Bespoke’s Morning Lineup – 4/21/25 – Picking Up Where Last Week Left Off
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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.
Brunch Reads – 4/20/25
Welcome to Bespoke Brunch Reads — a linkfest of some of our favorite articles over the past week. The links are mostly market-related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.
The Mariel Boatlift: The Mariel Boatlift was officially announced on April 20, 1980, when Cuban President Fidel Castro declared that any Cuban who wanted to leave the country could do so through the port of Mariel, located about 25 miles west of Havana. This followed an incident on April 1, 1980, when a group of Cubans seeking asylum crashed a bus through the gates of the Peruvian embassy in Havana. After the Cuban government withdrew its security from the embassy, thousands of Cubans sought refuge there, igniting the crisis.
Castro’s April 20 announcement allowed boats from the United States to come pick up Cuban citizens, and between April and October 1980, around 125,000 Cubans emigrated to the US, many landing in South Florida, especially Miami.
Economic Trends
Would You Go on a Payment Plan for Coachella? (The Cut)
Coachella’s 2025 crowd wasn’t just vibing to music, they were financing the experience like it was a used car. Nearly 60% used payment plans to afford tickets that started at $649. BNPL (Buy Now, Pay Later) culture has become so normalized that some festivalgoers are reportedly juggling multiple plans across events, stacking debt in the name of FOMO and social capital. Meanwhile, the billionaire behind Coachella keeps cashing in, which was enough to get Bernie Sanders to show up and speak on stage, because what’s more American than paying in installments to hear that the very system is broken? [Link]
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The Closer – Pressure on Powell, 5 Fed, US Share – 4/17/25
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we lead off with further commentary regarding the increasingly contentious relationship between President Trump and Fed Chair Powell (page 1). We then provide an update of our Five Fed Manufacturing Composite (pages 2 and 3). After a recap of the latest earnings reports (page 4), we close with a look into how the latest sell off has impacted the United States’ share of global market cap (page 5).
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Q1 2025 Earnings Conference Call Recaps: Bank OZK (OZK)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers Bank OZK’s (OZK) Q1 2025 earnings call.
Bank OZK (OZK) is a regional bank headquartered in Arkansas, best known for its Real Estate Specialties Group (RESG), which finances large, complex commercial real estate projects across major US metros. The bank also operates a growing Corporate & Institutional Banking (CIB) division and serves consumers and small-to-midsize businesses across a branch network concentrated in the Southeast and Texas. OZK reported 3.8% non-annualized loan growth in Q1 and reaffirmed full-year guidance for mid- to high-single-digit loan growth despite pulling formal RESG origination guidance due to macro uncertainty and tariff-related deal hesitation. Executives cited $957M in cumulative sponsor equity support across 450 loan modifications as a key sign of strength. The CIB platform continues expanding, with new verticals and a natural resources group on the way. Deposit costs fell 29bps, one of the best performances in the industry, helping protect NIM despite rate cut pressures. OZK also provided detailed updates on its high-profile OREO (Other Real Estate Owned) real estate holdings, including renewed buyer interest and patience on Chicago and LA land deals. OZK outpaced expectations, and the stock rallied more than 5% on 4/17…
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Q1 2025 Earnings Conference Call Recaps: American Express (AXP)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers American Express’ (AXP) Q1 2025 earnings call.
American Express (AXP) is a global financial services company best known for its premium charge and credit cards, loyalty rewards programs, and travel services. It operates a closed-loop payments network, giving it end-to-end control of transactions between merchants and cardholders. AXP primarily serves affluent consumers, small and mid-sized businesses, and large corporates, generating most of its revenue from cardmember spending and annual fees rather than lending. AXP reported an 8% YoY FX-adjusted revenue increase. Cardmember spending rose 6%, led by strong goods & services and resilient travel categories. Over 60% of new consumer cards came from Millennials and Gen-Z, whose US spend rose 15%. The company added 3.4 million new cards, 70% on fee-based products, driving 20% growth in card fees. Management reiterated full-year guidance and built in a 5.7% peak unemployment scenario, emphasizing confidence in their premium customer base and flexible cost model. Amex also closed its Center acquisition to strengthen SME (Small and Medium-sized Enterprises) solutions…
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Q1 2025 Earnings Conference Call Recaps: Charles Schwab (SCHW)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers Charles Schwab’s (SCHW) Q1 2025 earnings call.
Charles Schwab (SCHW) is one of the largest investment services firms in the US, offering brokerage services, wealth management, banking, and trading platforms for individual investors and registered investment advisors (RIAs). The company serves over 34 million brokerage accounts and manages nearly $9 trillion in client assets. SCHW is a bellwether for investor sentiment and behavior, particularly among self-directed and retail investors, and provides valuable insight into asset flows, retail engagement, and the health of the wealth management industry. SCHW reported a strong start to the year, with core net new assets up 44% YoY to $138B, and a 41% jump in EPS. Legacy Ameritrade clients contributed meaningfully to growth as post-integration satisfaction surged. Retail engagement hit records, with daily average trades up 24% and thinkorswim adoption more than doubling. Wealth assets neared $500B as SCHW expanded into alternatives and invested in Wealth.com. The firm announced plans to open 16 new branches and hire 250 consultants. Amid market volatility and shifting Fed expectations, SCHW saw a surprising cash inflow, reduced high-cost funding, and reaffirmed confidence in its full-year earnings outlook. On better-than-expected results, the stock way up 3% at midday on 4/17…
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Chart of the Day – Netflix (NFLX) Q1 Weakness
Bespoke’s Morning Lineup – 4/17/25 – “Code Blue!”
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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!
The Closer – Powell Comments, Correlation, BoC – 4/16/25
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we lead off with an evaluation of Fed Chair Powell’s comments today (page 1) followed by a look into the high correlation between stocks (page 2). After that, we dive into the latest earnings (page 3) followed by the Bank of Canada rate decision and TICS data (page 4). We close out with reviews of today’s NY Fed services data (page 5) and the latest update to industrial production (page 6).
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