Apr 23, 2025
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“There is nothing either good or bad, but thinking makes it so.” – William Shakespeare, Hamlet
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
It’s been quite a week for equity markets, and Wednesday hasn’t even started yet! After a 2%+ decline on Monday, the S&P 500 rebounded more than 2% yesterday, and after some less confrontational comments from President Trump after the close yesterday related to Powell and China, futures are up another 2%+ in the pre-market! Even US treasuries are rallying. And gold is down!
One comment from the President that encouraged markets was when he said that the 145% tariff on Chinese imports were “very high, and it won’t be that high. … No, it won’t be anywhere near that high. It’ll come down substantially. But it won’t be zero.” That’s encouraging, although at 145%, there a lot of room for tariff rates to come down significantly and still be incredibly high! 70% is less than half of 145%, but that would still be a crushing rate. Remember, back on April 2nd, the President thought he was going easy on countries with the rate of reciprocal tariffs. We’ll see how this all plays out, but until the next headline comes out that contradicts yesterday’s, markets can rally.
The pace of earnings news has really started to pick up in the last couple of days and will only get busier in the days ahead. On the economic calendar this morning, we’ll get flash PMI readings for the Manufacturing and Services sector at 9:45, which will likely show weakness, and then New Home Sales at 10 AM.
When the market is stuck in a downtrend, one key trend to watch for signs of a reversal is when stocks stop going down on bad news. When that happens, it’s usually taken as a sign that all the bad news is finally ‘priced in’ to the market. So, while an economic or earnings report may be ‘bad news’ in terms of coming in weaker than expected, if the broader market or an individual stock rallies on it, it can actually be considered good news.
Yesterday, the market got some bad news from the IMF regarding global growth forecasts, but considering the 4%+ gain in the S&P 500 since then (including today’s move in the futures), it must have been good news, right? Obviously, there were other factors behind the rally, but it does illustrate that this ‘news’ from the IMF was already well known by the market.
For the world in general, the IMF cut its overall estimated rate of global growth down by half a percentage point. For advanced economies, the growth rate was lowered for every country and region except Spain (+0.2 ppts). The US saw the sharpest downgrade to growth forecasts (-0.9 ppts), second only to Mexico’s drop of 1.7 ppts. In emerging and developing economies, growth forecasts saw nearly across-the-board cuts. The only country where the IMF upgraded global growth forecasts was Russia. Russia!
With the new GDP growth forecasts from the IMF, global growth in 2025 is expected to be slower in most economies. Again, the US is expected to see the sharpest deceleration relative to 2024, with growth declining by a full percentage point while Japan (+0.5 ppts) and Germany (+0.2 ppts) are the only two advanced economies expected to see growth accelerate in 2025 relative to 2024. In EM and developing economies, Russia is expected to see the sharpest slowdown (-2.9 ppts), but Mexico, Brazil, Europe, and China are all expected to see sharp slowdowns in GDP growth. The only economies in this group expected to see growth acceleration are Saudi Arabia, Middle East & Central Asia, and South Africa.
As the charts above illustrate, the US has seen among the sharpest downgrades to GDP growth estimates, but among developed economies, it is still expected to show relatively strong growth (+1.8%), second only to Spain’s expected growth rate of 2.5%. So, while the IMF may be cutting the rate of US growth by more than other advanced economies, its economy is still expected to see much stronger growth than other developed economies. In EM and developing economies, however, most countries are expected to see much stronger growth, as Mexico is the only economy expected to contract. As a result of the stronger growth in emerging and developing economies, overall global growth is expected to come in at 2.8% for 2025.
Apr 22, 2025
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“I don’t wanna be a product of my environment; I want my environment to be a product of me.” – Jack Nicholson
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 plunging to start the week yesterday, US futures are attempting to continue the late-day rebound that began in yesterday’s last hour of trading. With an indicated gain of about 0.8%, though, that would only be enough to erase a third of yesterday’s losses. With one step forward for every three steps back, it’s not an environment that leads to meaningful gains. European equities are all lower this morning after being closed for Easter yesterday, and with the STOXX 600 down only 0.70%, it’s down less since last Thursday’s close than the S&P 500.
Outside of equities, US Treasury yields are modestly lower, erasing earlier increases. Crude oil is up close to 2% and over $64 per barrel, while Bitcoin is up 1.5% and back near $89,000. Finally, the unstoppable freight train of gold is up another 1% to another record high – its 16th in the last 30 trading days!
The rise in gold prices has been nothing short of amazing, with the safe-haven asset seemingly hitting record high after record high, and today’s 1.15% advance marking yet another one. Yesterday’s 3%+ rally was the fifth time in the last ten trading days that gold rallied at least 2% in a single day. In the last 50 years, the only periods that experienced a higher frequency of 2%+ daily moves were in January and June of 1980. Since then, there have only been a handful of periods where gold experienced as many 2% daily moves in a ten-trading-day span, with the most recent occurring more than 15 years ago in September 2008. Also, keep in mind that the most recent five daily 2%+ gains occurred over an eight-trading-day span, so there are still two more trading days to increase that total!
With the high frequency of big daily gains, gold now trades more than 27% above its 200-day moving average. That’s the most extended traded relative to its 200-DMA since 2011. Like the high frequency of 2% daily moves in the 10-trading day period, there have only been a handful of other periods when gold traded more than 25% above its 200-DMA, and the most extended it ever got was an astonishing 130%+ in early 1980. To trade at similarly extreme levels now, gold would trade above $6,200 per ounce.
Apr 21, 2025
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“The world in which we live is collapsing and may be nearing the breaking point,” – Pope Francis
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Maybe US markets should have followed the US lead and stayed closed for Easter today. US futures are sharply lower to kick off the week as investors face the uncertainty of US economic, trade, and monetary policy. There’s always uncertainty, but investors have a lot to contend with right now as there has been little evidence of progress on trade deals with the 70+ countries eager to “make a deal”, heightened concerns over the Fed’s independence, and how these policies will impact the economy. And, oh yeah, we’re just getting into the peak of earnings season.
Outside of the equity market, long-term treasury yields are modestly higher, the dollar is lower, and gold is surging. Even Bitcoin is starting to show signs of life as dollar weakness becomes more ingrained into global markets.
It may have been a short week, but US stocks still found a way to fall last week, with the S&P 500 dropping 1.5%. While the index declined, five sectors finished the week higher, and only three – Technology, Consumer Discretionary, and Communication Services – underperformed the S&P 500. Overall, the eleven S&P 500 sectors had an average change of 0.00%, which was much better than the index itself.
Since 1990, it hasn’t been particularly common to see such a wide disparity between the weekly performance of the S&P 500 and the average performance of its sectors. Last week was just the 19th time that the S&P 500 fell more than 1%, and the average sector’s performance was either positive or less than a decline of 0.5%. In the chart below of the S&P 500, we have included a red dot to indicate each occurrence.
From 1990 through 1998, there was never a single weekly occurrence, but from 1999 through 2000, there were eight separate occurrences. Since then, the occurrences have been relatively spread out, the most recent being in March and April 2022. The fact that most of the prior occurrences came in 1999, 2000, and 2022 can be explained by the fact that those were other periods where there was a high level of concentration in the market, and more specifically in the Technology sector. When one sector has such a large weight in the overall index, it creates a backdrop where one sector can have a big impact on the index itself, even as other sectors hold up relatively well.
Apr 17, 2025
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“Had it not been for the recent uncertainty from global tariffs and their downstream impacts, we would have raised our expectations for 2025.” – Tim Arndt, CFO, Prologis
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
It’s still early in the Q1 earnings season, but one of the most significant quotes we have heard in an earnings conference call came from Prologis (PLD) CFO Tim Arndt where he noted that business fundamentals were improving to close out the first quarter to the point where the company was planning to raise expectations. Then the President appeared with the Reciprocal tariffs on April 2nd, and that moment changed everything. That ceremony forced corporate America to reassess everything as we enter one of the most uncertain operating environments in at least a generation.
In addition to a trickle of earnings news this morning, we got updates on Housing Starts and Building Permits for March at 8:30, along with jobless claims, and the April Philly Fed report. Housing Starts were a big miss, but Building Permits came in stronger than expected. Initial Jobless Claims came in 10K lower than expected, while Continuing Claims were higher. The Philly Fed report was a big miss and came in at -26.4, which, outside of one reading in April 2023, was the weakest since the Covid crash.
Ironically, the main company of focus this morning has nothing to do with tariffs. Shares of UnitedHealth (UNH) are trading down over 20% in the pre-market after the company reported a reverse triple play with weaker-than-expected EPS and revenues while also lowering guidance. After dropping as low as $438 in late February, the stock rallied up just above $600 as recently as last Thursday, but this morning has given it nearly all back as the stock sinks to $460.
What makes today’s plunge even more painful is that investors had been gravitating to the stock as they took on more defensive positioning since the market peak in February. Since the 2/19 peak in the S&P 500 through yesterday’s close, UNH had been the 12th best performing stock in the S&P 500 and the best performing stock in the Dow, and that included a 12.5% downside gap on 2/21! When the defensive stocks start to fall, where is an investor to turn?
With the stock on pace to open down 20.52% as of this writing, it would go down as UNH’s second-largest downside gap at the open since 1990. The only one that was larger was a 20.57% gap in August 1998 when the company took a $900 million charge. At this point, though, it wouldn’t take much more downside for today’s decline to unseat that decline. Besides the August 1998 occurrence, the only other time that UNH gapped down anywhere near 20% was in July 1996 (-19.13%). It’s also interesting to see that this morning’s extreme downside gap follows what was one of the stock’s most extreme upside gaps less than two weeks ago!
Apr 16, 2025
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“In seeking truth, you have to get both sides of a story.” – Walter Cronkite
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Trade headlines are weighing on market sentiment this morning as semiconductor stocks are down about 4% in aggregate on the heels of a 6%+ decline in Nvicia (NVDA) due to US government restrictions on the sale of Hopper chips to China. While not having as large of an impact as they have in the past, it’s another indication that uncertainty surrounding trade isn’t going anywhere.
In economic news, Retail Sales were inline with expectations at the headline level but better than expected after stripping out Autos, and February’s readings were also revised higher. On a net basis, this was a strong report as the divergence between hard and soft data continues.
The S&P 500 bounced over 8% from its closing low last week and more than 11% from its intraday low. Despite the rebound, on Monday, the index experienced what technical analysts call a ‘death cross’ where its 50-day moving average (DMA) crossed below its 200-DMA as both have downward slopes.
This was the S&P 500’s first death cross in more than three years (March 2022) and the 25th in its history, dating back to 1928. It’s also the eighth such pattern in the post-financial crisis period, and as shown in the chart below, it followed a nearly 20-year period where there was only one occurrence.
Apr 15, 2025
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“The Titanic hit the iceberg not because they could not see it coming but because they could not change direction.” – Dean Devlin
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
It’s over. No, not the tariff tantrum, but the 2024 tax season. If you’ve somehow forgotten to get your taxes done (or file for an extension), you’ve got a few more hours left!
Bespoke’s Paul Hickey was invited on CNBC earlier this morning to discuss markets. You can view the clip here or by clicking on the image below.
While the S&P 500 is down 12% from its highs after making a series of lower lows, the index’s cumulative advance/decline line – which is simply a running sum of the daily number of advancers minus decliners – has held up very well. As shown below, even after the post-Liberation Day market crash, the cumulative A/D line remained above its December lows.
