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.

“At first, dreams seem impossible, then improbable, and eventually inevitable.”– Christopher Reeve

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

As Florida recovers from Hurricane Milton and investors prepare for the latest round of economic data, equity futures are just modestly lower, treasury yields are higher, and crude oil is modestly higher. In Asia, equity markets in the region were higher across the board. Australia and Japan were modestly higher while Hong Kong rallied 3% and China was up just over 1%. In Europe, the tone has been less positive as the STOXX 600 trades down 0.2%, and most individual country benchmarks are also lower. Retail Sales in Germany increased 1.6% y/y versus 1.5% in July. Industrial Production in Italy rose just 0.1% m/m versus expectations for an increase of 0.3% but was still up from a decline of 1% in July.

Economic data just hit the tape, and each report went in the wrong direction in terms of the economic impact. CPI data came in higher than expected on both a headline and core basis. Headline CPI increased 0.2% m/m versus expectations for an increase of 0.1% while core CPI rose 0.3% which was also a tenth higher than expected. Jobless claims, on the other hand, both surpassed expectations. Initial claims came in at 258K versus forecasts for a reading of 230K.  That’s a pretty significant miss, but looking at the state-by-state numbers, the ones impacted by Hurricane Helene all saw large increases. North Carolina, for example, saw claims surge by over 8K alone.

Besides today’s CPI report and jobless claims, one big area of focus today will be Tesla Robotaxi Day after the close, and investors are expecting the company to shed light on its plans for a ride-hailing fleet of self-driving Teslas. Expectations are high regarding Musk’s vision, but investors probably aren’t expecting much in the way of an actual ready-for-the-wild vehicle. Tesla still has a way to go before getting approval for full-self driving, and Waymo, which currently holds the lead in this space, only operates a limited fleet in a limited number of areas.

Keep in mind, though, that however pie in the sky the concept of getting in a car without a driver feels today, it’s only a matter of time. iPhones, cloud computing, Uber, and even for most people, remote work, didn’t exist 15 or 20 years ago, and now they’re routine parts of our days.  Only a little more than a few years ago, if you left for work and forgot your phone you probably decided to go the day without it. Today, you can’t get very far out the door without it. ChatGPT isn’t even two years old, and already has over 180 million users! As Christopher Reeve said above, the impossible becomes inevitable and the inevitable becomes routine.

The S&P 500 closed at another all-time yesterday for the first time this month after five record closes in September. Record closing highs are starting to feel somewhat routine for the market these days, and this year’s total of 44 already ranks as the 11th most since 1954.

Looking at the chart, nothing is guaranteed, but it will only take a couple more closing all-time highs to crack the top ten. With 56 trading days left in the year, there’s even a decent chance that this year could crack the top five (56) if the market averages one new closing high per week.  It’s also technically possible but also unlikely that the record of 77 could be reached, but that would require a record high at a pace of about two every three days.  Even reaching the 70 in 2021 would require a pace of about one every other day.  New closing highs may feel routine, but they’re unlikely to become that routine.

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.

“I believe in everything until it’s disproved.” – John Lennon

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 not much economic data on the calendar this morning but a ton of Fedpseak scheduled, so there is the potential for some volatility around these speeches throughout the day. Futures indicate a modest decline at the open but they are off their overnight lows after major overnight volatility in China. The Shanghai CSI 300 fell over 7% as the Chinese government looks like it has under-delivered on stimulus expectations. Last night’s decline was the largest since early on in the Covid crash, and the ASHR ETF that trades in the US is on pace to crash 20% in two trading days! The only other time it fell over 20% in two sessions was in the summer of 2015 when the Chinese government devalued the yuan. If you thought crypto was volatile, it looks like a ‘widows and orphans’ asset class compared to the moves in China over the last few weeks.

In today’s Morning Lineup, we covered the latest sales results for Taiwan Semi (TSM) and much of those sales come from Nvidia (NVDA). NVDA has rallied over 14% in the last week taking its market cap back above $3 trillion and ahead of Microsoft (MSFT). With a market cap of $3.26 trillion, the only company with a larger market cap than NVDA is Apple (AAPL) at $3.43 trillion. The gap between the two companies is now roughly $170 billion, or one Disney (DIS).

NVDA’s stock had a pretty rough summer. After peaking in June, the stock made a series of lower highs with each successive rally attempt. After its late August lower high, though, the ensuing pullback bottomed out at a higher low, and the pullbacks became milder as the stock rallied back above its 50-day moving average. After successfully testing its 50-day moving average last week, the stock has rallied, and yesterday’s 4% rally enabled the stock to make its first ‘higher high’ since June.

NVDA’s technical picture may be improving, but the picture for the semiconductor sector isn’t as strong. While the Philadelphia Semiconductor Index (SOX) has rallied above its 50 and 200-day moving averages (DMA), it has been hung up at resistance all summer.  One bright spot for the sector is that the early September sell-off wasn’t as deep as in August. So, while the SOX may not yet be at the point of making higher highs, there has been a higher low. It’s a start!

Unfortunately, the relative strength of the SOX versus the S&P 500 doesn’t look as promising. September’s sell-off was deeper than August’s relative to the S&P 500, and the subsequent bounce back has also been weaker.  In last week’s quarterly Pros and Cons report, the recent performance of semis showed up on the negative side of the ledger, and this chart is a big reason why.