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Happy Friday the 13th.
There’s nothing scary about these markets. U.S. Futures are off their lows, trading higher. Europe is doing a bit better. The only drama I can see: can the benchmark indexes grind out yet another all-time high? Looks that way.
On the agenda today we get consumer sentiment data from the University of Michigan. It will be interesting to see if the humble consumer is as bullish on the economy as the impavid equity investor.
In today’s “by the numbers” I look closer at the stocks rally underway on both sides of the Atlantic. Spoiler: there’s another benchmark that’s outperforming the S&P 500, YTD.
Let’s see what else is moving markets. We begin in Asia.
Markets update
Asia
- Asia is mostly lower. The Hang Seng is again in the red, down 0.5% in afternoon trading.
- Investor jitters over China’s regulatory crackdown continues to take a toll on China’s tech giants. Shares in Baidu are down 3.3% in Hong Kong this morning—they fell by a similar amount in the U.S. On Thursday—after the search giant delivered a disappointing sales outlook.
Europe
- The European bourses look to close out the week on a high note with the Stoxx Europe 600 up 0.3% two hours into the trading session. Travel and leisure, consumer staples and retail lead the way higher.
- Shares in Adidas are 2.4% higher today, well outperforming the DAX, after the sportswear giant, at long last, found a buyer for its underperforming Reebok unit. It sold the brand for €2.1 billion ($2.5 billion) to Authentic Brands. Your correspondent’s two cents: if Fila could somehow become cool again, why not Reebok? I owned a pair of their pump-up ice hockey skates. I was pretty happy with them. Just sayin’.
- The answer to yesterday’s quiz: Archimedes, he of π fame, was born in Siracusa in 287 B.C. A big shout-out to all of you who emailed me the correct answer.
U.S.
- U.S. Futures have been looking better all morning. That’s after the S&P 500 and Dow—stop me if you’ve heard this one—closed at new record highs yesterdays.
- Shares in Disney are up 5.7% pre-market after the company reported a huge beat on streaming subscriptions. Oh, and it’s theme park division reported a profit for the first time since the pandemic.
- We got a fresh batch of housing data yesterday, and it’s not great news for prospective homebuyers. House prices soared just about everywhere.
- My colleague Jessica Mathews writes The Dividend, a weekly column on investing. The first edition came out yesterday. The topic: green bonds. Check it out here.
Elsewhere
- Gold is up, trading around $1,760.
- The dollar is off slightly.
- Crude is down, with Brent trading below $71/barrel.
- Bitcoin is level at $46,000.
***
By the numbers
10 straight
Don’t look now, but old-world Europe is suddenly a cool place to invest. If it were to hold today’s gains (that pesky subjunctive again), the benchmark Stoxx Europe 600 would be on a 10-day winning streak. According to Bloomberg, that would make it the longest rally since the go-go days of 1999 (when, incidentally, I was still living in New York covering the dot-com craze.) The chart below shows YTD gains for some of the major European indexes, with the European benchmark outperforming the S&P 500 so far this year. Lately, there’s been even more enthusiasm for European stocks as investors presume the U.S. Growth story has already peaked while laggard Europe is still trending higher. It’ll be worth watching this through the second half of the year.
47
The S&P 500 is no slouch either. The U.S. Benchmark closed at another record high, the 47th time that’s happened this year. Earlier in the week, I put this run into perspective. We’re on pace to see the S&P eclipse the 2017 performance of 62 all-time highs (ATHs). The only question: can it surpass the 1995 tally of 77 ATHs? There’s something noteworthy in the S&P’s recent run. As Deutsche Bank’s Jim Reid points out this morning, “the S&P 500 rose +0.30% [on Thursday] having traded in an average daily range of roughly 0.5% this month, which would be the lowest average monthly range since November 2019 if sustained.” These tiny incremental moves higher are the text-book definition of a grinding rally. No big jumps. Just steady momentum. That’s good news for those of you who are invested in one of those S&P ETFs. The sum-of-the-parts investing strategy has been an effective one. Betting on the components has been a bit trickier. Take yesterday as an example. Big-name tech stocks gained, but energy and industrials—categories that had been doing well earlier in the year—dragged things down. As Reid notes of Thursday’s performance, “the S&P actually saw a majority of its constituents fall back yesterday, with only 46% advancing.” That was hardly an outlier performance.
***
Postscript
Last weekend, a big white camper pulled up the road, and parked in the high grass down the hill from us. Out popped a young Italian couple, their two kids, and Camilla.
They introduced themselves as our new neighbors. They’d just purchased the old quake-stricken monastery, they explained, and planned to fix it up.
There hasn’t been much human activity in our little hamlet since the 2016 earthquakes, so this greeting felt kinda momentous.
Camilla and Scilla hit it off immediately. Camilla is another lagotto romagnolo, bringing the population of Sant’Ippolito, our little hilltop community to: 11 humans (including one American), three lagotto romagnolo (my neighbor Renzo, a serious truffle hunter, has Luna the lagotto), a pack of chickens, and too many sheep to count.
Here’s Scilla and Camilla posing for a cover to their next rap album: Straight Outta Sant’Ippolito.
***
Have a nice weekend, everyone. I’ll see you here on Monday.
***
Bernhard Warner
@BernhardWarner
[email protected]
As always, you can write to [email protected] or reply to this email with suggestions and feedback.
Today's reads
Beijing’s latest crackdown target? Karaoke—Coins2Day
As Delta infections spiked, COVID cases in schools actually fell—a lesson from England—Coins2Day
Bank of America CEO Brian Moynihan has some advice for CFOs about climate change—Coins2Day
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Market candy
Quote of the day
I guess that makes us HODLers, fam. 💎🤲
That's my colleague Robert Hackett. In his latest dispatch of The Ledger—you really ought to subscribe, if you don't already—he explained what went down when Coins2Day executed its first-ever NFT auction. It was a huge—though somewhat chaotic—success.