Welcome Stockaholics to the trading week of February 24th! 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: Shake Shack 10:30 a.m. Dallas Fed manufacturing Tuesday Earnings: Home Depot, Macy’s, Salesforce, Virgin Galactic, SmileDirectClub, RealReal 8:30 a.m. Philadelphia Fed non-manufacturing 9:00 a.m. S&P/Case-Shiller HPI 10:00 a.m. Consumer confidence 10:00 a.m. Richmond Fed survey 10:30 a.m. Dallas Fed services Wednesday Earnings: Lowe’s, L Brands, Square, Booking Holdings, Marriott, Etsy 10:00 a.m. New home sales Thursday Earnings: Best Buy, JC Penny, Beyond Meat 8:30 a.m. Initial claims 8:30 a.m. Durable goods 8:30 a.m. Real GDP (Q4 second reading) 10:00 a.m. Pending home sales Friday Earnings: Wayfair 8:30 a.m. Personal income 8:30 a.m. Advanced economic indicators 9:45 a.m. Chicago PMI 10:00 a.m. Consumer sentiment
Schizophrenic Stocks End Near Record Highs As Virus Fears Send Yields To All-Time Lows Yeah, that just happened... Stocks hover near record highs, bonds crash to all-time lows, and gold is exploding higher... Source: Bloomberg Especially the funny-mentals... Source: Bloomberg The 'hope'-filled gap between 'soft' survey data rising and 'hard' real economic data slumping has surged to 16 month highs... until this morning's carnage in PMIs... Source: Bloomberg Year-to-date, gold is the biggest winner... Source: Bloomberg Chinese stocks soared higher this week... Source: Bloomberg European stocks were broadly lower with UK's FTSE managing to scramble back into the green for the week... Source: Bloomberg In the US, only Trannies managed to cling to gains as Nasdaq went from outperformer to biggest loser... Dow ended the week back below 29k... As @Sentimentrader noted, NASDAQ 100's 20 day moving average has gone up 88 days in a row, THE MOST EXTREME IN HISTORY. Similar streaks always ended with SHARP corrections over the next month. Cyclicals notably underperformed... Source: Bloomberg Momentum was hit hard midweek but stabilized... Source: Bloomberg FANG stocks suffered their worst day since Mid-October... Source: Bloomberg As global liquidity has sent global stock prices to higher and higher record highs, it has also sparked more and more buying in global bonds (yields inverted in chart). Critically, as investors recognize the growth/inflation that was so hoped for is evaporating, global liquidity suggests the global average sovereign bond yield should be drastically lower... at ZERO!! Source: Bloomberg US Treasury yields extended their collapse today ending a major weekly plunge... Source: Bloomberg 30Y and 5Y yields hit new record lows today, 10Y and 2Y were just shy of their record lows... Source: Bloomberg The 30Y Yield hit 1.8840% at today's lows (the previous intraday low was 1.9039% on 8/28/19)... Source: Bloomberg The yield curve continued to collapse, falling to its most inverted since October... Source: Bloomberg The market is now demanding almost 2 full rate-cuts by end-2020... or else! Source: Bloomberg The dollar was clubbed like a baby seal today - worst day since 12/27, after 4 straight up... Source: Bloomberg Cryptos were all lower on the week... Source: Bloomberg Commodities were all higher on the week (copper barely) with PMs leading... Source: Bloomberg WTI managed to get back above $54 briefly but faded back... Source: Bloomberg Source: Bloomberg Silver is also surging, back above $18.50... Source: Bloomberg Gold is hitting record highs in many global currencies... Source: Bloomberg The dollar is holding up against the rest of global fiat but collapsing against hard assets!! Source: Bloomberg Finally, there's this... that Nasdaq 10,000 Y2K analog is spookily accurate still... Source: Bloomberg Stock markets seem unable to grasp that the liquidity spigot may not be open forever... Source: Bloomberg Maybe Bernie's rise will be the breaking point for stocks? Source: Bloomberg For now the market remains convinced that Trump will win... 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-
Earnings Season Observations The recent news that technology giant Apple would miss its fourth quarter 2020 revenue targets has understandably increased investor anxiety surrounding the potential economic impact of the coronavirus (now called COVID-19). Lost in those headlines is corporate America’s impressive performance this earnings season. “Companies have done an admirable job growing profits considering stiff headwinds,” said LPL Financial Chief Investment Strategist John Lynch. “Despite slowing global economic growth, weakness in capital investment and manufacturing, a strong US dollar, and a huge drop in energy sector profits, S&P 500 companies are impressively grinding out 1-2 percentage points of overall earnings growth.” The fourth quarter earnings growth may cement the third quarter of 2019 as the trough, as shown in the LPL Chart of the Day below. Some highlights of this earnings season: Solid revenue upside. A solid 65% of S&P 500 Index companies have beaten revenue estimates, the highest level since second quarter 2018 and well above the long-term average at 57%. S&P 500 companies have produced a larger-than-normal nearly one percentage point positive revenue surprise and are tracking to a 3.5% top-line increase. Respectable earnings upside despite headwinds. The earnings beat rate at 71% is slightly above the 10-year average (70%). S&P 500 earnings growth has surprised by a solid 4.4% so far despite economic, currency, and commodity headwinds. Consider the energy drag. Though 1-2% overall earnings growth isn’t much, the gain is approximately 4%, excluding the energy sector. Sector standout. One of the most China-exposed sectors produced one of the biggest upside earnings surprises: Technology. Technology sector earnings growth is tracking to a 5% year-over-year increase, about 9 percentage points above prior estimates. Reassuring outlooks. Estimates for S&P 500 earnings per share in 2020 have only fallen by about 0.9% since December 31, 2019. Though these numbers may come down a bit more in the coming days and the China situation remains fluid, this modest reduction reflects U.S. companies’ resilience overall amid significant supply chain disruptions. Election Year March: Performance Haunted By Steep 1980 Declines Boisterous March markets tend to drive prices up early in the month and batter stocks at month end. Julius Caesar failed to heed the famous warning to “beware the Ides of March” but investors have been served well when they have. Stock prices have a propensity to decline, sometimes rather precipitously, during the latter days of the month. In March 2001, DJIA plunged 1469 points (-11.8%) from March 9 to the 22. Normally a decent performing market month, March is somewhat above average in election years with advances 64.7% of the time with a 1.0% average DJIA gain since 1952. S&P 500 has also advanced 64.7% of the time since 1952, but gains have been slightly better at 1.2%, on average. NASDAQ has not fared well in March in election years since 1972. Due to a 17.1% loss in 1980, March is NASDAQ’s second worst month of the election year. Similarly, March 1980’s steep losses adversely affect Russell 1000 and Russell 2000 indices. Performance Throughout The Presidencies Tue, Feb 18, 2020 As markets were closed to observe Presidents Day yesterday and the 2020 Presidential election continues to ramp up, we thought it would be a good time to check up on stock performance during different administrations. In the table below, we show the performance of the Dow during the administrations of every US president since 1900 in addition to the annualized return. In the time since President Trump was sworn into office, the Dow has risen 46.9%. On an annualized basis, the 13.3% return places the current administration in 3rd place for the strongest performance. Only the Clinton administration in the 1990s and Coolidge administration in the 1920s have observed stronger annualized gains. The one caveat of course is that President Trump's term (or terms) has yet to end. Comparing Democratic and Republican administrations since 1900, Democratic presidencies have tended to average stronger returns than their Republican peers, so the stock market's returns under President Trump have deviated somewhat from the norm. While it is impossible to say what a candidate's election will mean for the market, at the moment betting markets favor the incumbent to win the presidency while Bernie Sanders and Michael Bloomberg go back and forth in taking the number 2 spot, hovering around 15%-16%. Come Super Tuesday (March 3rd) when we could finally see more clarity on the Democratic side, the back and forth between Bloomberg and Sanders might become more one-sided. Yet Another Corona Friday Fri, Feb 21, 2020 The major indices decided it was five o'clock somewhere right off the bat today as they experience yet another "Corona Friday". More concerns around the coronavirus have sent stocks lower with the S&P 500 down around 1.1% as of this writing and the Nasdaq down nearly 2% today. Declines on a Friday have become par for the course in 2020. Fridays have been the weakest day of the week so far in 2020; the only one to average a decline. On average, the S&P 500 has fallen 0.52% on Fridays while the next worst day has been Monday which has averaged a gain of 0.19%. Fridays have also been the day that the S&P 500 has closed higher the least. Only 28.6% of Fridays this year have seen the S&P 500 finish in the green. That compares to a positive close more than three-quarters of the time on Mondays, Wednesdays, and Thursdays. While it has averaged a gain of 0.24%, Tuesdays have also experienced a positive close less than half of the time. Try Bespoke's premium research package for free for two weeks. A Dow Without Boeing (BA) Wed, Feb 19, 2020 For more than a year now, Boeing (BA) has been plagued by the 737 MAX crisis which has weighed on shares of the plane manufacturer with it now currently down nearly 20% from when the initial groundings took place on March 10th of last year. Despite this, while underperforming the broader market due to the 737 issues, the stock is actually still up just over 5% since the start of 2019. Even though BA has lagged, it is still the highest-priced of the 30 stocks in the price-weighted Dow Jones Industrial Average. Currently trading around $338.50, the only stocks in the index holding a candle to BA are Apple (AAPL) and UnitedHealth (UNH), which also trade north of $300 per share. That means these stocks have the highest weighting in the index and therefore have a much larger impact than other stocks on the Dow's performance. With BA's issues, a number of people have pondered the what-ifs for the Dow had the company not had the issues with the 737. Would we have already broken out the Dow 30K hats were it not for BA? In the chart below, we show the actual performance of the DJIA and have overlaid the performance of an 'alternate Dow' showing its performance if BA had not been in the index since the start of 2019. We used the start of 2019 instead of the actual date of the groundings as it is a little less arbitrary. By our calculations, while we would be a bit closer, even if BA wasn't in the index since the start of 2019, we wouldn't quite be at Dow 30K yet. As shown, our alternate Dow would be almost 1% or 266 points higher if Boeing was not included in the index since the start of 2019. While BA has been a drag on the DJIA since last March, it also provided a big boost to the index in early 2018 before the 737 issues hit the stock. In fact, at the start of March 2017, BA was up over 36% YTD and the spread between the Dow's performance with and without BA was around 700 points in the other direction as it is now! Another example of this dynamic in which high priced stocks have a greater impact on the index was observed on Tuesday when Apple's (AAPL) stock fell after the company warned that Q1 revenues would be shy of prior guidance due to the coronavirus. The warnings sent shares down over 3% at its intraday lows, but the stock only finished down 1.83%. While there were equivalent or larger declines like Dow (DOW) or Walgreens Boots Alliance (WBA) in Tuesday's session, AAPL's declines by far weighed on the index more than any other stock. Of the Dow's 165.89 point decline, AAPL contributed 40.35 points. Fortunately, UNH helped to mitigate some of those losses as it had a positive impact on the index of +22.79 points. New All-Time Highs for S&P 500 and NASDAQ – Well Above Average Gains in Election Year As of today’s close, DJIA is up 2.84%, S&P 500 +4.81% and NASDAQ is up a whopping 9.41% year-to-date. All three indexes are well above their respective historical averages for this time of an election year. NASDAQ has in fact already exceeded its average full election year performance going back to 1972. Bullish sentiment and momentum appear to be firmly in place and historical election year patterns suggests strength could easily continue for DJIA and S&P 500 into May. NASDAQ’s surge higher could be vulnerable to a retreat sooner, in March.
Here are the current major indices pullback/correction levels from ATHs as of week ending 2.21.20- Here is also the pullback/correction levels from current prices- ...and here are the rally levels from current prices-
Stock Market Analysis Video for February 21st, 2020 Video from AlphaTrends Brian Shannon ShadowTrader Video Weekly 2.23.20 Video from ShadowTrader Peter Reznicek (VIDEO NOT YET POSTED!)
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 (2/24) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (2/24-2/28) <-- 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 2.24.20 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! Monday 2.24.20 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! Tuesday 2.25.20 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 2.25.20 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 2.26.20 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 2.26.20 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 2.27.20 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 2.27.20 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 2.28.20 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! Friday 2.28.20 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- ($BYND $SQ $HD $SPCE $CRM $BIDU $M $CRON $CHK $BBY $TTD $AMRN $SHAK $KOS $AWI $SDC $LOW $ILPT $CLVS $TNDM $IQ $PANW $CRI $SPNS $TJX $CTB $ETSY $TREE $KEYS $INTU $GWPH $W $TDOC $WEN $CROX $DIN $DNR $LL $DORM $GH $OXY $MGI $AMT $JCP $CBRL) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning February 24th, 2020 <-- click there to view!
I was so close to buying NNVC right before the close on Friday as I figured more bad coronavirus news over the weekend. Didn't make the purchase. Wish I would have.
So, market is going to open WAY down today. Who thinks it'll rally today, and who thinks it'll drop further today?
I think the bounce probably won’t come today, tomorrow at the earliest. Buying the dips a little bit but not too much
So the coronavirus spreading to outside of China is becoming a black swan for the market it seems like The market was priced for near perfection and I was a little surprised we kept going up despite the virus wasn’t spreading outside of China yet. I am also curious whether we are getting any new case here in the US So far at least it seems like it is not spreading here like they do in Korea and Italy
dj30 crosses -1K on the day on a % basis though this still isn't anything near being one of the worst one-day drops. but thta heatmap though! that's a lot of red
