A daily market update from FS Insight — what you need to know ahead of opening bell.
“The ability to simplify means to eliminate the unnecessary so that the necessary may speak.” – Hans Hofmann
Over the Weekend
All 80 on board safe after Delta plane flips over on landing at Toronto FT
US and Russia begin bilateral talks in Saudi Arabia over ending Ukraine war SEM
Homeland Security preparing political firings for hundreds of senior leaders this week CNBC
Social Security head steps down over DOGE access of recipient information, sources say AP
Musk’s xAI releases artificial intelligence model Grok 3, claims better performance than rivals in early testing CNBC
US government struggling to rehire nuclear arsenal staff it fired days ago BBC
Hundreds fired at aviation safety agency, union says BBC
JPMorgan axed about nine workers in Paris for ‘economic reasons’ BBG
DeepSeek ‘shared user data’ with TikTok owner ByteDance: South Korean officials BBC
Argentina’s President Javier Milei faces fraud probe over cryptocurrency crash SEM
New York governor weighs removing NYC mayor with City Hall in crisis BBG
Humpback whale briefly swallows kayaker in Chilean Patagonia — and it’s all captured on camera AP
Chart of the Day
| Overnight |
| S&P Futures +22
point(s) (+0.4%
) overnight range: -1 to +25 point(s) |
| APAC |
| Nikkei +0.25%
Topix +0.31% China SHCOMP -0.93% Hang Seng +1.59% Korea +0.63% Singapore +0.53% Australia -0.66% India -0.06% Taiwan +0.68% |
| Europe |
| Stoxx 50 +0.15%
Stoxx 600 +0.14% FTSE 100 +0.04% DAX -0.05% CAC 40 +0.07% Italy +0.55% IBEX +0.58% |
| FX |
| Dollar Index (DXY) +0.38%
to 106.98 EUR/USD -0.24% to 1.0459 GBP/USD -0.28% to 1.2590 USD/JPY -0.22% to 151.84 USD/CNY -0.22% to 7.2800 USD/CNH -0.22% to 7.2826 USD/CHF -0.14% to 0.9020 USD/CAD -0.11% to 1.4199 AUD/USD -0.09% to 0.6350 |
| UST Term Structure |
| 2Y-3
M Spread widened 2.1bps to -4.5bps
10Y-2 Y Spread widened 2.0bps to 23.3bps 30Y-10 Y Spread narrowed -0.4bps to 21.4bps |
| Yesterday's Recap |
| SPX -0.01%
SPX Eq Wt -0.10% NASDAQ 100 +0.38% NASDAQ Comp +0.41% Russell Midcap -0.01% R2k -0.10% R1k Value -0.14% R1k Growth +0.11% R2k Value -0.09% R2k Growth -0.11% FANG+ +0.30% Semis +0.26% Software +0.08% Biotech +0.71% Regional Banks +0.31% SPX GICS1 Sorted: Cons Staples -1.16% Healthcare -1.11% Utes -0.51% REITs -0.44% Materials -0.33% Indu -0.29% Cons Disc -0.27% SPX -0.01% Energy +0.13% Fin +0.14% Comm Srvcs +0.41% Tech +0.60% |
| USD HY OaS |
| All Sectors +11.3bps
to 309bps All Sectors ex-Energy +5.9bps 289bps Cons Disc +40.4bps 276bps Indu +1.8bps 221bps Tech +3.2bps 304bps Comm Srvcs +3.0bps 497bps Materials +2.3bps 269bps Energy -0.4bps 291bps Fin Snr +1.9bps 258bps Fin Sub +2.0bps 203bps Cons Staples +5.9bps 287bps Healthcare +3.6bps 356bps Utes +1.4bps 222bps * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 2/18 | 10:00 AM | Feb Homebuilder Sentiment | 46 | 47 |
| 2/18 | 4:00 PM | Dec Net TIC Flows | n/a | 159.888 |
| 2/19 | 2:00 PM | Jan 29 FOMC Minutes | n/a | 0 |
| 2/19 | 2:00 PM | Jan 29 FOMC Minutes | n/a | 0 |
| 2/21 | 9:45 AM | Feb P S&P Manu PMI | 51.2 | 51.2 |
| 2/21 | 9:45 AM | Feb P S&P Srvcs PMI | 53 | 52.9 |
| 2/21 | 10:00 AM | Feb F UMich 1yr Inf Exp | n/a | 4.3 |
| 2/21 | 10:00 AM | Feb F UMich Sentiment | 67.8 | 67.8 |
| 2/21 | 10:00 AM | Jan Existing Home Sales | 4.13 | 4.24 |
| 2/21 | 10:00 AM | Jan Existing Home Sales m/m | -2.59 | 2.17 |
MORNING INSIGHT
Good morning!
Last week we saw a collapse in retail sentiment (AAII, American Association of Individual Investors), which has historically been a reliable signal of strong forward returns.
Click HERE for more.
TECHNICAL
- We got a very good breakout in both S&P 500 and QQQ, coinciding with a big breakdown in the U.S. dollar.
- With regard to the S&P 500, we did in fact break out of the consolidation from January.
- In my view, the market showed its hand last week, and I think even if we see some minor backing and filling, the direction has now turned to bullish from sideways or neutral.
Click HERE for more.
CRYPTO
The key takeaways from last week involve an underwhelming flow picture and BTC’s relationship with various equity benchmarks. We’ll also explore why gold is outperforming BTC and the significance of the staked ETH ETFs.
Click HERE for more.
First News
Shareholder activism is in the news these days. Corporations are tired of it. Last year, ExxonMobile sued two investors after they filed shareholder petitions regarding the energy company’s climate-change risks, withdrawing it only after they agreed to not to do so again. JPMorgan’s Jamie Dimon has publicly criticized the concept of shareholder meetings altogether, depicting them as a “frivolous waste of time.”
Current regulations mandate that all U.S. publicly traded companies must hold annual shareholder meetings, and any shareholder with a stake of $2,000 or more can submit proposals to be voted on at the meeting. Exchange Act Rule 14a-8 lists 13 broadly stated reasons why the SEC will allow a company to exclude a submitted proposal from shareholder vote (along with rules governing whether a previously rejected proposal is eligible for resubmission).
Shareholder activism is hardly a new trend. In fact, it dates back at least to the early 1600s, when the Dutch East India Company found itself locking horns with Isaac Le Maire, its largest shareholder at the time. But this latest wave of antipathy arguably stems from years of ESG activism – when investors (inspired and encouraged by a group of global financial institutions who coined the ESG acronym in the 2004 United Nations report “Who Cares Wins“) – began pushing companies to consider environmental, social, and governance impacts in their operations and arguing that doing so would have both reputational and material benefits for shareholders. This progressive-leaning trend unsurprisingly spurred a conservative backlash in which right-leaning activists took a page from the ESG playbook.
Perhaps understandably, executives and corporate boards see all this as a headache – and a costly one. Under the second Trump administration, the SEC appears to be listening. The regulator last week issued guidance about how it plans to interpret Rule 14a-8, stating that “proposals that raise issues of social or ethical significance may be excludable, notwithstanding their importance in the abstract.”
That might not be good news for activists on either side of the divide. Although progressives hardly have a particularly stellar record of getting proposals passed as it is, conservatives are arguably faring even worse, despite having ramped up their anti-ESG or anti-DEI brand of shareholder activism in the past two years. Even before the SEC guidance, ESG activists had mostly left the party, no longer convinced that shareholder returns are strongly correlated with doing good. Their conservative counterparts might have a different idea of what “doing good” entails, but with the SEC making it more difficult for activists motivated by culture wars, they might well come to the same conclusion soon enough.
