Brunch Reads – 4/6/25
Welcome to Bespoke Brunch Reads — a linkfest of some of our favorite articles 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.
The Golden Sponge Cake: On April 6, 1930, in River Forest, Illinois, James Dewar, a baker for Continental Baking Company, noticed that the machine used to make strawberry shortcake sat idle outside of strawberry season. Dewar wanted to put the machines to good use and came up with the idea of injecting sponge cakes with cream filling, so they no longer depended on the strawberry growing season. The first version used banana cream but later switched to vanilla during a banana shortage in WWII. Dewar would name his newly invented snack the Twinkie, which was inspired by a billboard for Twinkle Toe Shoes. The rest, as they say, is history.
AI & Technology
Something Bizarre Is Happening to People Who Use ChatGPT a Lot (Futurism)
A new study by OpenAI and MIT Media Lab found that the heaviest ChatGPT users are showing signs of addiction. They are obsessing over the bot, feeling withdrawal, and even treating it like a friend. Surprisingly, users who engage in emotional or personal conversations with the chatbot are less likely to form unhealthy attachments than those who use it for work or brainstorming. The longer people use it, the more emotionally entangled they tend to get, especially if they’re lonely or lacking social support in real life. [Link]
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The Bespoke Report – 4/4/25 – “Houston, We Have a Problem”
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Bespoke’s Morning Lineup – 4/4/25 – Thank You Sir, May I Have Another
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.
“There is nothing more corrupting, nothing more destructive of the noblest and finest feelings of our nature, than the exercise of unlimited power.” – William Henry Harrison
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
There’s nothing to say this morning except it’s bad out there. Yesterday was an awful day and today isn’t looking much better. In some cases, it’s even worse given the scope of the declines in other areas of the market outside of US equities. Foreign equities are plunging, credit spreads are blowing out, commodities are sharply lower, the VIX is above 45, and the 10-year treasury is comfortably below 4%. The President and his administration wanted lower yields, and they got them. Whether they intended to get here the way we did, we don’t know. We’ve seen a lot over the years, but nothing quite like this.
Yesterday’s nearly 6% decline in the Nasdaq was the largest since March 2020 and the 47th decline of 5%+ in the index’s history. The charts below show the Nasdaq’s daily change over time (top chart) while the second chart shows each occurrence of a 5%+ decline over time. A large share of these declines came during the dotcom bust as there were 20 in the two years from 2000 to 2001 alone while another ten were in 2008.
The Closer – Blood Bath, Small Cap Bear, Dollar Drop – 4/3/25
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, after a brutal session on Wall Street, we begin with a rundown of performance across assets (page 1) including a look at the Russell 2,000 entering a bear market (page 2) and the historic daily decline in the US dollar (page 3). We then dive into the conflicting signals in the latest labor market data (pages 4 and 5) before finishing with an update on the housing market (page 6).
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Q1 2025 Earnings Conference Call Recaps: Lamb Weston (LW)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers Lamb Weston’s (LW) Q3 2025 earnings call.
Lamb Weston (LW) is one of the world’s leading producers of frozen potato products, best known for supplying French fries and related items to restaurants, food service distributors, and retailers across North America and internationally. With deep relationships in the quick-service restaurant (QSR) space and strong product innovation (like fridge-stable fries and cheese-filled potato bites), LW offers a unique window into global food service demand and consumer dining behavior. The company’s success hinges on agricultural planning, global logistics, and its ability to anticipate shifts in food consumption trends. This quarter reflected solid volume growth amid a tough macro backdrop. Volume rose 9% as the company regained lost ERP-transition customers and won new contracts, including a national rollout with a large QSR chain. Still, restaurant traffic remains weak. US QSR burger traffic fell 6% in February. Elevated inventories prompted line curtailments, hurting gross margins through higher cost absorption. A partnership with AlixPartners is driving a company-wide transformation, targeting cost, operational, and strategic improvements. Meanwhile, potato acreage was reduced due to soft demand, and tariff risks loom though near-term impacts are minimal. The stock resisted the broader selloff and rose more than 10% on 4/3 with better-than-expected results…
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Chart of the Day – 3%+ Downside Gaps
Bespoke’s Morning Lineup – 4/3/25 – The Pendulum Swings the Other Direction
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.
“The signing of this act is a momentous occasion in the world’s quest for enduring peace.” – Harry Truman
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
77 years ago today, President Truman made the comments above about his signing the Economic Assistance Act, better known as the Marshall Plan, into law. The Marshall Plan’s primary purpose was to help Western and Southern European countries recover from World War II by rebuilding cities and industries devastated by the war, removing trade barriers between European countries, and creating a more conducive environment between Europe and the US.
By almost all accounts, the Marshall Plan was a big success. But just one day shy of 77 years later, President Trump declared “Liberation Day” and signed an executive order instituting new punishing tariffs on countries around the world. While the tariffs were referred to as reciprocal, the levels were shocking and sent stocks plunging after hours.
Arguments can be made that other countries have been ripping the United States off by charging high levels of tariffs to US exporters. Unlike the Marshall Plan, though, which was meant to aid international economies and foster open trade between countries (even if they placed the US at a disadvantage), last night’s executive order did the opposite. The tariffs enacted by “Liberation Day” will enact a slew of protectionist policies for domestic industries and restrict international trade. If the Marshall Plan was a helping hand to the rest of the world, “Liberation Day” is a big middle finger.
What’s most ironic about last night’s tariff announcements and the rhetoric we’ve heard since Trump came into office is that while the President says he is acting to help US companies, it’s the US stock market that is down the most. The table below shows the performance of the ETFs that track the ten largest global economies. For each one, we show their YTD performance through yesterday’s close and then where they’re trading this morning. Heading into yesterday’s tariff announcement, the US was already the worst performing of the ten largest global economies, and since the announcement last night, the S&P 500 is off 3.4%, as measured by SPY, while none of the other nine ETFs are down as much.
With global markets lower and US futures sharply lower, the S&P 500, as proxied by the SPDR S&P 500 ETF (SPY), is on pace to break below the lows from earlier this week. The next level of potential support is the post-Labor Day September lows and then the lows from last August. That said, markets are rudderless at this point as the level of tariffs outlined last night will only exacerbate consumer and investor concerns about the outlook and create more uncertainty.
Today’s decline will be SPY’s seventh straight downside gap at the open. That ranks as the longest streak since early 2016 and is only one of only seven streaks with as many or more consecutive days of negative selling pressure at the open. The longest streak was ten days in August 2015.
The Closer – Liberation Day – 4/2/25
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we kick off with a recap of “Liberation Day” (page 1) followed by a look into the Nasdaq’s intraday strength (page 2). We then review the latest vehicle sales data (page 3) including a brand by brand breakdown and auto stock performance (page 4). We then look at the latest employment data (page 5) and petroleum stockpile readings (page 6).
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!
Chart of the Day – Airlines Falling Out of the Sky
Bespoke’s Morning Lineup – 4/2/25 – “Liberation Day”
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.
“There is no terror in the bang, only in the anticipation of it.” – Alfred Hitchcock
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 S&P 500 put in a closing low on March 13th that established the first major low of this correction. So far, we’ve managed to hold above that level, but it’s the one to watch going forward. A close below the 3/13 low will mark a resumption of the downtrend that’s in place. For bulls, the next step in breaking the downtrend would be a close above last Tuesday’s high and then a series of higher highs and higher lows that eventually takes the index to new all-time highs. You can see the process that played out when we had the last major pullback in July/August in the chart below:
