Bespoke’s Morning Lineup – 4/9/25 – China Responds

Apr 9, 2025

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.

“One should always be drunk. That’s all that matters…But with what? With wine, with poetry, or with virtue, as you chose. But get drunk.” ― Charles Baudelaire, Paris Spleen

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

After announcing the reciprocal tariffs in the Rose Garden last week, the President and members of his administration warned other countries not to retaliate. Why they thought some of our largest trade partners would sit back and “take their medicine” with no response is beyond us. This morning, China shot back with its response announcing 84% tariffs on US imports. Futures, which were lower overnight and rallied into the morning, are now back near their lows of the after-hours session, and the S&P 500 looks like it will be on pace to close 20%+ from its record close on 2/19.  Up and down, it goes and where it stops nobody knows. Looking on the bright side, while the retaliatory tariffs announced by China have knocked futures lower, it didn’t come with a significant devaluation of the yuan which would have arguably made things worse.

The volatility and magnitude of declines we have experienced over the last several days and weeks is unprecedented. The S&P 500 is on pace for one of its fastest-ever 20% declines from an all-time high. Over the shorter term, consider this. On Monday, the Nasdaq traded down more than 4% on an intraday basis and finished the day higher. Then, on Tuesday, the Nasdaq traded over 4% higher intraday and then finished lower. Back-to-back opposite moves of that magnitude have never happened, and the next closest was in October 2008 when there was a similar reversal of 3%.

Regardless of what the market does today, the Nasdaq’s 50-day moving average (DMA) will cross below the 200-DMA as both are trending lower, forming what technicians call an iron, or death cross.

Today’s moving average crossover will end the fourth-longest streak of the 50-DMA settling above the 200-DMA. At 519 trading days, it was the longest streak since November 2018, and the only two other streaks that were longer ended in September 2015 and September 1998.

Bespoke’s Morning Lineup – 4/8/25 – End of the Streak?

Apr 8, 2025

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.

“Learn to use your emotions to think, not think with your emotions.” – Robert Kiyosaki

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 wild ride of market moves continued overnight as the Nikkei 225 rallied 6% after falling more than 7% on Monday. That’s just the ninth time in the last 45 years that the index has rallied 5%+ after falling more than 5% in the prior session. Along with those days, there have only been two other days when the Nikkei fell more than 5% after rising 5% in the previous session. The Nikkei’s move was extreme, but we’ve seen volatile back-and-forth action in equity markets worldwide this week.

This morning, futures are building on some of yesterday’s intraday strength in US stocks on optimism that several countries are looking to make a trade deal with the Trump Administration. This doesn’t mean deals will happen, but at least conversations are taking place which buys some time for a pause in the selling. With this optimism, US equity futures are indicated higher, and that would end what has been a streak of nine straight days where the SPDR S&P 500 ETF (SPY) opened the day lower. In yesterday’s Chart of the Day, we covered that streak and how the market has historically performed following prior streaks of similar or longer durations, so make sure to give that a look.

They call the CBOE Volatility Index (VIX) a gauge of the stock market’s psychological state, and higher levels indicate a more emotional state for the market. Yesterday, the market got as emotional as a high school senior looking for a prom date. It closed at an extraordinarily high level of 46.98, but intraday it briefly traded above 60, which it has only done on 52 other trading days since 1990!

The chart of the S&P 500 below shows every time the VIX traded above 60 on an intraday basis since 1990. The only other times were in Q4 2008, during Covid in 2020, and one day last August. In retrospect, these periods turned out to be good buying opportunities although the market remained volatile in the short-term. Following the occurrences in Q4 2008, for example, the S&P 500 didn’t bottom until early March, but on an internal basis, that marked the low as most stocks bottomed in Q4 2008. Like a child, markets sometimes find themselves in a tantrum or emotional spiral, but more often than not, a pause, and a deep breath are enough to get things to calm down.

Bespoke’s Morning Lineup – 4/7/25 – More Pain

Apr 7, 2025

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.

“By 1864 Wall Streeters had spies in the Confederate high command and could learn southern battle plans before colonels in the Army of Virginia did.” – Mike Wallace

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

Futures are sharply lower again this morning, although off their overnight lows, as investors look for signs of a break in the selling vortex. You’ll hear all sorts of opinions as to when and where the market will bottom out, but they’re all guesses, so ignore them. No one knows at this point. You could make the argument that President Trump can end this as fast as he started it, but that’s not guaranteed either. The longer markets remain in their current state, the more control he loses as other issues and factors start to pop up, and the more likely it is that this decline stretches out into a more prolonged decline. What’s that old Warren Buffett quote about what happens when the tide goes out?

How bad have things gotten? Just now on CNBC, there was an interview with a former Federal Reserve official and two topics of conversation were whether we were entering another Smoot-Hawley-type era and if the dollar had the potential to lose its reserve currency status.  In the past, bringing up either of these issues would get you laughed off the set, and now they’re both legitimate topics to bring up, from a former Federal Reserve official no less!

The one thing the President has working for him is that foreign markets are starting to feel just as much, if not, more pain than the US. The day after the tariff announcements on Wednesday, US markets significantly underperformed foreign markets, but on Friday, the declines were more equally distributed. Today, at least so far, it is foreign markets that are generally feeling the most pressure. The more foreign markets underperform the US, the more likely it is that foreign countries come to the bargaining table. On the other hand, seeing foreign stocks underperform could only embolden the President more.

Futures are currently down around 2%, so we wanted to provide an update on where this decline stands relative to history. At current levels, the S&P 500 would be down 12.85% over a three-trading day span, which ranks up there as among the worst since late 1952 when the five trading day week in its current form started. At these levels, the decline is right around the worst of the three-day declines experienced during Covid and the Financial Crisis, and the only one that was meaningfully worse was the 1987 crash.  This is a decline of historical proportions.

The chart below shows every prior three-day decline of 10%+ with a red dot. Outside of the three periods mentioned above, the only two others were in 1998 (Russia’s Debt Default) and 2011 (US debt downgrade). One period that didn’t make the cut was the 9/11 attacks. In the four trading days when the market re-opened after those attacks, the S&P 500 declined around 12%, but it never reached a double-digit percentage decline in three days.

Given the market is coming off one of its worst two-day declines in history, you wouldn’t expect to see many stocks on the list of winners from Thursday and Friday, but we were surprised to see that not a single stock in the S&P 500 was up on both Thursday and Friday of last week.

On Thursday, 95 stocks in the S&P 500 finished higher on the day as investors tried to initially distinguish between winners and losers from Liberation Day, but Friday was more about investors coming to the realization that there wouldn’t be much in the way of winners from Trump’s plans.  As shown in the table below, of the 34 stocks that traded 2%+ higher on Thursday, they were all primarily defensive in nature and names you turn to when you’re expecting a market or economic decline.

On Friday, just 14 stocks in the S&P 500 finished the day higher. 11 of them were from the Consumer Discretionary sector, and eight were either homebuilders or related to the housing sector. While these stocks traded higher on Friday, they have all been weak for months now, and the one-day rally was a bounce in reaction to the yield on the 10-year which plunged below 4%.  Other winners included Lululemon (LULU), Nike (NKE), Target (TGT), and Dollar Tree (DLTR) which all fell 10% or more on Thursday in their immediate reaction to Liberation Day.

Turning back to the market macro, not even considering today’s weakness, the S&P 500 and most sectors all had their worst two-day periods since March 2020 last week. Think back to the way you felt in the Spring of 2020. While the two periods are incredibly similar in terms of the rampant levels of uncertainty, the causes of the uncertainty came from very different directions. In March 2020, people had no idea how Covid would impact the economy, how long it would last, or how to control it.  Today, the cause of the uncertainty is incredibly under control and could be turned off just as fast as it was turned on. Whether that happens before it’s too late is the biggest question mark, and financial markets increasingly view the switch being turned off or at least dialed back as unlikely.

Bespoke’s Morning Lineup – 4/4/25 – Thank You Sir, May I Have Another

Apr 4, 2025

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.

“There is nothing more corrupting, nothing more destructive of the noblest and finest feelings of our nature, than the exercise of unlimited power.” – William Henry Harrison

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

There’s nothing to say this morning except it’s bad out there. Yesterday was an awful day and today isn’t looking much better.  In some cases, it’s even worse given the scope of the declines in other areas of the market outside of US equities. Foreign equities are plunging, credit spreads are blowing out, commodities are sharply lower, the VIX is above 45, and the 10-year treasury is comfortably below 4%. The President and his administration wanted lower yields, and they got them. Whether they intended to get here the way we did, we don’t know.  We’ve seen a lot over the years, but nothing quite like this.

Yesterday’s nearly 6% decline in the Nasdaq was the largest since March 2020 and the 47th decline of 5%+ in the index’s history. The charts below show the Nasdaq’s daily change over time (top chart) while the second chart shows each occurrence of a 5%+ decline over time. A large share of these declines came during the dotcom bust as there were 20 in the two years from 2000 to 2001 alone while another ten were in 2008.