Welcome Stockaholics to the trading week of January 6th! 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: Cal-Maine Foods, Commercial Metals 9:45 a.m. Services PMI Tuesday 8:30 a.m. International trade 10:00 a.m. ISM nonmanufacturing 10:00 a.m. Factory orders Wednesday Earnings: Walgreens Boots Alliance, Constellation Brands, Lennar, RPM International, MSC Industrial, Bed Bath & Beyond 8:15 a.m. ADP 3:00 p.m. Consumer credit Thursday Earnings: Acuity Brands, Lindsay, Simply Good Foods, KB Home, PriceSmart, Synnex 8:30 a.m. Weekly jobless claims Friday Earnings: Infosys 8:30 a.m. Employment 10:00 a.m. Wholesale trade
Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year World War 3 worries? Meh, we've got The Fed to handle that shit!! Weakness in early going in stocks - due to the potential for global war after Soleimani's killing - were nothing but an opportunity to buy the f**king dip once again today...(as the machines used VWAP as support)... Source: Bloomberg Oil prices spiked but ended only around 3% higher on the day... Of course, defense stocks soared... Source: Bloomberg But bonds and bullion were bid as safe-havens... On the week, only Nasdaq is notably higher... And since the start of 2020, only Small Caps are red... VIX and stocks remain decoupled... Source: Bloomberg Credit markets widened notably today, relatively more than equity protection... Source: Bloomberg Treasury yields collapsed since the start of 2020 with 30Y yields down 13bps... Source: Bloomberg The 30Y Yield dropped to 4-week lows... Source: Bloomberg The yield curve flattened dramatically... Source: Bloomberg The dollar rallied for the second day in a row (despite some volatility today)... Source: Bloomberg Cryptos were notably bid today following the Soleimani killing... Source: Bloomberg After another drop below $7k, Bitcoin surged today... Source: Bloomberg Copper tumbled today as gold and oil rallied... Source: Bloomberg Gold topped $1550 - back to its highest in 4 months... And as Bloomberg reports, heightened Middle East tensions are boosting bets on further gains for gold as a haven asset. Volatility in call options giving holders the right to buy futures at a pre-set price reached the highest in almost three months against puts, which provide the right to sell the metal. The skew shows that investors are increasingly bullish on bullion, even with prices already near a six-year high in the wake of the U.S. air strike that killed a top Iranian commander. Source: Bloomberg Finally, US macro data is negative and disappointing notably (today's ISM at 10 year lows) with stocks just shy of record highs... Source: Bloomberg And some remember what happened last time... Source: Bloomberg
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2020- S&P sectors for the past week-
Typical January Trading: Volatile Last 20 Years Yesterday major indexes continued their recent trend of strength on the first trading day of 2020. While today the market has turned weaker on escalating tensions between the U.S. and Iran. This type of volatility was once quite rare in January. However since 2000, the S&P 500 has declined ten times in twenty years in January. This recent weakness can be seen in the above January seasonal pattern chart. Over the last 21 years, Only NASDAQ has posted a full-month average gain. DJIA, S&P 500 and Russell 1000 have started January positive, only to surrender early-month gains by the eighth trading day. Greatest weakness has appeared just after mid-month, the eleventh trading day. Mild average losses on or around the eleventh trading day quickly swell to over 2% for DJIA and nearly as much for S&P 500 and Russell 1000. A Banner Year for US Equities Thu, Jan 2, 2020 2019 was surely a banner year for US equities. With a total return of 31.5%, the S&P 500's gain in 2019 was nearly three times the historical average 12-month return of 11.7%. That's strong! In the chart below we compare the S&P 500's annualized returns over the last one, two, five, ten, and twenty years to its average annualized returns over those same time frames since 1928. While the one-year return sticks out like a sore thumb, we would note that the S&P 500's annualized returns over the last two, three, and ten years are also above average. Almost as notable as the fact that the one year return has been so much stronger than average is that the S&P 500's two-year return is less than two percentage points above its historical average. That just shows how bad 2018 was! Looking further out, the only time frame where returns are below average is over the last twenty years where the 6.1% annualized gain is almost five percentage points below the historical average. Over a full twenty years, that's a difference of tripling your investment versus making eight times your investment! The chart below compares how current returns during the above time frames rank on a percentile basis relative to all other periods. The S&P 500's one-year return ranks in the 85th percentile which is pretty extreme. For the two, five, and ten year periods, though, current returns are much more middle of the road. Conversely, as stretched as extreme to the upside that the one-year return is relative to all other periods, the twenty-year return is even more depressed to the downside. At just 4.6, more than 95% of all other 20-year periods have been better than the last 20. Finally, as mentioned above the last year has certainly been a strong one, and it follows a year where returns had been abnormally poor. The chart below shows the rolling 12-month total return for the S&P 500 going back to 1990. The gain of 31.49% over the last year was the strongest for the S&P 500 in six years coming up just shy of the 32.39% gain in 2013. Last year at this time, though, the S&P 500 was down over 4% on a total return basis in the prior 12 months. 2019 and 2020 Dogs of the Dow Thu, Jan 2, 2020 The Dogs of the Dow strategy is a simple, hands-off investment approach that says to buy the 10 highest yielding stocks in the Dow 30 at the start of each year. With the calendar turning over from 2019 to 2020, below is a look at how the Dogs strategy performed in 2019. As shown, the 10 Dogs posted a total return of 19.38% in 2019, which was below the 25% return for the Dow and well below the 28% that the 20 non-Dogs returned. The biggest winner in the Dogs in 2019 was JP Morgan (JPM) with a gain of 47.27%, but Pfizer's (PFE) decline of 6.92% really hurt overall performance. The 20 non-Dogs were led by Apple (AAPL), Microsoft (MSFT), Visa (V), and United Tech (UTX), while Walgreens Boots (WBA) and 3M (MMM) were the two non-Dogs that fell in 2019. Start a two-week free trial to Bespoke Institutional to access our Trend Analyzer tool and track key trends in individual stocks and major ETFs. Moving on to 2020, below is a list of this year's Dogs of the Dow. Eight of the ten Dogs from 2019 remain on the list, while 3M (MMM) and Walgreens Boots (WBA) -- the two non-Dogs that fell in 2019 -- have replaced JP Morgan (JPM) and Procter & Gamble (PG) -- the two biggest gainers of the Dogs in 2019. Dow Inc. (DOW) is the highest yielding Dog at 5.12%, followed by Exxon (XOM), IBM, and Verizon (VZ), which all have dividend yields above 4%. Full Year 2019, Q4, and December Asset Class Total Returns Thu, Jan 2, 2020 Below are the final total return performance numbers for key ETFs across asset classes in 2019. For each ETF, we also include its performance in Q4 and December. The S&P 500 rallied 2.9% in December and 8.99% in Q4 to finish the full year up 31.22%. The Tech-heavy Nasdaq 100 (QQQ) was by far the best performing US index ETF in 2019 with a gain of 38.96%, and it was the third best ETF in the entire matrix. The title of best performing ETF in 2019 goes to the S&P 500 Technology sector ETF (XLK), which rallied 49.86%. Remember, 40% of XLK is made up of just Apple (AAPL) and Microsoft (MSFT), which gained 89% and 58% in 2019, respectively. The Russia stock market ETF (RSX) was the second biggest winner in the matrix with a 2019 total return of 40.79%. Everywhere you look across the equity landscape, there were big winners in 2019, but the weakest area of the market was the Energy sector ETF (XLE). Even still, XLE managed to put up double-digit percentage gains on the year at +11.74%. In the commodities space, we saw oil gain 32.61% in 2019, which actually bested the gain for the S&P 500. Gold (GLD) and silver (SLV) both put in solid gains in the mid-teens, while the perpetually losing natural gas ETF (UNG) was the only ticker in the matrix that fell across all three time frames (December, Q4, and full year). Looking at fixed income, the aggregate bond market ETFs (AGG and BND) posted total returns of 8%+, while the 20+ Year Treasury ETF (TLT) gained 14% on the year. Q4 and December were tough for fixed income, however, as rates moved higher. January Almanac: Average Performance Slips in Presidential Election Years January has quite a reputation on Wall Street as an influx of cash from yearend bonuses and annual allocations typically propels stocks higher. January ranks #1 for NASDAQ (since 1971), but fifth on the S&P 500 and sixth for DJIA since 1950. It is the end of the best three-month span and holds a full docket of indicators and seasonalities. DJIA and S&P rankings did slip from 2000 to 2016 as both indices suffered losses in ten of those seventeen Januarys with three in a row, 2008, 2009 and 2010 and then again in 2014 to 2016. January 2009 has the dubious honor of being the worst January on record for DJIA (-8.8%) and S&P 500 (-8.6%) since 1901 and 1931 respectively. Last year, January was downright stellar after the worst December since 1931 for DJIA and S&P 500. In election years, Januarys have been weaker. DJIA and S&P 500 slip to number #8 while DJIA average performance dips negative. NASDAQ slips to #3, but average performance remains respectable at 1.7%.
Here are the current major indices pullback/correction levels from ATHs as of week ending 1.3.20- Here is also the pullback/correction levels from current prices- ...and here are the rally levels from current prices-
Stock Market Analysis Video for January 3rd, 2020 Video from AlphaTrends Brian Shannon ShadowTrader Video Weekly 1.5.20 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 (1/6) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (1/6-1/10) <-- click there to cast your weekly market vote and stock picks! ======================================================================================================== 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 1.6.20 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! Monday 1.6.20 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! NONE. Tuesday 1.7.20 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 1.7.20 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 1.8.20 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 1.8.20 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 1.9.20 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 1.9.20 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 1.10.20 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! Friday 1.10.20 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- ($CMC $WBA $BBBY $STZ $LEN $CALM $SMPL $RPM $ANGO $AZZ $KBH $UNF $MSM $INFY $SCHN $SNX $AYI $GBX $HELE $SAR $EXFO $NTIC $LNN $WDFC $KRUS $FC $SLP) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning January 6th, 2020 <-- click there to view!
kind of an interesting stat i just ran across in my morning reads here that i thought was a worth a quick share. since 1950, when the SPX has been up more than +30% on a total return basis. it has been higher by just over +15% on average the very next year. also feel into recession only twice. i suspect absent any major black swans, we could be staring down at something similar for this year. we shall see.
historically, looking back at the past 20 major geopolitical events since pearl harbor, the spx pullback about -5% on average. after the lows have been put in, it typically recovers in less than 2 months.
here is the dj30 with all major conflicts since WWI. the best annual return ever actually took place during WWI.
