May 9, 2025
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“If it’s in the papers, it’s in the price.” – Bill Miller
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Yesterday was the last big day for earnings season with roughly 200 companies posting Q1 numbers. For the next couple of weeks until Walmart (WMT) and NVIDIA (NVDA) wrap things up, we’ll see fewer than 30-40 reports per day.
While we saw a large percentage of companies cutting or pulling guidance in the early weeks of this earnings season in mid-April, things have taken a much more positive turn this month. The big uptick in positive guidance that we’ve seen so far in May has been enough to flip the guidance spread (% of companies raising minus lowering guidance) positive for the full earnings season. Of the 1,551 companies that have reported since the season began on April 10th, 6% have raised guidance versus 5% that have lowered. At the same time, 70% of companies have beaten consensus analyst EPS estimates, while 64% have beaten sales estimates. Q1 has basically been an average to slightly better-than-average earnings season during a period where market volatility and “uncertainty” raged due to President Trump’s tariff policy. In terms of share-price reactions, the average stock that has reported has averaged a one-day gain of 0.34% in reaction to the news. That’s very positive relative to history as well.
Feb 23, 2025
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.
Raising the Flag on Iwo Jima: On the morning of February 23rd, 1945, five days into one of the bloodiest battles of World War II, a small group of US Marines from the 2nd Battalion, 28th Marine Regiment, 5th Marine Division, began their ascent up Mount Suribachi, the dominant high ground on the island of Iwo Jima. The battle for the island had already claimed thousands of lives, and Japanese forces, deeply entrenched in bunkers and tunnels, continued to resist fiercely.
The Marine eventually reached the summit and hoisted a small American flag. Associated Press photographer Joe Rosenthal was there to capture what would become one of the most iconic images in American history. His photo of six Marines raising the flag, five Marines and one Navy corpsman, immortalized not just a military victory but grit and sacrifice. Rosenthal’s photo won a Pulitzer Prize and later inspired the Marine Corps War Memorial in Arlington, Virginia. But for the men who raised the flag, three of whom never left the island alive, the moment was less about glory and more about survival.
Economic Trends
With Falling U.S. Sales, Companies Are Trying to Hit the Sweet Spot for Prices (WSJ)
Companies are scrambling to keep shoppers happy as people get pickier about where their money goes. Reynolds American is pushing cheaper Newport packs, PepsiCo is tweaking chip sizes so people can buy more or less depending on their cash flow, and Estée Lauder is trying to revive sales with everything from budget-friendly makeup to $1,000 perfumes. It’s less about slashing prices and more about convincing shoppers they’re getting the most bang for their buck, whether that’s stronger trash bags, more concentrated cleaners, or luxury beauty products that feel worth the splurge. [Link]
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Nov 5, 2024
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“The ignorance of one voter in a democracy impairs the security of all.” – John F. Kennedy
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 finally over. The votes are counted, and the results are in. In the words of one CEO involved, “While the past few months have been difficult for all of us, we are all part of the same team. We will only move forward by listening and working together.” Yes, the Boeing strike is over. Wait, you didn’t think we were talking about the election? For that, the votes are still coming in and need to be counted, and one thing we can be confident of is that once we do finally have a winner, there will be very little ‘listening’ and ‘working together’ with the other side. Not if past experience is any indication of future results!
Heading into today’s session, equity futures are modestly higher. Outside of Palantir (PLTR) which is up by double-digit percentages, much of the earnings news overnight was weak, and this morning’s only economic report is ISM Services which is forecast to come in at 53.8 from 54.9 in September. Europe and Asian markets were mostly higher overnight, while Treasury yields and crude oil have also joined in on the upside.
If the betting market odds are to be believed (big if) when the dust all settles, former President Trump will be the 47th President, Republicans will take over the Senate, and Democrats will retake control of the House. Wouldn’t that be an interesting mix?
Based on numbers from electionbettingodds.com, there have been some notable moves in the betting markets over the last few weeks. After trailing late in the summer and into early September, former President Trump saw his odds steadily improve from around 45% in mid-September to roughly 63% in late October. From there, VP Kamala Harris saw her odds rebound briefly into this past weekend, but as we headed into Election Day, her odds have pulled back again and now stand at 41.0% versus 58.5% for Trump. While a nearly 20-point gap in the betting markets looks wide, it’s a smaller lead than it seems and indicates only a modestly better than coin-flip chance in favor of the former President. Nothing is close to guaranteed at this point.
As Trump’s odds rallied from mid-September before peaking out in late October and subsequently pulling back into the weekend, there were also some notable moves in the equity market. The table and chart below compare sector performance from 9/18 to 10/29 (when Trump’s odds were improving) to performance from 10/29 to 11/4 (when Harris’ odds rallied).
When the market started to price in a Trump win sectors like Technology, Communication Services, Financials, Consumer Discretionary, and Industrials all rallied over 3% while Health Care, Consumer Staples, and Real Estate fell over 1%. When Harris’ odds started to improve, Energy was the only sector with gains (1.82%) while Technology was the worst-performing sector. As shown in the scatter chart, it’s not a perfect relationship but many of the best-performing sectors during the period when Trump’s odds were rising were some of the weaker performers when Harris’ odds improved and vice versa.
Before finishing, we wanted to leave off with one last snapshot of sector performance heading into the election results from our Trend Analyzer. It’s a mixed picture. Most sectors are down over the week, and while there were four overbought and two oversold sectors a week ago, today, Communication Services is the only overbought sector while Consumer Staples, Health Care, and Real Estate are all oversold. Relative to their 50-day moving averages, six sectors are above and five are below. You can’t get much more neutral than that! Don’t forget to vote.
Oct 2, 2024
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“For civilization to survive, the human race has to remain civilized” – Rod Serling
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Click on the image below to view yesterday’s CNBC interview discussing the market backdrop heading into October.
ADP Payrolls came in stronger than expected this morning putting to rest some fo the concerns markets have had in the last few weeks. Mideast tensions continue to boil, and oil prices are trading up over 2% in reaction, but US Treasury yields have been on the rise at the long end of the curve. Equity futures are modestly lower, and Nike (NKE) is partly to blame as the stock is down over 5% in reaction to earnings after the close yesterday. If these losses hold, it will be NKE’s fourth straight quarter of declining at least 5% in reaction to earnings. Before this current streak, the longest streak of 5%+ declines on earnings reaction days dating back to 2001 was just two.
Throughout the entire conflict in the Middle East, the price of crude oil has been remarkably sullen. While prices have rallied 6% from Monday’s close, since the attacks on Israel last October, crude oil has declined over 16%, and since the end of Q2, prices have dropped over 10%. On the other hand, natural gas prices have been trying to break out of a long funk. Natural gas tends to be much more volatile than crude oil, but since its low in late August, the former is up over 55% which is impressive no matter how volatile a commodity we’re talking about.
In looking at the chart below, two things stand out. First, even after a 55% rally, natural gas remains more than 20% from a 52-week high. Second, looking at the moving averages of natural gas, the 50-day moving average is about to cross up through the 200-day moving average. With both moving averages on the rise, that would make it the first golden cross for the commodity in two and a half years (3/8/22).
Natural gas has now gone 530 trading days without hitting a 52-week high. That ranks as the fifth-longest streak on record, and the longest since 2016. If the current streak lasts another three weeks, it will move into fourth place overall while it would take another three months without a 52-week high to overtake the 590-day streak that ended in 2016.
Sep 13, 2024
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“If you can make it through the night, there’s a brighter day.” – Tupac Shakur
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
After the worst week in months to start September, the S&P 500 has already rallied more than 3% this week, and if it can finish the day in the green today, it will have had its second ‘perfect’ week in a month (and second five -day perfect week this year). At this point, futures are cooperating with modest gains as declines in Adobe (ADBE) and Boeing (BA) have been offset by rallies in Oracle (ORCL) and RH. To hold on to those gains, though, they’ll have to get through Import Prices at 8:30 and Michigan Sentiment at 10:00.
Even after the gains this week, the S&P 500 remains down close to 1% this month, so September has already lived up to its reputation for being the weakest month of the year. If the month continues to follow the seasonal trend, bulls should remain on guard. The snapshot below from our Seasonality Tool shows that based on the last ten years, the upcoming one-month period has historically been one of the weakest periods for the S&P 500. Over the last ten years, the S&P 500’s median performance over the next month has been a decline of 1.79% which ranks in just the first percentile relative to all other one-month periods throughout the month.
That’s the bad news. The good news is that despite the next month being so weak, the next three months have historically been among the best periods of the year for the S&P 500. With a median gain of 4.65%, the SP&P 500’s performance over the next three months ranks in the 87th percentile relative to all other periods.
The composite chart below illustrates the pattern. While the back half of September typically experiences sharp declines, the last three months have been strong. To borrow a phrase from Tupac Shakur, who died 28 years ago today, “If you can make it through the night, there’s a brighter day.”
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