Chart of the Day: Six-Month Spreads Stretched
June 2024 Headlines
Bespoke’s Stock Market Summer Camp
If you or any of your friends or colleagues have children, grandchildren, nieces, or nephews, please take note!
Here at Bespoke we’ve been following the stock market 24/7 for more than two decades, so based on the “10,000 hour” rule, we can confidently say that we are market “pros”.
At the same time, traditional education across grades K-12 doesn’t focus on the stock market, investing, and how it all works.
For years, we’ve thought about addressing the “stock market literacy gap” for students across the country. Now, we’ve come up with a plan!
Starting this summer, we are now offering “Stock Market Camp” for students in grades 5-8 and 9-12!
Bespoke’s Stock Market Camp will run for five days from Monday-Friday with each live Zoom class lasting roughly 75 minutes. Camp will be fun, engaging, and interactive, and by the end of the week, students will have a basic understanding of how the stock market and investing works! If a live class is missed, a recording will be available.
We don’t have to tell you how valuable knowing this information at a young age can be! Instead of kids playing video games, scrolling through TikTok, or messing around on Snapchat, we think our five-day Stock Market Camp will pay major dividends down the road!
For now we are making our Stock Market Camp available to students that are referenced by Bespoke readers. We are running one week of camp for high school students (grades 9-12) from July 22nd-26th, and one week of camp for middle school students (grades 5-8) from August 12th-16th. Each weekly camp will be capped at 40 students max, so please sign up ASAP to reserve your student’s spot. You can purchase as many spots as you’d like or forward this email to colleagues and have them sign up.
SIGN UP YOUR STUDENT OR STUDENTS TODAY AS THE CAMPS ARE LIMITED TO JUST 40 ATTENDEES!
We will touch base after sign-up to gather the pertinent information. If you sign up and the student cannot attend during the dates listed above, we can either provide access to a full recording of the camp or a credit for a future camp. Refunds will be provided upon request if we are notified at least one week before the camp’s start date.
Please reach out if you have any questions about Bespoke’s Stock Market Camp. The camp is for informational and educational purposes only, and there will be no investment advice or recommendations provided. All discussions will be impersonal and historical in nature. There will be no forward-looking analysis or discussion.
Airline Stocks in a Holding Pattern
Throughout the early days of Covid, daily updates on the number of passengers screened by the TSA at US airports became a key gauge of mobility trends in the US. Early on, daily passenger counts cratered from a range of well over 2 million to less than 125,000 at the height of the lockdowns. From the summer of 2020 to early 2021, passenger traffic improved, but it wasn’t until the summer of 2021 that activity levels approached anything even close to normal. By last summer, passenger traffic had largely returned to its pre-Covid range, and this summer, we’ve seen traffic trends regularly exceed their pre-Covid range. Just yesterday, the TSA screened 3,013,413 passengers which was not only a record high but also the first time that more than three million passengers passed through TSA security checkpoints in a single day.
While air travel trends have returned to and even exceeded their normal historical range, airline stocks have a way to go before recovering. In the year leading up to the Covid outbreak, the US Global Jets ETF (JETS) ETF traded in a range of the high $20s to low $30s, and as air travel cratered so did the price of airline stocks. As air travel trends started to improve, airline stocks followed suit. As shown in the chart below, from the start of 2019 through the end of 2021, TSA passenger traffic and airline stocks tracked each other closely with a correlation of +0.84. From 2022 on, the relationship between the two ended. While passenger traffic steadily improved, airline stocks moved in the other direction with a correlation of -0.16, and the JETS ETF remains around 40% below its pre-Covid high.
Early in the pandemic, investors and traders simply bid up the airline stocks at any signs of improvement in air travel trends. As the industry started to recover, the focus shifted to the massive dilution and debt these companies were forced to incur to make it to the other side. That coupled with the most aggressive Fed tightening cycle in over a generation only exacerbated those concerns.
Election Odds Swings
The political landscape has been given plenty of news to chew on over the past few weeks both internationally and domestically. For example, in last Friday’s Morning Lineup we covered the UK elections and today we provided some commentary on the surprise results of the French elections. Back in the US, today on X, President Biden reaffirmed that he will be staying in the race; contrary to the thoughts of many pundits and donors.
In the charts below, we show various candidates’ odds of winning the 2024 Presidential Election according to betting markets via data from ElectionBettingOdds.com. As shown, Biden’s odds plummeted in the wake of the first debate; bottoming out at a meager 12.5% chance last Friday. At that time, Biden was no longer the favored candidate for the Democrats with Vice President Harris becoming the new favorite (17.2% odds) and California Governor Gavin Newsom also getting some love receiving mid-single digit odds. With today’s announcement, Biden is back to having the highest odds of winning among Democrats at 18.4% compared to 15.7% for Harris and Newsom combined. Overall, former President Trump is seen as the most likely to win as he is being given a 58.6% chance.
Bespoke’s Morning Lineup – 7/8/24 – The Green Grass Grows Only Half Around
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.
“No matter who you are, the grass is never greener on the other side.” – Venus Williams
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
The winds of a negative start to the week have shifted overnight, and futures have turned positive as we approach the opening bell. Major Asian indices were lower last night, but Europe has traded positively. In the French elections, parties aligned with the left were able to outdo Le Pen’s far-right party, and with no party winning an outright majority, the extremes of each side will never materialize. Outside of Europe, cease-fire talks in the Israel-Gaza war have pushed oil prices lower. Back here at home in the US, there’s still a lot of uncertainty over whether President Biden will stay in the race, but calls for him to step aside have been slowly growing. From a market perspective, there seems to be little concern at this point
The economic calendar is quiet this morning with the New York Fed Survey of Consumer Expectations scheduled for 11 AM. Traders will be watching that report for inflation expectations, but unless there is a big move in the number, it shouldn’t have much of a market impact. There’s also not much on the earnings calendar this morning, although Corning (GLW) preannounced better-than-expected Q2 numbers citing strength in AI. Looking ahead, Friday marks the unofficial start to earnings season when the major banks report, but between now and then, we’ll hear from Delta (DAL), Pepsi (PEP), Conagra (CAG), and Progressive (PGR) which all report on Thursday.
Venus Williams may claim that the grass is never greener on the other side, but try telling that to small and mid-cap stocks. The snapshot below from our Trend Analyzer shows where US indices stand relative to their trading ranges. Whether you look at YTD returns, the last five trading days, or where each index finished off last week relative to its 50-day moving average (DMA), it’s a market of large and mega caps and everything else.
Of the fourteen index ETFs shown, seven are up over 15% YTD, were up at least 1% in the last five trading days, and are all at least 4% above their respective 50-DMAs. What do they all have in common? They’re all dominated by mega-cap stocks. The other seven index ETFs have fared much more poorly on both a YTD basis and over the last five trading days, and the key theme across all but one of these ETFs is the complete absence of any large-cap stocks let alone any mega-caps. The one exception is the Dow (DIA), and while mega-caps like Microsoft (MSFT), Apple (AAPL), and Amazon.com (AMZN) are all in that index, their combined weighting is ‘only’ 14% and other stocks like Nvidia (NVDA) and Alphabet (GOOGL) have no showing.
Investors have been waiting for months for the pendulum to shift back in favor of small caps, but like many lawns this summer, any signs of green have quickly faded.
Brunch Reads – 7/7/24
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.
Fame & Fortune
Kevin Bacon recalls wearing a disguise in public: ‘This sucks’ (USA Today)
Kevin Bacon, at 65, decided to test life as an ordinary person by donning a prosthetic disguise crafted by a special effects artist. He ventured to The Grove, a busy outdoor mall in Los Angeles, and went unrecognized. However, the experience quickly lost its charm as he faced the mundane realities of anonymity, like being ignored and waiting in lines. This experiment made him appreciate his fame more. That’s probably quite the opposite of what you’d expect, given the widespread complaints against fame. Reflecting on his career, Bacon discussed the unexpected and initially uncomfortable fame from his iconic role in “Footloose,” admitting he was resistant at first but has gained perspective over the years. [Link]
Continue reading our weekly Brunch Reads linkfest by logging in if you’re already a member or signing up for a complimentary 30-day trial to Bespoke Premium today! Cancel at any time.
Weekly Sector Snapshot & Can’t Miss Analysis
To read our weekly Bespoke Report newsletter and access everything else Bespoke’s research platform has to offer, start a two-week trial to Bespoke Premium. Below we show a comparison between the S&P 500’s price and breadth. We discuss this and more in this week’s report.
This Week’s Can’t-Miss Analysis — 7/5/24
We publish a lot of market-related content each week, and we want to make sure you don’t miss the most important topics. Below are some charts and tables we view as “can’t miss” from the last week.
The second half of the year began this week, and below is a recap of how various ETFs across asset classes did in the first half of 2024:
The average stock in the Russell 1,000 was up just slightly in the first half, and four stocks in the index gained more than 100%: NVIDIA (NVDA), Vistra (VST), Cava (CAVA), and AppLovin (APP). Below is a more expanded list of the best-performing stocks in the first half:
To continue reading the rest of this week’s “Can’t-Miss” analysis, which includes another dozen or so important market-related topics, sign up for one of our two membership levels with our July 4th special below!
Bespoke Premium July 4th Special — 74 Days for $17.76, then 20% Off
Bespoke Institutional July 4th Special — 74 Days for $17.76, then 20% Off
Below is a snapshot of what’s included so that you can decide which membership option is right for you:
If you didn’t get a chance to buy one yet, go check out our July 4th-themed Bespoke Threads shirts that will be available online for a few more days! Click here or on either of the images below to buy yours now!
Separately, please read on to learn about a new initiative launching in July that we’re very excited about!
STOCK MARKET SUMMER CAMP FOR STUDENTS
If you or any of your friends or colleagues have children, grandchildren, nieces, or nephews, please take note!
Here at Bespoke we’ve been following the stock market 24/7 for more than two decades, so based on the “10,000 hour” rule, we can confidently say that we are market “pros”.
At the same time, traditional education across grades K-12 doesn’t focus on the stock market, investing, and how it all works.
For years, we’ve thought about addressing the “stock market literacy gap” for students across the country. Now, we’ve come up with a plan!
Starting this summer, we are now offering “Stock Market Camp” for students in grades 5-8 and 9-12!
Bespoke’s Stock Market Camp will run for five days from Monday-Friday with each live Zoom class lasting roughly 75 minutes. Camp will be fun, engaging, and interactive, and by the end of the week, students will have a basic understanding of how the stock market and investing works! If a live class is missed, a recording will be available.
We don’t have to tell you how valuable knowing this information at a young age can be! Instead of kids playing video games, scrolling through TikTok, or messing around on Snapchat, we think our five-day Stock Market Camp will pay major dividends down the road!
For now we are making our Stock Market Camp available to students that are referenced by Bespoke readers. We are running one week of camp for high school students (grades 9-12) from July 22nd-26th, and one week of camp for middle school students (grades 5-8) from August 12th-16th. Each weekly camp will be capped at 40 students max, so please sign up ASAP to reserve your student’s spot. You can purchase as many spots as you’d like or forward this email to colleagues and have them sign up.
SIGN UP YOUR STUDENT OR STUDENTS TODAY AS THE CAMPS ARE LIMITED TO JUST 40 ATTENDEES!
We will touch base after sign-up to gather the pertinent information. If you sign up and the student cannot attend during the dates listed above, we can either provide access to a full recording of the camp or a credit for a future camp. Refunds will be provided upon request if we are notified at least one week before the camp’s start date.
Please reach out if you have any questions about Bespoke’s Stock Market Camp. The camp is for informational and educational purposes only, and there will be no investment advice or recommendations provided. All discussions will be impersonal and historical in nature. There will be no forward-looking analysis or discussion.
Don’t forget to go check out our Bespoke Threads site to pick up some super-soft Bespoke merch!!!
Have a great weekend!
Bespoke’s Morning Lineup – 7/5/24 – Another Mixed Employment Report
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.
“Maintain a firm grasp of the obvious at all times.” – Jeff Bezos
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Work on the day after July 4th? Life just isn’t fair is it? While many of us out here would prefer to use July 5th as a day to extend the July 4th holiday out an extra day, or even rest off a July 4th barbeque hangover, that wasn’t Jeff Bezos in 1994. Instead of going to the beach or taking an extra day, on this day thirty years ago Bezos started Abracadabra, which ultimately became known as Amazon.com (AMZN). In less than 30 years, this company has become one of the most valuable in the world. Thirty years to become the fifth largest company in the United States may sound impressive, but of the four that are larger, Microsoft (MSFT) and Apple (AAPL) are older after being founded in the mid-1970s, but NVIDIA (NVDA) is only a year older, and Alphabet (GOOGL) is four years younger.
Futures were little changed heading into the Non-Farm Payrolls report, as you would expect given the quasi-holiday, and the same went for Treasuries and crude oil. The market area seeing the most volatility this morning is in the crypto space where the release of assets tied to the Mt. Gox bankruptcy has raised fears of a wave short-term supply hitting the market.
The Non-Farm Payrolls report was just released, and just like last month, the headline reading came in stronger than expected while the Unemployment report was higher than forecast at 4.1%, the highest level since November 2021. Add to that, May’s originally reported number of an increase of 272K payrolls was revised down to 218K, so the blistering pace of the employment sector from a year ago no longer remains the case. As you might expect, treasuries caught a bid on the news and the 10-year yield is down 5 bps to 4.30%.
On the political front, major media outlets like Bloomberg are calling it a “Make-or-Break” weekend for the President saying that “most crucial for Biden will be an interview on Friday with ABC News, offering voters and allies the first unscripted, high-pressure look at the president since he faltered in his showdown with former President Donald Trump.” Whatever your politics, can we all agree that in this country’s nearly 250-year history, the bar for a “Make-or-Break” moment in a President’s administration has never been much lower than a taped interview?
If a monthly employment report drops on the Friday after July 4th when most people took the day off, does it count? That depends on the report. Today, we’ll get another answer as it will be just the fourth time in the last 25+ years that an employment report was released on the Friday after July 4th. In the chart below, we show the S&P 500’s intraday performance on the day of each of those prior three days, and based on that small sample size, you may want to be on the lookout for some volatility – at least more than a sub-13 reading in the VIX would suggest. In two of the three days, the S&P 500 was up at least 1%, while on the third and most recent occurrence (7/5/19), stocks fell 0.20%. Given the 1%+ daily moves on two of the three days, you would think that the reports deviated from expectations by a wide margin, but in 2002, the headline reading in Non-Farm Payrolls (NFP) was just 45K weaker than expected while in 2013, it came in 29K higher. Ironically, it was the 2019 report, when NFP deviated the most from expectations (+65K), that the S&P 500 had its smallest move. And what’s the deal with the shortened session in 2002, and who decided it was a good idea to make today a full trading day since then? Based on where futures are trading now, the S&P 500 looks to be following the low-volatility path of 2019, but there’s still a full session of trading left to go. Thanks, NYSE!
