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 corporate grip on opinion in the United States is one of the wonders of the Western world. No First World country has ever managed to eliminate so entirely from its media all objectivity—much less dissent.” – Gore Vidal    

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

While investors await tomorrow’s non-farm payrolls report, there’s a lot of economic data to get through this morning with jobless claims at 8:30 and the ISM Services at 10:00 which should not be overlooked. Heading into these reports, futures are modestly lower but off their overnight lows as tensions in the Middle East weigh on sentiment. Jobless claims came in mixed relative to expectations as initial claims were 4K higher than expected while continuing claims were 4K lower.

Overnight and this morning, markets in Asia were mixed as China remains closed for the National Holiday. The Nikkei rallied over 2% continuing its roller coaster week while the Hang Seng dropped 1.5%. Service sector PMIs for Japan and Australia were in expansion territory, but both came in weaker than expected and decelerated relative to August.

In Europe, stocks are mostly lower as the STOXX 600 fell about 0.5%. PMI readings for the Services sector were mixed. For the region, activity slowed less than expected. Germany was generally in line with expectations, the UK and Italy missed expectations, and France and Spain expanded more than expected.

It’s still hard to get used to this chart below where we have a market up about 20% YTD.  Yet the market’s most defensive sector, Utilities, is the top-performing sector. Granted, Communication Services and Technology aren’t far behind, but it’s like a Mustang struggling to pass a Corolla on the highway. You don’t see it often.

Utilities stocks often get lumped together as somewhat interchangeable, but if this year has taught us anything, not all Utilities are created equal. Take the two most common barometers of performance for the sector – the Dow Jones Utilities and the S&P 500 Utilities sector. While the S&P 500 Utilities sector has racked up a gain of 28.5%, the Dow Jones Utilities Index is up a much more modest 20.8. Both are respectable gains, but going back to 1990, the 27.5% gain for the S&P 500 Utilities sector through the end of Q3 ranks as the second best trailing only the 47.0% gain in the first three quarters of 2000, while for the Dow Jones Utilities Index, it ranks as just the fourth best since 1990.

In terms of consistency, the S&P 500 Utilities sector has been much better than the Dow Jones Utilities Index. While both indices have historically risen on 53% of all trading days, the S&P 500 Utilities sector has rallied on 59.4% of all trading days this year (second best since 1990) while the Dow Jones Utilities Index has risen on a much more modest 55.8% of all trading days (ninth best since 1999).

Returning to the performance spread, through the end of Q3, the S&P 500 Utilities Sector outperformed the Dow Jones Utilities Index by a record 7.2 percentage points.  The only two other years that were even close were 1991 (6.7 ppts) and 2000 (6.4 ppts).

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.

“For civilization to survive, the human race has to remain civilized” – Rod Serling

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

Click on the image below to view yesterday’s CNBC interview discussing the market backdrop heading into October.

ADP Payrolls came in stronger than expected this morning putting to rest some fo the concerns markets have had in the last few weeks. Mideast tensions continue to boil, and oil prices are trading up over 2% in reaction, but US Treasury yields have been on the rise at the long end of the curve.  Equity futures are modestly lower, and Nike (NKE) is partly to blame as the stock is down over 5% in reaction to earnings after the close yesterday.  If these losses hold, it will be NKE’s fourth straight quarter of declining at least 5% in reaction to earnings.  Before this current streak, the longest streak of 5%+ declines on earnings reaction days dating back to 2001 was just two.

Throughout the entire conflict in the Middle East, the price of crude oil has been remarkably sullen. While prices have rallied 6% from Monday’s close, since the attacks on Israel last October, crude oil has declined over 16%, and since the end of Q2, prices have dropped over 10%.  On the other hand, natural gas prices have been trying to break out of a long funk. Natural gas tends to be much more volatile than crude oil, but since its low in late August, the former is up over 55% which is impressive no matter how volatile a commodity we’re talking about.

In looking at the chart below, two things stand out. First, even after a 55% rally, natural gas remains more than 20% from a 52-week high. Second, looking at the moving averages of natural gas, the 50-day moving average is about to cross up through the 200-day moving average. With both moving averages on the rise, that would make it the first golden cross for the commodity in two and a half years (3/8/22).

Natural gas has now gone 530 trading days without hitting a 52-week high. That ranks as the fifth-longest streak on record, and the longest since 2016. If the current streak lasts another three weeks, it will move into fourth place overall while it would take another three months without a 52-week high to overtake the 590-day streak that ended in 2016.