Bespoke Brunch Reads: 12/13/20
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.
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Pandemic News
Sanofi suffers major setback in development of a Covid-19 vaccine by Helen Branswell (StatNews)
Major global vaccine player Sanofi, who has partnered with GlaxoSmithKline for its COVID vaccine, has had to re-start its Phase 2 trials thanks to a fault in some of the ingredients it used in earlier iterations of its inoculation. [Link]
Hundreds ill, 1 dead due to unidentified illness in India (AP)
A mystery illness has been reported in the Indian state of Andhra Pradesh. While the pathogen has not been confirmed and could be driven by environmental factors like chemical poisoning, the sudden spate of illnesses still brings grim recall of the early days of the COVID pandemic. [Link]
Desperate NYC workers using LIRR, cars as quiet and cheap office spaces by Lambeth Hochwald (NYP)
With offices and coworking spaces closed, some New Yorkers who are desperate to get out of the house and get some work done have been turning to an unusual source of productive zen. [Link; auto-playing video]
Investing
The valuation warning signs for stock markets by Ian Harnett (FT)
Current valuations are consistent with low forward returns over the subsequent decade, even if short-term returns don’t show much correlation to the elevated P/E ratio. [Link; paywall]
Grantham stumbles on $200m profit after Spac swoop on battery maker by Robin Wigglesworth (FT)
A $12.5mm investment seven years ago means a $200mm payday for investor Jeremy Grantham, who is now semi-retired and enjoying the proceeds of a special purpose acquisition company merger. [Link; paywall]
Social Media
Facebook Gets Paid by Craig Silverman and Ryan Mac (BuzzFeed)
Black-box algorithms have been generating perverse – or even perverted – outcomes, but outcomes that mean massive earnings for the world’s largest social media network. [Link]
Weird Markets
The Essex Boys: How Nine Traders Hit a Gusher With Negative Oil by Liam Vaughan, Kit Chellel, and Benjamin Bain (Bloomberg)
A small group of independent traders based in Essex made almost half a billion dollars on the shocking plunge into negative territory for oil futures back in April. [Link; soft paywall]
How Come the Mets Gave a Major League Deal to a Lifetime Minor Leaguer? by Tom Verducci (SI)
A journeyman minor leaguer parlayed some time with the Tampa Bay Devil Rays into a large major league deal, an unusual but not entirely irrational shift in his value as a ballplayer. [Link; auto-playing video]
Antiques
Cheers! Or not: ‘Scandalous’ 1st Christmas card up for sale by William J. Kole (AP)
Christmas Cards have only been commercially printed since 1843, and the first one is now up for auction. It’s expected to get anywhere from $6,000 to $11,000 at auction. [Link]
Politics
The Places That Had the Biggest Swings Toward and Against Trump by Jed Kolko and Toni Monkovic (NYT)
A data-intensive analysis of county-level vote data that shows the big trends from the 2020 election: a small decline in polarization, large metropolitan areas swinging against Republicans, and Latino voters moving towards the outgoing President. [Link; soft paywall]
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Have a great weekend!
2021 Outlook – Yield Curve & Fed
Our 2021 Bespoke Report market outlook is the most important piece of research that Bespoke publishes each year. We’ve been publishing our annual outlook piece since the formation of Bespoke in 2007, and it gets better every year! In this year’s edition, we’ll be covering every important topic you can think of that will impact financial markets in 2021.
The 2021 Bespoke Report contains sections like Valuation, The Fed, Sector Technicals and Weightings, Stock Market Sentiment, Stock Market Seasonality, Housing, Commodities, and more. We’ll also be publishing a list of our favorite stocks and asset classes for 2021 and beyond.
We’ll be releasing individual sections of the report to subscribers until the full publication is completed by year-end. Today we have published the “Yield Curve & Fed” section of the 2021 Bespoke Report, which looks at the year that was in central bank policy and the year to come, as well as the impact of the level of interest rates and their term structure on forward returns for equity markets.
To view this section immediately and all other sections, become a member with our 2021 Annual Outlook Special!
2021 Outlook – Seasonality
Our 2021 Bespoke Report market outlook is the most important piece of research that Bespoke publishes each year. We’ve been publishing our annual outlook piece since the formation of Bespoke in 2007, and it gets better every year! In this year’s edition, we’ll be covering every important topic you can think of that will impact financial markets in 2021.
The 2021 Bespoke Report contains sections like Valuation, The Fed, Sector Technicals and Weightings, Stock Market Sentiment, Stock Market Seasonality, Housing, Commodities, and more. We’ll also be publishing a list of our favorite stocks and asset classes for 2021 and beyond.
We’ll be releasing individual sections of the report to subscribers until the full publication is completed by year-end. Today we have published the “Seasonality” section of the 2021 Bespoke Report, which looks at the seasonal trends of various asset classes.
To view this section immediately and all other sections, become a member with our 2021 Annual Outlook Special!
2021 Outlook – Economic Cycles
Our 2021 Bespoke Report market outlook is the most important piece of research that Bespoke publishes each year. We’ve been publishing our annual outlook piece since the formation of Bespoke in 2007, and it gets better every year! In this year’s edition, we’ll be covering every important topic you can think of that will impact financial markets in 2021.
The 2021 Bespoke Report contains sections like Valuation, The Fed, Sector Technicals and Weightings, Stock Market Sentiment, Stock Market Seasonality, Housing, Commodities, and more. We’ll also be publishing a list of our favorite stocks and asset classes for 2021 and beyond.
We’ll be releasing individual sections of the report to subscribers until the full publication is completed by year-end. Today we have published the “Economic Cycles” section of the 2021 Bespoke Report, which recaps trends and levels of different US economic indicators and what they say about the health of the US economy.
To view this section immediately and all other sections, become a member with our 2021 Annual Outlook Special!
2021 Outlook – Economic Indicators
Our 2021 Bespoke Report market outlook is the most important piece of research that Bespoke publishes each year. We’ve been publishing our annual outlook piece since the formation of Bespoke in 2007, and it gets better every year! In this year’s edition, we’ll be covering every important topic you can think of that will impact financial markets in 2021.
The 2021 Bespoke Report contains sections like Economic Cycles, The Fed, Sector Technicals and Weightings, Stock Market Sentiment, Stock Market Seasonality, Housing, Commodities, and more. We’ll also be publishing a list of our favorite stocks and asset classes for 2021 and beyond.
We’ll be releasing individual sections of the report to subscribers until the full publication is completed by year-end. Today we have published the “Economic Indicators” section of the 2021 Bespoke Report, which recaps trends and levels of different US economic indicators and what they say about the health of the US economy.
To view this section immediately and all other sections, become a member with our 2021 Annual Outlook Special!
Daily Sector Snapshot — 12/11/20
B.I.G. Tips – IPOs Looking Bubbly
IPO Craze
It has been a big week for IPOs with DoorDash (DASH) and Airbnb (ABNB) both hitting the secondary market. These two stocks saw massive first-day gains of 86% and 113%, respectively. Generally speaking with the two aforementioned stocks as a case study, recent IPOs have been welcomed with open arms. As a result, the IPO ETF (IPO) has seen a sizeable rally having gained over 30% since the low at the end of October. While neither DoorDash nor Airbnb are current holdings of this ETF, this week saw some volatility with a 3% drop on the day of DoorDash’s debut and a 2.5% rally yesterday when Airbnb debuted. IPO currently sits just off its highs after the past month and a half’s rally, but that is at some of the most overbought levels of the past five years as shown in the second chart below.
Relative to the S&P 500 (SPY), IPOs have seen massive outperformance since the bear market lows. In the chart below we show the performance of the Renaissance IPO ETF (IPO) versus the S&P 500 (SPY) over the past five years. From 2016 through the pandemic lows in March, these two tracked each other very closely, but IPO has skyrocketed versus SPY over the last nine months. Click here to view Bespoke’s premium membership options for our best research available.
Bespoke’s Morning Lineup – 12/11/20 – No Deals Yet
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 free trial to Bespoke Premium. CLICK HERE to learn more and start your free trial.
“Diplomacy is the art of telling people to go to hell in such a way that they ask for directions.” – Winston Churchill
Lawmakers on both sides of the Atlantic are in intense discussions, but the involved parties in both sets of talks have yet to reach an agreement. Over in the UK, negotiators in the UK and EU have been at a stalemate and European Commission President Von Der Leyden says no deal is the most likely outcome of current talks. Closer to home in the US, lawmakers in Washington haven’t quite told each other to go to hell, but they still can’t agree on the terms of a new round of fiscal relief.
Futures are lower heading into the last trading session of the week as all of the major averages with the exception of the Russell 2000 are set to finish the week lower. Don’t tell that the this week’s latest round of IPOs, though. As noted in today’s Morning Lineup, they’ve been on fire lately.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, a recap of recent IPO performance, an update on the latest national and international COVID trends, and much more.
After yesterday’s rally in the Nasdaq, we wanted to provide a quick update on its intraday performance over the last three weeks. Even after yesterday’s rebound, the Nasdaq remains well below the uptrend it broke earlier this week. Looking forward, that level is likely to act as short term resistance on any bounce.
Similar to the Nasdaq, the S&P 500 also broke its uptrend earlier this week, but not to quite the same degree as the Nasdaq. Like the Nasdaq, though, that former uptrend line is likely to act as a short-term speed bump on any bounce.
Lastly, while most investors wouldn’t touch long-term treasuries at this point, they’ve actually performed quite well over the last few trading days and will likely break this short-term downtrend in today’s trading.
The Bespoke 50 Top Growth Stocks — 12/10/20
Every Thursday, Bespoke publishes its “Bespoke 50” list of top growth stocks in the Russell 3,000. Our “Bespoke 50” portfolio is made up of the 50 stocks that fit a proprietary growth screen that we created a number of years ago. Since inception in early 2012, the “Bespoke 50” is up 380.6% excluding dividends, commissions, or fees. Over the same period, the S&P 500 is up in price by 166.4%. Always remember, though, that past performance is no guarantee of future returns. To view our “Bespoke 50” list of top growth stocks, please start a two-week free trial to either Bespoke Premium or Bespoke Institutional.
