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.

“The clash of ideas is the sound of freedom.” – Lady Bird Johnson

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 you’re planning on flying somewhere in the next week, you’re going to have a lot of company.  According to AAA, a record 39 million Americans will travel by air this holiday season, topping the prior record in 2019.  That means that millions of Americans will be going through the ‘odorous’ process of taking their shoes on and off just to get through airport security, and we can all thank the ‘shoe-bomber’ who attempted to light his explosive-laden sneakers on fire while on a flight from Miami to Paris on this day in 2001. Thankfully, alert crew members and passengers aboard that flight were able to restrain the shoe-bomber, but even though he was unsuccessful, we’re all still paying the price 22 years later.

Dow futures are making it look like a moderately negative morning for equities on this last trading day before Christmas, but those numbers are skewed by Nike (NKE) which is trading down over 12% in reaction to weak earnings after the close yesterday.  If NKE’s current declines carry through to the closing bell, it would be the second worst one-day reaction to earnings for the stock in at least 20 years, and if it finishes the day down more than 12.8%, it will be its worst earnings reaction day since at least 2001.

S&P 500 and Nasdaq futures are flat, treasury yields are lower, and crude oil is modestly higher.  That could all change after 8:30 given the slug of economic data on the calendar that includes Personal Income, Personal Spending, PCE Deflator, and Durable Goods.  Then, at 10, we’ll get New Home Sales and Michigan Sentiment.  After that, there’s not a lot on the calendar, so expect things to slow down for the remainder of the day, but don’t forget to be on the lookout for a CNBC appearance at 11: 30 and our Year End report which will be posted and sent out later today.

The last week of the year has traditionally been thought of as a positive time for stocks, and for the most part that has been true. Over the last 20 years, though, median returns haven’t been nearly as positive.  As shown in the chart below, while the S&P 500’s median post-WWII performance during the last week of the year has been a gain of 0.59% with gains just over two-thirds of the time, over the last twenty years, the median gain has been just 0.02% with gains half of the time.

On the right side of the chart, we have also summarized the S&P 500’s performance under various performance scenarios like this year.  In the 19 years since 1945 that the S&P 500 was up 20%+ heading into the last week of the year, its median performance in the last week was a gain of 0.85% with gains 79% of the time.  Similarly, in the 23 years when it was up 2.5%+ MTD, its median performance in the last week of the year was also a gain of 0.85% with gains 78% of the time.  Lastly, in the eight prior years that the S&P 500 was up 20%+ YTD and 2.5%+ MTD, its median performance in the last week of the year was a gain of 1.24% with gains seven out of eight times.

Sign up for a two-week trial to Bespoke Premium to continue reading more of today’s macro analysis.

Print Friendly, PDF & Email