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“For those who believe, no proof is necessary. For those who disbelieve, no amount of proof is sufficient.” – Ignatius de Loyola
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 quote above sums up the state of US politics heading into the election which is now over a month away. Those supporting either candidate have already dug in their heels, and if you think you can convince someone to change to your side, it will not happen. No matter what you or the candidate says or does between now and then in hopes to sway an opinion isn’t going to work. Despite that, hundreds of millions of dollars (and collective hours) will be spent between now and November 5th. It’s hard to believe anyone hasn’t already made up their mind.
There’s not much going on in US markets this morning. Equity futures have a modestly negative bias, crude oil is slightly higher, gold is slightly lower, and Treasury yields are modestly lower. It’s been a busy morning for economic data, though, with Personal Income, Personal Spending, Wholesale Inventories, and Core PCE all being released at 8:30. Michigan Sentiment will then hit the tape at 10 AM. Regarding the 8:30 data, Personal Income and Personal Spending both came in weaker than expected, but the PCE data was pretty much right in line with expectations. In reaction to the data, equity futures have ticked slightly higher.
Outside of the US, the monster rally in China continued overnight with the Shanghai Composite rallying close to 3% capping off a weekly gain of over 12% and gains every day this week. The positive tone flowed over into Asia as well as the Nikkei was up 2.3%.
Futures may be looking at modest losses to close out the week, but that comes after the S&P 500, on a market cap and equal-weighted basis (charts below) hit an all-time high yesterday. Regarding the equal weight index, the ETF that tracks it has been in a steady uptrend for over two months and heads into this weekend right at the upper end of that channel. The market cap-weighted index was slower making a new high and isn’t in the same uptrend as the equal-weight index, but it looks like it has made a convincing breakout above the July highs.
For the S&P 500’s breakout to keep up its momentum, it doesn’t necessarily need to see leadership from the megacaps, but they have to perform in line with the rest of the market, which they haven’t done in the last couple of months. As shown in the charts below, the only one of the trillion-dollar stocks that have been making new highs is Meta (META). As shown in the charts below, the other five have a ways to go before they even start approaching their prior highs.
