the Bespoke 50 — 8/17/17

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” has beaten the S&P 500 by 47.6 percentage points.  Through today, the “Bespoke 50” is up 125.8% since inception versus the S&P 500’s gain of 78.1%.  Always remember, though, that past performance is no guarantee of future returns.

To view our “Bespoke 50” list of top growth stocks, sign up for Bespoke Premium ($99/month) at this checkout page and get your first month free.  This is a great deal!

45 $100+ Billion Companies in the S&P 500

We were looking through charts today and noticed that Exxon Mobil (XOM) is completely breaking down.  The drop has taken XOM’s market cap down to $328 billion, which ranks it as the 8th largest stock in the S&P 500.  Below is a look at the 45 largest stocks in the index.  These are the only stocks in the index with market caps above $100 billion as well.

Ten years ago, XOM was by far the largest stock in the world.  Since then it has been overtaken by Apple (AAPL), Alphabet (GOOGL), Microsoft (MSFT), Facebook (FB), Amazon.com (AMZN), Berkshire (BRK/B), and Johnson & Johnson (JNJ).  Even JP Morgan is creeping up on Exxon — it’s just $4 billion away.

The other company that has been lapped over the last ten years is General Electric (GE).  Ten years ago it was the second largest stock in the S&P 500, but now it ranks 16th behind companies like Visa (V) and AT&T (T).  A little bit more of a drop and Oracle will be larger than GE as well.

The point of this exercise is not so much to beat up on XOM and GE, but to try and help you recognize how much things can change in a ten-year span.  A good number of the companies on this list had market caps of less than $50 billion back in August 2007, and now they’re mega-cap behemoths.  Heck, Facebook (FB) wasn’t even public ten years ago, and now it’s the fourth largest company in the US.

While some of these companies will still be at or near the top of the list ten years from now, we can guarantee you that not all of them will.  Instead, they’ll be replaced by the next Facebook, Amazon, or Apple.  Anyone have a crystal ball we can borrow?

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The Closer — Multifamily Pain, Crude Drain, Fed-’splain — 8/16/17

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Looking for deeper insight on global markets and economics?  In tonight’s Closer sent to Bespoke Institutional clients, we review residential construction data from the US Census, recap weekly EIA data on the US petroleum market, and analyze the Fed minutes.

Sample

The Closer is one of our most popular reports, and you can sign up for a free trial below to see it!

See today’s post-market Closer and everything else Bespoke publishes by starting a no-obligation 14-day free trial to our research platform!

Fixed Income Weekly – 8/16/17

Searching for ways to better understand the fixed income space or looking for actionable ideals in this asset class?  Bespoke’s Fixed Income Weekly provides an update on rates and credit every Wednesday.  We start off with a fresh piece of analysis driven by what’s in the headlines or driving the market in a given week.  We then provide charts of how US Treasury futures and rates are trading, before moving on to a summary of recent fixed income ETF performance, short-term interest rates including money market funds, and a trade idea.  We summarize changes and recent developments for a variety of yield curves (UST, bund, Eurodollar, US breakeven inflation and Bespoke’s Global Yield Curve) before finishing with a review of recent UST yield curve changes, spread changes for major credit products and international bonds, and 1 year return profiles for a cross section of the fixed income world.

In this week’s note, we review the spike in corporate credit spreads and vol last week.

Sample

Our Fixed Income Weekly helps investors stay on top of fixed income markets and gain new perspective on the developments in interest rates.  You can sign up for a Bespoke research trial below to see this week’s report and everything else Bespoke publishes free for the next two weeks!

Click here to start your no-obligation free Bespoke research trial now!

Bespoke’s Global Macro Report — 8/16/17

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.

Click here to start a no-obligation two-week free trial to Bespoke Institutional!

The Closer — Quarterly Consumer Data, Retail Sales — 8/15/17

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Looking for deeper insight on global markets and economics?  In tonight’s Closer sent to Bespoke Institutional clients, we chart the quarterly data contained in the New York Fed’s Consumer Credit panel, as well as reviewing retail sales today and introducing three new web-based tools for subscribers.

Sample

The Closer is one of our most popular reports, and you can sign up for a free trial below to see it!

See today’s post-market Closer and everything else Bespoke publishes by starting a no-obligation 14-day free trial to our research platform!

Keep Track of Futures Positioning With The Closer

Each Friday in our post-market macro note — The Closer (available to Bespoke Institutional clients), we update tracking of futures market positioning using the CFTC’s Commitment of Traders report.  We’ve created a handy table so that clients can analyze the data each week, where we show the net position of traders reporting as speculators relative to the size of the market (percentage of open interest) in a given futures contract.

Speculator shorts are deducted from speculator longs to give a “net” position.  To summarize that positioning, the table below shows the current share of open interest (OI) along with the median, average, and ten year percentile.  We also show the change over the last 1, 4, 12, and 52 weeks, and show the position relative to the 10-year average in standard deviations in the scatter plot to the right as well as the change over the last 12 weeks.  The result is a comprehensive picture of how various asset classes are positioned.

Positioning can be a very helpful contrarian indicator; when financial speculators pile on to a rising price and become an unbalanced long, there’s nobody left to buy and prices are left vulnerable to a correction. This type of positioning is highlighted when the dots in our scatter plot move further and further into the green zone.  The opposite is also true for futures markets with falling prices.  When the dot in our scatter plot moves further and further left, speculators have become excessively bearish relative to history.  While not comprehensive – because they ignore spot markets for financial and physical commodities – the CoT report is definitely a helpful pointer to how the market currently sits.

Sign up for a two-week free trial to our Bespoke Institutional package if you’d like access to our weekly futures market positioning data in The Closer.

In our Closer report, we also show 10 year charts of positioning for each market listed above. Below is a sample of one of these chart grids, showing Energy futures positioning along with Copper, Lumber, and Gold.

Sign up for a two-week free trial to our Bespoke Institutional package if you’d like access to our weekly futures market positioning data in The Closer.

Bespoke’s FAANG+ Trading Range Screen

Below is an updated snapshot of our trading range screen ran on the 30 largest stocks in the Nasdaq 100.  The list is sorted by market cap as of the end of Q2, and we’ve highlighted the much-hyped “FAANG” names in yellow.  In the trading range section, the “OB” stands for “overbought,” and it happens when a stock trades more than 1 standard deviation above its 50-day moving average (the red zone).  The “OS” stands for “oversold,” and that’s when the stock trades more than 1 standard deviation below the 50-day.  “N” stands for “neutral,” which means the stock is trading between one standard deviation above and below its 50-day.  The black vertical “N” line in the screen represents each stock’s 50-day moving average.

Of the thirty largest Nasdaq 100 stocks, eleven are currently trading in overbought territory, while just two are oversold (GOOGL and SBUX).  Apple (AAPL), Comcast (CMCSA) and Charter (CHTR) are the most overbought names in the screen entering Tuesday’s trading day.

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The Closer — Toronto Home Prices, Fedspeak, Central Bank Doldrums, CoT Update — 8/14/17

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Looking for deeper insight on global markets and economics?  In tonight’s Closer sent to Bespoke Institutional clients, we review Canadian home price data released today, recent FOMC speeches, upcoming central bank meetings, and positioning recaps from the Commitment of Traders report released by the CFTC Friday.

Sample

The Closer is one of our most popular reports, and you can sign up for a free trial below to see it!

See today’s post-market Closer and everything else Bespoke publishes by starting a no-obligation 14-day free trial to our research platform!

Updated 2017 S&P 500 Sector Weightings

Below is an updated look at where S&P 500 sector weightings stand as of August 14th, 2017.  The Technology sector’s weighting remains above 23% at 23.15%.  That’s just 22 basis points below its multi-year high of 23.37% set during the week of June 9th, 2017.  Financials and Health Care are battling it out in second and third place with weightings of 14.52% and 14.25%, respectively.

Consumer Discretionary ranks fourth at 12.23%, Industrials is fifth at 10.17%, and Consumer Staples is sixth at 8.69%.  Consumer Staples just dipped to its lowest weighting since March 2002!

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Below is a look at S&P 500 sector weightings going back to 1990.  This allows you to see how things have shifted over the years.  In the early 90s prior to the Tech bubble, the economy was much more evenly distributed.  In early 1990, Industrials was the largest sector of the market at 14.72%.  That’s 8.5 percentage points below Tech’s weighting now.  In 1990, Technology was actually the second smallest in the S&P 500 with a weighting of 6.34%!  How times have changed.

The charts below break out the path of each sector’s S&P 500 weighting over time.  The red line in each chart represents the sector’s average weighting over the entire time frame, so you can see which sectors are currently the furthest above or below their long-term averages.  Technology and Health Care are the only two sectors currently well above their long-term averages.  Consumer Staples, Energy, Industrials, Materials, Telecom and Utilities are all well below their long-term averages.

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