Stock Market Today: June 24th - 28th, 2019

Welcome Stockaholics to the trading week of June 24th!

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:

• Tuesday

8:30 a.m. Philadelphia Fed

8:45 a.m. New York Fed President John Williams

9:00 a.m. S&P/Case-Shiller HPI

9:00 a.m. FHFA home prices

10:00 a.m. New home sales

10:00 a.m. Consumer confidence

12:00 p.m. Atlanta Fed President Raphael Bostic

1:00 p.m. 2-year note auction

1:00 p.m. Fed Chair Jerome Powell at Council on Foreign Relations

3:30 p.m. Richmond Fed President Tom Barkin

• Wednesday

8:30 a.m. Durable goods

8:30 a.m. Advance economic indicators

1:00 p.m. 5-year note auction

• Thursday

8:30 a.m. Initial claims

8:30 a.m. Real GDP

10:00 a.m. Pending home ales

1:00 p.m. 10-year note auction

• Friday

8:30 a.m. personal income

9:45 a.m. Chicago PMI

10:00 a.m. Consumer sentiment

 

Desperate-Doves & Downed-Drones Spark Gold's Best Week In 3 Years, Stocks & Bonds Gain
Gold!!! Dramatically outperforming since The Fed capitulated...



The market's response to Powell's promises this week... It's Never Enough!!







Big week in Chinese stocks with SHCOMP back above the crucial 3000 level (barely)...





Global negative-yielding debt exploded this week, now at a record $13 trillion market-value...



Not surprising with so much of European sovereign debt now trading below 0...





US equity markets love war, love dismal economic data, and love Fed promises of moar liquidity - that's all there is really...Nasdaq outperformed, Trannies were the laggard but still managed decent gains.





Small Caps are unch post-Powell...



And today saw stocks peak at the European close and fade the rest of the day to all close red with Small Caps the biggest losers...weak close as quad witch volumes hit





Transactions on S&P 500 stocks spiked on the quadruple witching open, when options and futures on indexes and stocks expire.

“They amplify/exacerbate moves in the markets as institutions update large derivatives positions,” Russ Visch, a technical analyst with BMO Capital Markets.

“My general advice is to be wary of any outsized moves in quad expiry weeks because it may be nothing more than someone getting caught on the wrong side of a trade and/or unwinding a big position.”

S&P is on target for the best June since 1995

Intraday, markets surged on headlines that VP Pence would cancel his China-Bashing speech (which he already had) citing "progress" with China, but that was dismissed by Chinese media demanding all sanctions be dropped before talks could progress. Peter Navarro also took some of the shine off the week when he warned of no deal being a possibility at around 1400ET but that didn't last long. Still, given that it was a quad witch, the pinning around unchanged today was notable and then an ugly close...





The Dow broke above the Jan 2018 high level that has been resistance since...





Will it hold?

Bank Stocks are at their weakest relative to the S&P since Sept 2016...





VIX decoupled from stocks today as - odd as it may seem - some investors decided to hedge...





Global bond yields are collapsing as global stocks soar back to record highs...





Treasury yields tumbled in the middle of the week...but rebounded notably today (on thin volumes) leaving 30Y underperforming - unchanged...





10Y Yields managed to scramble back above the crucial 2.00% level today as stocks were bid...





The yield curve steepened notably on the week (which is the signal for imminent recession as the curve shifts from deep inversion to steepness once again)...





Markets are now convinced 100% that The Fed will cut in July (22% chance of 50bps cut and 78% chance of 25bps)





The Dollar (DXY) suffered its worst week since Feb 2018 (down over 1%), dumping to its lowest weekly close since March ...





But most notably, the dollar puked below its 200DMA... (this is the biggest penetration of the 200DMA since May 2017)





Yuan mirrored the USD, spiking to six-week highs before fading today...





Bloomberg's Robert Fullem notes that Chinese iron ore prices are soaring but the Australian dollar isn’t, splintering their typical relationship.





Bitcoin surged this week, nearing the $10,000 Maginot Line...



Bitcoin futures did get above $10,000 however...



More notably, all September futures have already breached $10k on the crypto native platforms.





All the major cryptos gained (shrugging off any FacebookCoin angst)...



Ethereum surged late in the day, topping $295 for the first time since Sept 2018...





A weak dollar and safe-haven flows from Iran sent all commodities higher this week...





Oil surged this week on Iran tensions, jumping 9.5% - the best weekly gain since Dec 2016 (Trump election reflation euphoria)...





Gold is up for the 5th week in a row, topping $1400 with its best week since April 2016, pushing to its highest since Sept 2013...



As Bloomberg's Ye Xie notes, Gold and real-yields have never been as tightly bound as they are now. That probably means the metal's rally has squeezed as much as it can from the bond market, which has priced in a fair amount of rate cuts. For bullion to climb further, it'll need help from the dollar. The 30-day correlation between rates on five-year linkers and gold prices reached -0.79 this week. That's even tighter than during the global financial crisis. The post-crisis average is -0.3.



The stronger correlation means that buying gold is essentially buying inflation-linked bonds. It's a bet that real yields will keep falling, which increases the appeal of assets that don't offer yield. But without a weakening dollar, there's a limit to the gold rally.

Finally, some chart food for thought...

It's all about Fun-Durr-Mentals...



Stocks are Cheap...

How expensive are equities? Price/tangible book at 10.8x is nearly double the historical norm, a record high that is 24% above the dotcom bubble peak and represents a 3 SD event. In a word - froth. pic.twitter.com/NlnUtpz5Pi

— David Rosenberg (@EconguyRosie) June 21, 2019
Because all that matters is central-bank-liquidity...

 

Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2019-



S&P sectors for the past week-

 

Trend Analyzer - 6/20/19 - Only Defensives Are Also At Highs
Fri, Jun 21, 2019

The major index ETFs began the day yesterday split down the middle with half overbought and the other half still neutral. A large gap higher at the open led to a few more also entering overbought territory; namely the large-cap S&P 100 (OEF) and Nasdaq (QQQ). Of this group, QQQ has surged the most over the past week and is now sitting almost 3% higher. While the gap higher did make conditions generally more overbought across the board, some intraday selling prevented things from reaching any sort of extreme level. With the Core S&P Small-Cap's (IJR) gains in yesterday's session, only the Micro-Cap ETF (IWC) still remains below the 50-DMA.



Panning over the charts of these same ETFs, the breakout to new highs is evident only for large caps. The Dow (DIA), Russell 1000 (IWB), and S&P 500 (SPY) clearly finished at new highs. The only non-large cap index ETF to also reach a new high is the Russell Mid Cap (IWR). Other small caps and mid caps all have a long way to go to reach last year's highs though they have been progressing upwards in recent weeks.



With the market reaching new highs, one would expect that most of the movement has been a result of cyclical high growth sectors, but that simply has not been the case. Defensives have continued to perform well with Consumer Staples (XLP), Utilities (XLU), Health Care (XLV), and Real Estate (XLRE) all sitting firmly at extremely overbought levels on solid gains (though XLP has lagged a bit this week). But now cyclical sectors have also begun to see a string of buying in the past week. Sectors like Communication Services (XLC), Industrials (XLI), and Tech (XLK) have all risen well over 2.5% and are slightly outperforming this week. While the performance of these sectors has been strong, Energy (XLE) has actually seen the largest gains over the past five days as it works off oversold readings from last week. This is also the only sector that is not in an uptrend. With yesterday's substantial gains, it heads into trading today just barely below the 50-DMA.



The charts of the defensives are a bit better of a look into just how much they have outperformed in recent weeks. For most of the year, these have sat in solid, and relatively uninterrupted, uptrends. Whereas other sectors still sit a decent distance off of their 52-week highs, XLU, XLP, and XLRE all finished yesterday at another new high. Given that these sectors have become overextended, it is increasingly likely that they could see some sort of pullback. Additionally, while defensives have sat in uptrends (with their moving averages reflecting this), other sectors', like Materials (XLB), Communication Services (XLC), and Industrials (XLI), moving averages have become very flat recently. XLE, despite strong performance this week, actually still has downward sloping moving averages.



Best and Worst Groups Between Highs
Fri, Jun 21, 2019

While the S&P 500 made a new high for the first time in 35 trading days yesterday, many of the characteristics of the groups driving the rally have shifted. To highlight this, in the table below we summarize the ten best and worst performing S&P 500 Industries from the close on 4/30 through yesterday. During that 35 trading day stretch, 34 Industries saw positive returns while another 27 declined.

Industries that have seen the biggest gains between the two new highs are primarily defensive in nature as all but three come from sectors that are typically considered defensive (Consumer Staples, Health Care, and Real Estate). Health Care has been the real star of the show, though. Of the sector's six different industries, four of them made the top ten!

On the downside, cyclical industries have dominated the weak side. When industries like Semis, Autos, Construction & Engineering, and Air Freight are lagging the market, it really illustrates the presence of economic concerns. Leading the way lower, Energy Equipment and Services declined over 10%, followed by Semiconductors which were down just under 10% after failing at resistance on Thursday for the third time in a month. These two industries are followed by two industries (Tobacco and Power and Renewable Energy) that come from sectors that are traditionally considered defensive, but they have their own specific issues to deal with.



Broad Strength in Health Care Sector
Fri, Jun 21, 2019

In an earlier post, we highlighted the fact that some of the ten best performing S&P 500 Industries between the S&P 500's highs on 4/30 and 6/20 were from the Health Care sector. It hasn't just been these four industries that have been strong in the Health Care sector either. The performance snapshot of the sector below shows just how strong the sector has been lately. While all six of the industries within the sector aren't up YTD or so far in Q2, between the S&P 500's highs on 4/30 and 6/20, Health Care is the only sector where every industry within the sector has posted positive returns. Not even the industries within the Utilities sector have been this uniformly positive. The best performer of the bunch has been Health Care Technology, which is up 8% since the end of April and has extended its YTD gain to 36.8%. The worst performing industry in the sector has been Biotech which is up 2.1% since 4/30, and while that may not sound like much, it's still better than more than half of the other industries in the index.



Are Bulls An Endangered Species?
Posted by lplresearch

The S&P 500 Index closed at a new all-time high yesterday, the 5th new high so far in 2019. After May, the worst month for the S&P 500 since 2010, June is up 7.3% as of 06.20.19, which would be the best June since 1955.

Much of the rally this month has been sparked by a more dovish Federal Reserve (Fed), combined with U.S.-China trade discussions potentially back on track.

What’s quite interesting about things now though, is many signs of investor sentiment are a long way from bullish. Remember, from a contrarian (or opposing) point of view, this can suggest there is still money on the sidelines.

“The S&P 500 might be at new highs, but global fund managers and individual investors are quite underweight equities right now,” explained LPL Senior Market Strategist Ryan Detrick. “If you are looking for a reason this rally can continue, that could be it.”

For example, the recent Bank of America Merrill Lynch June Global Fund Manager Survey (a survey of managers who oversee more than $600 billion in assets) showed the largest jump in cash since August 2011. Additionally, equity allocation was the lowest it had been since March 2009, and the equity-to-bond allocation was the lowest since May 2009. Not to mention the allocation to bonds was the highest it had been in eight years. “Money on the sidelines might sound cliché, but it really seems to be the case this time,” said Detrick. With the S&P 500 hitting more all-time highs, having money in the market may make more sense (or cents!).

Individual investors are skeptical as well, as the recent American Association of Individual Investors (AAII) Sentiment Survey showed more bears than bulls for six straight weeks, the longest stretch since November 2016. Finally, as our LPL Chart of the Day shows, AAII bulls have been under 30% for six consecutive weeks for the first time since January 2016.

Big S&P 500 Junes Drain Life from Julys

S&P 500 is off to it best June performance since 1955, up 7.34% as of yesterday’s close. If yesterday was the last trading day of June, this performance would have been strong enough to push the month to 6th best going back to 1930. Looking back to late May, this performance is still impressive even though it was anticipated following May’s abysmal showing. However, such strong performance in June may not carry over into July.

Below S&P 500 performance in June has been split into positive and negative tables. Each table contains July’s historical performance as well as full-year performance. Historically July has been weaker after a positive June. July averages just 0.48% after an up June compared to a gain of 2.84% after a down June. Examining the Top 20 Junes and subsequent Julys showed only a modest improvement in performance with average July gain climbing to 1.11%. However, even if July does disappoint this year, the full year is likely to still be quite fair as past positive Junes where followed by full-year gains 80% of the time with an average gain of 13.44%.


Prospect of Lower Rates Lifts Gold

As widely anticipated, the Fed did not change its target rate today. Instead, the Fed set the stage for cuts possibly later this year. Overall, the market’s response was a choppy climb to a modestly higher close. A more enthusiastic move by the market may have occurred if the Fed cut rates. Gold’s reaction was more favorable, finishing the day higher by over 1%. Generally, the lower interest rates go, the more desirable gold can become as lower rates typically result in a weaker dollar.

In the above chart, gold’s monthly performance from 1975 to 2018 is displayed. Historically, October has been gold’s worst month and June is a close second. Historically, after weakness in June, gold has, on average, enjoyed solid gains in July, August and September. Some of this strength in gold is likely due to safe-haven demand during the stock market’s worst two months, August and September. Gold’s best three months, July to September, could easily be above average this year, especially if the Fed decides to cut sooner rather than later.

Can Stocks Really Gain 20% This Year?

U.S. stocks could have a big year if LPL Research’s forecasts prove correct.

All year, we’ve maintained our fair value target on the S&P 500 Index of 3,000, implying that we expect this bull market and economic expansion to continue. If the S&P 500 closes the year at 3,000, the index will have gained 19.7% in 2019.

On the surface, that seems like a high hurdle for U.S. stocks. However, the S&P 500 has already gained about 16% this year, so a rally to 3,000 isn’t far out of reach.

The S&P 500 also hasn’t posted a 20% gain for the year since 2013, an unusually long stretch compared to history.

“It is interesting that the S&P 500 hasn’t gained more than 20% in any one year for five consecutive years,” noted LPL Senior Market Strategist Ryan Detrick. “Only once since 1950 did it go more than five years in a row without gaining 20%, thus if this pattern continues we very well might get to 20% in 2019.”

As our LPL Chart of the Day “Can The S&P 500 Index Really Gain 20% This Year?” shows, it is quite rare for the S&P 500 to go this long without a 20% annual gain. Could the streak end in 2019? Be sure to read our Midyear Outlook 2019, which is set for release next week, for more on why this could be the case.

 

Here are the current major indices pullback/correction levels from ATHs as of week ending 6.21.19-


Here is also the pullback/correction levels from current prices-


...and here are the rally levels from current prices-

 

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Here are the upcoming IPO's for this week-

 

Stockaholics come join us on our stock market competitions for this upcoming trading week ahead!-

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• Stockaholics Daily Stock Pick Challenge & SPX Sentiment Poll for Monday (6/24) <-- click there to cast your daily market vote and stock pick!

• Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (6/24-6/28) <-- click there to cast your weekly market vote and stock picks!
• Stockaholics Weekly T/A Charting Challenge (6/24-6/28) <-- 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 June 21st, 2019
Video from AlphaTrends Brian Shannon


ShadowTrader Video Weekly 6.23.19
Video from ShadowTrader Peter Reznicek

 

Here is a look at this upcoming week's Global Economic & Policy Calendar-

 

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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 6.24.19 Before Market Open:

Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES!

NONE.

Monday 6.24.19 After Market Close:

Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES!

NONE.

Tuesday 6.25.19 Before Market Open:

Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES!

Tuesday 6.25.19 After Market Close:

Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES!

Wednesday 6.26.19 Before Market Open:

Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES!

Wednesday 6.26.19 After Market Close:

Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES!

Thursday 6.27.19 Before Market Open:

Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES!

Thursday 6.27.19 After Market Close:

Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES!

Friday 6.28.19 Before Market Open:

Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES!

Friday 6.28.19 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-
($MU $BB $FDX $NKE $GIS $WBA $STZ $LEN $FDS $PAYX $SOL $CAG $ACN $RAD $INFO $SNX $KBH $AVAV $JKS $UNF $SCHN $MKC $ATU $PIR $MLHR $SJR $AITB $SKIS $SGH $GMS $APOG $FUL $NG $PDCO $WOR $ACST $FC $CAMP $PRGS)


If you guys want to view the full earnings post please see this thread here-

• Most Anticipated Earnings Releases for the week beginning June 24th, 2019 <-- click there to view!

 

lpl research just out with their 2019 midyear outlook for anyone interested to read it over during their lunch break or spare time.

i setup a thread here with the full infographic for anyone interested.

(click here!)

 

wow nice indeed! the yellow metal has gone absolutely nowhere for almost a decade now...until finally some upward movement this year! gold bulls are finally rejoicing after such a long wait!

 

quick bit of stat i just ran across this afternoon and thought to share real quick in here.

so since 1975 the FED has cut rates 26 times where the SPX had a return of at least +15% or greater YTD as it does right now.

well a year later, the SPX was up over +13% on average and up 23 out of 26 times.

will be interesting to see if the FED does carry out with a cut at the july meeting, or at some point in the year.

as you and i @stock1234 have both been on the same opinion that this rally has been largely FED driven

 

wow! admittedly i have not really paid too much attention to crypto of late...that is quite the move since the spring! looks like it's now halfback to the ATH