Jan 21, 2025
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“In America, the impossible is what we do best.” – Donald J. Trump
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 presidential stock market performance scorecard starts all over again today, as Trump 2.0 begins. For Biden’s entire presidency, the Dow Jones Industrial average rallied 39.4%, about 18 percentage points less than the four years under Trump 1.0 and more than 100 percentage points less than the 149.4% during the eight years of the Obama administration. While the Dow’s performance under Biden was the weakest of the last three Presidents, it was still nothing to sneeze at, and it caps off a third straight period of strong gains under a Presidential term. The only other periods since 1900 where the DJIA rallied more than 30% under three straight presidents were FDR, Truman, and Eisenhower from 1933 to early 1961 and then Reagan, Bush I, and Clinton from 1981 through early 2001. The most recent period, though, was the only one that included two one-term Presidents.
Let these performance numbers serve as a reminder that as an investor you should never let your politics and investment decisions overlap. In late 2008/early 2009, many investors wanted out of the stock market because of Obama’s views towards business and the economy. Yet during his tenure, the Dow rallied nearly 150%. In late 2016/early 2017 another group of investors wanted out of the market because of all the chaos that came with Trump. Lot of good that did you if you moved to the sidelines. When Biden won the election in 2020, the cycle repeated itself, and now in 2025, it’s probably happening with some investors again.
The Dow’s performance under Biden may have been the weakest of the last three Presidents, but it was still enough to rank as one of the top ten performances of any president since 1900. Coolidge, Clinton, and FDR ranked as the top three all with gains of over 150% while the Presidents who encountered the worst stock market returns were Hoover, Bush II, and Nixon.
Jan 17, 2025
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“You may delay, but time will not.” – Benjamin Franklin
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Late last week and early this week we noted how extended the yield on the 10-year Treasury had gotten, and since then we’ve gotten a few cooler-than-expected inflation prints that finally caused the 10-year yield to not only stop going up, but also start pulling back. The pullback in yields has coincided with a rally in equities, but the bulls still have work to do. Both the S&P 500 ETF (SPY) and the Nasdaq 100 ETF (QQQ) have made a series of lower highs and lower lows since early December, and we’ve yet to see a break of that trend on the most recent bounce. As shown below, SPY has yet to get back above its 50-DMA and is sitting right below the top of its short-term downtrend channel. QQQ traded above its 50-DMA yesterday morning but pulled back intraday right when it touched the top of its own downtrend channel.
For both SPY and QQQ, one day of solid gains that hold into the close would break the recent downtrend, so we’ll see if the bulls have it in them today.
Jan 16, 2025
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“Mothers are often fondest of the child which has caused them the greatest pain.” ― Victor Hugo, The Hunchback of Notre-Dame
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
With the major inflation reports behind us, today’s pre-market session is much more muted than yesterday. S&P 500 futures are basically flat, while the Nasdaq is indicated to open modestly higher. The biggest of the inflation reports for the week may be behind us, but there’s still plenty of data on the calendar today with the Philly Fed, Retail Sales, Import Prices, and jobless claims all at 8:30 while homebuilder sentiment will hit the tape at 10 AM.
Retail Sales came in modestly weaker than expected, and jobless claims came in modestly higher than forecasts. Unfortunately Import Prices unexpectedly increase rising by 0.1%. But the big surprise was in the regional Philly Fed Manufacturing report which came in at +44.3 versus expectations for a reading of -5.0. That was the biggest beat relative to expectations in that report since at least 1998. The market reaction to all the data has been minimal as S&P 500 futures remain little changed.
Bulls couldn’t have asked for a better way to kick off the first ‘real’ day of earnings seasons as the major financials kicked things off with a bang. Of the six major financials reporting, all six rallied on the day, and all but JP Morgan Chase was up over 5%!
With an average daily gain of 5.74% yesterday, the six financials that reported yesterday had their best average earnings day reaction performance of any quarter since at least the financial crisis. These companies don’t always report on the same day, so it’s not entirely an apples-to-apples comparison. Still, it illustrates how strong the reactions to these earnings reports were yesterday (even if a softer-than-expected CPI report helped to goose the returns).
Jan 15, 2025
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“Mothers are often fondest of the child which has caused them the greatest pain.” ― Victor Hugo, The Hunchback of Notre-Dame
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
To view yesterday’s CNBC segment, click on the image below.
The last few days have seen a trickle of earnings reports, but this morning, the Q4 earnings season started in earnest with reports from six major banks/brokerages. After a very strong 2024, the banks have kicked off 2025 on a mixed note. Of the six companies reporting this morning, three are up YTD (C, JPM, and WFC), and three are lower (BK, BLK, and GS) for an average YTD change of 0.27% heading into today. Given the mixed returns, they are also all over the place regarding their trading ranges, although most finished yesterday below their 50-day moving averages. The outliers were JPMorgan Chase (JPM) and Citigroup (C).
All six of the banks scheduled to report this morning have now hit the tape, and at the headline level, the results were positive relative to expectations. Wells Fargo (WFC) is the only one of the six not to exceed sales results, and all six exceeded their profit forecasts. Given the better-than-expected results, all of them are trading higher in the pre-market with gains ranging from over 3% for WFC to JPM, which is up just fractionally.
The positive results have set the market up for a positive start to the trading day, but we still had to get through the December CPI report. Economists expected the headline reading to increase 0.4% m/m, with the core reading expected to rise 0.3%. At the headline level, the report was right in line with expectations while the core reading came in a tenth lower at 0.2% in what was the first weaker-than-expected core reading since the June report on 7/11/24. In response to the report, equity futures have built on their pre-market gains while the 10-year yield dropped down to 4.70%.
Jan 14, 2025
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“I took a negative and I turned it into a positive.” – Garo Yepremian
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
52 years ago today, the Miami Dolphins were on the verge of a perfect season and icing a win in Super Bowl VII. They were up 14-0 over the Washington Redskins, and it was fourth and four on the Washington 25-yard line with just about two minutes left in the game. Dolphin kicker Garo Yepremian came out to kick a 42-yard field goal which would have taken the score to a fitting 17-0 capping off Miami’s season with a 17-0 record.
It should have been a pretty easy field goal, but Washington’s defensive end Bill Brundige blocked the kick. Yepremian recovered it, but rather than fall on it, he made the boneheaded decision to pick it up and make a play. When he tried to pass it, the ball slipped out and into the hands of Washington’s cornerback Mike Bass who ran it back for a touchdown. Instead of 17-0, the score was 14-7, sending a scare down the Miami bench. With just two minutes left, Miami still had the lead and with a 14-7 was still likely to win. After the fact, they were even able to laugh about it. At the moment, though, it was anything but a joke and illustrated that even a “perfect season” can have its ugly moments.
The markets are experiencing a Yepremian scare right now. Since early December, nothing has seemingly gone right for equities where breadth has weakened, the dollar and yields have surged, and now even oil is on the rise. Like everything else, this too shall pass. At some point, we’ll be able to look back without a lot of concern regarding the last six weeks. The only question is when. Weeks? Months? Even longer?
For the very short-term, yesterday’s intraday rebound followed through to Asian markets overnight as Chinese stocks rallied over 2% after government officials pledged that measures would be taken to stabilize the market. Other countries in the region were also higher, although Japan was an outlier as the Nikkei fell over 1.5% (it was closed on Monday). In Europe, the STOXX 600 bounced 0.5%, and every country in the region except for the UK is trading higher.
Ahead of the US open, equity futures are higher this morning but off their highs as yields have reversed higher with the 10-year pushing close to 4.8%. Small business optimism continued its post-election surge rising to 105.1 which was the highest reading since late 2018 and was three full points ahead of consensus expectations. The report du jour, though, is the December PPI. That report will dictate the market’s direction today, but even that will only be an appetizer for tomorrow’s CPI.
The December PPI just hit the tape and at both the headline and core readings, the reported data came in well below forecasts, and the immediate reaction in markets has been for yields to fall and pre-market equity futures to build on their gains.
Semiconductors are a key area we’ll be watching for signs of where the market is going. While the broader market has only recently started to succumb to weakness, semiconductors started to roll over way back in July and fell 25% from early July to early August. After recovering half of those losses late in the summer, the Philadelphia Semiconductor Index (SOX) has been essentially trading in a sideways range for the last four months. As shown in the chart below, that range has resulted in a convergence between the 50 and 200-day moving averages.
What makes the recent convergence even more unique is that yesterday broke a streak of 14 trading days where the percentage spread between the level of these two moving averages was less than 0.50%. The chart below shows prior periods when the spread between the SOX’s 50 and 200-day moving average was less than 0.5%, and the just-ended streak was the second longest on record. The only streak lasting longer ended at 20 days in July 2005, and two other streaks lasted 13 trading days (one in March 2005 and another in January 2016).
Jan 13, 2025
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“There is no compression algorithm for experience.” – Andy Jassy
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Global equities stumbled into the weekend on Friday, and they’re bumbling out of the gate to kick off the week. While Japan was closed, other Asian markets started off the week on a down note with the Hang Seng falling 1%, while India South Korea, and Australia all also saw at least 1% declines. Europe was open during much of Friday’s US sell-off, so it didn’t have as much to ‘catch up’ from this morning, but the STOXX 600 is still down close to 1% which is right in line with where US futures are trading this morning. The culprit behind the global weakness has primarily been interest rates as yields have been increasing worldwide. Add to that the relentless run in the dollar, and now oil prices moving up towards $80 per barrel, and it isn’t a good recipe for higher stock prices.
Large-cap tech was notably weak on Friday as it was the first day since September 11th, that the Nasdaq 100 ETF (QQQ) opened and traded the entire session below its 50-day moving average. It’s been less than a month, but QQQ has established a relatively well-defined trend of lower highs and lower lows.
