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“Everybody in the world is a long-term investor until the market goes down.” – Peter Lynch

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

The NFL season ended a month ago, but Carrie Underwood’s “Waiting All Day for Sunday Night” has remained as applicable as ever.  With the S&P 500 teetering just above its 200-DMA and the market feeling vulnerable, investors now spend Sundays waiting for the inevitable opening of futures markets to see how bad the damage will be.

Once again, yesterday, the picture wasn’t good as futures have been weak all night. The S&P 500 finished last Friday just about 1% above its 200-day moving average (DMA), and this morning’s indicated weakness will put the level to the test for the fifth day in a row. There’s only so much testing a moving average can take before it gives way. Even European equities, which have been outperforming US stocks by a wide margin this year, are also feeling the pressure. What makes this morning’s weakness notable, though, is that there hasn’t been a specific catalyst.

The equal-weighted S&P 500 hasn’t been as weak as the cap-weighted index this year, but it finds itself in the same situation. It closed out last week just about 1% above its 200-DMA and is indicated to open down by a similar amount.

Normally, when doubts over the economy start to arise and markets start experiencing weakness, any comments that come from the Federal government attempt to take a soothing tone, but like a team having a tough season looking to improve their position in the next season’s draft, investors have been watching comments coming from administration and asking if they’re borrowing from the ‘tank-job’ playbook.

On CNBC last Friday, Treasury Secretary Bessent remarked, “Could we be seeing that this economy that we inherited starting to roll a bit? Sure”. He then added what has already become a now famous line, “There’s going to be a detox period.”  It’s not common to see a Treasury Secretary talk down and pile on to what is an already shaky economic and market picture. Even in 2008, just ahead of the Financial Crisis, Treasury Secretary Paulson would regularly make comments like “I think the economy is — long-term fundamentals are very healthy, that I believe we’re going to continue to grow”.

In a Fox News interview that aired this weekend (recorded earlier in the week), President Trump took a similar stance, saying “There will be a little disturbance, but we are OK with that.” He added. “It won’t be much.” With regards to the stock market, the President claimed, “I’m not even looking at the market.” Come again? President Trump not looking at the stock market????

For anyone who was still using President Trump’s first four years as a playbook for the next four, you can burn it. Look on the bright side, though: maybe the economy will get some good draft picks.