Stock Market Today: November 14th - 18th

Discussion in 'Stock Market Today' started by Stockaholic, Nov 11, 2016.

  1. Stockaholic

    Stockaholic Content Manager

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    Welcome Stockaholics to the trading week of November 14th!

    This past week saw the following moves in the S&P:
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    Major Indices End of Week:
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    Bird's Eye view of the Major Markets on Friday:
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    Economic Calendar for the Week Ahead:
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    Sector Performance WTD, MTD, YTD:

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    What to Watch in the Week Ahead:

    • Monday

    Earnings: Advance Auto Parts, Anglogold Ashanti

    1:20 p.m. Dallas Fed President Rob Kaplan

    4:30 p.m. Richmond Fed President Jeffrey Lacker on panel moderated by Rick Santelli

    6:30 p.m. San Francisco Fed President John Williams

    • Tuesday

    Earnings: Home Depot, TJX Cos, Teva Pharmaceuticals, Beazer Homes, Dick's Sporting Goods, JD.com, Agilent

    7:30 a.m. Boston Fed President Eric Rosengren

    8:30 a.m. Retail sales

    8:30 a.m. Import prices

    8:30 a.m. Empire state survey

    10:00 a.m. Business inventories

    1:30 p.m. Fed Vice Chairman Stanley Fischer

    • Wednesday

    Earnings: Target, Lowe's, Cisco, L Brands, Tencent, NetApp

    7:45 a.m. Minneapolis Fed President Neel Kashkari

    8:30 a.m. PPI

    9:15 a.m. Industrial production

    10:00 a.m. NAHB

    4:00 p.m. TIC data

    5:30 p.m. Philadelphia Fed President Patrick Harker

    • Thursday

    Earnings: Wal-Mart, Staples, Best Buy, Applied Materials, Intuit, JM Smuckers, Salesforce.com, Gap, Manchester United, JA Solar

    8:30 a.m. Initial claims

    8:30 a.m. CPI

    8:30 a.m. Housing starts

    8:30 a.m. Philadelphia Fed survey

    • Friday

    Earnings: Foot Locker, Abercrombie and Fitch, The Buckle

    5:30 a.m. St. Louis Fed President James Bullard

    9:30 a.m. New York Fed President William Dudley

    9:30 a.m. Kansas City Fed President Esther George

    1:30 p.m. Dallas Fed President Rob Kaplan
     
  2. Stockaholic

    Stockaholic Content Manager

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    Trump Triumph Sparks Dow's Best Week In 5 Years As Currencies Crash, Bonds Blow-Up, & Commodities Carnage
    A Trump victory has seen the world sell commodities, sell bonds, sell credit, sell foreign exchange, sell gold, buy dollars and buy US banks.


    Turmoil has rotated around the world's maket this week... Wednesday saw a developed market bond bloodbath, Thursday saw EM FX and bonds collapse, and Friday saw Commodities clubbed like a baby seal

    [​IMG]



    And even in The Dow itself, just 4 stocks accounted for half the post-Trump gains (GS, CAT, JPM, HD)

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    The divergence between The Dow's gain and Nasdaq's loss is the biggest since Lehman...

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    "Most Shorted" stocks are up almost 11% in the last 6 days - the biggest short-squeeze since July 2013...

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    The S&P is unchanged since pre-election, bonds and bullion down around 4% and the Mexican Peso down over 14%!!

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    Quite a week for stocks... here is the move in Futures from the pre-election close...

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    Small Caps rose an incredible 10% this week...(that's 5 times the return of the Nasdaq on the week)

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    Financials have soared in the last few days - most since May 2009 - to pre-Lehman levels...

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    But FANGs collapsed (with NFLX worst) - their worst 3-week run since January...

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    US Treasuries led the developed market bond rout this week (closed today)...the biggest percentage rise in 30Y yield in a week... ever

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    The long-bond dropped over 5% on the week...

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    Treasury futures signal a 2-3bps rise in yields today...

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    EM Bonds crashed to 8 month slows... (worst week since 2013 Taper Tantrum)

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    The USD Index swung around massively after crashing pre-Trump, back above 99.00 fo rthe 4th time in 2 weeks...

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    Finally, we remind readers that Stocks and Bonds (closed today with TSY Futs unch) now have the same yield for the first time since Jan 5th...

    [​IMG]



    What happens next?
     
  3. Stockaholic

    Stockaholic Content Manager

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    Submitted by Lance Roberts via RealInvestentAdvice.com,

    There was little doubt going into the election who was going to win. Whether it was the mainstream media, the polls, or the political punditry; the answer was clear.

    “Hillary was going to be the 45th President of the United States.”

    But it did not turn out that way.

    As I discussed many times on my Houston morning drive show, “The Lance Roberts Show,” what the “experts” missed was evidence of another “Brexit.”

    As with the “Brexit,” the polls, Wall Street, and the experts were wrong as the “Shy-Tory” effect took hold. This effect was derived from individuals being unwilling to express their opinions in fear of persecution from the counter party, but voted their beliefs at the polls. While the market “bet” Britain would stay in the E.U., the vote turned out differently.

    The same was clearly evident during the election campaigns in the U.S. as polls clearly indicated a favorability towards Clinton, but massive crowds were gathering a Trump rallies. The were clear indications the “Shy-Trump” phenomenon was present as individuals who wanted “hope and change” remained quiet during the campaigns, but voted loudly when it counted. This is shown in the graphic below of the county voting outcomes.

    [​IMG]

    The vote was really not as much about “Clinton vs. Trump” as it was a referendum on the last 8-years of economic weakness, lack of wage growth and a constant attack on America’s “way of life.” The vote was about wanting what Obama promised but failed to deliver – “hope and change.”

    My partner Michael Lebowitz just penned an excellent article on this point stating:



    There is ample evidence that despite the narratives of the Federal Reserve, media pundits, and most policy wonks, the economy is failing most Americans. While there are many ways to show the deterioration of the U.S. economy and the consequences endured by its citizens, we selected charts we deem to be the most telling.



    We hope that no matter who you voted for, you study these graphs to better understand the impetus behind Trump’s victory. More importantly, we hope this helps everyone better grasp why economic policy must change before the consequences become dire.”

    Importantly, when it comes to investing or economic policies, “timing is everything.” While there is currently high expectations for the future of economic policy, there is a strong headwind that must be fought. Unlike when President Obama took office, immediately following the financial crisis when unemployment was high, economic growth was decimated and “fear” ruled investors; Trump enters office with everything reversed. Policies that boosted economic growth in 2009-2011 will not be nearly as effective today. Infrastructure spending won’t have the same impact as what was seen in 2009. Higher rates and inflation will slow economic growth as it impacts an already strapped consumer. Debts and deficits will rise further slowing the economy as well.

    The point is that while there is much hope Trump’s economic plan will facilitate stronger growth, and it ultimately will, it will not forestall the onset of an economic recession and a negative shock to stocks within the next 12-18 months.

    The economic expansion over the last 8-years is already extremely long by historical standards and retailers, consumers and businesses are already showing signs of wear. Furthermore, the rise in both LIBOR and Treasury rates are already increasing borrowing costs for both consumers and businesses, further reducing future demand as people buy “payments” rather than products.

    While the spike in interest rates since the election has seemed to exceedingly large, sending bond investors fleeing for cover, let’s put the recent rise back into perspective.

    1. Rates are now back to where they were at the beginning of 2016.
    2. The run down in rates was due to overblown fears of the “Brexit.”
    3. Rates are now normalizing back to levels of current GDP and Inflation levels which is where “fair value” remains.
    4. Bonds are EXTREMELY oversold making bonds an interesting asset class as compared to overbought equities.
    5. Rates are the top of a long-term downtrend and pushing into the 7-year moving average resistance line. The long-term downtrend is correlated to the long-term downtrend in economic growth and inflation as well. Those issues are changing anytime soon.
    [​IMG]

    With the election now behind us, we can once again turn our focus back to the real drivers of financial markets over time; earnings, profits, valuations, and economic growth. There is little change in those specific dynamics to justify further increased valuations and additional speculative risk taking at this time.

    Yes, you just experienced a “Trexit.” The question is now what happens next?

    In the meantime, here is what I am reading this weekend.

    Fed / Election / Economy
    Markets
    Interesting Reads


    “If the question is when markets will recovery, a first-pass answer is never.” — Paul “Habitually Wrong” Krugman
     
  4. Stockaholic

    Stockaholic Content Manager

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    How the major indices have fared WTD, MTD, WTD & YTD up to this point:
    [​IMG]

    S&P sectors for the week:
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  5. Stockaholic

    Stockaholic Content Manager

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    Honoring our Veterans DJIA Poised for More Gains Next Week Before Thanksgiving and Options Expiration
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    “On [TV financial news programs], if the stock is near its high, 90% of the guests like it. If its near its low, 90% of the guests hate it.”

    In the picture above from page 103 of the Stock Trader’s Almanac 2016 we feature this quote from one of our favorite market analysts, Michael Burke from Investors Intelligence, who served with the Army 101st Airborne and left us in 2014. The quotation captures his contrarian wit.

    I am grateful to all my colleagues, friends and relatives who served on the rest of our behalves, especially our own Christopher Mistal who served on a fast attack nuclear submarines in the U.S. Navy as an electrical engineer. I hope you all thanked a Vet today and if you served please accept my thanks and I hope you took the day off. Thank you all for your service.

    DJIA has been leading the post-election charge and is poised to continue to stay out in front. Aside from its construction of many Trump sensitive stocks that should benefit from infrastructure building and regulatory reduction, DJIA outperforms the other major indices during the week before Thanksgiving and Options Expiration week of which next week is both. The Russell 2000 index of small cap stocks has been doing even better than DJIA, but its record next week is not as strong.

    DJIA has a better record than S&P 500, NASDAQ and Russell 2000 during this pre-holiday week. DJIA was up 18 of the last 23 years with an average gain of 0.72% the week before Thanksgiving with losses in 2003(-1.4%), 2004 (-0.8%), 2008 (-5.3%), 2011 (-2.9%) and 2012 (-1.8%). S&P is up 15 of 23, average 0.27%; NAS 13/22, 0.22%; R2K 12/23, -0.11%.

    It is also options expiration week. DJIA has been down 9 of the last 17 years for DJIA Monday of expiration week, but Friday is up 12 of the last 14 years with an average gain of 0.7%. For you fact-checkers our there it is not a mistake that November Op-Ex day has the same point change and percent change in 2014 and 2015. I triple checked, its right. If you go out 2 more decimal places in the percentage calculation it’s different, but that is getting way too wonky for a Friday post.

    S&P 500, NASDAQ and Russell 2000 have not been as bullish as DJIA around or on November option expiration. S&P 500 has advanced only 15 times during options expiration week while NASDAQ and Russell 2000 have climbed only 13 and 12 times respectively over the past 22 years. All four indices have posted average losses on Monday and aside from DJIA and S&P 500 have been essentially mixed on options expiration day. Friday’s solid average gains across the board are largely due to a sizable gain in 2008. Any weakness next week could be a good entry point for new longs ahead of the usually bullish Thanksgiving holiday. Note solid strength during the week after options expiration since 2002. The worst blemish on the recent history is 2011.

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    The Market Called the Election
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    Even with all the polling, prognosticating and predicting, the Electoral College delivered a surprise result late Tuesday/early Wednesday morning. Most polls were right as Hillary Clinton did in fact win the popular vote, but in the end Donald Trump took the votes on the Electoral College map. There were a poll or two that indicated Trump would win, but they were largely dismissed as outliers. Even the market was largely ignored even though its record of forecasting the winner is quite good, 15 of 18 prior to this year.

    [​IMG]
    Including 2016 in the above table, S&P 500 has correctly predicted the outcome of the last 19 Presidential Elections 16 times. When the S&P 500 gains in the three months August through October, the incumbent party retained the White House 9 of 11 times. When S&P 500 was down during those three months the incumbent lost 7 of 8 times. S&P 500 was down for August to October in 2016 and the incumbent party lost. This next graphic plots past Incumbent Victories and Defeats alongside 2016. Despite the market’s “surprise” plunge on Election night, it had already indicated an incumbent defeat

    [​IMG]
    DJIA Averages 14.1% Under a Republican President and Congress
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    Ahead of Election Day we examined DJIA’s historical returns based upon political alignment and DJIA’s performance in post-election years. Both posts covered scenarios applicable to both political parties. Now that Election Day has passed, we can focus solely on the scenario of a newly elected Republican President with a Republican Congress. Post-election years are generally weak however; they have been even weaker under a newly elected Republican president, the first year in office.

    [​IMG]
    But, 2017 will be just the first year of a four-year term and the combination of a Republican President with a Republican Congress has been the second best combination in D.C., averaging 14.1% across all years this combination existed since 1949.

    Beyond Election Day: Day after to Yearend Examined
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    Election Day has finally arrived and perhaps within a few more hours we will know the outcome. This time certainly has been different, but in many respects the market has performed similar to past presidential elections. The market was down in the two weeks prior to the election week. Historically the week before has a bullish bias while two weeks before it was bearish. The market was also up big yesterday, the day before, which has also been the trend since 1952. So what does history have to say about after the election?

    In the following chart, November’s performance in “All Years” and Presidential “Election Years” over two time frames are compared. Over the more recent era, 1952 to 2012, November’s performance is very similar whether or not it is an election year. By the end of November S&P 500 has averaged right around 1.5%. Extending data back to 1930, S&P 500 performance in November does weaken, but the full-month remains positive.

    [​IMG]
    Delving deeper into the data we examined S&P 500 performance on the day after Election Day, Election Week, from the close on the day after Election Day to November’s close and December’s close in the following table. The day after Election Day is solidly bearish regardless of timeframe with the S&P 500 posting average losses of 1.12% since 1932 and 0.78% since 1952. Full week performance is modestly bullish using 1932 to 2012 data, but noticeably weaker since 1952. From the close on the day after the Election until the end of November and December, S&P 500 performance is basically mixed, up only slightly more than 50% of the time, although it manages average gains of 0.66% and 1.80%, respectively, since 1952. Incumbent candidate and/or party victories are shaded in light grey.

    [​IMG]
    S&P 500 Performance after Daily Losing Streak of 9 or more Days Ends
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    Provided a repeat of Friday does not occur in the last hour of trading today, S&P 500’s streak of nine consecutive daily declines has come to an end. The following chart and table from last Friday’s post has been updated to include streaks of nine or more days only. This cut the number of losing streaks since 1950 (prior to current streak that just ended) from 22 down to 11. A steady recovery is still evident, just at a slower pace. Returns over the next 1-, 3-, 6- and 12-months are also slightly less, but still solid.

    Click here to view table full-size…

    [​IMG]
     
  6. Stockaholic

    Stockaholic Content Manager

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    In the Short Run, the Market Is a Voting Machine
    Posted by lplresearch

    The election is finally over and to the surprise of many, equity prices rallied after the Trump victory. It was widely believed a Trump victory would bring with it increased uncertainty and a likely equity selloff. That wasn’t the case, as the S&P 500 gained a surprising 1.1% on the day after the election. The big question now is: could this early strength tell us anything about future returns?

    Historically, the immediate reaction after the election has been to sell off. For instance, both of President Obama’s victories saw drops (with 2008 dropping 10% the next two days), but by the time the next election rolled around four years later, there were very solid returns for both of Obama’s terms. According to Ryan Detrick, Senior Market Strategist, “Although early market strength after the election is rare and caught many off guard this year, there is virtually no sign that it means much longer term, positive or negative. For longer-term returns, you need to remember to continue to focus on valuations and fundamentals.”

    To borrow a quote the great value investor, Benjamin Graham, “In the short run, the market is a voting machine, but in the long run, it is a weighing machine.”

    [​IMG]
     
  7. Stockaholic

    Stockaholic Content Manager

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  8. Stockaholic

    Stockaholic Content Manager

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    Stock Market Analysis for Week Ending 11.11.16
    Video from AlphaTrends Brian Shannon
     
  9. Stockaholic

    Stockaholic Content Manager

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    ShadowTrader Video Weekly 11.11.16 - Exactly what is going on. (period, not question mark)
    Video from ShadowTrader Peter Reznicek
     
  10. Stockaholic

    Stockaholic Content Manager

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    Stockaholics come join us in our weekly market poll and vote where you think the markets will end this upcoming week ahead!-
    In addition we have our weekly stock picking contest now up and running as well!-
    We also now have a daily stock picking & market direction guessing challenge running here!-
    And lastly we have a Fed poll...will they hike, will they stand pat? Vote!-
    It would be awesome to see some of you regulars here at Stockaholics join us and participate on these sentiment polls & challenges!

    Have a fantastic weekend everyone! :cool:
     
  11. Ken34

    Ken34 2017 Stock Picking Contest Winner

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    so there is going to be 11 fed speakers this week....that is terrible...im staying far away from commodities this week and bonds.
     
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  12. Ken34

    Ken34 2017 Stock Picking Contest Winner

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    all this tells me is the S&P will continue to march higher regardless of who the president is. and that and big corrections are to be bought.
     
  13. Vegastrader66

    Vegastrader66 Member

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    Nov 11 2016 Pro Post market Wrap & Sector Watch Free session
    What a week!!! Quite the snap back rally! It wouldn't be a shocker is we consolidated or pulled back to fill some gaps that have been created in indexes and sectors.

     
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  14. Stockaholic

    Stockaholic Content Manager

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  15. StockJock-e

    StockJock-e Brew Master
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    So basically the same as always.
     
  16. Stockaholic

    Stockaholic Content Manager

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    Weekend Review 11.13.16: VIX, TLT, SPY, IWM, QQQ, CAT, JPM, GS, BABA, AAPL, FB, AMZN, NFLX, GOOGL
    Video from Justin Pulitzer
     
  17. stock1234

    stock1234 2017 Stockaholics Contest Winner

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    The selloff in bonds continue during the Asian market hours :eek:
     
  18. Stockaholic

    Stockaholic Content Manager

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    dolla holla

    first time since january the dx printed above 100 :eek:

    [​IMG]
     
  19. Ken34

    Ken34 2017 Stock Picking Contest Winner

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    commodities continue to get crushed cause of the strong dollar, cooper still looking good though
     
  20. Gambit

    Gambit Active Member

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    • The U.S. dollar index is up more than 1% today, hitting 100 for the first time in eleven months, as yields on the 10-year Treasury note rose by another 11 basis points to 2.23%.
     

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