Bespoke Brunch Reads: 4/7/19
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.
While you’re here, join Bespoke Premium for 3 months for just $95 with our 2019 Annual Outlook special offer.
Autos
EVs Not Easier to Build, But Will Cut Jobs by John McElroy (Ward’s Auto)
While electric vehicles likely require less manpower to assemble due to less complex parts layouts, certain stages of the construction are extremely complicated and therefore overall construction isn’t dramatically faster. [Link]
Capital junkie (Reuters Breakingviews)
A free e-book capturing the life of former Fiat-Chrysler CEO Sergio Marchionne, who died at 66 this year. He turned around two different venerable brands that had collapsed. [Link]
Real Estate
He bought the fencing coach’s house. Then his son got into Harvard by Joshua Miller (Boston Globe)
A home belonging to Harvard’s fencing coach was assessed at $550,000, but sold for almost twice that price. The buyer’s son ended up being admitted as a student athlete on the fencing team. [Link]
50 Cent Sells Massive Connecticut Compound for 84% Less by Katherine Clarke (WSJ)
Curtis Jackson bought Mike Tyson’s 50,000 square foot, 52-room mansion for $4.1mm, then listed it in 2007, but only managed to sell it recently for $2.9mm. [Link; paywall]
Enthralling Essays
The Girl on the Train (Erynn Brook)
A heartbreaking recounting of a young woman suffering from seizures on the train, and the stranger that took some time out of her day to make sure the woman got home safely. [Link]
Heaven or High Water by Sarah Miller (Popula)
A dispatch from the future front lines of rising seas. In Miami a booming real estate market is operating under the assumption that all will be well, contrary to every model scientists produce. [Link]
Apparel
1 big thing: 🏀 The race to sign Zion by Kendall Baker (Axios)
Following the explosive demise of Zion Williamson’s shoe against UNC earlier this year (with his knee taking some collateral damage as well), will Nike be able to sign him? [Link]
Patagonia Is Cracking Down on the Wall Street Uniform by Kim Bhasin (Bloomberg)
Logo vests are a classic uniform of the financial and technology industries, but the biggest name in the sleeveless insulator game is pulling back. [Link]
Dodgy Wellness
Residents concerned about DNA-for-cash transactions in Louisville by Phylicia Ashley (Wave 3)
Louisville residents have reportedly been selling their DNA to a group posing as employees of a health care company, raising $20 from a cheek swab. [Link]
Does Your Smartphone Know if You’re Depressed? by Sumathi Reddy (WSJ)
Can “artificial intelligence” (note: not actual artificial intelligence) help guard against the advance of depression? [Link; paywall]
Legislation Laxly
You elected them to write new laws. They’re letting corporations do it instead. By Rob O’Dell and Nick Penzenstadler (USA Today)
A fascinating review of how much model legislation (bills written by outside interests of various types) has worked its way into legal codes as legislators outsource their jobs of legislating to industry or other parties interested in a specific outcome. [Link]
Feline Foibles
There Is Now Scientific Proof Your Cat Is Ignoring You by Brianna Abbott (WSJ)
While cats simply refuse to come when called – unlike loyal canine companions – they almost certainly know and recognize the names that we give to them. [Link; paywall]
Checkmate
How chess became a pawn in the Kremlin’s power game by Sam Jones (FT)
While chess is obviously a near-perfect expression of strategy, who would have thought the World Chess Federation would be a high stakes venue for geopolitical intrigue? [Link; paywall]
Tech Dystopia
YouTube Executives Ignored Warnings, Letting Toxic Videos Run Rampant by Mark Bergen (Bloomberg)
YouTube is likely to generate $16bn in revenue this year, but its effort to grow viewership and generate ad sales has led it to repeatedly host conspiracy theories and even worse. [Link; soft paywall]
Gender Wage Gap
A stunning chart shows the true cause of the gender wage gap by Sarah Kliff (Vox)
A new study shows that the entire gender wage gap amongst parents comes from the year surrounding the birth of their first child, resulting in 20% less earnings over the course of a career. [Link]
Read Bespoke’s most actionable market research by joining Bespoke Premium today! Get started here.
Have a great weekend!
Jobs Growth Slows, But Only A Little Bit
Today’s job numbers beat expectations, with 196,000 jobs added and a small positive revision to the prior two months. On a rolling 3 month average, job creation fell to the lowest level in over a year, but only marginally. While jobs growth is still solid, it has cooled a bit. That isn’t anything to worry about, but it is something to keep an eye on.
Start a two-week free trial to Bespoke Premium to access our interactive research portal. You won’t be disappointed!
Wage growth picked up dramatically last year, with 2016-2018’s sideways movement in the year-over-year change of average wages paid surging. Over the last few months that growth has once again been moving sideways, albeit at a much higher rate of growth than we’ve seen for almost all of the current economic expansion.
The Bespoke Report — Second Quarter Chart Checkup
Following big market moves like we have seen in the last six months, a number of market characteristics tend to change as some new leadership groups emerge and others fall by the wayside. In order to help get a better idea of what sectors and groups have been driving the market, in this week’s Bespoke Report, we are providing a ‘chart checkup’ of all the S&P 500 Industries as well as providing updates to some key market and economic charts that we feel are important to highlight.
It was a banner week for US equities and a great encore to a strong first quarter. With the exception of the Dow (DIA), every major index ETF was up over 2%. Value outperformed growth across all three market caps, but the margin between the two was pretty narrow. Defensive sectors like Consumer Staples (XLP) and Utilities (XLU) actually saw modest declines this week, while Materials (XLB), Financials (XLF), Communication Services (XLC), and Consumer Discretionary (XLY) all rallied over 3%. In international markets, China (ASHR) surged over 7%, while Mexico (EWW) bounced over 5%. Australia (EWA) was the only country up less than 1%. Fixed income ETFs saw modest declines across the board.
This week’s report is loaded with over 95 pages of charts and tables analyzing the various market moves. To read the Bespoke Report and access everything else Bespoke’s research platform has to offer, start a two-week free trial to one of our three membership levels. You won’t be disappointed!
The Closer: End of Week Charts — 4/5/19
Looking for deeper insight on global markets and economics? In tonight’s Closer sent to Bespoke clients, we recap weekly price action in major asset classes, update economic surprise index data for major economies, chart the weekly Commitment of Traders report from the CFTC, and provide our normal nightly update on ETF performance, volume and price movers, and the Bespoke Market Timing Model. We also take a look at the trend in various developed market FX markets.
The Closer is one of our most popular reports, and you can sign up for a free trial below to see it!
See tonight’s Closer by starting a two-week free trial to Bespoke Institutional now!
Chart of the Day: Constructive Signs from DocuSign (DOCU)
Singapore Equity ETF (EWS) on Fire
Below is a snapshot of the most overbought country stock markets right now using our Trend Analyzer tool (available to Premium and Institutional members).
As shown, there are seven countries whose markets are now in extreme overbought territory, meaning they’re more than two standard deviations above their 50-day moving averages. The Singapore equity market ETF (EWS) is the most overbought country right now as it’s three standard deviations above its 50-DMA. Other countries trading at extreme levels include Taiwan (EWT), Japan Hedged (DXJ), Sweden (EWD), Belgium (EWK), Hong Kong (EWH), and China (MCHI).
Below is a chart of the Singapore ETF pulled from our Chart Scanner tool. While the ETF is at extreme overbought levels relative to its 50-day moving average, it’s still well below its highs from 2018. And while the ETF may be due for some short-term downside mean reversion, its breakout above resistance at $24 this week should set the stage for newfound support as it trends higher. This chart looks pretty bullish in our view.
Bespoke Consumer Pulse Report — March 2019
Bespoke’s Consumer Pulse Report is an analysis of a huge consumer survey that we run each month. Our goal with this survey is to track trends across the economic and financial landscape in the US. Using the results from our proprietary monthly survey, we dissect and analyze all of the data and publish the Consumer Pulse Report, which we sell access to on a subscription basis. Sign up for a 30-day free trial to our Bespoke Consumer Pulse subscription service. With a trial, you’ll get coverage of consumer electronics, social media, streaming media, retail, autos, and much more. The report also has numerous proprietary US economic data points that are extremely timely and useful for investors.
We’ve just released our most recent monthly report to Pulse subscribers, and it’s definitely worth the read if you’re curious about the health of the consumer in the current market environment. Start a 30-day free trial for a full breakdown of all of our proprietary Pulse economic indicators.
Sector Check-Up — Consumer Discretionary, Materials Now Most Overbought
Below is a quick-and-easy way to see where US sectors are trading using our Trend Analyzer tool (available to Premium and Institutional members).
As of this morning, the two most overbought sectors were Consumer Discretionary (XLY) and Materials (XLB), which are both trading in extreme territory (more than two standard deviations above their 50-DMAs).
Every single sector is back above its 50-day moving average as of this writing, but Health Care (XLV) is barely hanging on above its 50-DMA and is lagging pretty badly.
After viewing sectors in our Trend Analyzer tool, you can take a deeper dive into each one with our Chart Scanner that’s available to Institutional members. Below are screenshots of US sector ETFs from our Chart Scanner this morning. You can see that Materials (XLB) has experienced a massive breakout this week above a tight sideways range it had been in over the last month or so. The next stop for Materials will be new six-month high if it can keep up the momentum.
Consumer Discretionary (XLY) has also been rallying and now sits in extreme overbought territory. Another day of gains and Consumer Discretionary will make a 52-week high.
Start a two-week free trial to Bespoke Premium to access our interactive research portal. You won’t be disappointed!
Oil, Ag, Base Metals Overbought; Nat Gas, Precious Metals Oversold
You can quickly pull up trend and timing info for commodity ETFs using our Trend Analyzer tool (available to Premium and Institutional members). Below is a snapshot from the tool as displayed this morning. Interestingly, all of the ETFs are either overbought or oversold, with none in neutral territory.
The Agribusiness ETF (MOO) is the most overbought and the only one in “extreme” territory, meaning it’s more than two standard deviations above its 50-day moving average. Next up is the United States Oil ETF (USO), which is right near extreme territory. As shown, USO is up 33.75% year-to-date and it’s 8.98% above its 50-day moving average. USO ranks first in terms of YTD performance and distance above 50-DMA compared to all other commodity ETFs.
All of the overbought commodity ETFs are related to oil, agriculture, or base metals. On the oversold side, it’s natural gas (UNG) and all of the precious metals like gold (GLD), silver (SLV), and DBP.
The oil ETF (USO) has been on a tear since it bottomed at the end of 2018. You can pull up charts for ETFs and individual stocks using our Security Analysis tool (available at the Bespoke Institutional level). Below is a quick snapshot of USO from our Security Analysis tool. The chart includes volume as well, and volume on up days is shaded green, while volume on down days is shaded red. Just this week, USO moved back above its long-term 200-day moving average. Compared to the death spiral that USO experienced last year, 2019 has been quite the opposite.
Start a two-week free trial to Bespoke Premium to access our interactive research portal. You won’t be disappointed!
Morning Lineup – Quiet Ahead of Jobs
We’ve just published today’s Morning Lineup featuring all the news and market indicators you need to know ahead of the trading day. To view the full Morning Lineup, start a two-week free trial to Bespoke Premium.
Here’s a snippet from today’s report:
Ever since it moved back out of inversion last week, the yield curve has taken a back seat in the conversation. Currently, the spread between the 10-year and 3-month US treasuries is at 12 basis points, and if you look at the chart below, you can see that it has been trying to hook higher in the last couple of days. Where it goes in the short-term, though, is likely to be guided by today’s Non-Farm Payrolls report. A much better than expected reading will likely move the curve even steeper and dismiss further concerns over inversion, while a weaker than expected print has the real potential to move us much closer back to inversion and bring those concerns back to the fore.
Start a two-week free trial to Bespoke Premium to see today’s full Morning Lineup report. You’ll receive it in your inbox each morning an hour before the open to get your trading day started.