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“The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.” – Michelangelo
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Beggars can’t be choosy, but is a rally that lasts just one session the best we can do these days? As good as days like yesterday feel during waves of selling, when most of those gains get washed away before the next session’s opening bell, it’s grueling. Futures for all the major indices are down over 1% this morning on no specific news other than continued uncertainty related to tariffs, trade, and almost everything else. While administration officials periodically dangle a carrot to the market, the threat of a much broader blanket of tariffs coming within a month looms larger.
Despite the uncertainty, markets will still open for trading at 9:30. Before that we’ll get several economic indicators, including Non-Farm Productivity, Unit Labor Costs, and most importantly jobless claims at 8:30. Last week’s initial claims report came in 21K ahead of expectations, and if there’s another upside surprise in that reading, look for the stagflation chatter to pick up in intensity. Adding to concerns over the employment picture, Challenger, Gray, and Christmas reported this morning that US employers announced 172K layoffs in February, the largest for a single month since July 2020.
It’s been a painful couple of weeks for US equities. As shown in the snapshot below from our Trend Analyzer, both the S&P 500 and Nasdaq 100 remained in oversold territory even after yesterday’s bounce, and they’re both down roughly 2% over the last week. The action in US equities stands in stark contrast to international equities, which are mostly higher over the last week and at varying degrees of overbought levels. European equities, as tracked by the ETF VGK, are up over 15% YTD and headed into today at ‘extreme’ overbought levels (2+ standard deviations above 50-day moving average).
