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“Don’t be afraid of failing. Don’t be afraid of making an ass of yourself. I do it all the time—and look what I got.” – William Shatner

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

Everything tends to move faster these days- except in sports where time seems to stand still. Did you watch the last four minutes of any of yesterday’s games?  While the NCAA tournament is only just tipping off, the first Masters in Augusta started on this date in 1934.  Today, because of TV and ratings, they don’t start the tournament until April after the college basketball champion has been crowned.

The Masters may have only been pushed out by a few weeks relative to when it first started in the 1930s, but the NHL’s Stanley Cup Championship is almost a summer event.  Like the Masters, the puck was also dropped on the first Stanley Cup hockey Championship series on this day in 1894.  These days, the playoffs (second season) don’t even start until the second half of April and last year, the Vegas Golden Knights didn’t clinch the cup until June 13th!

The markets are still as fast as ever, but this morning is quiet in terms of data.  There’s no economic data on the calendar, and after a flurry of earnings reports after the close yesterday, no reports are hitting the tapes.  That leaves investors with the opportunity to think about the barrage of central bank decisions that were released around the world over the last four days and ponder the fact that despite all of it, the S&P 500 is on pace for its best week of the year.  That, or you can just enjoy the basketball, complain about your busted bracket, and wonder what if the refs hadn’t blown the whistle on a phantom foul at the end of the Kansas-Samford game.

Not only is the S&P 500 on pace for its best week of the year, but the stock markets of major global economies have been rallying in unison.  As shown in the snapshot from our Trend Analyzer below, the ETFs of the G7 countries are all heading into the last trading day of the week at overbought or ‘extreme’ overbought levels.  They’re all sitting on comfortable YTD gains with Japan and Italy both up over 10% while the UK trails the pack with a gain of ‘only’ 2.5%. The last five trading days have seen a similar pattern play out.  Five of the seven country ETFs are all up over 1% in the last week, Germany has eked out a gain of 0.51% and Kentucky France is down 0.31%.

Read today’s entire Morning Lineup.

For more analysis of global equities and economic readings released this morning, read today’s full Morning Lineup with a two-week Bespoke Premium trial.

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.

“We live in a world defined by the rapid pace of technological change.” – Jerome Powell

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

Since yesterday’s close, we’ve seen multiple important central bank decisions from around the world (all discussed in today’s Morning Lineup), and at the margin, they have all been more dovish than hawkish with the Swiss Central Bank even announcing an unexpected rate cut.  This morning’s economic data has also been positive with all three reports (Philly Fed, initial jobless claims, and continuing claims) coming in slightly better than expected. These trends have been good enough to push equity futures near their highs of the morning after stocks around the world rallied overnight.

The positive reaction to yesterday’s Fed decision and subsequent press conference was largely tied to the fact that, despite February data showing that progress on inflation has stalled, Powell showed little concern that the trajectory has changed.  Within the dot plots, uncertainty over the Fed’s inflation forecasts appears to be declining, which indicates that the committee is more confident that inflation is still moving towards its 2% target.  While a May rate cut, at this point, is out of the question, the market is fine with that if the ultimate direction of rates is still lower.

Yesterday’s reaction to the announcement and subsequent press conference was a complete 180 versus January. Back then, stocks were lower heading into the announcement and only fell further once Powell started talking and essentially took a cut at yesterday’s meeting off the table. Just as we live in a world defined by a rapid pace of technological change, the way the market reacts to Powell Fed meetings may also be starting to shift.

Yesterday’s reaction to the statement (purple) also bucked the general long-term “Powell plunge” on Fed days since he became chair in 2018. As shown in the chart below, whether you look at his entire tenure as Fed chair or break it up into different slices during that period, Jerome Powell has not exactly been a stock market whisperer.

With a gain of 0.89% for the S&P 500 yesterday, it ranked as the 14th best single-day performance on a scheduled Fed Day of the 48 since Powell became the chair in March 2018.  Not only that, but it was also the 8th best post-decision performance of his tenure. Ironically, all the other days where the S&P 500 had a better post-meeting reaction have occurred since December 2021, essentially when the Fed started to telegraph the most recent tightening cycle.

To further illustrate how the market tide towards Fed decisions has been shifting, while the post-meeting reaction in January was one of the more negative post-meeting reactions under Powell’s tenure, the two meetings before that in November and December, were greeted warmly by the market (6th and 7th best under Powell’s tenure) and looked very similar to yesterday’s post-meeting reaction. If rate hikes are out of the equation, investors are willing to be patient with the timeline of rate cuts.

Read today’s entire Morning Lineup.

For more analysis of global equities and economic readings released this morning, read today’s full Morning Lineup with a two-week Bespoke Premium trial.