Welcome Stockaholics to the trading week of July 29th! 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: Sanofi, Ryanair, AK Steel, Transocean, Texas Roadhouse, Beyond Meat, Vornado Realty, Booz Allen Hamilton, Cognex, PerkinElmer Tuesday 2-day FOMC meeting begins Earnings: Apple, Amgen, Procter and Gamble, MasterCard, BP, ConocoPhillips, Merck, Pfizer, Corning, Cummins, Martin Marietta Materials, Bayer, Advanced Micro, Ralph Lauren, Under Armour, Sony, Eli Lily, Electronic Arts, Samsung Electronics, DR Horton, Gilead Sciences, Mondelez, Xerox, Groupon, FireEye, Genworth, Yum China, Bayer, Nintendo 8:30 a.m. Personal income and spending 9:00 a.m. S&P/Case-Shiller home prices 10:00 a.m. Pending home sales 10:00 a.m. Consumer confidence Wednesday Earnings: General Electric, Occidental Petroleum, Baker Hughes, Qualcomm, Vale, Apache, American Tower, Humana, Fiat Chrsyler, Encana, Credit Suisse, CME Group, Airbus, BNP Paribas, Carlyle Group, AMC Networks, Sturm Ruger, SunPower, Ethan Allen, Bloomin Brands, Spotify, Johnson Controls 8:15 a.m. ADP employment 8:30 a.m. Employment cost index 9:45 a.m. Chicago PMI 2:00 p.m. FOMC statement 2:30 p.m. Fed Chair Jerome Powell briefing Thursday Monthly vehicle sales Earnings: Verizon, General Motors, Archer Daniels Midland, Barclays, Delphi Automotive, Kellogg, Marathon Petroleum, Dunkin Brands, Generac, TreeHouse, Square, Petrobras, SVMK, Teradata, Etsy, GoPro, Yeti, Legg Mason, U.S. Steel, Alliant Energy, Wayfair, ArcelorMittal, Siemens, Clorox, S&P Global, Parker Hannifin, Cigna, HollyFrontier, Andeavor Logistics, Avon Products, Hanesbrands, Xenia Hotels and Resorts 8:30 a.m. Initial claims 9:45 a.m. Manufacturing PMI 10:00 a.m. ISM manufacturing 10:00 a.m. Construction spending Friday Earnings: Exxon Mobil, Chevron, Allianz, Honda Motor, Toyota Motors, Seagate, Sempra Energy, CBOE Holdings, Sealed Air, BT Group, Ameren, Cinemark, Newell Brands, Noble Energy 8:30a a.m. Employment report 8:30 a.m. International trade 10:00 a.m. Consumer sentiment 10:00 a.m. Factory orders
Stocks Soar To Record Highs As Corporate Profits Hit 8 Year Lows GDP beat, record high stocks, tumbling VIX... but corporate profits are weakest since 2011, global bond yields are at record lows, and delinquencies are on the rise... Still , forget all that, it's all Powell baby!! Chinese stocks managed gains on the week thanks to a big buying panic Tues/Weds European stocks ended the week green, thanks to a bounce today after yesterday's Draghi-driven dump... Let's hope Powell delivers because global liquidity is starting to diverge again... Alphabet's outsized gains led Nasdaq to new record highs Oh and while we are talking about GOOGL... FANG stocks were up on the week, retracing about half of last week's NFLX losses... BYND is insane! Today's gains were dominated by defensives... "Most Shorted" stocks ended the week unchanged... VIX dumped back towards an 11 handle today but on the week, HY spreads really collapsed relative to IG... Bonds and stocks continue to diverge ahead of next week's FOMC... Treasury yields were higher on the week, mainly driven by Draghi's disappointment (with barely any reaction on GDP)... 10Y Yields spiked up to pre-FOMC levels but twice tested 2.10% and faded... The market's expectation of what The Fed will do in 2019 tightened quite significantly this week... With a 17.5% chance of a 50bps cut next week... Despite all the talk about weak dollar policies and sources claiming WH discussions, the dollar spiked back to 6-week highs around the pre-FOMC levels... Yuan ended the week unchanged... Mixed picture in cryptos this week with Bitcoin worst and Bitcoin Cash best... Bitcoin is down for the 3rd week in a row and closed the week below $10k... And just in case you think Bitcoin is in another bubble... "that's not a bubble, this is a bubble" Ugly week for Dr.Copper and a down week for gold as silver outperformed... What is Dr.Copper telling us? After a 10-day run of silver outperformance, gold has gained more than silver in the last two days... Hedge funds have held a net-long position in Gold since April, and the options markets registered a bullish skew for 48 sessions -- the longest run since 2009. Finally, with stocks spiking to new record highs ahead of next week's FOMC meeting, we note that today's historical GDP data revisionsindicate that revised numbers of corporate profits show that operating profits peaked in Q3 2014 and have been moving sideways ever since... dipping to the lowest since 2011. Operating profits in the GDP accounts and S&P 500 operating profits over the long run track fairly close to one another, although there can be large differences in any given year... and they don't tend to end well. Like in 2007... And in 2000... Allocate accordingly!
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 - 7/26/19 Fri, Jul 26, 2019 The Chicago Fed's National Activity Index kicked off this week's busy macroeconomic data slate on a disappointing note with a still negative reading that was below forecasts. Weak data continued to come in on Tuesday with FHFA home price growth slowing to 0.1% and the Richmond Fed Manufacturing index reaching a multi-year low. Existing Home Sales also came in weaker. Preliminary Markit PMIs released on Wednesday came in below estimates and weaker than the previous month while the services portion saw the opposite results. The release of preliminary Durable Goods and Capital Goods on Thursday came in much stronger than both expectations and the May release. Meanwhile, weekly labor data once again came in at a multi-month low. We ended the week with stronger than expected GDP data, but it still showed the economy slowed versus the first quarter. Overall, economic data didn't have the greatest of weeks with over half of the indicators released weakening or coming in below estimates. Next week is a busy one when it comes to macroeconomic developments. The week starts off quiet with only the Dallas Fed's Manufacturing Activity Index out on Monday. It is expected to rebound to -5 off its multiyear low of -12.1 from its June release. Things pick up on Tuesday with the release of personal income and spending data which are forecast to fall 0.1%. PCE data, Pending Home Sales, and consumer confidence will also be out that day. Ahead of Friday's Nonfarm Payrolls report, which is expected to show 170K added jobs in July, on Wednesday ADP will release their own employment data. Also on Wednesday, there will be an FOMC rate decision followed by a presser by Fed Chair Powell. Markets are anticipating a 25 bps cut in this meeting. After digesting the results of this meeting, on Thursday ISM will release their manufacturing report for July. In addition to the NFP report, the release of the June trade balance, factory orders, and the University of Michigan's sentiment data will all round out the week on Friday. The Bespoke Report -- Global Macro Outlook Fri, Jul 26, 2019 This week we're outlining how we see the global economy at present, along with its influence on US interest rates, credit, commodities, and equity markets. One of the topics we discuss in detail is the strong performance of US GDP in Q2, which in addition to upward revisions from 2014-2018 also showed newly-reported Q2 growth that was far stronger than analyst estimates. Smaller-than-expected headwinds from trade and inventory and a massive surge in consumer spending helped push growth above expectations despite weak investment. With the Fed set to join the global central bank easing party at its July meeting, it's part of the reason to expect that the global backdrop is set to improve. The Closer: End of Week Charts -- 7/26/19 Fri, Jul 26, 2019 Looking for deeper insight on global markets and economics? In tonight's Closer sent to Bespoke clients, we recap weekly price action in major asset classes, update economic surprise index data for major economies, chart the weekly Commitment of Traders report from the CFTC, and provide our normal nightly update on ETF performance, volume and price movers, and the Bespoke Market Timing Model. We also take a look at the trend in various developed market FX markets. Financials Appear Poised For a Strong Second Half After a disappointing start to the year, financials were the top performing sector in the second quarter. And technical analysis suggests they may have more room to run. As shown in the LPL Chart of the Day, Financials Outperformance May Mark a Change in Trend, the relative performance of financials versus the S&P 500 Index has broken a downtrend, which we see as a bullish technical signal. This tells us the technicals may now be aligning with our optimistic fundamental outlook for financials, which we highlighted in our Midyear Outlook 2019. Financials’ strong performance has continued a few weeks into July, with the S&P 500 Financials Index and KBW Bank Index both outpacing the market thus far. Defensive areas of the market, including the utilities, real estate, and healthcare sectors, have all lagged the S&P 500 since the end of the first quarter. We think cyclicals’ outperformance could continue if economic fundamentals improve. “The rotation from defensive stocks, which have led for much of the past year, to more cyclical areas of the market, is not only healthy for the bull market, but should favor active managers who can overweight these sectors,” according to LPL Chief Investment Strategist John Lynch. While we don’t anticipate broad market performance to be as strong in the second half of 2019, we believe that an overweight to financial stocks may offer an opportunity for suitable investors based on attractive valuations, a potentially steeper yield curve, and an improving technical picture. August: Better in Pre-Election Years, But Still Not Great Money flows from harvesting made August a great stock market month in the first half of the Twentieth Century. It was the best month from 1901 to 1951. In 1900, 37.5% of the population was farming. Now that less than 2% farm, August is amongst the worst months of the year. It is the worst DJIA, S&P 500, NASDAQ, Russell 1000 and Russell 2000 month over the last 31 years, 1988-2018 with average declines ranging from 0.1% by NASDAQ to 1.1% by DJIA. In pre-election years since 1950, Augusts’ rankings improve modestly: #7 DJIA, #8 S&P 500, #10 NASDAQ (since 1971), #9 Russell 1000 and #10 Russell 2000 (since 1979). Average performance in pre-election years is positive except for Russell 2000 which is unchanged. Contributing to this poor performance since 1987; the shortest bear market in history (45 days) caused by turmoil in Russia, the Asian currency crisis and the Long-Term Capital Management hedge fund debacle ending August 31, 1998 with the DJIA shedding 6.4% that day. DJIA dropped a record 1344.22 points for the month, off 15.1%—which is the second worst monthly percentage DJIA loss since 1950. Saddam Hussein triggered a 10.0% slide in August 1990. The best DJIA gains occurred in 1982 (11.5%) and 1984 (9.8%) as bear markets ended. Sizeable losses in 2010, 2011 and 2013 of over 4% on DJIA have widened Augusts’ average decline. A strong August in 2014 of S&P 3.8% and NASDAQ 4.8% preceded corrections of 7.4% and 8.4% respectively from mid-September to mid-October. Second-Half Pre-Election Year Blues Absent…So Far A little over one week ago, we posted updated charts of historical pre-election year performance with 2019 overlaid for comparison. Like then DJIA, S&P 500 and NASDAQ are still comfortably above average for this time of a pre-election year when compared to historical data. Thus far earnings have supported a continuation of the rally. A 100% probability (according to CME Group’s FedWatch Tool as of today) that the Fed will cut rates at least 0.25% is also aiding. And now it appears the debt ceiling is going to be raised eliminating another market headwind. It would seem the market has nearly everything going its way. Almost, sentiment is running on the frothy side. According to Investors Intelligence, bullish advisors have reached 58%, a new high for 2019, while bearish advisors are down to just 16.8%. Historically these levels have been an early warning. Combined with the historically meager gains in the second half of pre-election years (visible in the charts below), the rally appears to be increasingly prone to faltering. If the market does take a pause and consolidate some of its gains so far this year in August/September/early-October, it would likely improve the possibility of a respectable fourth quarter rally.
Here are the current major indices pullback/correction levels from ATHs as of week ending 7.26.19- 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 (7/29) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (7/29-8/2) <-- click there to cast your weekly market vote and stock picks! Stockaholics August 2019 Stock Picking Contest & SPX Sentiment Poll <-- click there to cast your monthly market vote and stock picks! Stockaholics Weekly T/A Charting Challenge (7/29-8/2) <-- 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 July 26th, 2019 Video from AlphaTrends Brian Shannon ShadowTrader Video Weekly 7.28.19 Video from ShadowTrader Peter Reznicek (VIDEO NOT YET UP!)
Here is a look at this upcoming week's Global Economic & Policy Calendar- (GLOBAL ECONOMIC AND POLICY CALENDAR NOT YET UP!)
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 7.29.19 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! Monday 7.29.19 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! Tuesday 7.30.19 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 7.30.19 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 7.31.19 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 7.31.19 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 8.1.19 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 8.1.19 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 8.2.19 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! Friday 8.2.19 After Market Close: Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES!
And finally here is the most anticipated earnings calendar for this upcoming trading week ahead- ($AMD $AAPL $BYND $SHOP $SQ $MA $GE $PG $TWLO $APHA $MO $QCOM $AMRN $SIRI $BAH $EA $MRK $VZ $PFE $SPOT $AKS $NSP $AWI $ENPH $UAA $SNE $AMG $XOM $SNY $ILMN $X $GILD $CTB $GRUB $CHGG $LRCX $LLY $ZNGA $TSEM $WDC $GLW $ONDK $RL $GM) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning July 29th, 2019 <-- click there to view!
Back in the 90's when I used to hold stocks long term, every time earnings would come up I would either put on an options collar or just buy an OTM put option and consider it an insurance premium. Losses on put options are tax deductible...at least they used to be. IRS may have changed the rules.
