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“All great and honorable actions are accompanied with great difficulties, and both must be enterprised and overcome with answerable courage.” – William Bradford
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Futures are mixed this morning with the Dow indicated to open higher, the S&P 500 trading slightly lower, and the Nasdaq trading a little deeper into negative territory. The weakness in the Nasdaq is mostly due to Apple (AAPL) which is down over 2% following reports that iPhone orders over the first weekend of sales have been weaker than expected. These reports usually have little more than a temporary effect, but on an otherwise quiet morning, it’s making its impact felt. The only economic report on the calendar today is Empire Manufacturing, which was just released and came in stronger than expected at +11.5 vs forecasts for a reading of -4.0. Believe it or not, that was the first positive reading of the year and the highest level since April 2022.
Don’t let the quiet start to the week lull you into sleep, though. Tomorrow, we’ll get an important Retail Sales report, and then Wednesday morning we’ll get the August read on Housing Starts and Building Permits as an appetizer to the FOMC rate decision at 2 PM Eastern where the only question is whether Powell and Company will cut rates by 25 or 50 basis points.
The market mood heading into this past weekend and into the new week stands in stark contrast to where things stood a week ago. The snapshot below from our Trend Analyzer shows where major index ETFs stood last Friday and a week earlier. After Labor Day and the first week of September, all three index ETFs were below their 50-day moving averages and down between 3.2% and 5.6% as September looked to be living up to its reputation as the cruelest month. A week later, each of the four indices erased nearly all their declines from the prior week and reclaimed their 50-day moving averages.
When the market experiences weekly reversals like the one seen over the last two weeks, the sectors that led on the way down also usually lead on the way up or vice versa. That wasn’t necessarily the case last week. While that trend applied to Technology (best last week and worst the week before) and Communication Services (third best last week, third worst week before) it didn’t to most other sectors. Take Energy; last week it was the only sector to finish lower for the week, and the week before, it performed worse than every other sector except for Technology. Going the other way, Real Estate was one of just two sectors to finish each of the last two weeks with gains.
