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“I know not all that may be coming, but be it what it will, I’ll go to it laughing.” – Herman Melville, Moby Dick
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Shares of Disney (DIS) spiked up about 9% in the pre-market after the release of better-than-expected earnings and a management outlook forecasting double-digit EPS growth over the next two years. The strength in DIS has helped to push futures to their morning highs, although the magnitude of the gains is modest. After yesterday’s inline CPI report, the headline PPI for October was right in line with expectations, although Core PPI was a tenth higher than expected. Initial jobless claims were 3K lower than expected, but continuing claims were in line with estimates.
Crude oil prices are modestly higher, but WTI remains below $70 per barrel. Meanwhile, gold is down another 1%, taking the total decline from its recent peak to more than 8%. Along with gold’s decline, silver is 2% lower, while copper is also down 1% for the fifth day in a row. Physical gold has been weak lately, but the rally in ‘digital gold‘ continues this morning as Bitcoin sits above $91,000 after briefly touching $93,000 in the last 24 hours.
The positive tone in the US counters a weak overnight session in Asia. After Japan’s Nikkei 225 had a modest gain to kick off the week on Monday, it’s been down three days in a row now after last night’s decline of 0.6%. Chinese stocks were even weaker during the session as the Shanghai Composite fell over 1.7% and Hong Kong’s Hang Seng fell 2.0%. Australian stocks bucked the negative trend even as October employment growth rose less than expected. European stocks have had a much more positive tone this morning as the STOXX 600 is up nearly 1% with German stocks leading the charge (+1.4%) despite an inline Q3 GDP report.
With stocks surging to record highs post-election, it should come as no surprise that investor sentiment has turned more optimistic, and that’s exactly what we saw in the latest numbers from the American Association of Individual Investors (AAII) sentiment survey. Over the last week, bullish sentiment spiked to 49.8% from 41.5%. While that’s a sizable jump, bullish sentiment remains below 50% and is lower than it was in September. Meanwhile, along with the rise in bullish sentiment, bearish sentiment also ticked slightly higher rising from 27.6% up to 28.3%.
What was most notable about this week’s numbers was the sharp drop in neutral sentiment which fell from 30.9% down to 21.8%. That’s the lowest level since the bear market lows in October 2022. With the election behind us, investors suddenly became a lot more decisive, and they shifted to the bullish camp.
