Welcome Stockaholics to the trading week of November 11th! 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 Bond market closed for Veteran’s Day Earnings: Tencent Music, Liberty Broadband, Noah Holdings, Grocery Outlet 8:15 a.m. Boston Fed President Eric Rosengren Tuesday Earnings: CBS, Datadog, Skyworks Solutions, Nissan, Tyson Foods, Advance Auto Parts, DR Horton, Rockwell Automotive, Vodafone, Adaptive Biotech, Tilray, SmileDirectClub 5:15 a.m. Fed Vice Chair Richard Clarida 6:00 a.m. NFIB small business survey 8:30 a.m. Philadelphia Fed President Patrick Harker 12:00 p.m. Richmond Fed President Tom Barkin 12:00 p.m. President Donald Trump speaks at Economic Club of New York 6:00 p.m. Minneapolis Fed President Neel Kashkari Wednesday Earnings: Cisco Systems, Beazer Homes, Copa Holdings, Luckin Coffee, Change Healthcare, Tetra Tech, Tencent, Best Inc 8:30 a.m. CPI 11:00 a.m. Fed Chairman Jerome Powell speaks before Joint Economic Committee 12:30 p.m. Richmond Fed’s Barkin 2:00 p.m. Federal budget 1:30 p.m. Minneapolis Fed’s Kashkari Thursday Earnings: Walmart, Nvidia, Applied Materials, Brookfield Asset Management, International Game Technology, Canopy Growth, Burberry, Wheaton Precious Metals 5:30 a.m. Fed Vice Chairman Randal Quarles 8:30 a.m. PPI 8:30 a.m. Jobless claims 9:00 a.m. New York Fed President John Williams 9:10 a.m. Chicago Fed President Charles Evans 9:10 a.m. Fed Vice Chairman Clarida 10:00 a.m. Powell before House Budget Committee 1:00 p.m. Dallas Fed President Robert Kaplan Friday Earnings: JD.com, JC Penney 8:30 a.m. Retail sales 8:30 a.m. Import prices 8:30 a.m. Empire State manufacturing 9:15 a.m. Industrial production 10:00 a.m. Business inventories
Gold Suffers Worst Week In 3 Years As Fed Balance Sheet Explodes Remember, this is 'Not' QE... The Fed has expanded its balance sheet for 10 straight weeks (by almost $280 billion) - the biggest such expansion since April 2013, the peak of QE3... Source: Bloomberg Since The started 'NotQE' POMO... Stocks haven't had a down week... Source: Bloomberg And that explosion in liquidity means fun-durr-mentals collapsing just don't matter... Source: Bloomberg Or maybe there's another reason (stocks have soared non-stop as Warren's odds of getting the nomination have tumbled)... Source: Bloomberg All of which made us think... * * * Chinese stocks ended the week green but the late Friday session saw notable selling pressure... Source: Bloomberg European markets were also higher with a notable divergence between Spain/UK and France/Germany/Italy... Source: Bloomberg Most notably, European stocks are broadly back near their record highs... Source: Bloomberg US equity markets were higher on the week, led by a major move in Trannies all on the back of trade-deal optimism... It seems, despite Trump's statement that he hasn't agreed to rollback tariffs, the market prefers to believe China/Kudlow over Trump/Navarro... However, optimism for a US-China trade deal seem to have stalled the last few days... Source: Bloomberg Rather more notably, despite massive intraday squeezes, "most shorted" stocks fell for the second week in a row... Source: Bloomberg Momentum had another ugly week (down 5 weeks in a row and this was the worst week since the September momo massacre)... Source: Bloomberg VIX tumbled for the 6th week in a row (longest streak since Feb 2019) barely holding above an 11 handle... And as VIX tumbled, specs piled in to a new record short position... Source: Bloomberg Bond yields have tracked Cyclicals/Defensive Stocks almost perfectly... Source: Bloomberg Bonds were a bloodbath this week with Treasury yields blowing out around 20bps (short-end outperformed)... Source: Bloomberg Pushing the longer-end of the curve to 3-month highs... Source: Bloomberg The yield curve exploded this week: 3m10y curve steepened for 5 straight weeks but 2y10y biggest weekly steepening since Feb 2018... Source: Bloomberg Rates markets are now pricing in less than one rate-cut by the end of 2020... Source: Bloomberg German bond yields have also soared, back near their highest of the year... Source: Bloomberg As European issuance has broken the full-year issuance record with more than seven weeks to spare, after borrowers including Apple Inc., Bayer AG and the People’s Republic of China piled in to the market this week. Source: Bloomberg And Japanese bond yields saw the biggest weekly rise since 2013... Source: Bloomberg The dollar soared by the most since August 2018 this week... Source: Bloomberg Offshore Yuan rallied for the sixth straight week (longest run sine 2018), but trade-deal optimism gains rolled over in the last 24 hours... Source: Bloomberg Cryptos had a tough week, tumbling in the last 48 hours... Source: Bloomberg Bitcoin broke back below $9,000... Source: Bloomberg Commodities were extremely mixed this week with PMs pummeled and crude and copper bid... Source: Bloomberg WTI ended back above $57, but could not top $58 at the upper edge of its medium-term range... Source: Bloomberg This was Gold's worst week since Nov 2016 (Trump Election)... ...and Silver's worst week since Oct 2016... Despite gold's tumble on the week, silver was considerably worse, driving the gold/silver ratio to its highest since mid August... Source: Bloomberg Gold also tumbled against yuan, back to its lowest since early August... Source: Bloomberg And as global negative-yielding debt drops below $12 trillion, one wonders if gold has further to fall... Source: Bloomberg Finally, here a few scary things for melt-up fans to watch... The surge in yields - we note that despite all the excitement about bond yields rising, signaling to some that growth is back and everything with record high stocks is awesome again, the last two times that rates accelerate at this pace, things did not end well for stocks... Source: Bloomberg Additionally, the steepness of VIX term structure is extreme - a level at which stocks have generally stalled in the past two years... Source: Bloomberg And investors are at an "Extreme Greed" level of complacency across multiple asset classes... Source: CNN And then there's this... Enough’s enough. Fresh 50-year low in the commodities-to-equities ratio. The next monetary & fiscal experiment will come at a cost. Major cyclical turn in this ratio likely ahead. pic.twitter.com/gIKtpdp1KB — Otavio (Tavi) Costa (@TaviCosta) November 8, 2019
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2019- S&P sectors for the past week-
November Expiration Week: S&P 500 & DJIA Best DJIA has been up 10 of the last 15 years on Monday of expiration week and Friday is up 13 of the last 17 years with an average gain of 0.45%. By the way, it is not a mistake that November Op-Ex day has the same point change and percent change in 2014 and 2015. It was triple checked and its correct. If you go out 2 more decimal places in the percentage calculation, it’s different. S&P 500, NASDAQ and Russell 2000 have not been as bullish as DJIA around or on November option expiration. S&P 500 has advanced only 16 times during options expiration week while NASDAQ and Russell 2000 have climbed only 15 and 14 times respectively over the past 25 years. All four indices have posted average losses on Monday and aside from DJIA and S&P 500 have been essentially mixed on options expiration day. Friday’s solid average gains across the board are largely due to a sizable gain in 2008. Any weakness next week could be a good entry point for new longs ahead of the usually bullish Thanksgiving holiday. S&P 500 Price vs 50-DMA Thu, Nov 7, 2019 The S&P 500 has been on a seemingly uninterrupted run higher over the last several days, but by some measures, it may not be as extended as you would think. The chart below shows the historical percentage spread between the S&P 500 and its 50-day moving average (DMA) over the last three years. Through Thursday's close, the S&P 500 was 3.2% above its 50-DMA, which is relatively high but nowhere near an extreme. The red line in the chart below shows the current percentage spread between the S&P 500's price and its 50-DMA. There have been a number of times since the 2016 election where this spread was higher with the most recent being back in July. In fact, 17% of all prior days in the last three years have seen the S&P 500 close at a higher level relative to its 50-DMA than it is now. That doesn't mean the market isn't overbought, but it's not exactly at unprecedented levels either. Leaders and Laggards Since FOMC Wed, Nov 6, 2019 We've now had nearly a full week of trading since last Wednesday's FOMC meeting where Fed Chair Powell suggested that the punch bowl isn't going to be taken away anytime soon. During that time, we've seen a real shift in leadership as defensive sectors have sold off while cyclical sectors have been on fire. Energy - yes, Energy - has been the top-performing sector with a gain of 3.5% while Industrials aren't far behind with a gain of 2.8%, Behind these two, Technology and Financials have also comfortably outperformed the S&P 500's gain of 1.2%. On the downside, Real Estate and Utilities, two of the market's most popular sectors for much of 2019 due to their dividend yields, have both dropped over 1% while Consumer Staples and Health Care have also sold off. Due to the fact that we are also in the thick of earnings season, it's a bit more difficult to see how the Fed's actions last week impacted individual stocks as some of the best and worst performances over the last week have been earnings-related. With that caveat, the tables below list the best and worst-performing S&P 500 stocks over the last week. Starting off with the winners, three S&P 500 stocks are up over 20% in the last week, and all three were due to earnings reports. Overall, 12 stocks have rallied over 10%, while all 25 of the top performers are up over 7%. In terms of sector representation on the list, nearly a third (8) of the stocks on the list are from the Technology sector, while another five come from the Consumer Discretionary sector. The remaining 12 stocks on the list come from five different sectors. On the downside, 8 of the 25 worst performers since last week's FOMC meeting are down over 10% with Arista Networks (ANET) losing nearly a quarter of its value. Again, ANET's decline was tied to an earnings report as opposed to a reaction to the FOMC. In terms of overall sector representation, though, the underperformance of the Real Estate sector highlighted above is also evident on this list as eight of the companies listed come from that sector. The Few, the Lowly, the Laggards Wed, Nov 6, 2019 With less than two months left to go in 2019, the S&P 500 is sitting on a gain of nearly 23% YTD, and all but two of the index's 24 industry groups are up by at least double-digit percentages. The two laggards are Energy (+4.5%) and Drugs and Biotechs (+5.5%), while the three strongest groups are all from the Technology sector (Tech Hardware: +44.8%, Semis: +37.7%, and Software: +32.8%). Surprisingly enough, Banks are even starting to move up the performance list as that group is up just a hair under 30% on the year putting it in fifth place on a YTD basis. The table below lists where each of the S&P 500's Industry Groups is currently trading with respect to its 50-DMA. While you would expect just about everything to be extended after the recent leg higher, that's not the case. The S&P 500 as a whole is just 3% above its 50-DMA, and just five groups are more than 5% above their 50-DMAs. The two most extended groups are Tech Hardware (think Apple) and Banks. On the downside, there are actually as many Industry Groups trading below their 50-DMAs as there are groups trading more than 5% above their 50-DMAs. As shown at the bottom of the table, Consumer Services, Real Estate, Household & Personal Products, Commercial Services, and Utilities are all currently below their 50-DMAs. These aren't groups that have been lagging the market all year. In fact, three of them are outperforming the S&P 500 on a year to date basis, but in the majority of cases, these are defensive-oriented groups that have fallen out of favor as the market's sentiment has shifted and rates have risen. Seasonally Strong Period, But… As I head to Las Vegas for my annual pilgrimage to @MoneyShows TradersEXPO I am both thrilled and shocked to hear everybody on Wall Street and the financial media talking about bullish yearend market seasonality and practically every one of them has used the phrase, “seasonally strong period.” I’m thrilled because it validates what we already know and what I live and breathe: that there are clear evidence-based results of real, consistent, tradable and investable seasonal market patterns. I am shocked at how late many of them are to the party. We’ve been in bullish Best Six Months mode since our Seasonal MACD Buy Signal on October 11. Since our October 11 Buy Signal we have tactically maneuvered out of our defensive positions in Bonds, Cyclicals, Utilities and others and into the main U.S. equity index ETFs: DIA, SPY, QQQ and IWM and the gamut of seasonally strong growth sectors over three weeks ago. We also put out a brand new Stock Basket of undervalued growth stocks under Wall Street’s radar. Market seasonality is clearly firing on all pistons as it has been all year, but everyone’s is jumping on the seasonal bandwagon just a two regular seasonal soft patches are about to come around on the calendar. Now that our Bullish Halloween Trading Strategy is complete with some big market gains at the end of October and the beginning of November we are on the lookout for weakness ahead of Thanksgiving. Next week is two weeks before Thanksgiving and we’ve shown in several recent posts, it is part of the mid-November soft patch. Then stocks usually pick up in anticipation of Thanksgiving and continue to rally through the end of November. After thanksgiving watch out, the first couple weeks of December are notoriously choppy and not especially bullish as tax-loss selling kicks into high gear. With the market elevated and the news ever changing, stocks will be vulnerable to these perennial weak spots. Presidential Cycle Stars Align for Stocks in 2020 Despite all of the geopolitical events, things still look good for stocks next year with an incumbent running. The potential for a decent trade truce with China, along with an economy that’s still growing and accommodative interest rates add up to a continuation of the bull market. With the Stock Trader’s Almanac 2020 coming off the press this week here’s a little preview of some our analysis and outlook that’s in the 53rd Annual Edition. Presidential incumbency is a powerful phenomenon and the driving force behind the 4-Year Presidential Election Cycle. This quadrennial quadrille is what has made the Pre-Election Year the best year of the cycle and Election Year second best. Since 1952 S&P 500 is up 12.5% on average in election years when a sitting president is running for reelection vs. 6.7% in all election years and –1.5% in election years with an open field and no incumbent commander-in-chief running for a second term. We are also arguably now experiencing some fiscal and monetary policy synchronicity. After several years of conflicting policy the Federal Reserve and the U.S. Federal government are finally getting in synch. Interest rates are historically low and the Fed has lowered rates again at the last three scheduled FOMC meetings at the same time as fiscal policy has been lowering taxes and increasing spending. These dual pro-growth policies should continue to propel the stock market higher. Gains will of course not come without pause and correction. The world stage will continue to feature some challenging geopolitical, political, diplomatic, trade-related and economic storylines. U.S. presidential campaign politics will increasingly focus on domestic political disputes, standoffs and unfinished business – as well as impeachment proceedings. But when all is said and done, we expect 2020 to be a positive year based on the historical patterns and cycles and current favorable policies, healthy economics, and positive market behavior. Pre-Election Year Patterns: A November Market Pause Now that we’ve survived Octoberphobia and the market has begun to strengthen again, breaking out above resistance and logging new highs on DJIA, S&P 500 and NASDAQ, we are likely to experience a bit of consolidation here in November. Normally the top S&P month of the year and #2 for DJIA, NASDAQ and the Russell 2000, November has been weaker in Pre-Election Years. As you can see in the updated chart of Pre-Election Year Seasonal Patterns overlaid with 2019 we have been tracking all year November tends to be flat in the Pre-Election Year with a pop around Thanksgiving. Then after the usual first half of December softness the market tends to push toward additional new highs near yearend. Considering the banner performance so far this year and the uncanny tracking of this historical seasonal pattern, we expect the stock to consolidate over the next few weeks and then resume its march higher. Productivity Growth Fades November 7, 2019 Stalled business spending is having ripple effects on U.S. company efficiency. Nonfarm productivity (output per worker) unexpectedly slid 0.3% in the third quarter, according to a Bureau of Labor Statistics (BLS) report released November 6. As shown in the LPL Chart of the Day, that was productivity’s first quarterly decline since the fourth quarter of 2015. Third-quarter productivity floundered as employee hours rose 2.4%, while total output climbed 2.1%. The BLS noted that self-employed workers made an “unusually large contribution” to hours worked in last quarter’s productivity contribution, which could suggest the drop may be temporary. Still, sustained productivity growth has been a tough feat in this economic expansion, thanks to muted business spending. Higher business investment leads to higher productivity as newer technology and more worker training leads to more efficient production. Productivity growth has been a key part of our economic outlook, as higher productivity could provide a timely boost to output while capping employer costs and supporting profit margins. Productivity surged in the first two quarters of this year, but positive momentum could continue to fade. U.S. businesses have largely shelved investment in the face of elevated uncertainty. Nonresidential investment has dropped for the past two quarters for the first time since early 2016. “Businesses have switched to a more defensive stance as they’ve waited for more clarity on unprecedented trade and geopolitical issues,” said LPL Financial Senior Market Strategist Ryan Detrick. “We understand why companies are holding back, but the hesitation to spend could be a material weight on future output.” Many companies are in the planning stages for next year’s investments, and progress on the trade front could motivate some businesses to resume expansion plans. The United States and China may not solve all their issues with this reported agreement, but even a narrow deal that leads to a lasting truce would be positive for business investment. Bulls Stay in Motion November 5, 2019 “An object in motion tends to remain in motion along a straight line unless acted upon by an outside force.” Sir Isaac Newton What a year it has been for the bulls. The S&P 500 Index recently made four more new highs, and it’s up more than 20% for the year (as of Nov. 4). This leads to the big question: What could happen in the final two months of 2019? Well, we think the bulls might like it. “A good year tends to see continued strong performance the final two months of the year,” explained LPL Financial Senior Market Strategist Ryan Detrick. “In fact, when the S&P 500 has been up 20% or more for the year heading into the usually bullish November, stocks have never dropped in November, while December also has tended to see a strong upward bias.” As the LPL Chart of the day shows, going back to 1950, when the S&P 500 was up more than 20% heading into November, then the final two months were up an average of 6.2%. The S&P 500 has also never fallen in the final two months of the year after closing October up more than 20% for the year. This phenomenon could be due to portfolio managers buying to play catch-up, or it could be that an object in motion stays in motion, as Newton noted more than 300 years ago.
Here are the current major indices pullback/correction levels from ATHs as of week ending 11.8.19- Here is also the pullback/correction levels from current prices- ...and here are the rally levels from current prices-
Stock Market Analysis Video for November 8th, 2019 Video from AlphaTrends Brian Shannon (VIDEO NOT YET POSTED!) ShadowTrader Video Weekly 11.10.19 Video from ShadowTrader Peter Reznicek
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 (11/11) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (11/11-11/15) <-- click there to cast your weekly market vote and stock picks! Stockaholics Weekly T/A Charting Challenge (11/11-11/15) <-- 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!
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 11.11.19 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! Monday 11.11.19 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! Tuesday 11.12.19 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 11.12.19 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 11.13.19 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 11.13.19 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 11.14.19 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 11.14.19 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 11.15.19 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! Friday 11.15.19 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 $WMT $CRON $CGC $CSCO $ACB $OSTK $DHI $NEPT $TLRY $JD $FOLD $GOOS $TSN $AAP $SWKS $JCP $AMAT $LK $CBS $SE $NBEV $DXC $HUYA $TME $YY $CGEN $CTEK $QRTEA $HIIQ $DF $WIX $TWOU $BEP $KEM $NOG $NTAP $SAGE $WB $VIAB $ROK $RETA $GO $TDW $ERJ) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning November 11th, 2019 <-- click there to view!
Trump speaking tomorrow I believe, let’s see if he will say something about the potential trade deal again
now that the peak of earnings season is behind us, seems like we could be in for a pretty slow final 2 months of the year. wouldn't surprise me if we see a 10 vix sooner or later
Yeah if we don’t see some volatility by early December then we probably would finish this year with a pretty nice yearly gains. Next year is an election year so it should be an interesting year for the market
man apple has been a great stock for me over the past couple months. amd has been decent recently as well.
haven't really been keep track of the new ATHs set this year on the spx, but evidently yesterday has already tied last year's mark at 19
spx so far is up +31.5% off of its midterm year low that was set on 12/24/18 which looks to be on par for its historical average. absent any bad news or black swans, this is probably shaping up to be a pretty nice finish to the year.
