 52-week high and then proceeded to fall for five straight days doesn’t instill a lot of confidence, and a look at recent history will show you why. Looking at the S&P 500 since the start of 2020, this most recent period is the third time that the S&P 500 closed at a 52-week high that was then followed by at least four straight days of declines.  The other two occurrences were on July 31st, right before the S&P 500 began its late summer swoon, and then on 1/3/22, which marked the peak of the post-COVID bull market.  Happy Friday!

While the last two occurrences certainly weren’t positive, if we widen our perspective, the declines that followed those two most recent occurrences were more of an exception than the rule.  Extending the chart out to 2020 shows that while there was another occurrence right at the pre-COVID peak in February 2020, from late 2020 through 2021, there were multiple occurrences that, in hindsight, are barely noticeable.

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