See what’s driving market performance around the world in today’s Morning Lineup. Bespoke’s Morning Lineup is the best way to start your trading day. Read it now by starting a two-week trial to Bespoke Premium.  CLICK HERE to learn more and start your trial.

“Do right and risk the consequences.” – Sam Houston

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 equity market weakness that kicked off September has continued into the third trading day of the month, but the magnitude of the losses has been restrained. In the fixed-income market, treasuries have gotten off to a strong start this month, but this morning, rates are little changed as the 2s10s yield curve has moved into positive territory…if you go out to four decimal places (0.0001%).

After some weak data to kick off the month and yesterday’s Beige Book, investors have returned to worrying over the state of the US economy. That means weak labor data will not be positively received from the equity market. The first of those labor reports was the ADP Employment report which showed monthly growth of just 99K relative to forecasts for an increase of 142K –  the smallest monthly increase since January 2021. That was the bad news. The good news was that initial and continuing jobless claims came in lower than expected.

In addition to those two reports, Non-Farm Productivity was in line with forecasts (+2.5%), and Unit Labor Costs rose just 0.4% versus forecasts for an increase of 0.8%. The only other reports on the calendar for today are PMI readings for the Services sector from S&P and ISM both of which are expected to decline slightly from their prior readings.

It may sound hard to believe, but with the S&P 500 now 2.6% off its mid-July high, long-term US Treasuries, as measured by the iShares 20+ US Treasury ETF (TLT), are closer to a 52-week high than the US stock market.  As shown in the chart below, TLT’s current 52-week high was back in late 2023.

The chart below shows the historical spread between TLT’s closing price and its 52-week high (on a closing basis), and as of yesterday, the ETF finished the day 1.5% from a 52-week high which is as close as it has been since late 2020.

2000 was a long time ago, and the current spread of 1,027 trading days without closing at a 52-week high is by far the longest drought since the ETF first started trading in the early 2000s.  For fixed-income investors, the 52-week high list has been a foreign concept, but if concerns over the economy start to increase, they may start spending a lot more time together.

Continue reading today’s full Morning Lineup by starting a two-week trial to Bespoke Premium.