The Triple Play Report — 5/2/24
An earnings triple play is a stock that reports earnings and manages to 1) beat analyst EPS estimates, 2) beat analyst sales estimates, and 3) raise forward guidance. You can read more about “triple plays” at Investopedia.com where they’ve given Bespoke credit for popularizing the term. We like triple plays as an indication that a company’s business is firing on all cylinders, with better-than-expected results and an improving outlook. A triple play is indicative of positive “fundamental momentum” instead of pure fundamentals, and there are always plenty of names with both high and low valuations on our quarterly list.
Bespoke’s Triple Play Report highlights companies that have recently reported earnings triple plays, and it features commentary from management on triple-play conference calls, company descriptions and analysis, and price charts. Bespoke’s Triple Play Report is available at the Bespoke Institutional level only. You can sign up for Bespoke Institutional now and receive a 14-day trial to read this week’s Triple Play Report, which features 31 new stocks. To sign up, choose either the monthly or annual checkout link below:
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EMCOR (EME), one of nine Industrial companies in this report, is an example of a company that reported an earnings triple play recently.
EME has rallied 65.4% so far in 2024 and has traded above its 50 and 200-DMA consistently since the beginning of the year.
Looking at the snapshot below from our Earnings Explorer, EME has beaten both EPS and revenue estimates in all of the last eight quarters, with two triple plays including the most recent one. All of the last eight quarterly earnings have produced positive one-day gains for the stock as well.
With a P/E ratio of 23.4, EME is close to the industry average of 19.5. What’s impressive about EME is that the company has been able to consistently beat EPS estimates by wider margins over the last eight quarters, as shown below. Revenue growth has also been solid.
As a mechanical and electrical infrastructure and building services company, EME benefits from increased infrastructure spending. The company sees high demand in high-tech and traditional manufacturing. The emergence of AI technologies and big data projects are driving growth in network and communications. You can read more about EME and the 30 other triple plays in our newest report by starting a Bespoke Institutional trial today.
Bespoke Investment Group, LLC believes all information contained in these reports to be accurate, but we do not guarantee its accuracy. None of the information in these reports or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. This is not personalized advice. Investors should do their own research and/or work with an investment professional when making portfolio decisions. As always, past performance of any investment is not a guarantee of future results. Bespoke representatives or clients may have positions in securities discussed or mentioned in its published content.
Bespoke’s Morning Lineup – 5/2/24 – Rebound
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“How you finish, is what they will remember.” – Unknown
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Markets are in rebound mode this morning as they look to recoup the losses from the last hour of trading. Crude oil is higher but still below $80, and the 10-year yield is unchanged. This morning’s economic data has been mixed with jobless claims coming in lower than expected, but Unit Labor Costs rising more than expected (4.7% vs 4.0%) although last quarter’s reading was revised lower. As labor costs increased, Non-Farm Productivity was weaker than expected rising just 0.3% compared to forecasts for an increase of 0.5%.
When people look back on Super Bowl LI, most will only remember that the Patriots won their fifth championship in an unbelievable comeback against the Falcons. The Falcons, who were up by 25 in the second half, won’t be remembered for being so close, but instead for one of the biggest choke jobs in Super Bowl history. At one point in the second half, they had a 99% probability of winning. It was guaranteed.
Similarly for the market, people will not look back on yesterday as being a day when the S&P 500 was up over 1% with less than an hour left in the session. Most people will just remember it as a day when the S&P 500 finished moderately lower (-0.34%), and for those more involved in the day-to-day moves, they’ll remember that the S&P 500 collapsed into the close falling over 1% in the final hour and more than 0.50% in the last ten minutes of trading! As we noted in the Closer last night, at one point yesterday, the S&P 500 had a 99% probability of finishing the day with a gain. Choke job indeed.
What’s even crazier about yesterday’s tank into the close, is that it was the second day in a row where it happened. Below we show the S&P 500’s intraday charts for Tuesday (4/30) and Wednesday (5/1). While the patterns heading into the last ten minutes of both days were almost the opposite, the last ten minutes were nearly identical; The S&P 500 dropped 0.59% in the final ten minutes on Tuesday and 0.60% on Wednesday. These late-day declines are uncommon enough on their own, but to occur on back-to-back days is extremely rare.
The chart below shows streaks where the S&P 500 declined 0.50% or more in the final ten minutes of trading going back to 1985, and there have only been nine other periods where there were back-to-back occurrences (with two extending to an unheard-of third day). The most recent occurrence was in February 2018 during the Volmageddon meltdown. The next before that was in August 2015 when China devalued the yuan and before that August 2011 when the US lost its AAA credit rating from S&P. There were also a few occurrences during the Financial Crisis and also in October 1987 during the market crash. You probably get the point; these types of back-to-back declines normally occur during periods of intense market stress.
For an analysis of how the market performed following these periods, read today’s entire Morning Lineup.
For much more analysis of global equities and economic readings released this morning, read today’s full Morning Lineup with a two-week Bespoke Premium trial.
Bespoke Market Calendar — May 2024
Please click the image below to view our May 2024 market calendar. This calendar includes the S&P 500’s historical average percentage change and average intraday chart pattern for each trading day during the upcoming month. It also includes market holidays and options expiration dates plus the dates of key economic indicator releases. Click here to view Bespoke’s premium membership options.
Chart of the Day – April Review
Bespoke’s Morning Lineup – 5/1/24 – May Day
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“You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.” – Warren Buffett
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Many global markets are closed in observance of May Day today, and here in the US, most investors are close to crying “Mayday” after futures are firmly lower following yesterday’s sharp declines. It’s another busy day of earnings and economic data, and the big report overnight was from Amazon.com (AMZN) which is trading modestly higher. Several other smaller but notable companies like Super Micro Computer (SMCI), Starbucks (SBUX), and Skyworks (SWKS) are all trading lower, though. And that’s just the companies that begin with ‘S’! On the economic calendar, the ADP Payrolls report came in modestly higher than expected, but we still have JOLTS, ISM, and Construction Spending on deck. Also, don’t forget the Fed at 2 PM and Powell’s presser at 2:30.
April has historically been a positive month for stocks but not this year. The S&P 500’s 4.2% decline was only the weakest April since 2022 (-8.8%), but it was one of only seven Aprils since WWII where the S&P 500 declined more than 4%. Not only was the S&P 500 down in April, but it also broke a five-month streak of gains.
Five-month streaks of gains for the S&P 500 haven’t been uncommon. Since WWII, there have been 31 prior periods where the S&P 500 posted positive returns for five or more straight months. What made the recent streak unique is that every positive month was a gain of at least 1%, and there have only been nine of those since WWII.
In the charts below, we summarize the performance of the S&P 500 in the one, three, six, and twelve months following the first down month that ended prior streaks. While futures are lower this morning, and the S&P 500 is entering what has historically been a weak period in terms of returns, bulls can take some solace in the fact that median returns following the end of the prior 31 five-month winning streaks along with the median performance following five-month streaks of 1%+ gains have been better than the average for all one, three, six, and twelve month periods since WWII.
Speaking of a weak period for the market, like the recently ended streak, there have only been three other periods where the S&P 500 was up for at least five straight months and then declined in April. It’s a small sample size, but on a positive note, the S&P 500 was higher one, three, and six months later. One year later, though, performance was mixed with declines once, a paltry gain of just 2.4% another time, and a massive gain of over 22% following the streak that ended in April 1986.
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Chart of the Day – Here Comes May
Bespoke’s Morning Lineup – 4/30/24 – So Close
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“It was the best of times, it was the worst of times.” – Charles Dickens
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 were already lower ahead of the 8:30 release of the Employment Cost Index (ECI), and things have gotten worse since then as the report came in higher than expected (1.2% vs 1.0%). This year started with a high probability of multiple rate cuts as inflation was expected to decline. Now, the probability of even one rate cut has been marching toward zero as inflation remains stubbornly high. Still on the docket for today, we have the FHFA House Price Index at 9 Am followed by the Chicago PMI at 9:45 and Consumer Confidence at 10 AM. Outside of November 2023, which looks more and more like an aberration, the Chicago PMI has been below 50 since the fall of 2022, and with economists expecting a reading of 45.0 today, it’s not expected to get back into growth mode anytime soon.
After an impressive rally last week, push is coming to shove as the major averages face their first major test of the bounce in the form of the 50-DMA. While the S&P 500 finished the day higher yesterday, it didn’t quite have enough momentum to close back above its 50-DMA even though it traded briefly above that level intraday.
The picture for the Nasdaq looks similar as it closed just shy of its 50-DMA as well.
One reason for the S&P 500 and the Nasdaq not reclaiming their 50-DMAs is the fact that Microsoft (MSFT), the largest company in both indices, traded down 1% and finished close to its lows for the day.
It wasn’t all bad news from a technical perspective yesterday, though. After coming up just shy of the 50-DMA on Friday, the Philadelphia Semiconductor Index (SOX) opened just below that level on Monday and managed to break through to the upside on an intraday basis and remain there through the close.
While MSFT has been having its troubles recently, shares of Apple (AAPL) have caught a break over the last six trading days, and the former largest company in the world has rallied over 5% taking it back above its 50-DMA for the first time since late January ending what was the longest streak of closes below the 50-DMA since late 2015.
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Chart of the Day: AI Implementation Struggles
Bespoke’s Morning Lineup – 4/29/24 – Yo Yo Yen
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“Endure what is difficult to endure and to suffer what is difficult to suffer.” – Hirohito
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
It’s been a quiet start to the trading week as equity futures trade modestly higher and US Treasury yields are modestly lower. The only economic report on the calendar for the day is the Dallas Fed Manufacturing report which is expected to improve slightly from last month’s reading of -14.4. Just because the week is starting quietly, though, doesn’t mean it will stay that way. In terms of earnings, this week is the second busiest of the reporting period, and the economic calendar is also jam-packed with Consumer Confidence, both the ISM Manufacturing and Non-Manufacturing reports as well as the Employment report on Friday.
While Japanese equity markets were closed for Showa Day, the yen has seen some wild moves overnight. When FX markets opened for trading last night, the yen sold off hard and the USD/JPY cross quickly crossed above 160 for the first time since 1990. It didn’t stay at those levels for long, though, and buyers stepped in and the yen rallied. After briefly dropping below 155, the cross is currently trading right around 156. As shown in the chart below, after breaking above 152 just over a month ago, the yen has become unhinged.
It’s not often that the USD/JPY cross sells off more than 1% in a session and then reverses all those losses and more to finish the day with a rally of more than 1%. Since 1989, that’s only happened seven other times. In terms of where in the yen’s cycle the seven prior reversals have occurred, there hasn’t been a clear pattern. The two in the late 1990s came during periods of yen strength (decline in the USDJPY cross), but the more recent occurrences were all clustered right around the end of a sharp rally in the cross (weaker yen).
Continue reading today’s Morning Lineup.
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Bespoke’s Brunch Reads – 4/28/24
Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market-related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.
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On This Day in History:
AI & Technology
AI-powered cameras installed on Metro buses to ticket illegally parked cars (Los Angeles Times)
Los Angeles Metro is rolling out AI-powered cameras on its buses to monitor and ticket cars parked illegally in bus lanes. Developed by Hayden AI, these cameras are part of an effort to speed up bus service and make it more accessible, especially for passengers with disabilities who need clear paths to board. Starting with a summer test phase and a full launch expected by the end of 2024, the $11 million project will initially issue warning citations to help drivers adjust. To ensure fairness in enforcement, humans will view the videos to confirm violations before any tickets are issued. [Link]
NASA’s Voyager 1 Resumes Sending Engineering Updates to Earth (NASA)
NASA’s Voyager 1 is back online and sending data after a clever fix by the Jet Propulsion Laboratory team. They worked around a faulty computer chip by reconfiguring the spacecraft’s memory, allowing us to receive updates on its health and status again. This sets the stage for restoring the flow of scientific data. Meanwhile, its sibling, Voyager 2, is cruising along smoothly in interstellar space. [Link]
Elon Musk and SpaceX hit reusable-rocket milestone with Starlink satellite launch (MarketWatch)
Last week’s launch of 23 Starlink satellites marked a milestone as it marked the 300th time that SpaceX has landed a rocket booster back down on Earth after a launch. SpaceX has an ambitious schedule for 2024 with 12 launches planned per month.[Link}
Apple reportedly slashes Vision Pro headset production and cancels updated headset as sales tank in the US (PC Gamer)
Apple has reportedly halved production volumes of its Vision Pro mixed reality headset due to lower-than-expected demand, even before its international release. Analyst Ming-Chi Kuo suggests initial demand in the US was tepid, potentially leading to the cancellation of a planned 2025 update. The high price tag of $3,499 and the device’s bulky design likely deterred many potential buyers, despite its advanced technology and sleek interface. The limited appeal of the Vision Pro doesn’t necessarily reflect on the broader market for mixed reality and virtual reality headsets, as its high cost and size make it a niche product. [Link]
Environmental
Characteristics of Power Plants Seeking Transmission Interconnection (Berkeley Lab)
As of the end of 2023, nearly 12,000 projects, totaling 1,570 gigawatts (GW) of generator capacity and 1,030 GW of storage capacity, are actively seeking transmission interconnection in the United States. These projects, dominated by solar, storage, and wind technologies, represent the forefront of the nation moving in the direction of renewable energy. The report provides insights into the challenges of integrating such large-scale renewable resources into the grid, including increasing wait times in interconnection queues and low completion rates for proposed projects. [Link]
The world’s electric car fleet continues to grow strongly, with 2024 sales set to reach 17 million (IEA)
This year, EVs are making waves, with more than one in five cars sold globally expected to be electric. According to the IEA’s latest Global EV Outlook, we could see about 17 million EVs sold in 2024. The surge is driven by strong sales in China, the US, and Europe, where policies and lower battery costs are making EVs more appealing. If current trends and policies continue, half of all cars sold by 2035 might be electric. Under optimal conditions, this could jump to two-thirds, dramatically cutting down reliance on oil for road transport. [Link]
Investments
New York Stock Exchange tests views on round-the-clock trading (Financial Times)
A survey from NYSE suggests an interest in round-the-clock trading, as opposed to the 9:30 am to 4:00 pm window we operate in now. 24 Exchange, a startup backed by Steve Cohen, is seeking SEC approval to launch the first 24-hour exchange of its kind. Although he said his traders would adhere to the five-day workweek given regular market hours, Cohen also has invested in golf with the idea that it is only a matter of time before the four-day workweek becomes mainstream thanks to advancements in AI. [Link]
The Average Lifespan of an ETF Just Got a Little Shorter (Bloomberg)
The average lifespan of ETFs has shortened with the closures of two funds this week, the Defiance Israel Fixed Income ETF (CHAI) and the Opportunistic Trader ETF (WZRD). While CHAI struggled to attract assets despite initially strong demand, WZRD garnered $25 million in just one month but still plans to shut down. The closures highlight the challenges and concentration in the ETF industry, particularly in the active ETF market where a few issuers dominate. Investors tend to favor more passive ETFs with strategies closely resembling their benchmarks. In other news, certain ETFs face outflows as geopolitical tensions ease and hopes for Fed interest-rate cuts diminish. [Link]
Policy
Trump Allies Draw Up Plans to Blunt Fed’s Independence (WSJ)
Although no one specifically is quoted in the article, allies of Donald Trump are “reportedly” devising proposals to diminish the Fed’s independence if he secures a second term. Suggestions range from giving Trump a say in interest-rate decisions to subjecting Fed regulations to White House review. Some even propose that Trump has the authority to replace Jerome Powell as Fed chair before his term ends in 2026. While Trump hasn’t finalized his approach to the Fed, he’s expressed interest in reshaping its leadership. However, these efforts face legal and institutional challenges, with some Republican lawmakers expressing opposition to presidential interference in monetary policy. [Link]
Population Trends
U.S. birth rate drops to record low, ending pandemic uptick (CBS News)
The birth rate in the US continues to decline, reaching a new record low in 2023, according to the latest CDC report. Approximately 3.6 million babies were born last year, marking a 2% decrease from 2022. This downturn ends a brief rise in births observed during the COVID-19 pandemic. If current trends continue, the US population could shrink without increased immigration or other demographic changes. Teen birth rates have also started to plateau, and cesarean delivery rates have increased. [Link]
Economic Trends
I made $70K selling NYC restaurant reservations — and I don’t even live in New York (New York Post)
Securing restaurant reservations in NYC has become fiercely competitive. A college student earned $70,000 last year by selling reservations for places like Ralph Lauren’s Polo Bar. Reservation resale platforms are also thriving, with one reportedly making $6 million last year. Celebrities like Justin and Hailey Bieber reportedly use these services, with fees ranging from $500 to $1,000. Despite the profits, restaurants are struggling with fake reservations and bots, affecting their business and accessibility for regular patrons. [Link]
US agency poised to ban worker ‘noncompete’ agreements (Reuters)
The FTC recently approved a rule to ban employer noncompete agreements. The decision is intended to promote worker mobility and potentially boost wages by up to $488 billion over the next decade. It also anticipates the creation of over 8,500 new businesses annually. The rule, set to take effect in August, has stirred much debate. Supporters argue it frees workers from restrictive practices that limit job opportunities and suppress wages, especially in lower-wage industries. However, critics, including some major business groups, argue that the rule oversteps legal boundaries and could harm the economy by making it harder to protect trade secrets. [Link]
Vacancies are a Red Herring (Ned Resnikoff)
When discussing housing and homelessness, a common question arises about utilizing vacant apartments to solve the crisis. However, this notion oversimplifies the issue, as many vacancies are short-term or involve newly built, unoccupied units. Moreover, studies indicate that homelessness rates are highest in cities with the lowest vacancy rates, suggesting that a lack of available housing, rather than artificially withheld units, exacerbates both high housing costs and homelessness. Therefore, truly addressing the crisis requires the construction of more affordable housing, not just reallocating existing spaces. [Link]
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