Small and mid-caps have surged in the past week as the Russell 2000 (IWM) and Core S&P Mid-Cap (IJH) gained well over 2%. These strong gains came in spite of their sideways trends; except for the Russell Mid-Cap (IWR) which saw more middling gains and is also in an uptrend.  Last week’s gains also resulted in sizable movements within each ETFs’ respective trading ranges.  While they were in neutral territory last week, many have moved to overbought levels.  Although it has gotten close, the only one of the index ETFs not at overbought levels the Micro-Cap (IWC).

No major index ETFs finished lower last week, but the Dow (DIA) was a significant laggard with a gain of only 15 bps. While DIA underperformed (largely due to Boeing), the Nasdaq 100 (QQQ) surged 2.24% and the S&P 500 (SPY) rallied 1.63%.  Whith these gains, the S&P 500 and Nasdaq managed to finish last week at new all-time highs, but the Dow still has some progress to make until it can do the same. Start a two-week free trial to Bespoke Institutional to access our Trend Analyzer and much more.

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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Food

No One Knows Why a Mystery In-N-Out Burger Was Found Abandoned in Queens, 1,500 Miles from Home by Morgan Phillips (Mediaite)

How on earth did a fresh In-N-Out Burger make it from Kansas City (if not much further afield) to the streets of Queens early in the morning? [Link]

Chicago’s Real Signature Pizza Is Crispy, Crunchy, and Nothing Like Deep Dish by Jason Diamond (Bon Appétit)

You’ve been getting pizza all wrong. Specifically, the thick, deep dish sausage and cheese cakes are less genuine than thin, cheap, and crunchy bar snacks. [Link]

Investing

The Patsy, Revisited by Rusty Guinn (Epsilon Theory)

An ode to the combined importance and utter impossibility of knowing who else owns the assets you own, be they stocks, bonds, or anything else. [Link]

The Cannabis Opportunity by Meb Faber (Meb Faber Research)

A long read on the investing approach that might lead to owning cannabis stocks and why that bet may well be correct in the long term. [Link]

Mercy Withheld

Businessman: Wyoming Valley West board president denied 22K school lunch debt donation offer by Bob Kalinowski (The Citizens’ Voice)

After a Pennsylvania school board received national attention for its zero-tolerance approach to school lunch debt, a Philadelphia businessman offered to cover the debt but was rebuffed by school board officials. [Link]

Trump administration proposed rule would cut 3 million people from food stamps by Tom Polansek and Humera Pamuk (Reuters)

In 43 states, residents can become eligible for SNAP (commonly referred to as food stamps) if they already qualify for another benefit program, the Temporary Assistance for Needy Families. A new rule would end that practice. [Link]

Media

Inside the Democrats’ Podcast Presidential Primary, Where Marianne Williamson and Andrew Yang Rule by Oar Sanchez (The Wrap)

With more than 20 Democrats running for the top of the Presidential ticket, they’ve collectively logged more than 1200 podcast appearances. [Link]

22 Books That Expand Your Mind and Change The Way You Live by Darius Foroux (Pocket)

A range of interesting reads ranging from novels to history to philosophy that open up new worlds for readers. [Link]

The moon landing was a giant leap for movies, too by Jake Coyle (AP)

Touching down on the moon stimulated the national imagination in all kinds of ways, but the wave of movies before and after the moon landing drove a public fascination with space that has continued to this day. [Link]

Autos

Citroën Sabotaged Wartime Nazi Truck Production in a Simple and Brilliant Way by Jason Torchinsky (Jalopnik)

One small change to oil dipsticks meant French-produced trucks broke down at the worst times, but it was such a small change that it was easy to effect and basically undetectable. [Link]

Ford F-150 EV pickup prototype tows more than 1 million pounds by Dalvin Brown (USA Today)

An electric version of Ford’s classic pickup has demonstrated epic torque capable of moving a million pounds 1000 feet, a performance that would be literally impossible with traditional fuels. [Link]

Regulation & Competition

Equifax Data Breach Settlement (Federal Trade Commission)

A settlement with the FTC has created a series of benefits for the nearly 150mm consumers impacted by the Equifax Data Breach. [Link]

Justice Department to Open Broad, New Antitrust Review of Big Tech Companies by Brent Kendall (WSJ)

Facebook, Google, Amazon, and Apple are all in the crosshairs of Washington, reversing a light-touch regulatory approach to competition that has prevailed inside the Beltway for years. [Link; paywall]

Asia

In Hong Kong Protests, Faces Become Weapons by Paul Mozur (NYT)

In a war fought between protestors and authorities, identification and correlation between what’s said online and offline are key battlegrounds. [Link; soft paywall]

The #NoMarriage Movement Is Adding to Korea’s Economic Woes by Jihye Lee (Bloomberg)

Korea’s government has tried to boost birth rates, but more citizens are dying than being born, but many women feel the patronizing and sexist approach is making motherhood even less attractive. [Link; soft paywall, auto-playing video]

Wealth

Billionaire Behind Victoria’s Secret Built His Version of the American Heartland by Sophie Alexander (Bloomberg)

There’s a certain kind of rich that sparks a taste for buying things far beyond what most can imagine. For instance: an entire town. [Link; soft paywall, auto-playing video]

Yacht Owners Ditch Life on Land for the High Seas by Emily Nonko (WSJ)

For some retirees, no fixed address and constant access to the open ocean means cutting ties with land and moving permanently into the nautical world. [Link; paywall]

Economics

Why dynamic and personalized pricing strategies haven’t taken over retail — yet by Ben Unglesbee (Retail Dive)

E-commerce has allowed companies to show consumers different prices in order to maximize the revenue from sales, but there still isn’t much of that in the real world. [Link]

Internal Trade in Canada: Case for Liberalization by Jorge Alvarez, Ivo Krznar, and Trevor Tombe (IMF)

A quantification of the barriers to trade between Canadian provinces, which unlike American states are not governed by a uniform commercial scheme. [Link]

Sports

The World’s 50 Most Valuable Sports Teams 2019 by Kurt Badenhausen (Forbes)

More than half of the most valuable franchises are American football teams, which are magnets for valuation in a way that global soccer teams just can’t manage to match. [Link]

Central Banking

The New York Fed Has a Black Swan Hunter by Craig Torres (Bloomberg)

A special unit inside the New York Fed is charged with questioning orthodoxy, arguing against convention, and trying to pick out the biggest threats to the economy before they become visible. [Link; soft paywall]

Swiss policymakers caught in crossfire over franc by Eva Szalay (FT)

Efforts to reduce the value of the Swiss franc may catalyze an international reaction against the exchange rate-obsessed Swiss National Bank. [Link; paywall]

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Have a great weekend!

The Chicago Fed’s National Activity Index kicked off this week’s busy macroeconomic data slate on a disappointing note with a still negative reading that was below forecasts. Weak data continued to come in on Tuesday with FHFA home price growth slowing to 0.1% and the Richmond Fed Manufacturing index reaching a multi-year low.  Existing Home Sales also came in weaker.  Preliminary Markit PMIs released on Wednesday came in below estimates and weaker than the previous month while the services portion saw the opposite results. The release of preliminary Durable Goods and Capital Goods on Thursday came in much stronger than both expectations and the May release.  Meanwhile, weekly labor data once again came in at a multi-month low.  We ended the week with stronger than expected GDP data, but it still showed the economy slowed versus the first quarter. Overall, economic data didn’t have the greatest of weeks with over half of the indicators released weakening or coming in below estimates.

Next week is a busy one when it comes to macroeconomic developments. The week starts off quiet with only the Dallas Fed’s Manufacturing Activity Index out on Monday.  It is expected to rebound to -5 off its multiyear low of -12.1 from its June release.  Things pick up on Tuesday with the release of personal income and spending data which are forecast to fall 0.1%. PCE data, Pending Home Sales, and consumer confidence will also be out that day. Ahead of Friday’s Nonfarm Payrolls report, which is expected to show 170K added jobs in July, on Wednesday ADP will release their own employment data. Also on Wednesday, there will be an FOMC rate decision followed by a presser by Fed Chair Powell.  Markets are anticipating a 25 bps cut in this meeting. After digesting the results of this meeting, on Thursday ISM will release their manufacturing report for July.  In addition to the NFP report, the release of the June trade balance, factory orders, and the University of Michigan’s sentiment data will all round out the week on Friday.   Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

After collapsing below 25% at the start of June, bullish sentiment had rebounded for six consecutive weeks, but this week’s release of the AAII survey snapped that streak.  The percentage of bullish investors dropped to 31.74% from 35.93% last week.  This comes despite the major indices once again reaching all-time highs yesterday (which admittedly would have little effect on the survey due to timing) and earnings season kicking off to a solid start with rising beat rates and guidance spreads. While this was the biggest drop in bullish sentiment since May, it has not brought the indicator to any sort of extreme low, but it has now been below its historical average for 11 consecutive weeks. While that may sound like a long streak, in the history of the survey—going back to 1987—there have been 19 other such streaks; six of which continued on for twice as long.

Whereas bullish sentiment fell, bearish sentiment picked up.  Bears now outnumber bulls with 32.02% of investors reporting as bearish versus last week’s 28.64%. This is the first time that bears have outnumbered bulls since late June when a streak of nine straight weeks of this came to an end. Bearish sentiment has also now moved back above the historic average of 30.33% after staying below for two weeks. Before that, bearish sentiment was above average for 8 straight weeks.

Although bears outnumber bulls, neutral is still the predominant sentiment level at 36.24%. For a solid chunk of this year—16 of 30 weeks—those reporting as neutral have outnumbered both bulls and bears. That is already more than the entirety of 2018 (14 weeks) and is closing in on that count for 2017 (18 weeks).  Neutral sentiment continues to stay in a fairly tight range as it has for most of the year. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.