Welcome Stockaholics to the trading week of September 9th! 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 3 p.m. Consumer credit Tuesday 6 a.m. NFIB small business survey 10 a.m. JOLTS 1 p.m.: Apple event Wednesday 8:30 a.m. Producer price index 10 a.m. Wholesale trade Thursday 7:45 a.m. European Central Bank policy announcement 8:30 a.m. Initial jobless claims 8:30 a.m. Consumer price index Friday 8:30 a.m. Retail sales 8:30 a.m. Import prices 10 a.m. Consumer sentiment 10 a.m. Business inventories
Stocks & Bond Yields Rise On Trade War Hope, Commodities Collapse Most In 28 Years Stocks within inches of record highs and bonds within mm of record low yields... and all on the back of a call and a possible round of trade talks in a month... "Awesome" as long as Powell delivers at least 125bps of rate-cuts in the next 15 months... Source: Bloomberg Source: Bloomberg 30Y German bond yields very briefly went positive this week, but despite gains in stocks today, bonds were also bid... Source: Bloomberg Ugly end to the week for an exuberant post-mid-week pumpathon...the dump started at 330ET Second day in a row that a late-day sell program hit... Source: Bloomberg After a tough open (with a holiday-shortened week), US equity markets soared/squeezed higher to end green with Nasdaq leading and Small Caps lagging... Futures show the volatility intraday best (or extra-day in this case)... Small Caps remain below the 200DMA... As the odds of a US-China trade deal shot higher this week... Source: Bloomberg Cyclicals made a big comeback after the trade deal headlines, but defensives also ended the week positive... Source: Bloomberg Treasury yields ended the week higher (with 30Y +6bps, 2Y +2.5bps) Source: Bloomberg 30Y Yields remained above 2.00% but tumbled during today's day session after the weak jobs data... Source: Bloomberg The yield curve steepened on the week but 3m10Y remains drastically inverted... Source: Bloomberg The dollar has fallen 4 straight days back to 2-week lows... Source: Bloomberg China's offshore yuan had its 2nd best week in 7 months, soaring back up near the fix by week's end... Source: Bloomberg Cryptos ended the week broadly higher, despite a sudden puke today, with Bitcoin a notable outperformer vs altcoins... Source: Bloomberg Despite today's tumble, Bitcoin ended the week back above $10k and increasingly set for a breakout one way or another... Source: Bloomberg Gold and Silver ended the week lower, crude and copper higher... Source: Bloomberg WTI spiked up to what seems like a magic number of $56.50 today... Gold erased most of Trump's tariff tantrum gains (with some crazy vol today)... No real surprise that things are getting a bit more volatile in gold as flows near record highs again... Silver was also extremely volatile today... Gold's drop tracked the fall in the value of global negative-yielding debt (Bitcoin decoupled)... Source: Bloomberg Gold rebounded from its intraweek underperformance against silver... Source: Bloomberg As Bloomberg details, soft commodities are on their longest losing streak in at least 28 years as trade tensions and currency swings add further woes to oversupplied markets. The Bloomberg Softs Spot Subindex tracking coffee, sugar, and cotton headed for the 10th straight week of declines, the longest stretch since 1991 when the index started. Source: Bloomberg “The ratcheting-up of trade tensions, which is of itself feeding into broader concerns about global growth” are putting pressure on prices, and the weak Brazilian real is adding stress on sugar and coffee, said Caroline Bain, chief commodities economist at Capital Economics in London. Finally, we note that, with stocks within a percent of record highs and US macro data back into positive territory for the first time in 7 months, who would blame Powell for cutting 50bps... what could go wrong? Source: Bloomberg Since the last Fed rate-cut, the dollar and stocks are unchanged, bonds and bullion up around 6%... If at first you utterly fail, try to cut rates again?
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2019- S&P sectors for the past week-
Meager “Worst Months” Gains Still the Norm in Pre-Election Years With a little more than four months of DJIA’s and S&P 500 “Worst Six Months” already completed, the markets performance thus far has been lackluster and in line with historical averages. NASDAQ’s “Worst Four Months” (July through October) has been similar to DJIA and S&P 500. From the close on April 30 through yesterday’s close, DJIA gained just 0.51%, S&P 500 1.02%. From the end of June NASDAQ has gained 1.38%. These are rather slim returns for the amount of time. And this excludes the volatility the market experienced in May and again in August. At their respective lows during late May and early June DJIA and S&P 500 were down over 6%. At the August low, NASDAQ was off nearly 3.5%. Our Seasonal Switching Strategy exited DJIA and S&P 500 positions on May 2 and rotated into bond positions. Those bond positions were up an average of 10.1%, excluding dividends on September 4. Next Week's Economic Indicators - 9/6/19 Fri, Sep 6, 2019 Despite a shortened week from the Labor Day holiday, there was a heavy slate of economic data with a total of 30 releases. Half of these came in better than estimates or the prior period's reading while another 13 missed or weakened. Three indicators were in line with estimates. There was a lot of manufacturing data this week including readings from Markit and the ISM, Factory Orders, Durable Goods, and Capital Goods. The ISM reading was the most strikingly negative of these as it showed a contractionary reading. The ISM and Markit service counterparts, on the other hand, showed healthier levels, but the Markit PMI did miss estimates. Labor data also was a major focus this week and the overall results were pretty mixed. ISM employment, initial jobless claims, and today's NFP report all disappointed, but the ADP employment change, continuing claims, and labor force participation rate came in stronger than expected. Similarly, each indicator for wages including quarterly unit labor costs and average earnings showed improvements. It will be slightly less busy next week with only 24 releases scheduled. Following up on this week's labor data, the JOLTS report is due out Tuesday morning and is expected to show fewer job openings than June. Inflation indicators like PPI, CPI, and export and import prices make up a considerable portion of next week's data. Core estimates for both PPI and CPI are forecasted to show higher price inflation in August. In addition to preliminary consumer sentiment, on Friday we will also get a reading on retail sales for August. For both core and headline readings, this indicator is expected to slow significantly MoM compared to July. Economic Surprise Index Turns Positive Fri, Sep 6, 2019 When it comes to economic reports, one trend that has seemingly been in place all year is that the vast majority of data points have come in short of expectations. The fact that economic momentum has been slowing is one thing, but when the economy consistently comes up short relative to expectations, it sets a tone that things are quickly deteriorating. That's never a good thing, but thankfully, there are signs that the tide is turning. The Citi Economic Surprise Index measures the pace at which economic indicators are coming in ahead of or below consensus forecasts. When the index is negative, it means that the majority of reports are coming in below expectations, while a positive reading indicates that most data is coming in ahead of expectations. The chart below shows the index going back to 2003, and the parts where the line is red indicate periods where the index was negative for at least 100 trading days. The most recent period of negative readings was one of the longest ever at 140 trading days and just the 6th streak of 100 or more trading days (during the period from 2015 to 2016 there were actually two separate streaks although it looks like just one long streak in the chart). The fact that this index is now positive indicates that economists have finally ratcheted down estimates enough to be in line with actual conditions on the ground. Sentiment Back to Normal Thu, Sep 5, 2019 Bullish investor sentiment as measured by AAII's sentiment survey rose 2.5 percentage points to 28.64% this week. While this is an improvement, bullish sentiment is still in the 18th percentile of the data over the past decade. We must also note that the survey would not have captured any benefit from today's news on the trade front and the technical breakout of stocks and other assets like crude oil. Save a tweet or a headline reversing what appears to be optimism given today's positive price action, we'll likely see a bigger jump in bullish sentiment next week. Bulls borrowed from the bears this week as bearish sentiment fell from 42.2% last week to 39.5%. As with bullish sentiment, this is not necessarily a dramatic improvement as it is still higher than 83% of weeks over the past 10 years. Bearish sentiment also remains the predominant sentiment level among investors as the bull-bear spread is still fairly wide at -10.87 percentage points. Granted, that is the narrowest spread since the last week of July when it was only 28 bps in favor of bears. The bulk of the loss in bearish sentiment went to bulls, but a small portion also went to the neutral camp as the percentage of investors reporting as neutral grew to 31.9%. While bullish sentiment is still several percentage points below its historical average and the opposite applying to bearish sentiment, neutral sentiment has been pulling back to its historical average over the past few months. Where it currently sits at 31.9%, it is only 0.33% from that average. ISM Services Shows Little Pressure in Inflation Thu, Sep 5, 2019 Following Tuesday's ISM Manufacturing report, we noted the extremely low reading in the monthly ISM Commodities Survey, which measures the number of commodities rising and falling in price. After today's report for the Non-Manufacturing sector, that trend remained in place. In this morning's report, respondents noted price increases in just 6 commodities and decreases in 4. That net reading of +2 is the weakest reading since January. Combining the results of both reports, in August we saw a total of just 8 commodities up in price and 15 lower. That reading of negative 7 was the lowest since February 2016, while the three-month moving average of -4.0 was the lowest since April 2016. As we noted on Tuesday, low readings in the commodities survey usually track the direction of inflation readings pretty closely and would imply that the current y/y reading of 1.8% in CPI will see downward pressure in the months ahead. For example, in the eight prior months where the three-month moving average in the combined reading was between zero and negative five, the average y/y reading in CPI was +0.45% while the median level was +0.65%. Low P/E, Low Return Wed, Sep 4, 2019 Most investors are trying to forget about August performance as quickly as possible, but we wanted to highlight a noteworthy data set about the month before it gets too far into the rear-view mirror. At the end of every month, we run our decile analysis of the S&P 500 to see which stock characteristics drove performance the most. One characteristic we look at is valuation, and in August, valuations played a big role in performance. Below we've broken up the S&P 500 into deciles based on P/E ratios (trailing 12-month). Decile 1 contains the 50 stocks in the S&P with the lowest P/Es at the start of August, while decile 10 contains the 50 stocks in the index with the highest (or negative) P/Es. Each bar in the chart shows the average percentage change in August of the 50 stocks in each decile. As shown, the 50 stocks in the S&P with the lowest P/E ratios at the start of the month fell an average of 11.5% in August! The next two deciles with the lowest P/E ratios fell more than 5% as well. On the other end of the spectrum, the 50 stocks with the highest P/E ratios fell only 0.78% in August. You've certainly heard a lot about the "death of value investing" recently, and this is why! We have to think that at some point the scales will tip and head in the other direction. Down August, Up YTD, No Worries Now that the very volatile month of August has finished on the downside folks are concerned about the other worst month, September, and for good reason. Since 1950, September is the worst performing month of the year. However, while August was negative this year with the market still up year-to-date the prospects for Q4 and the year as a whole are not so ominous. In fact, it’s kind of bullish. Early last month we relayed the historical data on August declines being quite commonplace though overall, years with August declines were quite choppy and not especially bullish. However when the market was up year-to-date at the end of August despite an August decline the picture changes dramatically. In the tables here you can see that after some extended volatility and negativity in September Q4 and the year as a whole has been rather positive. Since 1949 in years the market was up YTD in August but down for the month DJIA was up in September 56.3% of the time (9 of 16) with an average gain of 0.76%, up in Q4 81.3% of the time (13 of 16) with an average gain of 5.68% and up for the year 100% of the time with an average gain of 17.43%. The S&P has a similar record up 58.8% of the time in September (10 of 17) with an average gain of 0.81%, up in Q4 94.1% of the time with an average gain of 5.73% and up for the year 100% of the time with an average gain of 20.21%. Since 1971 NASDAQ was up in September 66.7% of the time (6 of 9) with an average gain of 0.35%, up in Q4 66.7% of the time (6 of 9) with an average gain of 4.04% and up for the year 100% of the time with an average gain of 21.72%. NASDAQ was hit much harder in the 1983 bear market and 1997 Asian Financial Crisis than the much larger cap (at the time) DJIA and S&P.
Here are the current major indices pullback/correction levels from ATHs as of week ending 9.6.19- 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 (9/9) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (9/9-9/13) <-- click there to cast your weekly market vote and stock picks! Stockaholics Weekly T/A Charting Challenge (9/9-9/13) <-- 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 September 6th, 2019 Video from AlphaTrends Brian Shannon ShadowTrader Video Weekly 9.8.19 Video from ShadowTrader Peter Reznicek
Here is a look at this upcoming week's Global Economic & Policy Calendar- (GLOBAL ECONOMIC AND POLICY CALENDAR NOT YET POSTED!)
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 9.9.19 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! Monday 9.9.19 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! Tuesday 9.10.19 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 9.10.19 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 9.11.19 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 9.11.19 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 9.12.19 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 9.12.19 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 9.13.19 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. Friday 9.13.19 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- ($ACB $ZS $KR $AVGO $RH $HDS $PLAY $GME $CTRP $MCFT $DLTH $LOVE $LMNR $TLRD $ASPU $ORCL $GFN $PHR $WDG $LAKE $FARM $UEPS $PCYG $OXM $EFOI $LPTH $AMRK) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning September 9th, 2019 <-- click there to view!
I jumped out of SQ last week with miniscule gains. Payment processors seem weak to me. Other than GPN, which I also closed last week. Today PYPL and V not doing so hot, see if PYPL can hold this:
Yeah those stocks are really weak today. Seems like both MA and V hit ATH earlier today before pulling back significantly
here is the avg. spx move in the month of sept. over the past 20 and 70 yrs plotted on a chart. both charts seem consistent in that the MTD high is made sometime mid month followed by a selloff. we'll see if this sept. follows the historical avg.
Transports with a strong day, +2.06%. The IBD 50 index FFTY with a horrible day, -2.92%. Kinda believe today's weakness was the McClellan Oscillator pulling back from being overbought. ZS report tomorrow is a big one for cloud stocks, ZS already sold off -11% on August 19 due to a downgrade, and is in bear territory.
AAPL event tomorrow. I remember CNBC used to talking non stop about Apple a day before the event, I wasn’t watching CNBC all day long to be honest but I also don’t think I have heard them talking about Apple at all when I was watching
aapl event set to get under way in just under 5min. from now. does anyone really care? i used to be one who tuned in to every event for the first couple of minutes at least to see what's new. this year? don't even care to be bothered with it.
Not really looking to buy a new phone this year Broke my iPad a few months ago and I got a new one when it was on sales at BestBuy, so I doubt I will be looking to buy another iPad too
