Jan 29, 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.
“Discrepancies – and hence opportunities – in securities originate most often when events move faster than quotations.” – Benjamin Graham
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Markets bounced back on Tuesday from Monday’s DeepSeek drop, and the S&P is entering Wednesday trading down just 58 bps on the week. Investors sold first and asked questions later on Monday, but once they did start asking questions, it seems as if cooler heads might be starting to prevail.
While AI Infrastructure stocks have fallen this week, the DeepSeek news has caused investors to contemplate an overall lower cost to compute on the AI front, which should benefit margins for companies in the AI Implementation space and also increase overall demand from consumers in the long run.
As shown below, NVDA’s drop in market cap this week has mostly been offset by gains in market cap for the other major mega-cap Tech and Tech-adjacent stocks. Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), Meta (META), and Microsoft (MSFT) have seen a combined increase in market cap of $299 billion so far this week, while NVDA has seen a drop of $334 billion. On a net basis, the market cap for all six of these behemoths has only fallen $34.8 billion on the week.
Below is a quick snapshot of the six mega-caps mentioned above run through our Trend Analyzer tool. While NVIDIA (NVDA) is down 8.4% over the last week and in oversold territory, Meta (META) and Apple (AAPL) are both up more than 7%.
Jan 28, 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.
“Profitability is coming from productivity, efficiency, management, austerity, and the way to manage the business.” – Carlos Slim
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Even though the S&P 500 was down 1.4% yesterday, there were 351 advancers and just 152 decliners within the index. As shown below, Technology, Utilities, and Industrials pretty much saw all of the pain, while Consumer Staples and Health Care were actually up more than 2%. All of the weakness yesterday came from declines in the companies that deal with producing and powering AI.
NVIDIA (NVDA) ended last week as the largest company in the world with a market cap of roughly $3.5 trillion. It ended Monday with a market cap of $2.9 trillion and now ranks as the third largest company behind Apple (AAPL) and Microsoft (MSFT). Since last Thursday’s close, NVIDIA (NVDA) has lost $705 billion in market cap!
Jan 27, 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.
“The music is not in the notes, but in the silence between.” – Mozart
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 S&P 500 finished last week with its second straight weekly gain, and it was the first week of back-to-back 1.5%+ advances since mid-May as the S&P 500 managed to close at an all-time high last Thursday. Since the S&P 500 ETF’s (SPY) closing low on 1/10, the large-cap benchmark is up 4.73% while the Nasdaq 100 ETF (QQQ) has rallied by a similar amount (4.42%). Moving down the market cap spectrum, mid-caps (MDY) have rallied 5.64% while small caps (IWM) are up 5.47%. The leader has been micro-caps, though, as the Russell 2000 micro-cap ETF is up 5.75%.
Much of those gains from the last two weeks have been erased over the weekend as both the S&P 500 and the Nasdaq 100 are indicated to open sharply lower on concerns over DeepSeek upending the entire investment landscape for AI. News of DeepSeek first dropped around Christmas and started to pick up steam early last week as articles reported that the model has achieved comparable progress in AI to the most advanced US models for fractions of the cost. Articles published over the weekend have hit a nerve, resulting in a massive sell-off in mega cap US stocks.
If the reports of DeepSeek’s success at such low costs are true, and this is a big if as there is still a lot we don’t know in terms of how it was developed, it would pose problems for some of the biggest AI winners over the last two years. As we type this, the S&P 500 (proxied by SPY) is trading down about 2.25% which would be the largest downside gap since early August and the 60th largest downside gap in the ETF’s history dating back to 1993.
For the Nasdaq 100 (QQQ), the declines are even steeper. With the ETF poised to gap down 3.8% at the open, it would be QQQ’s largest downside gap since early August and the 20th largest downside gap since its inception in 1999. As shown in the chart below, before last August’s downside gap, the last time QQQ gapped down as much as it on pace to today was back in September 2020.
Among the mega cap stocks, this morning’s declines aren’t uniform. The chart below shows where each trillion-dollar market cap stock is trading this morning relative to Friday’s close. Leading the way to the downside, Broadcom (AVGO) and Nvidia (NVDA) are both down by double-digit percentages. These have been the biggest AI winners, so it’s no surprise that investors are selling them the fastest. Microsoft (MSFT) has also declined more than 5% given its close relationship with OpenAI. One name that has barely been impacted by the overnight sell-off is Apple (AAPL); in pre-market trading, it’s down less than 1%. Ironically, all anyone could talk about last week concerning AAPL was how it’s overvalued and missed the boat on AI. Today, that lack of investment in AI is being looked at as a plus!
Jan 24, 2025
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“One of the most helpful things that anybody can learn is to give up trying to catch the last eighth—or the first. These two are the most expensive eighths in the world.” – Edwin Lefèvre, Reminiscences of a Stock Operator
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Here in the US this morning, US futures are biased to the downside as markets digest what is expected to be the second week in a row of gains. Earnings season has continued on a bullish note with positive earnings from the banks and financials last week and then strong reports from Netflix (NFLX), 3M (MMM), Charles Schwab (SCHW), and P&G (PG) this week. Next week will be an even bigger test as the pace of reports will only increase and megacaps like Meta Platforms (META), Microsoft (MSFT), Apple (AAPL), and Amazon.com (AMZN) will all report.
If you’re still reading this, congratulations because that means you survived the ‘December crash’. The S&P 500 declined 4.3% from its December high to early January, which was admittedly accompanied by the weakest short-term period of market breadth since at least 1990. The rally that kicked off Monday has now fully erased the declines, and the bull market has gone on to live another day (or week, month, year, etc.). For many investors, the pullback felt especially painful even if it was modest in magnitude. As shown in the chart below, since the bull market began in October 2022, there were five other periods when the S&P 500 experienced a decline that was both larger in magnitude and longer in duration.
Jan 23, 2025
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“The more people who own little businesses of their own, the safer our country will be, and the better off its cities and towns; for the people who have a stake in their country and their community are its best citizens.” – John Hancock
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 a shaky start to the year, US equities have more than stabilized over the last two weeks, and whether you’re talking about small caps with the Russell 2000 or large caps like the Nasdaq and S&P 500, the major averages are sitting on YTD gains of over 3%. Not bad for just over three weeks! You might be surprised to hear, though, that even with those strong performance numbers, European stocks are modestly outperforming the US on a MTD basis. After accounting for the impact of currency moves, the Vanguard FTSE Europe ETF (VGK) is already up over 4.7% YTD.
It’s been a good start to the year for European shares, but they still have a lot of work to do. While the Russell 2000, Nasdaq 100, and S&P 500 have all been in well-defined uptrends, the same can’t be said for VGK which has been stuck in a downtrend since last fall. Not only does it remain in a rut of lower highs and lower lows, but it also isn’t even trading above its 200-DMA.
Jan 22, 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.
“If a man will begin with certainties, he shall end in doubts; but if he will be content to begin with doubts, he shall end in certainties.” – Francis Bacon
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 positive reaction to earnings reports continues this morning with the most high-profile example being Netflix (NFLX). As noted in yesterday’s Chart of the Day, historically, the stock tends to respond most positively to its Q4 earnings report, and that was the case once again this earnings season as the stock is indicated to open close to 15% higher taking the market cap well above $400 billion. NFLX isn’t the only example, though, as UAL, P&G, and Travelers are just a few more examples of large companies trading higher in the pre-market in reaction to earnings. The only notable losers are in the Health Care sector where Abbot (ABT) and J&J (JNJ) are down about 2%.
What was looking like a breakdown in the chart of the S&P 500 (SPY) last Monday has quickly reversed. After closing back above its 50-day moving average on Friday, equities picked right back up on Tuesday with additional gains, breaking the string of lower highs and the short-term downtrend that has been in place since early December. We’re still just about 1% off those former highs, but the last five trading days have been a good start, and if the market can continue to react positively to the incoming earnings reports, those highs should be within reach.
Like SPY, some other major indices are playing peekaboo with their downtrends that have been in place since early December. The Nasdaq 100 ETF (QQQ) is an example as it broke its downtrend from the December highs yesterday. Additionally, it didn’t make a higher high yesterday, but based on pre-market trading, it should break that string of lower highs today.
