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“Trying to sell short in this market is like being run over by a train that’s going to derail a mile down the road.” – Julian Robertson
We may be at the tail end of earnings season, but it’s not going out quietly as we’re seeing some significant earnings-related moves this morning. On the downside, both Cisco (CSCO) and Alibaba (BABA) are down over 6% as they both missed sales estimates and lowered guidance. On the upside, even after the run it has had into earnings, Nvidia (NVDA) is up over 8%. In the retail space, a number of stocks including Victoria’s Secret (VSCO), Kohl’s (KSS), and Macy’s (M) are all up by at least 7%.
Today is also a fairly busy one for economic data as well with Jobless Claims and the Philly Fed at 8:30 and then Leading Indicators at 10 AM. Then, at 11 AM we’ll close out the week’s economic calendar (there are no reports scheduled for tomorrow) with the KC Fed r manufacturing report. Jobless Claims were pretty much right inline with expectations coming in at a post-COVID low of 268K while continuing claims were much lower than expected at 2.08 million. The Philly Fed report also came in better than expected coming in at a level of 39.0 which was the best reading since April.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including the latest US and international COVID trends.
Relative to last Wednesday’s close, major US equity averages have generally had a positive bias but have seen little in the way of moves in either direction. As shown in our Trend Analyzer snapshot of US index ETFs, the only one that has moved up or down 1% during this period is the Micro-Cap index (IWC) with a decline of 1.17%. Despite the decline, though, IWC remains at overbought levels and is still one of the top-performing ETFs YTD. Behind IWC, the next worst performing index ETF in our snapshot is IWM which is down 0.9% over the last week. Like IWC and every other index ETF listed below, IWM remains at overbought levels, so it’s not as though these moves have been significant.
With small caps and large caps at two different ends of the performance spectrum this week, we wanted to highlight each index’s price chart to show how the moves look from a longer-term perspective. IWM has seen a pretty swift reversal in the last week, but it also follows a short-term move that was much steeper to the upside. Large caps like SPY, on the other hand, saw more gradual (relatively) increases leading up to their recent highs and remain right near all-time highs with the S&P 500 actually coming up just short of a record closing high on Tuesday.
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