Bespoke’s Morning Lineup — 8/11/21
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“Blessed are the young, for they shall inherit the national debt.” – Herbert Hoover
US equity futures are bouncing a bit after the headline monthly CPI released at 8:30 AM ET came right inline with expectations.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including activity in Washington DC, key earnings reports out of Europe and the latest US and international COVID trends.
Also, make sure to check out our Daily Sector Snapshot.
While the S&P 500 has been making new highs in a steady uptrend for the last couple of months, international equities have yet to really break out of their sideways ranges. That is, until this week. As shown below, the Bloomberg World equities index has just broken out to new highs above what proved to be a pretty stiff resistance level. This is a positive technical development.
As we have highlighted numerous times in recent weeks and months, international equities have been underperforming US equities for more than a decade, and at some point we expect this trend to reverse in a secular fashion.
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Daily Sector Snapshot — 8/10/21
Bespoke Stock Scores — 8/10/21
Chart of the Day: Earnings Season Rundown
Labor Concerns Grow and Inflation Worries Ease For Small Businesses
The NFIB released their July reading on small business sentiment this morning. In today’s Morning Lineup, we highlighted the strength in labor market indicators included in the report. Included in that was the percentage of survey respondents reporting either the cost or quality of labor as their most important problem. As shown below, 9% and 26% reported as such respectively. On a combined basis, that is 35% of respondents reporting either of these issues as their biggest problem. That is the highest percentage since November 2019 when 36% reported as such. Government-related concerns came in as the biggest problem for the next largest share of businesses. 31% reported either taxes (19%) or government requirements and red tape (12%) as their biggest problems, up from 29% on a combined basis last month. While higher month over month, that is still multiple percentage points below the recent high of 35% from May. The other biggest issue that comes in behind labor and government is inflation. 11% of respondents reported that they worry about cost pressures which is actually down from 13% the prior month. While improved, that is still one of the highest readings to date outside of the string of record or near-record readings in 2008. Click here to view Bespoke’s premium membership options.
A Record Share of People Leaving Jobs Are Quitting
Yesterday, the BLS released June data on job openings and labor turnover, also known as the JOLTS report. This alternative view of labor markets is released at a one month lag to the monthly employment situation report which includes the nonfarm payrolls number. In additional to openings, JOLTS also includes a look at quits and other separations from businesses which include retirements, firings, and other departures. Since the data begins in 2000, the average month has seen quits account for about 55% of total separations. Over the last three months, that number has surged to nearly 70% and is sitting at a record level. One thing we can say with great confidence about the current labor market: lots of workers are quitting for greener pastures. Click here to view Bespoke’s premium membership options.
Chart sources: BLS, FRED, Bespoke Investment Group calculations
Bespoke In-Depth: Economic Sentiment, NFIB, and COVID Updates
July 2021 Headlines
Bespoke’s Morning Lineup — 8/10/21
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.
“All that glitters is not gold.” – William Shakespeare
It’s a relatively slow news morning in equity markets. S&P 500 and Nasdaq futures are indicating a slightly higher open, while the Dow 30 is set to open slightly lower. Bitcoin is down 1% while gold and oil are bouncing back a bit after trading deeply oversold (more on that below). The 10-year yield is up slightly after crossing above 1.3% yesterday.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including key earnings reports out of Europe and the latest US and international COVID trends.
Also, make sure to check out our Daily Sector Snapshot.
The ARK Innovation ETF (ARKK) appears ready to break out of the downtrend it has been in since peaking in the first quarter. Over the last two months, ARKK has managed to make a series of higher lows and is now just above the “flag” pattern that has emerged.
Given its 10% weighting in the ARKK ETF, Tesla (TSLA) has had a lot to do with ARKK’s broader move. As shown below, TSLA has also broken out of its downtrend in recent weeks.
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