Welcome Stockaholics to the trading week of September 23rd! 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 9:30 a.m. New York Fed President John Williams at N.Y. Fed conference on Treasury market 9:45 a.m. Manufacturing PMI 9:45 a.m. Services PMI 11:30 a.m. San Francisco Fed President Mary Daly 1:00 p.m. St. Louis Fed President James Bullard Tuesday 9:00 a.m. S&P/Case-Shiller home prices 9:00 a.m. FHFA home prices 10:00 a.m. Consumer confidence 1:00 p.m. $40 billion 2-year note auction Wednesday 8:00 a.m. Chicago Fed President Charles Evans 10:00 a.m. Cleveland Fed President Esther George 10:00 a.m. New home sales 11:30 a.m. $18 billion 2-year floating rate notes 1:00 p.m. $41 billion 5-year note auction 7:00 p.m. Dallas Fed President Robert Kaplan Thursday 8:30 a.m. weekly claims 8:30 a.m. Real GDP Q2 (third) 8:30 a.m. Advance economic indicators 9:30 a.m. Dallas Fed’s Kaplan 10:00 a.m. St. Louis Fed’s Bullard 10:00 a.m. Pending home sales 11:45 a.m. Fed Vice Chairman Richard Clarida 11:45 a.m. San Francisco Fed’s Daly 1:00 p.m. $32 billion 7-year note auction 2:00 p.m. Minneapolis Fed President Neel Kashkari 4:30 p.m. Richmond Fed President Tom Barkin Friday 8:30 a.m. Fed Vice Chairman Randal Quarles 8:30 a.m. Durable goods 8:30 a.m. Personal income/spending 10:00 a.m. Consumer sentiment 12:00 p.m. Philadelphia Fed President Patrick Harker
Stocks & Bond Yields Sink Amid Quad Witch Chaos, Trade Turmoil, & Powell Promises While Jay Powell did his best to promise more QE - spiking stocks - China trade headlines spoiled the stock market party by week-end, but bonds and gold were bid. The odds of a trade deal tumbled... Order Your Book by Former White House Insider, David Stockman Now – Free Shipping[/paste:font] America is on the verge of crisis and Stockman is sounding the alarm… his brand new book reveals • Why the “trump boom” has been a complete lie • How America blew its LAST shot at saving our financial future • Why the mainstream media WON’T get their wish to bring down trump Pay just $10 for the book and shipping is FREE – a $26 value on Amazon. Sponsored By Charles Street Research And among all of this is the Fed's biggest liquidity crisis in over a decade (that will now continue until October 10th) - that few understand and so will just brush off... until its effects ripple out...trade accordingly. Chinese markets ended the week lower... Source: Bloomberg European markets continued their bounce today, scrambling back into the green for the week... Source: Bloomberg The China headlines spoiled Powell's spike, leaving all the major indices red for the week (Trannies worst)... The S&P 500 algos were seemingly desperate to pin around 3,000 - thanks in large part to the gamma from quad witch... but failed! The S&P 500 is up 2.4% from its highs a year ago... Source: Bloomberg After the quant quake, momo factor stocks soared this week (after crashing 10% last week) - biggest weekly gain since May 2016... Source: Bloomberg Roku was routed for the second week in a row (but is still up 240% YTD)... Source: Bloomberg After the bond bloodbath last week, Treasury yields tumbled this week with the long-end dramatically outperforming... Source: Bloomberg 10Y Yields fell back below 1.75%... Source: Bloomberg The volume of global negative-yielding debt re-accelerated again this week... Source: Bloomberg Between the IPO debacle and comments from Fed's Rosengren, WeWork bonds tumbled... Source: Bloomberg Of course the liquidity crisis was front and center for many. As Bloomberg's Edward Bolingbroke notes, it’s been a turbulent few days for U.S. swap traders amid the repo rate surge and the subsequent emergency liquidity measures. Source: Bloomberg On Thursday, the spread tightened to a record low, in a sign the market was disappointed that the Federal Reserve hadn’t introduced a permanent solution to address concerns of a funding squeeze. The two-year swap spreads rallied after the New York Fed announced more repo operations, showing that worries over financing costs were ebbing. The spread between Effective Funds Rates and IOER blew out... Source: Bloomberg The Dollar Index ended the week higher but chopped around like a penny stock... Source: Bloomberg Yuan tumbled after today's canceled trade meeting... Source: Bloomberg Source: Bloomberg Source: Bloomberg Source: Bloomberg Source: Bloomberg Copper was worst on the week as PMs managed gains (silver outperforming) while crude surged... NOTE - the china trade headlines sent crude and copper lower today and PMs higher Source: Bloomberg Gold bounced back up off $1500 after falling back to that level after the Saudi spike... After the bombing of a Saudi refinery last weekend, oil prices ended up 6% on the week (well below the 15-20% initial spike)... Palladium surged to a new record high... Source: Bloomberg Lean Hogs were limit down after China canceled its trip to farmland And finally, just in case you wondered, this is the longest and deepest PMI cycle of the past 20 years "Transitory"? US economic surprises are at their highest since April 2018 as China sinks... Source: Bloomberg But, "buy and hold"...
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2019- S&P sectors for the past week-
S&P 500 down 23 of 29 during week after September options expiration, average loss 0.95% The week after September options expiration week, next week, has a dreadful history of declines especially since 1990. The week after September options expiration week has been a nearly constant source of pain with only a few meaningful exceptions over the past 29 years. Substantial and across the board gains have occurred just three times: 1998, 2001, 2010 and 2016 while many more weeks were hit with sizable losses. Full stats are in the following sea-of-red table. Average losses since 1990 are even worse; DJIA –1.02%, S&P 500 –0.95%, NASDAQ –0.90% and a sizable –1.38% for Russell 2000. End-of-Q3 portfolio restructuring is the most likely explanation for this trend as managers trim summer losers and position for the fourth quarter. October Challenging in Pre-Election Years October often evokes fear on Wall Street as memories are stirred of crashes in 1929, 1987, the 554-point drop on October 27, 1997, back-to-back massacres in 1978 and 1979, Friday the 13th in 1989 and the 733-point drop on October 15, 2008. During the week ending October 10, 2008, Dow lost 1,874.19 points (18.2%), the worst weekly decline in our database going back to 1901, in point and percentage terms. The term “Octoberphobia” has been used to describe the phenomenon of major market drops occurring during the month. Market calamities can become a self-fulfilling prophecy, so stay on the lookout and don’t get whipsawed if it happens. Pre-election year Octobers are ranked second from last for DJIA, S&P 500 and NASDAQ while Russell 2000 is dead last with an average loss of 1.9%. Eliminating gruesome 1987 from the calculation provides only a moderate amount of relief. Should a meaningful decline materialize in October it is likely to be an excellent buying opportunity, especially for depressed technology and small-cap shares. Where’s That September Volatility? September 20, 2019 September is historically known as one of the worst for stocks, yet in 2019 the S&P 500 Index is up 2.7% so far amid a sea of scary headlines. Incredibly, the S&P 500 has wavered less than 0.1% from its previous close 6 of the past 10 trading sessions, as it consolidates just beneath all-time highs. “Over the past two weeks we’ve had the European Central Bank meeting, the Federal Reserve meeting, higher inflation, a historic jump in crude oil, Middle East turmoil, trouble in the repo market, and even multiple NFL quarterbacks sustaining major injuries,” said LPL Financial Senior Market Strategist Ryan Detrick. “Yet, with all of those scary headlines, stocks are actually in the midst of one of the least volatile two-week stretches we’ve seen in years.” We are quite encouraged by the overall change in market tone we’ve heard recently, with more cyclical names taking the baton and leading, but with the S&P 500 up near our fair value target of 3,000, we would be on the lookout for this sea of tranquility to get rougher at any time. In fact, according to historical calendars, we may need to be on high guard for the second half of September. As shown in the LPL Chart of the Day, The Second Half of September Can Be Tricky For Stocks, later in the month of September is when we’ve seen seasonal weakness. Things have been going well for equities in the face of some worrisome headlines, but don’t get complacent, as the calendar could be one of the biggest near-term risks. The Fed Hits It Down The Middle September 18, 2019 “History does not repeat itself, but it rhymes.” Mark Twain As expected, the Federal Reserve’s (Fed) policy committee cut its policy rate by 25 basis points (.25%) to a target range of 1.75%–2%. This comes on the heels of the first rate cut in more than 10 years at the end of July. This cut is somewhat more controversial, however, because the overall U.S. economic data has been improving, and there’s been a tick higher in inflation. One of the most important questions heading into this meeting was how many voting Fed members would support additional rate cuts. There were two dissenting voting members at the July rate cut, and once again there were two votes opposed to today’s cut—but unlike last time, there was also one dissenter who favored a larger 50 basis point (.50%) cut. Materials in the economic projections indicated 10 of 17 participants (which includes non-voting members) did not believe additional cuts would be needed over the remainder of the year, although evolving economic conditions could certainly lead to a shift. As the quote from Mark Twain suggests, by looking back at history we can potentially find clues as to what might happen in the future. Looking back at the previous two recessions (2001 and 2008), the Fed cut rates 50 basis points (.50%) to kick off the new cycle of rate cuts. We looked back at what the Fed said at the time, and policymakers didn’t foresee a recession; the larger .50% cut might have been their way of showing how worried they really were at the time. In other words, maybe the Fed knew there potentially was trouble under the surface. Compare this with three consecutive 25 basis point (.25%) cuts in the 1995/1996 and 1998 rate cut cycles, which led to continued equity gains and avoided recessions. Given we foresee one more cut this year, could it be another three cuts of 25 basis points (.25%) and then an economic acceleration? “Here’s the catch. When the first two cuts in a new cycle of rate cuts are only 25 basis points, this could be the Fed’s way of truly viewing the cuts as insurance,” explained LPL Financial Senior Market Strategist Ryan Detrick. “In fact, the past five cycles of cuts that started with two 25 basis point cuts saw the S&P 500 Index move higher 6 and 12 months later every single time.” As shown in the LPL Chart of the Day, Stocks Have Historically Done Well If The First Two Fed Rate Cuts Are 25 Basis Points, the S&P 500 was up an average of 9.7% six months after the second of two 25 basis point cuts to kick off a new cycle of rate cuts. Going out a year, the S&P 500 had gained a very impressive average of 16.7%. Strong Start for September, but Second Half Could Bring Trouble As of Friday’s close the market is well above historical average performance in September. DJIA was up nearly 3.1%, S&P 500 was up 2.8%, NASDAQ and Russell 1000 were up 2.7% while Russell 2000 was up 5.6%. Small-caps outperforming large-caps recently is not unusual and they did so again today. However, the second half of September has historically been weaker than the first half. The week after options expiration week can be treacherous with S&P 500 logging 23 weekly losses in 29 years since 1990. End-of-quarter portfolio restructuring, and window dressing can amplify the impacts of any negative headlines. Broader Transports Still Outperforming YTD Wed, Sep 18, 2019 With shares of FedEx (FDX) on pace for their second worst earnings reaction day since at least 2001, the Dow Transports, an index in which FDX has a weighting of over 8% (after today's decline), is down close to 2%. Historically, the Transports have been considered a leading indicator of the economy, so the weakness in FDX, and by extension, the Dow Transports, is resulting in heightened concerns over the state of the economy. Looking at the chart below, the picture for the Transports doesn't look pretty. The timing of today's decline couldn't have been worse as it came just as the Transports were attempting to break above the highs from July, but now it just looks like the second lower high this year. Following today's declines, the Dow Transports are up 14.7% YTD which is about five percentage points behind the performance of the S&P 500. Given the changes in the US economy over time, we've been skeptical of the continued predictive ability of the Transports, but even putting that aside for a moment, a broader look at Transports shows a less pessimistic picture. The chart below shows the performance of the stocks in the S&P 1500 index on an equal-weighted basis so far in 2019. By this measure, today's decline comes after the index made a higher high, and while it's back below those former highs today, with a gain of 20.5% YTD, this broader look at transports is still outperforming the S&P 500 on a YTD basis. It may not be a great picture for this group of transport stocks, but it doesn't really look bad either.
Here are the current major indices pullback/correction levels from ATHs as of week ending 9.20.19- 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 (9/23) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (9/23-9/27) <-- click there to cast your weekly market vote and stock picks! Stockaholics Weekly T/A Charting Challenge (9/23-9/27) <-- 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 20th, 2019 Video from AlphaTrends Brian Shannon ShadowTrader Video Weekly 9.22.19 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 9.23.19 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! Monday 9.23.19 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! NONE. Tuesday 9.24.19 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 9.24.19 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 9.25.19 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 9.25.19 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 9.26.19 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 9.26.19 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 9.27.19 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. Friday 9.27.19 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 $NIO $AZO $KMX $NKE $BB $RAD $CMD $ACN $UXIN $JBL $INFO $CAG $DAVA $MANU $SNX $FDS $KBH $UEPS $ATU $CTAS $MTN $AGTC $WOR $PIR $ISR $DLNG $CAMP $AIR $FUL $PRGS $CMTL $DYNT $RBZ) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning September 23rd, 2019 <-- click there to view!
Guess they didn't learn the 1st time around? Millenials want to BUY Mac's, not make them....lol Apple’s new Mac Pro to be made in Texas https://www.apple.com/newsroom/2019/09/apples-new-mac-pro-to-be-made-in-texas/
Can’t believe we are heading to Q4 soon Looks like it will be a pretty good year for stocks unless Q4 is a total disaster
Been checking this seasonal pattern from https://twitter.com/ukarlewitz/status/1167767458201178114, who seems to have gotten it from the Traders Almanac. "The August dump happened. If the seasonal pattern holds, upward bias into mid-September, then a 2nd dump into Oct (from @AlmanacTrader)"
