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“Nothing is impossible, the word itself says ‘I’m possible’!” – Audrey Hepburn
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
16-year-old, meet market. If you think the life of a 16-year-old is an emotional roller-coaster where ‘life isn’t fair’ turns into ‘top of the world’ on a dime, the market has been doing a stellar impression lately. From the end of February right through all of March, the S&P 500 declined for five straight weeks. Once March ended, though, the pendulum swung completely in the opposite direction with five straight weeks of gains. There hasn’t been any in between.
It has been very uncommon for the S&P 500 to experience at least five weekly declines followed by at least five weekly gains. Since WWII, there have been 32 other losing streaks of at least five weeks, and there have been 120 streaks of at least five-week gains. However, there have only been five other periods when a five-week winning streak came immediately after a streak of at least five weeks of losses. The last one was way back in 1982, so the teenagers out there (and maybe even their parents) won’t remember that one.
Last week also saw a notable shift in a pattern that has been prevalent ever since the war started. For the last nine weeks, it seemed as though whatever was good for oil prices and the energy sector was bad for all other stocks and vice versa. Last week, though, Energy was the top-performing sector, gaining 3.48%, but the only other stocks to finish the week lower were Materials (-1.10%) and Consumer Discretionary (-0.05%). In fact, four other sectors rallied more than 1%, including Technology (1.03%) and Communication Services (1.02%). The market won’t be able to ignore rising energy prices in perpetuity, but it is a welcome respite.
It’s been a volatile morning for equity futures as conflicting headlines from the Middle East caused a sharp pullback in futures earlier this morning. Reports that Iran fired on a US ship erased earlier gains in equities and a sharp increase in oil prices. US officials have refuted the reports, though, and we’ve reclaimed a decent amount of the earlier losses, and the S&P 500 is now just down 0.2% while the Nasdaq is flat.
In Asia, Japan and China were closed for a holiday, but South Korea surged over 5% while Hong Kong rallied 1.2%. Manufacturing PMIs for both South Korea and Singapore both expanded more than expected.
European stocks returned from last Friday’s holiday with losses. The STOXX 600 is down over 0.5%, led lower by Spain, which is down over 1% while France and Italy are both underperforming. Like Asia, Manufacturing PMIs for countries in the region have generally been stronger than expected.
Looking ahead to the US today, the only economic report on the calendar is Factory Orders at 10 AM. NY Fed President Williams will be speaking at the Yale Club just before 1 PM, and after the bell, Palantir (PLTR) will report Q1 earnings.
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