Bespoke’s Global Macro Dashboard — 4/15/20
Bespoke’s Global Macro Dashboard is a high-level summary of 22 major economies from around the world. For each country, we provide charts of local equity market prices, relative performance versus global equities, price to earnings ratios, dividend yields, economic growth, unemployment, retail sales and industrial production growth, inflation, money supply, spot FX performance versus the dollar, policy rate, and ten year local government bond yield interest rates. The report is intended as a tool for both reference and idea generation. It’s clients’ first stop for basic background info on how a given economy is performing, and what issues are driving the narrative for that economy. The dashboard helps you get up to speed on and keep track of the basics for the most important economies around the world, informing starting points for further research and risk management. It’s published weekly every Wednesday at the Bespoke Institutional membership level.
You can access our Global Macro Dashboard by starting a 14-day free trial to Bespoke Institutional now!
Bespoke Morning Lineup – 4/15/20 – A Taxing Day For Oil
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.
It’s Tax Day, and while Treasury delayed the deadline for this year, it’s still looking like a taxing day for financial markets as equity futures are indicated to fall over 1% and crude oil is below $20 at its lowest level since early 2002.
We finally got some economic data for this week, and while expectations were already low, the data was even worse. Retail Sales fell 8.7% in March versus expectations for a decline of 8.0%. That was a March number. For April, we got the Empire Manufacturing report, and that was an absolute disaster. Economists were forecasting the headline index to come in at -35.0, which would have been the worst reading in its history dating back to 2001. The actual result was more than twice as bad, though, coming in at a level of -78.2. As negative as that reading is, it’s to be expected when you have a complete shutdown of the US economy.
Read today’s Bespoke Morning Lineup for a discussion of overnight market events in Asia and Europe, the drop in crude oil, details of the airline bailout, the latest major US earnings reports, trends and statistics of the COVID-19 outbreak, and other stock-specific news of note.
This morning’s Retail Sales report was even more interesting in the details which we will discuss more in a report later. But one trend that has completely reversed is that of “Eating In vs Eating Out”. After trending lower for years now, the share of total retail sales taking place at food and beverage stores spiked to 13.53%. Moving in completely the opposite direction, the share of sales at Bars and Restaurants plunged to 10.05%. If you think that was bad, though, keep in mind that the economy wasn’t shut down for all of March. Wait until the April numbers are released.
The Closer – Tech Rules As Markets Roar Higher Into Recession – 4/14/20
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Looking for deeper insight on markets? In tonight’s Closer sent to Bespoke Institutional clients, we show how stocks are richly valued relative to next year’s earnings estimates. We then take a look at how forecasters are now certain of an imminent recession. We close out tonight by showing Tech’s strength in leading the market higher while grossly outperforming banks which are seeing an uptick in bad debt charges..
See today’s post-market Closer and everything else Bespoke publishes by starting a 14-day free trial to Bespoke Institutional today!
Daily Sector Snapshot — 4/14/20
Chart of the Day: Decile Analysis of the New Raging Bull
Stocks for the COVID Economy — Update
S&P 500 Sector Performance Numbers
Below is an updated look at the performance of the S&P 500 and its eleven sectors over various time periods. From the S&P 500’s last all time high on February 19th, no sector has been hit as hard as Energy. From those highs for the broader index, the sector had been more than cut in half by the time the S&P 500 found a bottom on March 23rd. In the time since then, Energy has been the best performing sector having risen 44.9%. Meanwhile, some of the best performing sectors over the past few years like Technology and Consumer Discretionary have performed essentially inline with the S&P during this rally. Despite Energy’s outperformance off the 3/23 lows, the sector is still down 36.3% since the S&P 500’s February 19th high and is down even more YTD. Over the past year, two year, and three year period, Energy has also been roughly cut in half.
After the huge rally we’ve seen since March 23rd, there are now four sectors that are back up on a year-over-year basis — Utilities, Health Care, Technology, and Consumer Staples. On a two-year basis, seven of eleven sectors are now back in the green, while only three sectors are now down on a three-year basis (Energy, Industrials, and Communication Services).
The S&P 500 as a whole is now down just 2.53% year-over-year, while it’s up 6.6% over the last two years and up 21.6% over the last three years.
The Covid crash brought most sectors to some form of a multi-year low. But with the significant bounce since 3/23 across sectors, a significant mean reversion has taken place and several sectors are now sitting more in the middle of the past few year’s range as shown in the charts below. Meanwhile, others like Energy, Financials, Industrials, and Materials remain at the lower end of those ranges.
Even on a shorter time frame equities are simply in the middle of their ranges. Last week, the Health Care sector finally crossed back above its 50-DMA; the first sector to do so since the Utilities sector in the first week of March. Today, the Consumer Discretionary, Consumer Staples, Health Care, Materials, and Technology sectors have all done the same but are still within 1% of their 50-DMAs except for Health Care which is 2.5% above.
The S&P 500, Communication Services, Real Estate, and Utilities are only around 2.5 or fewer percentage points away from their 50-DMAs. But for Financials and Industrials, they are still over 8% away. Energy still has the furthest to go currently 13.5% below its 50-DMA. Start a two-week free trial to Bespoke Institutional to access our Sector Snapshot and much more.
Bespoke Stock Scores — 4/14/20
Bespoke’s Morning Lineup – 4/14/20 – Earnings Season Kicks Off With a Thud
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.
Earnings season kicked off this morning with JP Morgan (JPM) reporting Q1 results. If first impressions are to be trusted, it could be messy. Of the six companies reporting this morning, three missed EPS forecasts (JP Morgan, Wells Fargo, and Conn’s), two beat EPS forecasts (First Republic and Johnson & Johnson), and one reported inline bottom-line results (Fastenal). This is just the tip of the iceberg, though, as the pace of reports will only pick up going forward. Despite the weakness in results, the one silver lining is that expectations couldn’t be much lower, so that should help to set the bar incredibly low.
Read today’s Bespoke Morning Lineup for a discussion of overnight market events in Asia and Europe, the first batch of US earnings reports, the latest trends and statistics of the COVID-19 outbreak, and other stock-specific news of note.
We’ve talked in the past about how the US and every sector has finally moved out of oversold territory. On a more global scale, we have seen the exact same trend. The image below is from our Trend Analyzer and shows the performance of various international regional ETFs. What’s striking about this chart is how every ETF has not only moved out of oversold territory, but they are also all at nearly the same spot with regards to its trading range. Talk about uniformity!
The Closer – Statecrafting, Retracing Prices, Credit Premiums – 4/13/20
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Looking for deeper insight on markets? In tonight’s Closer sent to Bespoke Institutional clients, we begin with the news that several states are beginning to strategize on how to reopen their economies. Next, we turn to several technical developments across the equities space before taking a look at today’s $140 billion of bill issuance. We finish with a look at the massive premiums in the high yield ETF space.
See today’s post-market Closer and everything else Bespoke publishes by starting a 14-day free trial to Bespoke Institutional today!