Daily Sector Snapshot — 4/8/25
Biggest Jumps in Dividend Yields
While the tariff situation has created a great deal of uncertainty and stock prices have crashed in tow, one silver lining is that dividend yields have at least ticked up. Currently, the S&P 500’s dividend yield of 1.64% is the highest it has been since November 2023. For the average member that pays a dividend, it has seen a 33 bps increase in its yield, up to 2.58%. Additionally, there are 59 S&P 500 members that now have a higher yield than the 10-year Treasury. Of course, the impact of tariffs could materially impact earnings and hence their ability to pay a dividend at all, but holding that conversation aside, below we show the S&P 500 members that have seen the largest increases in their dividend yields since the sell-off began on February 19. Of all members of the index, there are 34 to have seen a full percentage point increase in their yields as a result of the declines since the S&P’s high. The largest increase has come from Dow (DOW) which now yields over 10% after falling over 30% since 2/19. That is also the single highest yield of all S&P 500 members. Of the rest of the list below, there are another five stocks that now rank in the top ten highest yields: LyondellBassell (LYB), Pfizer (PFE), Franklin Resources (BEN), APA Corp (APA), and United Parcel Services (UPS).
Like this post? Join our complimentary Dividend Discovery email newsletter to receive a dividend-centric post in your inbox a couple of times per week. If you’re interested in dividend stocks and ETFs, this newsletter is for you! CLICK HERE to sign up with just your email or click on the image below.
Chart of the Day – Health Care in the ICU
Bespoke’s Morning Lineup – 4/8/25 – End of the Streak?
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.
“Learn to use your emotions to think, not think with your emotions.” – Robert Kiyosaki
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 wild ride of market moves continued overnight as the Nikkei 225 rallied 6% after falling more than 7% on Monday. That’s just the ninth time in the last 45 years that the index has rallied 5%+ after falling more than 5% in the prior session. Along with those days, there have only been two other days when the Nikkei fell more than 5% after rising 5% in the previous session. The Nikkei’s move was extreme, but we’ve seen volatile back-and-forth action in equity markets worldwide this week.
This morning, futures are building on some of yesterday’s intraday strength in US stocks on optimism that several countries are looking to make a trade deal with the Trump Administration. This doesn’t mean deals will happen, but at least conversations are taking place which buys some time for a pause in the selling. With this optimism, US equity futures are indicated higher, and that would end what has been a streak of nine straight days where the SPDR S&P 500 ETF (SPY) opened the day lower. In yesterday’s Chart of the Day, we covered that streak and how the market has historically performed following prior streaks of similar or longer durations, so make sure to give that a look.
They call the CBOE Volatility Index (VIX) a gauge of the stock market’s psychological state, and higher levels indicate a more emotional state for the market. Yesterday, the market got as emotional as a high school senior looking for a prom date. It closed at an extraordinarily high level of 46.98, but intraday it briefly traded above 60, which it has only done on 52 other trading days since 1990!
The chart of the S&P 500 below shows every time the VIX traded above 60 on an intraday basis since 1990. The only other times were in Q4 2008, during Covid in 2020, and one day last August. In retrospect, these periods turned out to be good buying opportunities although the market remained volatile in the short-term. Following the occurrences in Q4 2008, for example, the S&P 500 didn’t bottom until early March, but on an internal basis, that marked the low as most stocks bottomed in Q4 2008. Like a child, markets sometimes find themselves in a tantrum or emotional spiral, but more often than not, a pause, and a deep breath are enough to get things to calm down.
The Closer – Poetic Price Action, Internals, Delinquencies – 4/7/25
Log-in here if you’re a member with access to the Closer.
Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we lead off with commentary regarding the immense volatility in today’s session and the catalysts that drove those swings (page 1). We then dive into the just how few stocks are trading above their 200-DMAs (page 2) in addition to decile breakdowns of other factors (page 3). We then close out with a look at the dollar and credit (page 4) and the latest mortgage delinquency data (page 5).
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!
Daily Sector Snapshot — 4/7/25
Chart of the Day: Nine Straight Lower Opens
Country ETFs since “Liberation Day”
Since President Trump’s second term began with the Inauguration on January 20th, the S&P 500 ETF (SPY) is down 16.5% compared to a 6.2% drop for the all world ex US ETF (CWI). A ten percentage point gap in performance in less than three months is significant. It’s early, but the rest of the world is solidly beating US markets so far under Trump 2.0.
Below is a table showing the performance of 45 country ETFs available to US investors since the close last Wednesday just before the President’s Rose Garden announcement of reciprocal tariffs that were orders of magnitude higher than the market expected.
The average country ETF is down exactly 10% in the two and a half trading days since Trump’s “Liberation Day,” and the only two down less than 5% are India (INDA) and Turkey (TUR).
Of the G7 countries, the US (SPY) has been the third worst with a drop of 11.2%. The UK (EWU) and Italy (EWI) are down more at -13.3%, while Germany (EWG), Japan (EWJ), Canada (EWC), and France (EWQ) have fallen a little bit less than the US.
Norway (ENOR), Greece (GREK), Poland (EPOL) and China (MCHI) are the four country ETFs down more than 14% since last Wednesday’s close, while Vietnam (VNAM) — a country punished with a 45% tariff even though they only tariff the US roughly 5% — is down a tad less than SPY with a drop of -11%.
Rollercoaster
Late last week and over the weekend, there were multiple predictions calling for more volatility. For instance, CNBC’s Jim Cramer drew parallels with “Black Monday”. Most investors probably haven’t even had lunch yet, but already it’s looking like a session for the history books. As we noted in a post on X, there have already been multiple mid-single-digit swings in both directions. As shown below, with the declines the S&P 500 (SPY) briefly dipped into bear market territory which we discussed the implications of in last Friday’s Bespoke Report.
Again, it’s not even noon but the opening move in addition to the declines last week has been enough to earn accolades. For starters, SPY has now had negative downside gaps (open lower than the prior day’s close) nine sessions in a row. Since SPY began trading in the early 1990s, there have only been four other such streaks. The most recent streaks were clustered around 2015 and 2016 while the other occurrence was way back in January 1995.
Not only has there been such consistency to the downside at the open, but the moves have been very large. For four straight sessions now, SPY has gapped down at least 1% which is a new record. Within that streak was a 1.05% decline last Wednesday, a 3.4% drop Thursday, a 2.4% decline Friday, and a 3.2% decline today. The only other streaks of 1% gaps down that even lasted for three days occurred in September and December 2008 and later in March 2020.
As noted earlier, there have already been some wild swings intraday. As a result, the intraday trading range has blown out to epic proportions, and again, it’s not even lunchtime. As shown below, today’s intraday high-low spread for SPY has been 8.58%. In the ETF’s entire history, there have only been 20 other trading days with as wide of a range. The most recent of these before today was during the COVID Crash. The China currency devaluation in August 2015 was another relatively recent example of a huge intraday range although it wasn’t quite as big as today, and before that, there were multiple instances around the time of the Great Recession, July 2002, August 1998, and October 1997.
Bespoke’s Morning Lineup – 4/7/25 – More Pain
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.
“By 1864 Wall Streeters had spies in the Confederate high command and could learn southern battle plans before colonels in the Army of Virginia did.” – Mike Wallace
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 sharply lower again this morning, although off their overnight lows, as investors look for signs of a break in the selling vortex. You’ll hear all sorts of opinions as to when and where the market will bottom out, but they’re all guesses, so ignore them. No one knows at this point. You could make the argument that President Trump can end this as fast as he started it, but that’s not guaranteed either. The longer markets remain in their current state, the more control he loses as other issues and factors start to pop up, and the more likely it is that this decline stretches out into a more prolonged decline. What’s that old Warren Buffett quote about what happens when the tide goes out?
How bad have things gotten? Just now on CNBC, there was an interview with a former Federal Reserve official and two topics of conversation were whether we were entering another Smoot-Hawley-type era and if the dollar had the potential to lose its reserve currency status. In the past, bringing up either of these issues would get you laughed off the set, and now they’re both legitimate topics to bring up, from a former Federal Reserve official no less!
The one thing the President has working for him is that foreign markets are starting to feel just as much, if not, more pain than the US. The day after the tariff announcements on Wednesday, US markets significantly underperformed foreign markets, but on Friday, the declines were more equally distributed. Today, at least so far, it is foreign markets that are generally feeling the most pressure. The more foreign markets underperform the US, the more likely it is that foreign countries come to the bargaining table. On the other hand, seeing foreign stocks underperform could only embolden the President more.
Futures are currently down around 2%, so we wanted to provide an update on where this decline stands relative to history. At current levels, the S&P 500 would be down 12.85% over a three-trading day span, which ranks up there as among the worst since late 1952 when the five trading day week in its current form started. At these levels, the decline is right around the worst of the three-day declines experienced during Covid and the Financial Crisis, and the only one that was meaningfully worse was the 1987 crash. This is a decline of historical proportions.
The chart below shows every prior three-day decline of 10%+ with a red dot. Outside of the three periods mentioned above, the only two others were in 1998 (Russia’s Debt Default) and 2011 (US debt downgrade). One period that didn’t make the cut was the 9/11 attacks. In the four trading days when the market re-opened after those attacks, the S&P 500 declined around 12%, but it never reached a double-digit percentage decline in three days.
Given the market is coming off one of its worst two-day declines in history, you wouldn’t expect to see many stocks on the list of winners from Thursday and Friday, but we were surprised to see that not a single stock in the S&P 500 was up on both Thursday and Friday of last week.
On Thursday, 95 stocks in the S&P 500 finished higher on the day as investors tried to initially distinguish between winners and losers from Liberation Day, but Friday was more about investors coming to the realization that there wouldn’t be much in the way of winners from Trump’s plans. As shown in the table below, of the 34 stocks that traded 2%+ higher on Thursday, they were all primarily defensive in nature and names you turn to when you’re expecting a market or economic decline.
On Friday, just 14 stocks in the S&P 500 finished the day higher. 11 of them were from the Consumer Discretionary sector, and eight were either homebuilders or related to the housing sector. While these stocks traded higher on Friday, they have all been weak for months now, and the one-day rally was a bounce in reaction to the yield on the 10-year which plunged below 4%. Other winners included Lululemon (LULU), Nike (NKE), Target (TGT), and Dollar Tree (DLTR) which all fell 10% or more on Thursday in their immediate reaction to Liberation Day.
Turning back to the market macro, not even considering today’s weakness, the S&P 500 and most sectors all had their worst two-day periods since March 2020 last week. Think back to the way you felt in the Spring of 2020. While the two periods are incredibly similar in terms of the rampant levels of uncertainty, the causes of the uncertainty came from very different directions. In March 2020, people had no idea how Covid would impact the economy, how long it would last, or how to control it. Today, the cause of the uncertainty is incredibly under control and could be turned off just as fast as it was turned on. Whether that happens before it’s too late is the biggest question mark, and financial markets increasingly view the switch being turned off or at least dialed back as unlikely.
