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“I Didn’t Set Out to Beat the World; I Just Set Out to Do My Absolute Best.” – Al Oerter
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 opening ceremonies of the 2024 Summer Olympics will kick off in less than four hours, and markets are already in a celebratory mode. Futures are sharply higher across the board with the Russell 2000 leading the way with indicated gains of over 1.5%, the Nasdaq looks to open higher by just over 1%, and even the S&P 500 stands to open with a gain of 0.75%.
There’s no specific catalyst to point to for the gains, but strangely enough, futures did get a bounce when news came out that former President Barack Obama and his wife Michelle are supporting Kamala Harris’ run for President (people didn’t think they would throw their support behind Trump did they?). The positive tone heading into the last day of the trading week is welcome, but we still have some important economic data to get through, and barring a monster rally beyond current levels, it’s looking like US equities will close out the week lower for the second week in a row.
Outside of equities, crude oil is modestly lower as WTI trades below $78 per barrel and natural gas is only 1% from a ‘one-handle’. Gold and bitcoin are higher, though, and treasuries are looking at modest gains with the 10-year yield down 2 bps and the 2-year yield down one basis point.
This morning’s economic data was mostly in line with forecasts. Personal Income was weaker than expected at 0.2% versus 0.4% expected, but Personal Spending was right in line with estimates. PCE data was right in line with expectations on both a headline and core basis. Not surprisingly, there has been little reaction in equity futures.
The table below is from last Friday’s Bespoke Report and shows the historical performance of the S&P 500 during every summer Olympics in the post-WWII period. Below that we included a bar chart showing performance during each two weeks of competition. Overall, the S&P 500 has averaged a gain of 1.13% with positive returns just over half the time. That average, however, is skewed by the 9.4% gain in the Summer of 1984 when the US dominated. On a median basis, the S&P 500 has gained a more modest 0.47%. We’d also note that performance since those 1984 games has also been strong with gains eight out of ten times.
