Welcome Stockaholics to the trading week of May 13th! This past week saw the following moves in the S&P: Major Indices End of Week: Major Futures Markets on Friday: Economic Calendar for the Week Ahead: Sector Performance WTD, MTD, YTD: What to Watch in the Week Ahead: Monday Earnings: Legg Mason, Take Two Interactive Tuesday Earnings: Allianz, Nissan, Vodafone, Ralph Lauren, Best Inc,Tilray, CyberArk Software, The Container Store, Pershing Square 6:00 a.m. NFIB 8:30 a.m. Import prices 12:45 p.m. Kansas City Fed President Esther George Wednesday Earnings: Cisco, Macy's, Alibaba, Tencent, ZTO Express, Embraer 8:30 a.m. Retail sales 8:30 a.m. Empire state survey 9:15 a.m. Industrial production 10:00 a.m. Business inventories 10:00 a.m. NAHB survey 1:00 p.m. Richmond Fed President Tom Barkin 4:00 p.m. TIC data Thursday Earnings: Walmart, Applied Materials, Pinterest, Baidu, Burberry 8:30 a.m. Jobless claims 8:30 a.m. Housing starts 8:30 a.m. Philadelphia Fed survey 8:30 a.m. Business leaders survey Friday Earnings: Deere, Dr. Reddy's Labs 10:00 a.m. Consumer sentiment 11:15 a.m. New York Fed President John Williams
Trade Turmoil Sparks Worst Week Of 2019, Wipes Over $2 Trillion Off Global Stocks A couple of tweets, and just like that $2.5 trillion of global equity market cap evaporates... As stocks went from 'everything is awesome' to the worst week of the year in an instant... As stocks began to catch down to the far less exuberant global systemically important banks... An ugly week in Europe too with France and Italy worst... The week in US equity markets has been dominated by algos chasing headlines about trade talks with dead cat bounces giving way to reality checks... NOTE - today's "constructive" talks headline prompted the 4th biggest buy program of the month (PPT?). Notice that the market turned around when the world's biggest money-losing IPO opened... It seems it took the algos a long time to actually read He's and Mnuchin's comments: Liu He: "No talks are scheduled from here" Steve Mnuchin: "No future talks planned as of now" But when they did, stocks rolled over... Smells like PPT turned up after Mnuchin's comments as VIX flash-crashed (signaled) at 0830ET today then fell after Mnuchin's comments... VIX has been inverted all 5 days this week... Prompting a huge short-squeeze lift. just like on Monday (fail) and Thursday (fail)... This is the seventh Friday in a row where a sudden panic bid lifted stocks... The Dow ended below its 50DMA for the 3rd day in a row but the rest of the majors scrambled back above the key technical level... DMA And then of course, there's Uber... Second worst week of the year for credit markets... Treasury yields fell across the curve this week but the long-end notably underperformed... The Dollar ended the week unchanged... Yuan fell all week...biggest weekly drop in yuan against the dollar since June 2018 Yuan tumbled to 4-month lows... Bitcoin soared on the week, along with Ethereum... Bitcoin rallied above $6400 as trade tensions escalate... Despite the dollar's flat week, silver slumped and crude managed gains... And finally, it appears "constructive" is the new 'put'...
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2019- S&P sectors for the past week-
Next Week's Economic Indicators - 5/10/19 Fri, May 10, 2019 Macroeconomic data took a back seat to earnings and tariff tweets in what was a pretty quiet week of data. There were only 25 releases on the radar with most missing estimates or coming in below the prior period. With no releases on Monday, the JOLTS report kicked things off on Tuesday showing 7.488 million job openings in March versus expectations of 7.350 mln. Consumer Credit data for March also came out Tuesday coming in below both the consensus forecast and February's print. Weekly mortgage applications were stronger this week rising 2.7% while DOE petroleum data showed a draw on crude inventories, though, gasoline and distillates both fell less than expected. Producer inflation data came out on Thursday, coming in unchanged versus March. Headline PPI was expected to grow 2.4% in April rather than the 2.2% reading we got. CPI data was released later in the week with similar results. Things will be pretty quiet again next week, with one fewer data release than this week. Once again, nothing is scheduled to come out on Monday, but Tuesday will see NFIB's small business optimism and Import and Export Price indices. Wednesday will be the busiest day of the week by far with Retail Sales out in the morning, followed up by Industrial Production, NAHB Homebuilder Sentiment, and TIC Flows. Other than Industrial Production and Homebuilder sentiment, lower readings are expected across the board. Housing Starts and Building Permits for April are scheduled to come out Thursday morning in addition to the Philly Fed's Business Outlook Index for May. Each of these releases is expected to show improvements from the previous month. Finally, we will round out the week with the Leading Index and University of Michigan Sentiment on Friday. Global Data Surprises Bottoming Out, Driven By China Fri, May 10, 2019 Over the past couple of months, Chinese data has provided a much-needed shot in the arm for global economic surprise indices. Recent data since March has been on a tear relative to expectations in China. Industrial production, fixed asset investment, and exports are some good examples of recent data that has handily beat. For the global picture, that's helped push the Global Economic Surprise index off multi-year lows, even if it's still in negative territory. In other words, even though global economic data has come in weaker than expected over the last few months, things are less bad now than they were earlier this year. It Doesn't Get Any Worse Than This Fri, May 10, 2019 One of the tools included in the new Interactive section of our website covers market seasonality. This tool shows the S&P 500's historical performance over the upcoming one week, one month, and three months over the last 10 years. Users can then also enter historical date ranges and find stocks and ETFs that have historically performed the best over these custom time periods. The Seasonality tool also allows you to screen custom portfolios and see which holdings in the portfolios have historically performed the best and worst over any time frame throughout the year. Checking in on today's Seasonality tool, we were greeted with a rather ominous short term trend. As shown in the gauges below, the S&P 500's median return from the close on 5/10 through 5/17 has historically been a decline of 1.78%, which ranks as the worst one week period for the market of the calendar year! Looking further out, things get better in terms of performance (they can't get any worse) as the S&P 500's median one-month change from the close on 5/10 has been a gain of 0.97%, which ranks in the 46th percentile relative to all other one-month periods. Finally, the S&P 500's median three-month performance has been a gain of 3.20%, which ranks in the 64th percentile. In the table below, we look a little closer at just how bad the upcoming one-week period has been for equities over the last ten years. Even as the stock market has enjoyed one of its strongest and longest bull markets of all-time, the period from 5/10 through 5/17 has been a big exception. Since 2009, the week has only seen positive returns twice and in all but two of the years where equities have been down, the decline has been well over 1.5%. Compounding Interest: The 8th Wonder Of The World Posted by lplresearch “Compounding interest is the eighth wonder of the world.” Albert Einstein When should you start investing? Yesterday is one of the best answers we can think of. As Einstein stated in his quote, compounding interest can be extremely powerful for investors over time. Compounding interest essentially means “interest on interest,” and it’s why so many long-term investors have been successful. “Yes, investing can be volatile, and periods like December 2018 can make it quite tough, but if you are saving for retirement and have potentially decades to go until retirement, one of the best things you can do during periods of market stress is nothing,” explained Senior Market Strategist Ryan Detrick. “By ‘nothing’ we mean you should stick to your financial plan.” By dollar-cost averaging into a retirement plan through the ups and downs of markets and over a period of years and decades, your nest egg has significant growth potential thanks to—among other reasons—compound interest effect on the earnings. Here’s a powerful example. Our LPL Chart of the day shows two hypothetical investments, both assuming an annual return of 8%. In the first scenario, an investor puts away $3,000 a year from the age of 21 until age 30, then stops. The second scenario assumes an investor starts to invest $3,000 a year from the age of 31 until age 70. Incredibly, the investor who invested only 10 years, but started 10 years earlier, has more money at age 70 (over $1 million!) than the investor who put money away for 40 years—simply because the investor started earlier and let compounding interest work its magic. Earnings Estimates Stand Firm Posted by lplresearch Earnings growth projections have remained positive globally, even as trade tensions have rattled financial markets this week. Lately, headlines on the U.S.-China trade dispute have distracted investors, and a few pockets of the global economy have weakened over the last several months. Fixed income markets have positioned for a marked economic slowdown with the yield curve again nearing inversion (long-term rates falling below short-term rates). Uncertainty can be uncomfortable, but in times of market volatility, we encourage investors to focus on long-term fundamentals instead of short-term noise. One of the fundamental pillars we like to focus on is company earnings. As shown in the LPL Chart of the Day, earnings in all three major global regions are expected to rise this year. U.S. companies are poised to lead, with consensus expectations for 4.2% profit growth in 2019. “The bar for earnings results is low because of heightened uncertainty,” said LPL Research Chief Investment Strategist John Lynch. “Economic growth may be moderating internationally, but we see enough catalysts ahead to drive another year of record profits in the U.S.” U.S. company profits escaped last quarter’s soft patch, based on earnings results from about 85% of constituents that have already reported. S&P 500 Index profits likely grew about 1% year over year in the first quarter of 2019, markedly better than the 2–4% decline expected at the beginning of the reporting season, depending on the data source. Better-than-feared earnings have helped push the S&P 500 to all-time highs over the past few weeks and we expect improving earnings to carry stocks going forward. Earnings expectations for developed and emerging markets (EM) are below U.S. projections. However, we think EM earnings projections may be too pessimistic. Global market volatility, trade tensions, and a strong U.S. dollar have contributed to reduced EM growth expectations in recent months, but we think the Federal Reserve’s pause should help cap gains in the U.S. dollar and help fuel stronger global currencies and EM economic activity. Uncomfortable, but Expected Posted by lplresearch Trade tensions have flared up again, and they’ve caught the stock market off guard. The S&P 500 Index has dropped 2.1% over the past two days amid a slew of trade-related headlines. On May 6, the United States announced it would implement additional tariffs on Chinese imports at the end of the week if no trade agreement is reached. In response, China threatened its own retaliatory measures. China and U.S. officials are still scheduled to continue trade talks in Washington, D.C. May 9, but the threat of escalation looms large in investors’ minds. Recent market volatility has been uncomfortable, but not particularly surprising given the lack of turbulence year to date. As shown in the LPL Chart of the Day, the S&P 500’s largest pullback this year has been unusually small relative to previous years. Since 1970, the S&P 500 has made it through the first five months of the year without at least a 2.5% pullback only once—in 1995. On average, the S&P 500 has endured an 8.5% pullback from January to May each year. This year, stocks haven’t come close to that. The largest S&P 500 pullback this year has been a one-day slide of 2.48%. “Given the recent run we’ve had, we believe conditions are ripe for an increase in volatility,” said LPL Research Chief Investment Strategist John Lynch. “Though we remain optimistic about U.S. stocks’ longer-term prospects, stocks recently reached overbought levels.” While volatility could take over in the near term, we see the resurgence in trade risk as a temporary obstacle to new S&P 500 highs later this year. In our view, current trade headwinds will have a negligible impact on economic growth, and the U.S. economy has emerged relatively unscathed from what is traditionally the weakest quarter of the year. Economic fundamentals also point to higher prices: The labor market is steadily improving, corporate profits are at all-time highs, and inflation is healthy. In the meanwhile, we look for S&P 500 support in the 2,775 range, the index’s 200-day moving average. If this level were to be reached, it would represent a 6% slide from record levels, and at the low range of a typical 6-10% market correction. Solid fundamentals and technical support may provide investors with potential for relief from the recent bout of market volatility. May Option Expiration Week: Recent Weakness Trading around May option expiration is mostly a mixed bag. DJIA has been down nineteen of the last thirty-seven May expiration days with an average loss of 0.12%. The full-week has a bearish bias for DJIA and S&P 500 with records of 20 declines and 17 advances over the past 37 years. More recently, DJIA has suffered declines in eight of the past ten expiration weeks. Rotate in May — Top Sectors for the “Worst Months” May to October Today we are not going to bother debating whether one should actually sell in May or not. Instead, let’s focus on some tactical adjustments that can be made in portfolios to take advantage of what actually does work during the “Worst Six Months” while either shorting or outright avoiding what does not work all that frequently. In the following table, the performance of the S&P 500 during the “Worst Six Months” May to October is compared to fourteen select sector indices or sub-indices, gold and the 30-year Treasury bond. Nine of the fourteen indices chosen are S&P Sector indices. Gold and 30-year bond are continuously-linked, non-adjusted front-month futures contracts. With the exception of two indices, 1990-2018, a full 29 years of data was selected. This selection represents a reasonably balanced number of bull and bear years for each and a long enough timeframe to be statistically significant while representing current trends. In an effort to make an apple-to-apple comparison, dividends are not included in this study. Using the S&P 500 as the baseline by which all others were compared, five indices and the 30-year Treasury bond outperformed during the “Worst Six Months” while nine others and gold underperformed based upon “AVG %” return. At the top of the list are Biotech and Healthcare with average gains of 8.69% and 4.85% during the “Worst Months.” However, before jumping into Biotech positions, only 24 years of data was available and in those years, Biotech was up just 54.2% of the time from May through October. Some years, like 2014, gains were massive while in down years losses were frequently nearly as large. Although not the best sector by AVG %, Consumer Staples advancing 79.3% of the time is the closest thing to a sure bet for a gain during the “Worst Months.” Market Celebrates Mother’s Day with Gains Over the last twenty-four years on the Friday before Mother’s Day the Dow Jones Industrials have gained ground sixteen times. On the Monday after, DJIA has advanced seventeen times. Average gain on Friday has been 0.19% and a respectable 0.49% on Monday. However, in four of the last seven years, the Monday following Mother’s Day has been down. Relax It’s May Not China Trade War Fears A full blown trade war with China is not in anyone’s interest. President Trump’s negotiating style may be unsettling to the market at times, but neither country is likely to stand on ceremony to save face at the risk to their respective economies and markets. With the market at new highs and up big the first four months this year it is even more prone to short-term weakness in May. Our overall outlook for the year remains bullish as it has been since our Annual Forecastin December that was followed by a bullish January Indicator Trifecta. The historical strength of Pre-Election Years, which has been self-evident thus far this year, is supported by resilient economic and corporate readings, a dovish Fed clearly done with raising interest rates for the time being and a White House that is supportive of Wall Street. But, as you can see in the chart of Pre-Election Year Seasonal Patterns below, the Dow (black dotted line) and S&P (green dotted line) are already at historical average gains for the Pre-Election year and NASDAQ is way ahead of the pace up more than 20% for 2019 to date. Ostensibly, the S&P and NASDAQ are on the brink of clearing the last levels of resistance. But the Dow is struggling and Russell 2000 is well off the pace. S&P and NASDAQ made new all-time highs last month, but are straining to hold those levels and there is chatter in technical analysis circles about a bearish double top forming on the S&P and NASDAQ. Also evident in the chart here is the weakness often experienced in the latter part of May. So while we remain bullish on the year, we do expect the market to be weaker during the May soft patch and backing and filing during the Worst 4 Months July-October. First Level of Support Tested Tough day for the market as seasonal weakness ran into more geopolitical maneuvering on the China trade front. This pushed the S&P 500 to test the first level of technical support. As illustrated in the chart here S&P broke below the 2875 support level intraday before closing above it. This level coincides with the old January 2018 highs and a host of other technical levels on the chart. The next level of support is 2815 at last November 7th’s intraday high. Below that is 2775. But let’s not panic just yet. This sort of weakness in May is not uncommon. And the market had been on a tear. Perhaps it’s time for a pause and the Trump/China trade talk rhetoric is just the catalyst.
Here are the current major indices pullback/correction levels from ATHs as of week ending 5.10.19- Here is also the pullback/correction levels from current prices- ...and here are the rally levels from current prices-
Stockaholics come join us on our stock market competitions for this upcoming trading week ahead!- ======================================================================================================== Stockaholics Daily Stock Pick Challenge & SPX Sentiment Poll for Monday (5/13) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (5/13-5/17) <-- click there to cast your weekly market vote and stock picks! Stockaholics Weekly T/A Charting Challenge (5/13-5/17) <-- click there to participate! ======================================================================================================== It would be pretty sweet to see some of you join us and participate on these! I hope you all have a fantastic weekend ahead!
Stock Market Analysis Video for May 10th, 2019 Video from AlphaTrends Brian Shannon ShadowTrader Video Weekly 5.12.19 Video from ShadowTrader Peter Reznicek (VIDEO NOT YET UP!)
Here is a look at this upcoming week's Global Economic & Policy Calendar- (Global Economic & Policy Calendar Not Yet Out!)
Here are the most anticipated Earnings Releases for this upcoming trading week ahead. ***Check mark next to the stock symbols denotes confirmed earnings release date & time*** Monday 5.13.19 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! Monday 5.13.19 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! Tuesday 5.14.19 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 5.14.19 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 5.15.19 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 5.15.19 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 5.16.19 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 5.16.19 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 5.17.19 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! Friday 5.17.19 After Market Close: Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES! NONE.
And finally here is the most anticipated earnings calendar for this upcoming trading week ahead- ($NVDA $BABA $ACB $CSCO $IQ $BIDU $WMT $TTWO $AMAT $CYBR $TLRY $STNE $M $RL $BILI $LEGH $WIX $DE $CPRX $TME $EAST $LMB $MYO $KEM $AZZ $A $PAGS $MEEC $MIME $NTES $CTST $DARE $CRMD $TSG $CPLP $CELP $BOOT $NEWR $GDS $SESN $AKTS $LM) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning May 13th, 2019 <-- click there to view!
What did Teflon Don think was going to happen!?!? Looks like there might be some buying opportunities soon. Lets see how far this sets us back.
