Daily Sector Snapshot — 8/1/22
Bespoke Market Calendar — August 2022
Please click the image below to view our August 2022 market calendar. This calendar includes the S&P 500’s average percentage change and average intraday chart pattern for each trading day during the upcoming month. It also includes market holidays and options expiration dates plus the dates of key economic indicator releases. Click here to view Bespoke’s premium membership options.
Bespoke’s Matrix of Economic Indicators – 8/1/22
Our Matrix of Economic Indicators provides a concise summary analysis of the US economy’s momentum. We combine trends across the dozens and dozens of economic indicators in various categories like manufacturing, employment, housing, the consumer, and inflation to provide a directional overview of the economy.
To access our newest Matrix of Economic Indicators, start a two-week free trial to either Bespoke Premium or Bespoke Institutional now!
Gas Prices Continue to Decline
In 2022, extremely elevated gas prices have been impacting the economy, as every product-producing company has seen energy and transportation costs increase, forcing price hikes on the part of businesses simply to keep margins flat. Although there are a variety of factors affecting CPI readings, high gas prices certainly apply upward pressure. Today, gas prices are still extremely elevated compared to historical levels. At the AAA current national average of $4.22, just 1.8% of all days since the start of 2005 have seen a higher national average high, and all of them occurred this year. Click here to learn more about Bespoke’s premium stock market research service.
The national average price per barrel is still up 32.75% y/y, but this is actually the smallest y/y increase so far in 2022 and comes as the national average price has declined for 48 consecutive days. That’s the fourth longest streak on record. This streak is certainly notable, but gas prices are still at a level that is wearing on consumers.
The 40-day rate of change in average gas prices (-15%) has been notable as well, with only six other periods seeing a larger decline on a percentage basis. The most recent occurred during the COVID crash when it became clear that demand was going to deteriorate due to government-imposed mandates across the globe. Consumers will hope for further declines as we begin to near the $4.00 per gallon level. Not only have prices been falling lately, but they have also been more volatile than usual, as the current 50-day standard deviation (26 cents) is 3.2 times higher than the average since 2005. Click here to learn more about Bespoke’s premium stock market research service.
Chart of the Day – 1% Three-Peat
Strongest July in Post-WWII Era
On Friday, the S&P 500 closed over 140 basis points higher on the back of favorable earnings from Apple (AAPL), Amazon (AMZN), Chevron (CVX) and Exxon (XOM). This was the third straight day in which the S&P 500 gained at least one percent, allowing bulls to breathe a sigh of relief after a tough start to the year. These moves came even as a second consecutive quarter of negative real GDP growth was reported and the Fed hikes rates by 75 basis points.
Friday’s move helped the S&P 500 post its best July in the post-WWII era, finishing with a gain of 9.2%. Although the index is still close to 14% off of its early January highs, the market looks more inviting than it did at the beginning of the month, when the YTD declines were above 20%. As investors, we could just give ourselves high fives for the month, but it’s vital to remain forward-looking. Following July gains of 5%+, the S&P 500 has averaged a gain of 0.6% in August (median: +1.4%), performing positively 60 percent of the time. Between the start of August and the end of the calendar year, the index has averaged a gain of 8.0% (median: +10.0%), gaining 80% of the time. Over the following twelve months (starting in August), the index has averaged an impressive gain of 15.6% (median: +15.4%), rallying 87% of the time. Based on past history, bull runs in July tend to bode well for the market for both the rest of the year and over the following twelve months. Click here to learn more about Bespoke’s premium stock market research service.
Bespoke’s Morning Lineup – 8/1/22 – The Real World
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.
“Ladies and gentlemen, rock and roll.” – John Lack
Below is a snippet of content from today’s Morning Lineup for Bespoke Premium members. Start a two-week trial to Bespoke Premium now to access the full report.
41 years ago today, teens, pre-teens, and other people resembling the cast of “Stranger Things” watched “Video Killed the Radio Star” as MTV revolutionized the entertainment industry by making music both a listening and viewing experience. Eleven years later, in 1992, MTV mixed things up again with the launch of “The Real World” in what ultimately became the start of the reality TV revolution. The life cycle of MTV has been interesting to watch. What started as a network intended solely for ‘watching’ music, has become a network that now shows little or no music at all. MTV’s experience also shows the importance of adapting and changing with the times. Peter Drucker may not have had MTV in mind, but the phrase most famously applied to him still applies. Innovate or die.
Futures started off the month of August with losses last night but have erased much of the weakness so far this morning. Treasury yields are only marginally higher, crude oil is lower, while gold is higher. The big economic indicator of the day is the ISM Manufacturing report at 10:00 AM Eastern. Economists expect the headline reading to come in at 52.2 versus June’s reading of 53.0. Any reading under 53.0 would be the weakest reading in two years (June 2020).
Today’s Morning Lineup discusses earnings news out of Europe and the Americas, global PMI data for July, a detailed look at other economic data from around the world, and much more.
There may not be an official start date, but August represents what many consider the dog days of summer when, for a lot of people, the market is the last thing on their minds. Historically, there have been a number of calamitous events that began or transpired in August, but overall stock market returns during this time of year have been middling. The snapshot below from our Seasonality tool shows that over the last ten years, the S&P 500’s median performance from the close on 8/1 over the next week, month, and three months has ranked between the 50th and 60th percentile. For the next week, the S&P 500’s median gain has been 0.40%. The next month has had a median gain of 1.15% while the next three months have seen a median gain of 2.75%. Nothing especially notable, but the way this year has gone, a gain is a gain!
Start a two-week trial to Bespoke Premium to read today’s full Morning Lineup.
Bespoke Brunch Reads: 7/31/22
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.
While you’re here, join Bespoke Premium with a 30-day free trial!
Energy Policy
Department of Energy Releases New Notice of Sale as Gasoline Prices Continue to Fall (The White House)
A new Biden administration initiative will start using futures markets in conjunction with the SPR, in an effort to balance the crude market’s term structure as well as the physical market, which can allow for easier market conditions without outright selling crude from the SPR. [Link]
Resource Nationalism and Decarbonization by Miguel Ángel Marmolejo Cervantes , Martín Obaya, Thea Riofrancos, and Alex Yablon (Phenomenal World)
A conversation discussing the prospects of nationalization and national management of decarbonized energy resources in Latin America. [Link]
How London Paid a Record Price to Dodge a Blackout by Javier Blas (Blooomberg)
The UK’s metropole only barely avoided a blackout in mid-July, but to do so it needed to pay 5000% more per hour than is typical. These sorts of shocks to the grid are becoming more and more common as resilience falls. [Link; soft paywall]
Growth Tech
Zuck Turns Up The Heat by Alex Heath & David Pierce (The Verge)
The trials and tribulations of the Meta CEO, struggling to manage a sprawling social media behemoth that is being nibbled at from all sides. [Link]
Changes to Shopify’s team by Tobi Lutke (Shopify)
A frank admission that the explosion in e-commerce activity during the pandemic didn’t continue, and investments made during that period are souring amidst a huge swing back towards normal spending from consumers. [Link]
Politics
Republicans Confront Unexpected Online Money Slowdown by
While political partisans on both sides of the aisle appear motivated, recent GOP grassroots fundraising efforts have dried up at a critical period for advertising spending headed into the midterm elections, in a potential warning sign for the party that has analysts puzzled. [Link; soft paywall]
Investing
The Secret Diary of a ‘Sustainable Investor’ — Part 1 by Tariq Fancy (Medium)
A rejection of the “sustainable” or “ESG” investing movement by one of its founding members, in favor of much bigger and more dramatic interventions in how our society consumes resources. [Link]
Demographics
Study: Millennials didn’t stray far from where they grew up by Mike Schneider (AP)
A new analysis of Census data suggests that narrow economic opportunity sets mean they tend to lead their adult lives close to where they grew up. [Link]
Remembering When Bob Dylan Shocked The World By Going Electric, On This Day In 1965 [Videos] by Rex Thomson (Live For Live Music)
An oral history of the night that folk music legend Bob Dylan decided to take a different tack, switching from his acoustic guitar to an electric one and forever changing how he was viewed as an artist. [Link]
Inflation
Cheaper Beer, Cigarettes Gain Favor as Inflation Pinches Shoppers by Jennifer Maloney and Alex Harring (WSJ)
Lower-priced value brands are seeing strong sales while premium offerings suffer, a response to pinched budgets and incomes that can’t keep up with broad prices. [Link; paywall]
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Have a great weekend!
The Bespoke Report — Equity Market Pros and Cons — Q3 2022
This week’s Bespoke Report is an updated version of our “Pros and Cons” edition for Q3 2022.
With this report, you’re able to get a complete picture of the bull and bear case for US stocks right now. It’s heavy on graphics and light on text, but we let the charts and tables do the talking!
On page two of the report, you’ll see a full list of the pros and cons that we lay out. Slides for each topic are then provided on page three and beyond.
To read this report and access everything else Bespoke’s research platform has to offer, start a two-week trial to Bespoke Premium.
