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.
“I am a slow walker, but I never walk back.” – Abraham Lincoln
Below is some introductory commentary of today’s Morning Lineup. Start a two-week trial to Bespoke Premium to get full access.
The market is catching its breath this morning after the big moves of last week. Equity futures, treasury yields, and crude oil are all modestly higher while the dollar follows through on its declines from last week. There’s very little in the way of economic data this morning, and the pace of earnings has been relatively slow so far, but the pace will pick up later this afternoon and into tomorrow as earnings season remains in full swing- at least in terms of the number of reports.
Last week’s 5.82% gain for the S&P 500 was the best week of the year and the best week for the major US benchmark since the week ending November 11th from last year. With geo-political tensions remaining hot, earnings looking not so hot, and interest rates surging, the prospects for equities looked dim. You couldn’t fault an investor for thinking that it may be a good time to lighten up and sit things out for a bit until things cool off and some of the uncertainty recedes. As the market tends to prove time and time again, though, just when things look their worst, the market has a way of going the other way. In addition, timing the market remains one of, if not, the most difficult aspects of investing. Without fail in the markets, the best weeks tend to come when they’re least expected.
The chart below shows the growth of $100 invested in the S&P 500 at the start of 2010 (dividends not included) on both a buy-and-hold strategy as well as if an investor missed out on the best week of each calendar year. The gap is enormous. While the original $100 is now worth $390.85, had you missed out on the best week of each year, you would have less than half of that amount at $193.55. In other words, well over half of the gains since 2010 can be attributed to those 14 weeks. Admittedly, you could make the counterargument that most of the losses during this period have also occurred in a small number of weeks, but trying to successfully anticipate when these good weeks or down weeks will occur is IMPOSSIBLE. As “KC and the Sunshine Band” advised in 1979, “Please Don’t Go”.
Sign up for a two-week trial to Bespoke Premium to continue reading more of today’s macro analysis.
