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“I think the one lesson I have learned is that there is no substitute for paying attention.” – Diane Sawyer

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 year is finally starting to wind down as the pace of economic data, earnings results, and analyst actions slows down to a trickle, if at all.  This morning, traders are in a buying mood as S&P 500 futures trade 0.4% higher while the Nasdaq is up 0.65%. Bond yields are modestly higher as crude oil jumps 2% following reports that the US has seized another Venezuelan oil tanker. Even with that move, though, WTI still trades below $58 per barrel, so those sub=$3 gas prices should be safe for now.

The real action this morning, though, is coming from the metals markets. Gold and silver are trading to new highs with gains of 1.5% and 2.5%, respectively. Platinum prices are blowing those rallies out of the water, though, surging more than 5% to its highest level since 2008 and within 8% of its record high. Even crypto prices are joining in on the rally to kick off the week as Bitcoin is back above $90K.

Asian stocks had a rough go of it last week, but they’re in the holiday mood to start this week. South Korea led the way higher with a gain of 2.1%, followed by the Nikkei, which rallied 1.8%. Other major benchmarks in the region were also higher, but by less than 1%. Yields in Japan continue moving higher, but the Yen managed to rally.

In terms of holiday cheer, there isn’t much in Europe to start the week. The STOXX 600 is down fractionally, with the UK and France leading the way with losses of about 0.5%.

It’s called the most wonderful time of the year, but is it for the stock market? The chart below shows the S&P 500’s historical returns during Christmas week since 1945.  For each year, we measure the S&P 500’s performance during the week when the Christmas holiday was observed. For all years since 1945, the S&P 500’s average gain was 0.53% with positive returns 66% of the time.  For all one-week periods since 1945, the S&P 500’s average gain was 0.30% with gains 57% of the time, so Christmas week may not be the “most wonderful”, but it’s much better than average. The best Christmas week for the S&P 500 was in 1991, when it rallied just over 5%, while the worst Christmas week was in 2002 (-2.3%).

Looking at different scenarios applicable to this year, in the 30 years when the S&P 500 was up 15%+ YTD heading into Christmas week, the S&P 500’s average Christmas week rally was 1.08%, with gains 83% of the time. There have also been 25 years when the S&P 500 was down MTD heading into Christmas week, and in those years, the S&P 500’s performance was more muted at a gain of 72%, with gains just over two-thirds of the time. Together, there have been nine years when the S&P 500 was up 15%+ YTD and down MTD heading into Christmas week, and in those years, the average gain during the week was 0.92% with gains 78% of the time.

The chart below shows each of the nine other years that the S&P 500 was up 15%+ YTD and down MTD heading into Christmas week. The most recent occurrence was last year when the S&P 500 rallied 0.67% during Christmas week. Before that, the next most recent occurrence was way back in 1997.

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.

“What we obtain too cheap, we esteem too lightly: it is dearness only that gives every thing its value.” – Thomas Paine

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

US futures are limping into the last trading session of the week with the S&P 500 indicated up by a few basis points while the Nasdaq is indicated 0.15% higher. The 10-year yield is up 3 basis points, but still below 4.15%, and crude oil is up 1%, but still below $57 per barrel. Gold is essentially flat, putting it on pace for a gain of nearly 1% on the week, while Bitcoin is up over 3% as it attempts to erase some of the week’s sharp losses.

The only economic reports on the calendar this week are Existing Home Sales and UMich sentiment at 10 AM. While options expiration and a rebalancing in the S&P 500 could create some volatility, trading is likely to really slow down next week and into year-end

While it was a down week for stocks in Asia, they closed out the week on a positive note. The Nikkei rallied 1% but still finished down 2.6% for the week. China was up 0.4% and was unchanged on the week, while South Korea rallied 0.7% to soften its decline for the week to 3.5%. As expected, the BoJ raised rates 25 bps to 0.75%, which was the highest level in 30 years. While monetary policy in Japan is tightening, investors in China are speculating that the PBoC will loosen policy by lowering the reserve requirement early in the new year.

In Europe, the tone is less positive this morning as equity markets on the other side of the Atlantic snooze into the weekend. The STOXX 600 is down 0.1%, but still up over 1% for the week. Germany is poised to finish the week basically unchanged, while most other country benchmark indices are up over 1%. Inflation data in the region was mixed as German PPI for November was unchanged versus expectations for an increase of 0.1%, while French PPI increased 1.1%.

It’s hard to believe that the S&P 500 hit an all-time high a week ago yesterday, and yet as of yesterday’s close, it was barely above its 50-day moving average and essentially at the same levels it was at in early October. As Yogi Berra might say, the stock market is doing great. It’s just not going anywhere.

While the S&P 500 hasn’t really gone anywhere, sector performance has been disparate. Communication Services and Health Care are both up over 6%, and another three sectors have outperformed the S&P 500 gain of 0.3%. At the other end of the spectrum, Utilities is down over 5%, but right behind it, Technology has declined 3%. The fact that Technology, which makes up over a third of the S&P 500, has declined over 3%, and the market has treaded water, indicates a broadening of performance. It also illustrates how hard it is for the market to make headway without Technology participating.

In terms of individual stock performance, of the twenty top-performing stocks in the S&P 500, 19 are up over 25%. Technology is the most heavily represented sector on the list with six, but the strength has been largely isolated to memory stocks, led by Sandisk (SNDK), which has rallied over 60% in just over two months! Besides Technology, six other sectors are represented, including Health Care with four, and Consumer Discretionary and Industrials with three each.