Bespoke Baskets Update – July 2026
Chart of the Day – Netflix (NFLX)
Financials Feeling at Home in Overbought Territory
The S&P 500 Financials sector has been trading in overbought territory (at least one standard deviation above its 50-DMA) for 22 consecutive trading days as of yesterday’s close. That ties the sector’s previous two streaks that ended on 12/6/24 and 1/12/26, and the sector appears poised to extend that run today.
While the current streak is only tied for the 14th-longest of the past decade, it has been unusually intense. The sector closed at least two standard deviations above its 50-DMA on 16 of the 22 days during this streak, including each of the last four. The two previous 22-day streaks included ten or fewer such closes. In fact, no other streak of at least 22 overbought days during the past decade has featured a higher concentration of extremely overbought readings.
Over the last ten years, there have been 17 streaks when the sector was overbought for 22 days or longer. The longest streak lasted 52 trading days, from 1/19/24 to 4/3/24, although the sector reached extremely overbought territory on only four of those days. Thirteen of the 17 streaks lasted longer than the current one, but Financials could surpass several of them if the run continues over the coming days.
Following the 16 prior streaks, performance was typically weak over the short term. Once the streak ended, Financials posted median declines of 1.91% over the next week and 1.68% over the next month. Over the next three months, the chances of gains improved to a coin flip, and over the six-month and one-year periods, median returns improved to 6.65% and 14.48%, respectively.
The sector has rallied 7.8% during the current 22-day streak, roughly matching the median gain during comparable streaks. How forward returns stack up against historical instances will come after the sector finally falls out of overbought territory. For now, though, the streak continues to roll on.
You can find more sector research like this in Bespoke’s Daily Sector Snapshot.
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Bespoke’s Morning Lineup – 7/15/26 – PPI With the Encore
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“We seek friendly relations with all nations. Any nation can be our friend without being any other nation’s enemy.” – Richard Nixon
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Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
S&P 500 futures are slightly higher this morning while the Nasdaq is slightly stronger, pointing to a gain of 0.33% as investors await the June PPI, hoping for a positive encore to yesterday’s tame CPI report. Treasury yields are moving higher, though, as the 10-year yield remains above 4.6%. In the energy market, crude oil prices are only fractionally higher despite a new round of attacks by the US on Iran. Gold is fractionally lower as it continues to hold above $4,000 per ounce, while Bitcoin quietly rallies as it moves up to $65,000.
Asian markets were mostly higher overnight, with the Nikkei rallying 1.5% while South Korea surged 6.2%. China was the outlier, falling 0.3% following a round of sluggish economic data. In Europe, stocks are lower across the board, but the losses are only fractional in nature as no major benchmark is down more than 1%. Industrial Production for the Eurozone unexpectedly declined 0.2% in May, versus expectations for an increase of 0.3%.
The data train continues to accelerate today with a busy slate of earnings results coupled with Empire Manufacturing and PPI at 8:30. Empire Manufacturing exceeded forecasts, coming in at 15.6 vs 9.2, and PPI was weaker across the board, coming in well below expectations. Headline CPI fell 0.3% m/m versus forecasts for no change, and the y/y reading dropped to 5.5% versus the 6.2% forecasts. Stripping out Food and Energy, the core reading came in at 0.2% m/m and 4.7% y/y versus expectations for increases of 0.3% and 5.1%, respectively. In reaction to the reports, futures are building modestly on their pre-market gains.
If ever there was an example of how earnings season can cause huge disparities in individual stock returns, yesterday’s performance of the Dow 30 components was Exhibit A. Fueled by better-than-expected EPS and revenue results, shares of Goldman Sachs (GS) topped the Dow performance chart yesterday with a rally of 9% and the best earnings reaction day for the stock since January 2019. While GS had one of its best earnings reaction days in years, IBM had its worst single-day performance ever with a decline of 25.2% after preannouncing weaker-than-expected results. Looking at the chart below, with yesterday’s disparate returns, the performance of the Dow 30 stocks looks more like a YTD chart than just one day.
The YTD performance chart of Dow 30 stocks looks more like this. Even with yesterday’s big gains and losses, GS is not the best performing stock in the Dow YTD nor is IBM the worst performer. GS actually ranks third with a gain of just under 30%, trailing CAT and Cisco (CSCO). To the downside, IBM’s 26.7% YTD decline also ranks as the third worst performer in the index, ahead of only Salesforce (CRM), which is down 36.8% and Nike’s (NKE) decline of 32.7%.
For a good part of yesterday’s session, it looked as though the S&P 500 would finish the day higher while the Dow would trade lower. The Dow managed to eke out a gain of 0.02% at the end of the day, avoiding a 26th session this year when the two indices moved in the opposite directions. The chart below shows the number of days by year when the Dow and S&P 500 moved in opposite directions. At 25 this year, 2027 is on pace for 47 diverging days between the two indices this year. If that pace keeps up, the year would finish in third for the most number of diverging days since 1960, trailing the peak of 62 in 2024 and 50 in 1993.
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The Closer – CPI, Hawk Talk, Financials – 7/14/26
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- Relative to a sample of Fed communications dating back to 1994, only a few could be evaluated as more hawkish than Fed Governor Waller’s speech today.
- The technicals for WTI crude oil have begun to turn around and gasoline futures are suggesting a price of $4/gallon at the pump.
- Futures positioning from CFTC data showed speculators are increasingly betting on higher rates ahead.
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Daily Sector Snapshot — 7/14/26
A Jolt for Energy
Energy rallied 3.16% yesterday, outpacing the next-best sector by almost 2.5 percentage points. The move comes as military action in the Middle East has resumed, sending oil prices sharply higher. It was Energy’s best day since February 3, 2026, and, as shown below, only a handful of sessions over the past few years have produced a larger gain.
The Energy sector is up 128.5% over the last five years, but most of its biggest daily gains were concentrated early in that period. Of the 48 days when the sector gained at least 3%, 42 occurred during the first half of the five-year span. Just eight have occurred over the past two and a half years, including two in the last week.
Compared to other S&P 500 sectors, Energy leads the index month-to-date, up 6.8% through Monday’s close. Financials has also had a good start to July with a gain of 4.44%, while Industrials, Technology, Materials, and Consumer Discretionary are lower.
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B.I.G. Tips – Big Blue Feeling Blue
Chart of the Day – CPI and Seasonality
Bespoke’s Morning Lineup – 7/14/26 – And They’re Off
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“I don’t know as I want a lawyer to tell me what I cannot do. I hire him to tell how to do what I want to do.” – JP Morgan
Bespoke’s Paul Hickey will be appearing on Making Money With Charles Payne today at 2 PM on Fox Business. Check it out!
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
As if the flood of earnings reports from the big banks, the June CPI report, and Congressional testimony from Kevin Warsh weren’t enough, IBM just added one more big ingredient to today’s market recipe with an earnings warning. The stock is trading down over 20% in the pre-market and on pace for its most negative opening gap in at least 50 years.
Dow futures are down 0.6% as IBM has a larger weighting in that index than the S&P 500. As a result, S&P 500 futures are down just 0.10%, while the Nasdaq 100 is on pace to open higher by over 0.50%. Whether those gains can hold into the end of the day remains to be seen.
Treasury yields continue to march higher, with the 10-year yield up to 4.62%. WTI crude oil is back above $80, while gold is fractionally higher, hanging on to $4,000, and Bitcoin is up 1%.
Equity investors in Asia licked their wounds from Monday and pushed stocks modestly higher overnight. Both the Nikkei and KOSPI were up 0.7% while onshore China was up 1.4%, and offshore stocks were up 0.5%. The 0.7% rally in South Korea looks like a modest move at the surface, but it was a volatile session with the index trading down over 5% intraday at one point.
The tone is decidedly weaker this morning in Europe as the STOXX 600 trades down 0.6%, led lower by Spain (-0.9%) and France (-0.8%), while the UK (-0.3%) and Italy (-0.4%) hold up relatively better. While equities are generally lower across the board, stocks in the region are off the intraday lows.
As mentioned above, there are a lot of catalysts for investors to navigate through today. Earnings results have been very positive, and CPI just hit the tape. The headline report came in much weaker than expected, with a decline of 0.4% versus forecasts for a decline of just 0.1%. Core CPI was unchanged versus forecasts for an increase of 0.2%. Most importantly, the year/year reading came in at 3.5% versus forecasts for 3.8%. While the May report last month created an inflation scare for the market, today’s report largely erases that. The only other report on the calendar was NFIB Small Business Sentiment, which came in higher than expected.
Below is a look at how the major banks and brokerage firms looked relative to their trading ranges heading into this morning’s earnings reports. The five stocks reporting are far from a monolith based on their YTD returns. While Citi (C) and Goldman Sachs (GS) are both up close to 20%, Bank of America (BAC) and JPMorgan Chase (JPM) have seen just single-digit gains, and Wells Fargo (WFC) is lower. More recently, they’ve mostly seen modest weakness, although WFC has eked out a gain. The recent weakness, it should be noted, comes after the stocks recently reached overbought levels, as they look to digest recent gains.
The chart below of the S&P 500 Financials sector ETF (XLF) puts the recent moves of the largest banks into perspective. After breaking above resistance about two weeks ago to the highest level of 2026, XLK reached extremely overbought levels, trading as much as three standard deviations above its 50-day moving average. It then pulled back and digested those gains after running into resistance at its prior record highs. With XLF stuck between one former and one current resistance level, how the stocks react to today’s earnings reports could say a lot about how the summer plays out for the sector.
So far, the initial reaction of the stocks hasn’t been promising. All five major banks reporting this morning have easily blown out EPS and revenue forecasts, but all but GS is trading lower in the pre-market. Based on their runups into earnings season, the bar for these companies was set high.
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