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“Not only strike while the iron is hot, but make it hot by striking.” – Oliver Cromwell
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
September may have started on a poor footing. Still, after a bounce yesterday afternoon, the positive tone carried over overnight and into this morning, following positive news for Alphabet (GOOGL) and, by extension, Apple (AAPL). Asian stocks were mostly lower overnight, with the Nikkei falling nearly 1% and China falling more than a percent. In Europe, though, there has been broad-based strength with the STOXX 600 trading up over 0.6%. On the economic calendar today, the only reports on the calendar are JOLTS and Factory Orders.
Yesterday was an unsurprising start to September, and the silver lining was that the ‘buy the dip’ mentality of investors that we discussed in Friday’s Bespoke Report remained intact. The S&P 500 sold off sharply early in the session, tested those lows right around midday, and then rallied throughout the session to finish right at the highs for the day. From a short-term perspective, the S&P 500 has now made two higher highs and two higher lows, reinforcing the overall upward trend.
Both the S&P 500 and Nasdaq are priced to continue yesterday afternoon’s bounce this morning, and the key driver is Alphabet (GOOGL) following last night’s ruling that it would not be required to sell its Chrome browser. In response, the stock is on pace to gap up nearly 6%. If these levels hold through the opening bell, it would be the largest upside non-earnings related gap higher since 2008.
With today’s gain, we also wanted to provide an update on the comparison between GOOGL and Microsoft (MSFT) since the launch of ChatGPT. The overall consensus has been that MSFT’s quick action and investments into OpenAI helped it to win the AI race among the hyperscalers, but the market has a different opinion. While MSFT has nearly doubled since the launch of ChatGPT in November 2022, at the open today, GOOGL will be up over 121%. While MSFT has won in the court of public opinion, GOOGL has won in the wallet.
