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“Don’t let what you cannot do interfere with what you can do.” – John R. Wooden

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

The market has one more day to salvage what’s been a negative week for stocks, and so far, it’s making a valiant effort. Futures on the S&P 500, Nasdaq, and Dow are all up 0.39%. With today being both Friday the 13th and the last day of trading into a weekend, it’s surprising to see equities catching a bid. Treasury yields are modestly lower, with the 10-year yield at 4.25%, and oil prices are down 2% to $93.50 per barrel. Gold prices are also pulling back, but Bitcoin is trading up close to 3% and above $72K.

Asian stocks ended what was already a down week on a negative note. The Nikkei was down over 1%, which took its weekly decline to over 3%, while China finished the week with a 0.7% decline, and India was down over 5%. Higher oil prices are a major pain point for the Asian economy, so the longer the Strait of Hormuz remains cut off, the more pressure it will put on these economies.

Equity performance has been more muted in Europe. The STOXX 600 is little changed for both the day and week, and no major index in the region is up or down more than 0.5% on the day. Industrial Production for January fell 1.5% versus expectations for an increase of 0.6%. Weaker growth, coupled with increasing inflationary pressures from rising energy prices, is the type of cooking markets would prefer not to see on the menu.

The economic calendar is jam-packed this morning with most of the reports (Personal Income, Personal Spending, GDP, PCE, Durable Goods) hitting the tape as we send this out, but at 10 AM Eastern, we’ll also get Michigan Confidence and JOLTS.

With the S&P 500 down 1% on the week heading into today, we’re on pace for the eighth negative week in the first eleven weeks of the year. With just three positive weeks, it’s been one of the weakest starts to a year for the S&P 500 in the post-WWII period. If the S&P 500 doesn’t rally more than 1% today, it will be the eighth year since 1945 that it has had three or less positive weeks to start a year. Ironically, last year also started weak, and while the market remained shaky through early April, it ended up being a good year. Before last year, the last time the year started out this inconsistently was in 2009, and the only year where there were fewer positive weeks to start a year was in 1982.

Two groups you would expect to benefit from the war in the Middle East are energy and defense stocks. Right out of the playbook, Energy stocks have rallied since the war broke out, but defense stocks have taken a sell-the-news response.

The chart below shows the performance of the iShares US Aerospace and Defense ETF (ITA) over the last year. While the ETF has surged over the last 12 months, it has struggled since the first missiles were fired. While ITA gapped up the Monday after markets reopened for trading after the war started, it’s been drifting lower ever since. Yesterday, it closed below its 50-DMA for the first time this year, and as Bloomberg noted in a news story overnight, the ETF had the largest outflow of assets in its history yesterday. Understandably, investors would take profits after the rally of the last year, but it’s interesting to see it follow the opposite path of Energy stocks.

Below, we show the ten largest holdings in the ITA ETF and where each one closed relative to its trading range yesterday. Over the last week, all ten stocks are lower and some by a lot. General Electric (GE) and Boeing (BA) are the ETF’s two largest holdings, and both stocks are down more than 6% in the last week alone. For BA, that decline has taken it more than 12% below its 50-DMA and into ‘extreme’ oversold territory (2+ standard deviations below 50-DMA).

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.

“Great things are not accomplished by those who yield to trends and fads and popular opinion.” – Jack Kerouac

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

Paul Hickey appeared on CNBC’s Money Movers yesterday to discuss the moves in the energy market and their impact on the equity market. To view the segment, click on the image below.

After a mixed session yesterday where the Nasdaq finished up 8 basis points (bps) while the S&P 500 fell 8 bps, US futures are firmly lower this morning, with the S&P 500 and Nasdaq both indicated to open down by about 35 bps. The primary culprit is crude oil, where prices are up over 5% and back above $90 as Iran stepped up attacks on tankers in the Persian Gulf.  Energy Secretary Chris Wright was also just on CNBC and noted that the US is not yet ready to escort tankers through the Strait of Hormuz, but could be mobilized later this month. As long as the bottlenecks around the Strait continue, oil prices will remain elevated, raising the risk that the conflict makes its mark on the economy.

With crude oil prices rising, treasury yields are higher again as investors focus on the potential inflationary impacts. Gold prices are essentially flat, silver is up 2%, and Bitcoin is down fractionally but still above $70K.

Stocks were down across the board in Asia overnight, as the Nikkei was down 1.0%, while China’s Shanghai Composite was only down 0.1%, and the Kospi fell 0.5%. Relative to the last two weeks, it was a muted session! Given the spike in crude oil prices and the region’s dependence on energy imports, you could make the argument that it could have been worse.

In Europe, equities are also taking the overnight spike in crude oil prices in stride. The STOXX 600 is down just 0.4%, while Germany is fractionally higher. We’re also starting to see impacts of the conflict showing up in corporate results as UK travel firm On the Beach lowered guidance, citing a sharp slowdown in travel bookings for locations in the Eastern Mediterranean.

On the economic calendar this morning, we just had jobless claims, Building Permits, and Housing Starts at 8:30. Initial claims came in 2K lower than expected, while continuing claims were 1K higher, so from this perspective at least, the labor market remains very well behaved. With respect to the housing numbers, permits were lower than expected (1376K vs 1410K) while starts were much higher than expected (1487K vs 1341K), although much of the strength was due to multi-family units.

With treasury yields moving higher, it’s been a rough month for homebuilder stocks. The SPDR S&P Homebuilder ETF closed at $121.36 on 2/13, but has since declined more than 15% through yesterday’s close. Those highs in February were enough to push the group to 52-week highs, but the gains for 2026 quickly evaporated, and it’s now close to testing support at the $100 level.

Part of that 15% decline since the February highs includes what is now an eight-day losing streak, which is tied for the longest losing streak in the ETF’s entire history. The last time there was a streak this long was over a year ago in late 2024, and the only longer streak was 13 days ending in October 2018.