2019 Outlook — Sentiment
Our 2019 Bespoke Report market outlook is the most important piece of research that Bespoke publishes each year. We’ve been publishing our annual outlook piece since the formation of Bespoke in 2007, and it gets better and better each year! In this year’s edition, we’ll be covering every important topic you can think of dealing with financial markets as we enter 2019.
The 2019 Bespoke Report contains sections like Washington and Markets, Economic Cycles, Market Cycles, The Fed, Sector Technicals and Weightings, Stock Market Sentiment, Stock Market Seasonality, Housing, Commodities, and more. We’ll also be publishing a list of our favorite stocks and asset classes for 2019 and beyond.
We’ll be releasing individual sections of the report to subscribers until the full publication is completed by year-end. Today we have published the “Sentiment” section of the 2019 Bespoke Report, which looks at the performance of equities and bonds following various levels of bullish and bearish sentiment.
To view this section immediately and all other sections as they’re published between now and December 21st, sign up for our 2019 Annual Outlook Special!
2019 Outlook — Sector Analysis
Our 2019 Bespoke Report market outlook is the most important piece of research that Bespoke publishes each year. We’ve been publishing our annual outlook piece since the formation of Bespoke in 2007, and it gets better and better each year! In this year’s edition, we’ll be covering every important topic you can think of dealing with financial markets as we enter 2019.
The 2019 Bespoke Report contains sections like Washington and Markets, Economic Cycles, Market Cycles, The Fed, Sector Technicals and Weightings, Stock Market Sentiment, Stock Market Seasonality, Housing, Commodities, and more. We’ll also be publishing a list of our favorite stocks and asset classes for 2019 and beyond.
We’ll be releasing individual sections of the report to subscribers until the full publication is completed by year-end. Today we have published the “Sector Analysis” section of the 2019 Bespoke Report, which looks at S&P 500 sector weightings, technicals, and correlations.
To view this section immediately and all other sections, sign up for our 2019 Annual Outlook Special!
Facebook (FB) Unfriends Privacy
Facebook (FB) is down over 6% today after headlines last night that the company had exposed users’ information to other companies, and while the stock isn’t at new lows it’s still nearly 40% from record highs posted as recent as July 25th. There are two ways to think about the catastrophe that the company has been for investors over the last five and a half months: declines in market cap in dollar terms and declines in percentage terms. In dollar terms, the losses are staggering. The company’s market cap has fallen from a peak of $629bn in July to $394bn today. That drawdown makes prior retreats in the company’s value look like nothing. In percentage terms, things have actually been worse though. Following its IPO, Facebook retreated more than 50% from its high water mark and in both 2014 and 2016, the stock saw drawdowns of over 20%. Facebook is currently trading $7 (~5%) above its November low of $126.85, so as the stock faces pressure from its latest round of legal woes, that is the line in the sand for the stock going forward.
Fixed Income Weekly – 12/19/18
Searching for ways to better understand the fixed income space or looking for actionable ideals in this asset class? Bespoke’s Fixed Income Weekly provides an update on rates and credit every Wednesday. We start off with a fresh piece of analysis driven by what’s in the headlines or driving the market in a given week. We then provide charts of how US Treasury futures and rates are trading, before moving on to a summary of recent fixed income ETF performance, short-term interest rates including money market funds, and a trade idea. We summarize changes and recent developments for a variety of yield curves (UST, bund, Eurodollar, US breakeven inflation and Bespoke’s Global Yield Curve) before finishing with a review of recent UST yield curve changes, spread changes for major credit products and international bonds, and 1 year return profiles for a cross section of the fixed income world.
This week we look at relative yields across equities, corporate bonds, and USTs. We also discuss mortgage rates and applications.
Our Fixed Income Weekly helps investors stay on top of fixed income markets and gain new perspective on the developments in interest rates. You can sign up for a Bespoke research trial below to see this week’s report and everything else Bespoke publishes free for the next two weeks!
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Chart of the Day: Semis, FANG+ Make Higher Lows So Far
Trend Analyzer – 12/19/18 – Defensive Sectors Tumble
Despite a gap up and some large movements intraday, most indices finished yesterday right around the prior day’s close leaving the picture in our Trend Analyzer largely unchanged. Every major index ETF remains extremely oversold. In addition, all of these names firmly remain in downtrends. The Nasdaq (QQQ) also has still held onto gains for the year. QQQ is also the least oversold relative to the other index ETFs. Despite this, the degree of the movement into/deeper into oversold territory over the past week is about in line with its peers.
Taking a look at sector ETFs, while YTD returns of cyclicals have gotten hammered, over the past week more defensive sectors haven’t been immune either. These groups have quickly retreated off of neutral and overbought levels as illustrated by the long tails in the Trading Range section of our Trend Analyzer. Headlines of the ACA’s constitutionality coming to question late last week has sent the Health Care Sector (XLV) tumbling. It is currently the second most oversold sector behind Financials (XLF). It is also down the second most in the past week behind the battered Energy Sector (XLE). Energy, much like oil, has fallen off a cliff recently, now down almost 16% on the year and 5.66% in the past five days. While Energy is down a lot in YTD terms, Materials (XLB), Communication Services (XLC), and Financials are not far behind.
Morning Lineup – Fed on Deck
US stocks are looking to start the day higher but given the inability of the market to hold onto gains in recent days, no rally, not even in December, is safe these days. Obviously, the main draw for today will be the FOMC rate decision early this afternoon. Read today’s Bespoke Morning Lineup below for major macro and stock-specific news events, updated market internals, and detailed analysis and commentary:
Bespoke Morning Lineup – 12/19/18
In the past, we have referred to Fed Ex as a bellwether for the state of the US and global economy, so it was only fitting that the day before the “most important” Fed decision of the year, the company reported Q3 earnings. Unfortunately, the stock is trading down sharply on the results, and if it finishes today where it is trading in the pre-market, it will be FDX’s worst earnings reaction day in over five years based on the data from our Earnings Screener.
After listening to the company’s conference call last night, FDX’s view on the state of the global economy is not particularly positive and should give pause to anyone who thinks the global economy is just humming along fine. Below we have included a number of key quotes from the call. Reading through the commentary, it’s clear that while the US economy remains solid, global trends are weakening at an increasing state. The key quote is the last one, where FDX management pins the blame for economic weakness on “bad political choices.” Not just in the US, but around the world. The question Fed policymakers must contend with is, how long the US can continue to keep itself insulated from global trends.
“Some of the largest economies in Europe are experiencing weakness.”
“World trade slowed in Q3 to just 3.5% compared to 5.3% in Q3 2017. Leading indicators point to positive, but even slower trade growth near-term.”
“Economic growth in the UK has slowed sharply since July.”
“The peak for global economic growth now appears to be behind us.”
“China’s economy has weakened due, in part, to trade disputes.”
“Our international business, especially in Europe, weakened significantly”
“FedEx is experiencing strong growth in the US, where the economy remains solid.”trade will continue to grow.”
“I’ll just conclude by saying most of the issues that we’re dealing with today are induced by bad political choices, making a bad decision about a new tax, creating a tremendously difficult situation with Brexit, the immigration crisis in Germany, the mercantilism and state-owned enterprise initiatives in China, the tariffs that the United States put in unilaterally. So, you just go down the list, and they’re all things that have created macroeconomic slowdowns. The good news is, with a change in policy, they could turn it around pretty quick, too. So fundamentally, we think trade will continue to grow.”
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2019 Outlook — Washington
Our 2019 Bespoke Report market outlook is the most important piece of research that Bespoke publishes each year. We’ve been publishing our annual outlook piece since the formation of Bespoke in 2007, and it gets better and better each year! In this year’s edition, we’ll be covering every important topic you can think of dealing with financial markets as we enter 2019.
The 2019 Bespoke Report contains sections like Washington and Markets, Economic Cycles, Market Cycles, The Fed, Sector Technicals and Weightings, Stock Market Sentiment, Stock Market Seasonality, Housing, Commodities, and more. We’ll also be publishing a list of our favorite stocks and asset classes for 2019 and beyond.
We’ll be releasing individual sections of the report to subscribers until the full publication is completed by year-end. Today we have published the “Washington” section of the 2019 Bespoke Report, which discusses the performance of equities based on the political composition in DC and how the current environment is more polarized than it has ever been.
To view this section immediately and all other sections, sign up for our 2019 Annual Outlook Special!
2019 Outlook — Thematic Performance
Our 2019 Bespoke Report market outlook is the most important piece of research that Bespoke publishes each year. We’ve been publishing our annual outlook piece since the formation of Bespoke in 2007, and it gets better and better each year! In this year’s edition, we’ll be covering every important topic you can think of dealing with financial markets as we enter 2019.
The 2019 Bespoke Report contains sections like Washington and Markets, Economic Cycles, Market Cycles, The Fed, Sector Technicals and Weightings, Stock Market Sentiment, Stock Market Seasonality, Housing, Commodities, and more. We’ll also be publishing a list of our favorite stocks and asset classes for 2019 and beyond.
We’ll be releasing individual sections of the report to subscribers until the full publication is completed by year-end. Today we have published the “Thematic Performance” section of the 2019 Bespoke Report, which discusses drivers of relative performance across quantitative strategies, market cap size, volatility markets, tax rate, international revenue exposure, and correlation trading.
To view this section immediately and all other sections, sign up for our 2019 Annual Outlook Special!
2019 Outlook — Credit Markets
Our 2019 Bespoke Report market outlook is the most important piece of research that Bespoke publishes each year. We’ve been publishing our annual outlook piece since the formation of Bespoke in 2007, and it gets better and better each year! In this year’s edition, we’ll be covering every important topic you can think of dealing with financial markets as we enter 2019.
The 2019 Bespoke Report contains sections like Washington and Markets, Economic Cycles, Market Cycles, The Fed, Sector Technicals and Weightings, Stock Market Sentiment, Stock Market Seasonality, Housing, Commodities, and more. We’ll also be publishing a list of our favorite stocks and asset classes for 2019 and beyond.
We’ll be releasing individual sections of the report to subscribers until the full publication is completed by year-end. Today we have published the “Credit Markets” section of the 2019 Bespoke Report, which reviews recent returns, current risk premiums and themes, and implications for equities in the US corporate credit markets.
To view this section immediately and all other sections, sign up for our 2019 Annual Outlook Special!