Welcome Stockaholics to the trading week of October 17th! This past week saw the following moves in the S&P: Major Indices End of Week: Bird's Eye view of the Major Markets on Friday: Economic Calendar for the Week Ahead: Sector Performance WTD, MTD, YTD: What to Watch in the Week Ahead: Monday Earnings: Bank of America, IBM, Netflix, United Continental, Charles Schwab, JB Hunt Transportation, Celanese, Hasbro 8:30 a.m. Empire State survey 9:15 a.m. Industrial production 12:15 p.m. Fed Vice Chair Stanley Fischer at Economic Club of New York Tuesday Earnings: Goldman Sachs, BlackRock, Johnson and Johnson, United Health, Philip Morris, Comerica, Domino's Pizza, Harley-Davidson, Kansas City Southern, Intel, Yahoo, Intuitive Surgical, Pinnacle Financial 8:30 a.m. CPI 10 a.m. NAHB survey 4 p.m. TIC data Wednesday Earnings: American Express, Morgan Stanley, US Bancorp, M&T Bank, eBay, Abbott Labs, Halliburton, St. Jude Medical, Tupperware, Supervalu, Unifirst, Tractor Supply, SLM, Citrix, Canadian Pacific Railroad, Northern Trust 8:30 a.m. Housing starts 8:45 a.m. San Francisco Fed President John Williams 1:30 p.m. Dallas Fed President Rob Kaplan 2 p.m. Beige book 7:45 p.m. New York Fed President William Dudley Thursday Earnings: Microsoft, Verizon, Travelers, Union Pacific, Bank of NY Mellon, Walgreens Boots Alliance, Illinois Tool Works, E*Trade, Dunkin Brands, American Airlines, Alaska Airlines, Pulte Group, Fifth Third, KLA-Tencor, Advanced Micro 7:45 a.m. European Central Bank rate decision 8:30 a.m. New York Fed's Dudley welcoming remarks at NY Fed workshop on financial industry 8:30 a.m. Initial claims 8:30 a.m. Philadelphia Fed survey 10 a.m. Existing home sales 4:45 p.m. New York Fed's Dudley closing comments at workshop on financial services Friday Earnings: Daimler, General Electric, Honeywell, McDonald's, Manpower 10:15 a.m. Fed Gov. Daniel Tarullo 2:30 p.m. San Francisco Fed's Williams
What A Week: Bonds Battered, Copper Clubbed, Stocks Slide As China Currency Crumbles Well that was a week... Biggest weekly drop in US Macro data in 6 weeks... Yuan down, stocks down, bonds down, Copper down, Pound down... VIX Up, USD up, The Dow was briefly ramped to unchanged on the week but ince Europe closed weakness came back into US equity markets... And after hours S&P 500 futures pushed to the lows of the day and went red... The S&P broke its wedge... to the downside... And the S&P broke its Post-Feb uptrend... Small Caps (Russell 2000) have dropped 3 weeks in a row for the first time in 4 months... the biggest drop since May. (IWM down 6 of the last 7 days) VIX pushed up against its 200DMA once again before being slammed lower today below 16... The last hour or two of the day today saw aggressive selling across the bond curve which had the smell of risk-parity deleveraging... Correlation across bonds and stocks is dropping a little... The yield curve steepened notably for the 2nd week in a row... To its steepest weekly close since Brexit (back above 170bps) The USD rose for the 2nd week in a row to 8 month highs... led by Cable weakness... As Cable closed the week at multi-decade lows and Gilt yields spiked... But all eyes were on Yuan... Crude tumbled back to around unchanged on the week today (as copper was clubbed)... Copper tumbled for the 2nd week in a row for the biggest drop in 5 months... Hillary's best week (relative to her Trumpian benchmark) sparked derisking across the asset classes... Charts: Bloomberg
Spoiler: Weekend Reading: Market Breaks Support, Time To Worry? Submitted by Lance Roberts via RealInvestmentAdvice.com, This past Tuesday my blog was titled: “A Decision Point Is Coming…Soon.” I just didn’t realize when I wrote it, that “soon” would mean “immediately.” “The chart below is the last 3-months of daily price movement. As you will see, while prices have been quite volatile, there has been virtually no progress in the market during the period.” “The two dashed lines so the tightening consolidation pattern more clearly. With the pattern becoming much more compressed it is quite likely a breakout is going to occur within the next few days. The direction of that breakout will be most important.” Unfortunately, the break occurred to the downside this past week as shown below in the daily price chart. As I have been noting over the last few weeks, the consolidation that was occurring was eventually going to break and the expectation has been it would be to the downside given the ongoing overbought conditions with a very relevant “sell signal” in place. That’s the bad news. The good news, so far, is the support level which coincides with the markets break out to “all-time” highs is holding for now. The problem is currently is that all the gains since May of 2015 have now been erased. Unfortunately, this breakdown keeps portfolios on risk-adjusted allocations with higher cash levels. It will now require an advance of the market to effectively new highs before risk allocations can be increased. Given the weak economic and fundamental backdrop, particularly given the stronger dollar, such an advance may not be in the cards currently. Let me be clear, the break of the consolidation to the downside is not “bullish.” These breaks tend to be a warning of often bigger events in the works. As such, it would be wise not to quickly dismiss this event as a “Buy The Dip” moment. It might turn out that way, but from a risk/reward standpoint, the opportunity for gain is greatly outweighed currently by the possibility of capital destruction. Next week will be extremely telling as to what happens next. In the meantime, here is what I am reading this weekend. Fed / Economy A Big Shift Inside The Fed by Bob Bryan via Business Insider Americas Strange Economic Malaise by Pascal-Emmanuel Gobry via The Week The Global Economy Reaches Perilous Territory by Larry Summers via Washington Post 27 Economic Charts To Review by Timothy Lee via Vox How The Fed Turns Good News Into Bad by Narayana Kocherlakota via Bloomberg $7 Trillion Moment Of Truth by Tracy Alloway via Bloomberg Uneven Payrolls For Uneven Economy by Jeffrey Snider via Alhambra Partners Oil Prices Creating Goldilocks Scenario by Yuval Rosenberg via Fiscal Times A Federal Reserve Divided Against Itself by Mohamed El-Erian via Bloomberg Dissent Is Growing Inside The Fed by Chris Matthews via Fortune The Job Filled Non-Recovery by Robert Barro via AEI Markets The Beer Googles Stock Market by Danielle DiMartino-Booth via Money Strong BofA – Stocks Nearing Tech Bubble Valuations by Akin Oyedele via BI Consumer Stocks Flash An Economic Warning by Michael Paulenoff via BI Bull Market Illusion by Barbara Kollmeyer via MarketWatch UBS: Investors Face An Unprecedented Situation by Matt Clinch via CNBC Is The Bond Market In Frothy Territory by Robert Pozen via WSJ Forget The Election, It’s Oil by Paul La Monica via CNN Money Market Looks Similar To 1987 by Akin Oyedele via BI A Bone Chilling Market Indicator by Mark Hulbert via MarketWatch Charts Warn Of A Big Selloff by Tomi Kilgore via MarketWatch The Great Market Switcheroo Of 2016 by James Mackintosh via WSJ This Measure Of Investor Fear At Record Highs by Joseph Ciollii via Bloomberg Stocks Flirting With Levels Not Seen In 15 Years by Sue Chang via MarketWatch How The End Of QE Will Remake Markets by Matthew Lynn via MarketWatch The Health Care Sector Is Not Healthy by Michael Kahn via Barron’s Interesting Reads 8 Ways Rich People View The World by Kathleen Elkins via CNBC Confusion Reigns When It Comes To Retirement by Jamie Hopkins via MarketWatch 10-Tricks To Appear Smart In Meetings by Sarah Cooper via Quartz Investor Optimism At 9-Year Highs by Jim Normal via Gallup Trumped Up Myth Behind Trickle Down Economics by Gary Galles via The Mises Institute 5 Books That Could Change Your Mind by Cass Sunstein via Bloomberg Why Peter Drucker’s Writing Is Still Relevant by Hermann Simon via Havard Bus. Review Canary In A Dangerous Coal Mine by Rana Foroohar via Time What The Candidates Won’t Say by John Stossel via Reason When Will Market Fundamentals Matter? by Brian Smith via TCW 5-Key Events For The 4th Quarter by Marc Chandler via Brown Brothers Harriman Extreme Overvaluation & Weak Fundamentals by John Hussman via Hussman Funds Why Energy Prices Are Headed Lower by Gail Tverberg via Our Finite World A Strange Production Cut As OPEC Hits Record by Tyler Durden via ZeroHedge Why Fiscal Stimulus Won’t Happen This Time by David Stockman via The Daily Reckoning Stocks Uptrend Snaps by Dana Lyons via Tumblr Never Say Never by Jesse Felder via The Felder Report “The average man doesn’t wish to be told that it is a bull or a bear market. What he desires is to be told specifically which particular stock to buy or sell. He wants to get something for nothing. He does not wish to work. He doesn’t even wish to have to think.” — Jesse Livermore
October options expiration prone to wild swings Since 1994, the Monday of options expiration week has a bullish bias for DJIA, S&P 500, NASDAQ and Russell 2000. Expiration day however, tends to be mixed with average losses across the board even though S&P 500 and NASDAQ have advanced more often than not. Entire expiration week and the week after also lean bullish. Of note is the small-cap index streak of 13 straight advances from 1994 through 2006 (not shown, the streak is actually 17 years starting in 1990) and it has been down in six of the last nine years. October’s reputation for volatility can be seen with wild daily and weekly swings in the tables below. Weekly moves in excess of 5% occurred in 1998, 2002, 2008 and 2011. DJIA performs best under newly elected Democrat Presidents In the below chart, “All Post-Election” years since 1953 is the baseline to which “All 1st Elected,” “Dem 1st Elected,” and “Rep 1st Elected” are compared. “All 1st Elected” years are the first years of a new president. “Dem 1st Elected” are first years of a new president that was a Democrat and “Rep 1st Elected” are new Republican presidents. For the first half of a post-election year all four are quite close. Under 1st Elected Democrats DJIA was weaker in January and February on average as a result of early losses in 2009. By the end of July DJIA’s performance begins to show significant deviation and by the end of the year DJIA has performed best under a newly elected, 1st-year Democrat. Should polls hold and Hillary Clinton become the next President, DJIA’s performance in 2017 could resemble the green line. If Donald Trump can defy odds and polls then DJIA could follow the path of the black line. Buy Yom Kippur, Sell Passover Earlier this month we examined “selling Rosh Hashanah” and now let’s take a closer look at buying Yom Kippur. Last week’s table has been trimmed and condensed to show the last 26 years results. DJIA has advanced 22 times and declined just four times since 1990 between Yom Kippur and Passover with an average gain of 8.6%. The worst decline was 7.4% in 2000-2001 and the best was 25.4% from 1998-1999. Over the last seven years of the current bull market, DJIA’s average gain has been 10.6%. Presidential Election Cycle & Gold In the following table the annual performance of gold (continuously-linked, front-month futures contract) is broken down by years of the presidential election cycle. Stocks have historically performed best in pre-election and election years while gold’s best performance has been in midterm and pre-election years on average. Gold’s worst years have been election years. Excluding 2016, gold declined in six of the last ten election years and its best performance was a 10.8% gain back in 1980.
Expected ER beats this week - $PHM $HA $AAL $LVS $INTC $ISRG $ABCB $KMI $JNJ $SKX $AMD $TACO Monday morning ER - $BAC $HAS $LII $ABCB $JBHT $SCHW
Stockaholics come join us in our weekly market poll and vote where you think the markets will end this upcoming week ahead! Weekly SPX Poll - Sentiment (10/17-10/21) <-- click there In addition we have our weekly stock picking contest now up and running as well! Stockaholics Weekly Stock Picking Contest for the Week of (10/17-10/21) <-- click there We also now have a daily stock picking & market direction guessing challenge running here! Stockaholics Daily Stock Pick Challenge & SPX Sentiment Poll for (10/17) <-- click there And lastly we have a short-term SPX price target poll open now! SPX - ATHs or 2050 first? It would be awesome to see some of you regulars here at Stockaholics join us and participate on these polls & challenges! Have a fantastic weekend everyone!
ShadowTrader Video Weekly 10.16.16 - Feels like sideways to lower... Video from ShadowTrader Peter Reznicek
Oct 14 2016 Market Wrap and Sector Watch for next week Bears have the opportunity to take control and we could be looking at some key technical levels being breached. It's all about earnings they could make us or break us next week.
Q3 Earnings season is here! Here are the most notable ER coming out this week: $NFLX $AMD $BAC $INTC $IBM $JNJ $GS $MSFT $HAS $SKX $DPZ $GE $AAL $UNH $LII $EBAY
How do I quote this? "Earnings: Bank of America, IBM, Netflix, United Continental, Charles Schwab, JB Hunt Transportation, Celanese, Hasbro" Anyway, I'm going to try and pull off a Spiked Lizard on NFLX. That is, buy an ITM Put, sell 2 at the money Puts, sell one out of the money put (A butterfly) and then sell 2 more out of the money puts to finance it so I don't pay anything, or take in a credit. I believe my break even price will be somewhere down around $87.00. Can't lose if it moves up. Will make good money if it stays flat. Will lose money after it drops below $87.00.
Here are the complete list of ER this week which includes the company name, ticker symbol, time of release and estimates: Monday Pre-Market: Monday After-Hours: Tuesday Pre-Market: Tuesday After-Hours: Wednesday Pre-Market: Wednesday After-Hours: Thursday Pre-Market: Thursday After-Hours: Friday Pre-Market:
Good morning Stockaholics! Happy Monday. Hope you all had a nice relaxing weekend. Here's are your stock movers & market news on this Monday morning- Spoiler: 10/17 Monday's Stock News Movers: BAC, HAS, SVU, TSLA, DB, MCD, MENT, STZ, WBA, WFC, DNKN, GRPN, WHR 10/17 Monday's Stock News Movers: BAC, HAS, SVU, TSLA, DB, MCD, MENT, STZ, WBA, WFC, DNKN, GRPN, WHR Good day Stockaholics! Happy Monday! Frontrunning: October 17 Bonds Selloff Spreads on Inflation Concern; Stocks Fall With Oil (BBG) Trump charges U.S. election results being rigged 'at many polling places' (Reuters) CNN’s Stelter Blames Firebombing of NC Republican Office on Trump's 'Over Heated' Rhetoric (Newsbusters) Britain, France seek EU condemnation of Russia over Syria (Reuters) Inside the Secret Society of Wall Street's Top In-House Lawyers (BBG) How Caterpillar’s Big Bet Backfired (WSJ) Lack of new blood casts doubt over Wells Fargo's change plan (Reuters) Iran Boosting Oil Production in Possible Hitch to OPEC Deal (BBG) OPEC’s Oil U-Turn Missed Looming Peak Demand (BBG) Crown Shares Post Record Fall as China Detains Casino Staff (BBG) Samsung Self-Tested Batteries in Galaxy Note 7 Phone (WSJ) Big Winner From London’s Brexit Exodus Isn’t Even in Europe (BBG) China 2016 economic growth seen slowing to 6.6 pct, 6.5 pct in 2017 (Reuters) One of China's Poorest Provinces Puts Nation on Track to Beat 6.5% Growth (BBG) ECB’s QE programme strains eurozone repo market (FT) Capital One US Delinquencies at Multiyear High (WSJ) Dumber Stock Market Theory Gains Traction in Earnings Day Impact (BBG) China Foreign Currency Shares Plunge in Sudden Afternoon Selloff (BBG) China launches longest manned space mission (Reuters) UK prosecutors question Barclays executives for Libor probe (FT) STOCK FUTURES NOW: MONDAY'S MARKET HEAT MAP: YESTERDAY'S S&P SECTORS: TODAY'S ECONOMIC CALENDAR: MOST ACTIVE TRENDING PRE-MARKET DISCUSSIONS (SYMBOLS ARE CLICKABLE!): BAC HAS OMER MCD TWX NFLX TCK KITE XLK XLI WBA P DNKN SGY BZUN CYH IEF CELG XLF CLR ESV MRO BOFI XLE IBM TODAY'S EARNINGS CALENDAR: THIS MORNING'S PRE-MARKET NEWS MOVERS: source: cnbc.com Bank of America — Bank of America earned 41 cents per share for its latest quarter, beating estimates by seven cents, with revenue also beating forecasts. Strong trading results helped make up for weakness in some of the bank's consumer businesses. Hasbro — The toymaker reported quarterly profit of $2.03 per share, easily beating estimates of $1.74, with revenue also topping analyst estimates. Hasbro did especially well in its partnered offerings, such as the Disney Princess and "Frozen" product lines. Supervalu — The supermarket operator is selling its Save-A-Lot business to an affiliate of Canadian private equity firm Onex Corporation for nearly $1.37 billion. Tesla — German officials are asking the automaker to stop including the Autopilot function in its ads. The country's transport minister is concerned that drivers might feel their attention is not needed while behind the wheel of the vehicle. Separately, a product announcement scheduled for today has been pushed back to Wednesday, with CEO Elon Musk tweeting that the unnamed new product needed a few more days of refinement. Deutsche Bank — Deutsche Bank is considering changes to its U.S. strategy, according to Reuters. The bank is not likely to abandon the U.S. market, but it may considering scaling down its activities here. Deutsche Bank is currently fighting a proposed $14 billion Justice Department fine over financial crisis era mortgage bond sales. McDonald's — The restaurant chain is losing a number of senior executives, including chief field officer Karen King and senior vice president Erik Hess. That comes on the heels of other departures, including soon-to-retire McDonald's USA President Mike Andres, chief administrative officer Pete Bensen, and high-growth markets division chief David Hoffmann. Mentor Graphics — Mentor has hired Bank of America to explore strategic alternatives including a potential sale, according to Reuters. Activist hedge fund Elliott Management has an 8.1 percent stake in the software maker and feels Mentor's shares are significantly undervalued. Constellation Brands — The spirits maker is near a deal to sell its Canadian wine business to the Ontario Teachers' Pension Plan for about $760 million, according to a Wall Street Journal report. Walgreens Boots Alliance — Walgreens has been upgraded to "buy" from "hold" at Jefferies, which has also increased its price target for the drug store operator's stock to $95 per share from $87. Jefferies feels investors are underestimating both the fundamental positives as well as the incremental benefits that will be provided by its acquisition of Rite-Aid. Wells Fargo — Wells Fargo was downgraded to "market perform" from "outperform" at Keefe Bruyette & Woods, which cut its price target to $48 from $57. Keefe Bruyette does not feel the price is low enough to reflect the uncertainty surrounding the change in the bank's sales practices. Dunkin' Brands — RBC downgraded Dunkin' to "sector perform" from "outperform," saying the stock's price already reflects the donut chain's acceleration in sales, the introduction of new beverages, and the launch of its "On-The-Go" mobile ordering platform. Groupon — Wedbush upgraded Groupon to "outperform" from "neutral," as the site sees increased customer traffic and expands its deal inventory. Whirlpool — MKM downgraded the appliance maker to "neutral" from "buy," based primarily on a rise in steel prices. Good trading day to everyone in here on this Monday!