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“My father was frightened of his mother; I was frightened of my father, and I am damned well going to see to it that my children are frightened of me.” – King George V

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.  

After an unusual surge into the close on Friday, futures have seen some follow-through this morning with Nasdaq futures leading the way as Asia and Europe traded higher overnight and this morning. It’s a busy week for economic data, so we should get a good read by the end of the week whether the economy is really starting to see a summer slowdown or starting to reheat after a cooldown. That in turn will greatly impact the thermostat for interest rates.

As mentioned above, Friday’s late-day surge was unusual as the S&P 500 was slightly lower heading into the final half-hour of trading but then surged 0.90% to close the session.

Since 1990, Friday’s last half-hour gain of 0.90% was the 132nd time that that index rallied 0.75% or more in the final 30 minutes of trading which isn’t uncommon. What is unusual, however, is the environment it occurred in. While these types of moves are commonplace during volatile periods like the Financial Crisis or Covid, it was the first time it ever occurred when the VIX was under 15. Including Friday’s move, the average VIX reading on these days was 37.5!

Not only was it the first time there was a rally of 0.75% in the last half hour when the VIX was under 15, but it was only the fifth time a rally of that magnitude occurred when the VIX was under 20. The table below shows the S&P 500’s performance following each of the prior four days. Unfortunately, if you are looking for a pattern following these prior occurrences, there isn’t one. A year later, the S&P 500 was down once, up modestly once, and up by double-digit percentages twice.

To continue reading the rest of today’s morning note, where you’ll find much more analysis of global equities and economic readings released this morning, read today’s full Morning Lineup with a two-week Bespoke Premium trial.

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