Bespoke’s Morning Lineup – 5/22/24 – Calm Seas and Fair Winds

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.

“Volatility is a welcome creator of opportunity.” – Seth Klarman

Morning stock market summary

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 are modestly lower this morning as Asian and European stocks trade lower for the second day in a row. One of the main drivers of weaker sentiment has been a hotter-than-expected inflation report in the UK. That has lowered the odds of a June rate cut from the BoE, and treasury yields are increasing in response. We’ll finally get an economic report this week with Existing Home Sales at 10 AM, but the main event everyone has been waiting for all week is Nvidia’s (NVDA) earnings report after the close.

Last Friday’s close of 11.99 in the VIX ended a streak of 1,137 trading days where the index closed above 12. As the index closed just a penny below 12, it was hardly a convincing end to that streak, but yesterday it closed below 12 more convincingly (11.84), so we wanted to highlight it. As shown in the chart below, while the VIX traded at lower levels on an intraday basis last December, it hasn’t closed below yesterday’s level since late November 2019.

The just-ended 1,137-day streak of closes above 12 ranks as the third longest of all time and just the fifth time the index went more than a year without closing below 12.  The most recent streak before the just-ended streak was also the shortest of the five lasting just 287 trading days and ending in late November 2019 not long before Covid. The longest streak was coming out of the dot-com bubble burst and lasted 2,257 trading days or the equivalent of just about 5 years.

With the VIX now so low, does the lack of volatility equal less opportunity going forward?  In today’s Morning Lineup, we looked into that question and provided a summary of how markets performed going forward. To read that analysis, login or signup today

To continue reading the rest of today’s morning note, where you’ll find 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.

The Closer – Fedspeak & Returns, Single Family Starts, Credit – 5/21/24

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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we begin with an update on recent Fedspeak tones and what that implies for equity performance (page 1). We follow up with a look at Canadian CPI and new single family home starts (page 2).  We close out with a checkup on credit quality (page 3).

See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!

Crypto Rises and Shorts Shatter

As we first noted in today’s Morning Lineup, while equities are having a snoozer of a session, crypto prices are rallying.  Although it has come off the high, the price of Bitcoin was above $70,000 this morning for the first time in over a month.  Meanwhile, Ethereum prices are up double-digit percentage points (11% as of this writing) on renewed ETF optimism.  As shown below, using the Grayscale Bitcoin Trust (GBTC) as a proxy, Bitcoin prices are currently trading at the high end of this year’s range.

Typically, it goes without being said that crypto prices are highly volatile given the asset is at one of the more extreme ends of the risk spectrum.  In a similar boat are the most heavily shorted stocks. Those “meme stocks” were also recently in the spotlight as they saw a temporary resurgence last week.  In the chart below, we show the relative strength line of GBTC versus an index of the 100 most heavily shorted Russell 3,000 members over the past year.  For the most part, GBTC has outperformed the most heavily shorted stocks.  However, beginning in mid-March that relationship swapped to those highly shorted names beginning to outperform Bitcoin. That hit a pinnacle one week ago as stocks like GameStop (GME) began giving up the ghost, and since then that relative strength line is back to favoring GBTC.

Although last week had reminiscences of the 2021 meme stock mania, one interesting difference was the relationship with crypto prices and those short squeeze names.  Using the same groups as above, below we show the rolling 50-day correlation between GBTC and the most heavily shorted stocks.

As shown, for most of the past several years, Bitcoin has tended to have a decent positive correlation with price action in the most heavily shorted stocks. In other words, crypto prices and heavily shorted stocks generally moved in the same direction on a given day.  That positive correlation has been present recently although it got a dent on the meme stock surge.  Again, that hit to the correlation has been merely a dent as it stands in stark contrast to January 2021 (or even various other points of the past year) when the two had historically uncorrelated moves.

Q1 2024 Earnings Conference Call Recaps

Bespoke’s Conference Call Recaps provide helpful summaries of corporate conference calls throughout earnings season.  We go through the conference calls of some of the most important companies in the market and summarize key topics covered by management.  These recaps include information regarding each company’s financial results, growth by segment, as well as some aspects of the business that management expects to impact future results.  We also identify trends emerging for the broader economy in these recaps.

Bespoke’s Conference Call Recaps are available at the Bespoke Institutional level only.  You can sign up for Bespoke Institutional now and receive a 14-day trial to read our newest Conference Call recaps.  To sign up, choose either the monthly or annual checkout link below:

Bespoke Institutional – Monthly Payment Plan

Bespoke Institutional – Annual Payment Plan

Below is a list of the Conference Call Recaps published during the Q1 2024 and Q4 2023 earnings reporting periods.

Q1 2024 Recaps:

Palo Alto: Q3 2024


Walmart: Q1 2025


Home Depot: Q1 2024


Airbnb: Q1 2024


Uber: Q1 2024


Palantir: Q1 2024


Apple: Q2 2024


Shake Shack: Q1 2024


Generac: Q1 2024


Amazon: Q1 2024


Restaurant Brands Intl: Q1 2024


Microsoft: Q3 2024


Alphabet: Q1 2024


Northrop Grumman: Q1 2024


Chipotle: Q1 2024


Meta Platforms: Q1 2024


General Motors: Q1 2024


Tesla: Q1 2024


PepsiCo: Q1 2024


Cadence Design: Q1 2024


American Express: Q1 2024


Netflix: Q1 2024


D.R. Horton: Q2 2024


CSX: Q1 2024


Las Vegas Sands: Q1 2024


United Airlines: Q1 2024


ASML: Q1 2024


Big Banks (JPM, C, GS, BAC, MS): Q1 2024


Delta Air Lines: Q1 2024


Lamb Weston: Q3 2024


Conagra Brands: Q3 2024

RH: Q4 2023

FedEx: Q3 2024

Nike: Q3 2024

Lululemon: Q4 2023

General Mills: Q3 2024

Q4 2023 Recaps:

Williams Sonoma: Q4 2023
Nordstrom: Q4 2023
AeroVironment: Q3 2024
Aaron’s: Q4 2023
NVIDIA: Q4 2024
Walmart: Q4 2024
Home Depot: Q4 2023
Deere: Q4 2023
Generac: Q4 2023
Airbnb: Q4 2023
AutoNation: Q4 2023
Restaurant Brands International: Q4 2023
Shopify: Q4 2023
Cloudflare: Q4 2023
Hershey: Q4 2023
Disney: Q1 2024
Arm: Q3 2024
Uber: Q4 2023
Chipotle: Q4 2023
Spotify: Q4 2023
Simon Property: Q4 2023
Palantir: Q4 2023
Caterpillar: Q4 2023
McDonald’s: Q4 2023
Apple: Q1 2024
Amazon: Q4 2023
Meta Platforms: Q4 2023
Honeywell: Q4 2023
Old Dominion Freight: Q4 2023
Starbucks: Q1 2024
Microsoft: Q2 2024
United Parcel Service: Q4 2023
Alphabet: Q4 2023
Whirlpool: Q4 2023
Super Micro Computer: Q2 2024
Norfolk Southern: Q4 2023
American Express: Q4 2023
IBM: Q4 2023
Tesla: Q4 2023
ASML: Q2 2024
Texas Instruments: Q4 2023
Netflix: Q4 2023
RTX: Q4 2023
3M: Q4 2023
General Electric: Q4 2023
Schlumberger: Q4 2023
PPG Industries: Q4 2023
Taiwan Semiconductor: Q4 2023
H.B. Fuller: Q4 2023
Fastenal: Q4 2023
Big Banks (JPM, C, BAC, GS): Q4 2023
Delta Air Lines: Q4 2024
Constellation Brands: Q3 2024
Conagra Brands: Q2 2024
Lamb Weston: Q2 2024
Walgreens: Q1 2024
FedEx: Q2 2024
Costco: Q1 2024
Brown-Forman: Q2 2024
SentinelOne: Q3 2024

 

 

Recaps published during Q1 2024 are available with a Bespoke Institutional subscription.

Bespoke’s Morning Lineup – 5/21/24 – Crypto Flying

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 most difficult thing is the decision to act, the rest is merely tenacity.” – Amelia Earhart

Morning stock market summary

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 another quiet morning in terms of economic data this morning with no scheduled reports on the calendar, but a few earnings reports are driving the direction of futures, including reports from Lowe’s (LOW), Macy’s (M), and Palo Alto Networks (PANW).  Overnight and this morning, the general tone of equities in Asia and Europe has been to the downside, and oil and gold are trading lower as well.  The only real asset class that is moving notably higher is crypto where Bitcoin and Ethereum are both sharply higher. Equity futures are essentially flat, although slightly higher.

While there are no economic reports on the calendar, there’s a ton of Fed speak to contend with this morning, so keep on your toes in terms of any potential tape bombs throughout the morning.

The S&P 500 closed just two cents shy of its closing 52-week high from last week yesterday, but Communications Services and Technology managed to close at their respective highs.  As shown in the chart below, the only other sectors that have traded at 52-week highs in the last week were Financials, Consumer Staples, and Utilities.  Meanwhile, more than half of the S&P 500’s sectors haven’t traded at a 52-week high in at least a month, and for two sectors – Consumer Discretionary and Real Estate – their respective closing 52-week highs were more than two months ago.

Most sectors may have gone more than a month without a 52-week high, but that doesn’t mean they aren’t knocking on the door. As shown below, Real Estate is the only sector that’s more than 5% from a 52-week high, and only two other sectors (Energy and Consumer Discretionary) are more than 1.5% from a 52-week high. In other words, it won’t take much to put most sectors over the hump.

Below we show the charts for the six sector ETFs whose 52-week highs were at least a month ago. Here again, these charts illustrate just how close most sectors are to 52-week highs with the only exceptions being Energy (XLE), Real Estate (XLRE), and Consumer Discretionary (XLY).

To continue reading the rest of today’s morning note, where you’ll find 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.

The Closer – Tech New Highs, Fedspeak, Build Conference – 5/20/24

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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we start out with a look at the new highs in Tech (page 1) followed by a rundown of the latest Fedspeak and international central bank action (page 2).  We then take a look at performance of Microsoft (MSFT) and its industry group around the company’s Build Conference (page 3). After previewing this week’s Treasury auctions (page 4), we recap the latest positioning data (page 5 – 8).

See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!

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