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When futures opened last night, it was looking like there would be some positive follow-through from last week’s rally, but the gains evaporated overnight as weakness in Europe dampened sentiment on our side of the Atlantic. As things stand now, the S&P 500 is looking at a gap down of 0.80%. Crude oil was also weaker but has reversed into positive territory after Saudi Arabia announced a unilateral 1 million barrel per day production reduction. On the data front, it’s a quiet start to the week, but there’s still a number of earnings reports on the calendar
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, economic data out of Europe and China, and the latest stats and figures surrounding the COVID-19 outbreak.
From a seasonality perspective, this morning’s weakness doesn’t seem out of line. From our Seasonality Tool, the S&P 500 is currently entering what has historically been one of the weakest periods of the year. As shown below, the S&P 500’s median performance from the close on 5/11 through 5/18 has been a decline of 0.65% which ranks in just the 9th percentile for all one week periods of the year. The S&P 500’s median one-month return is positive at 0.37% but still ranks below the 30th percentile of all rolling one month periods. While one week and one month returns come in at the low end of the historical range, the S&P 500’s median three-month gain of 3.08% ranks considerably better in the 61st percentile of all rolling three-month periods.