Welcome Stockaholics to the trading week of March 16th! 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 8:30 a.m. Empire State manufacturing 4:00 p.m. TIC dara Tuesday FOMC meeting begins 8:30 a.m. Retail sales 8:30 a.m. Business leaders survey 9:15 a.m. Industrial production 10:00 a.m. Business inventories 10:00 a.m. NAHB survey 10:00 a.m. JOLTS Wednesday 8:30 a.m. Housing starts 2:00 p.m. FOMC decision 2:30 p.m. Fed Chairman Jerome Powell press briefing Thursday 8:30 a.m. Weekly jobless claims 8:30 a.m. Philadelphia Fed manufacturing survey 8:30 a.m. Current account Friday 8:30 a.m. Existing home sales
US Equity Market Crashes Below 2007 Highs Despite Massive Surge On Trump Stimulus Plan Today saw the biggest spike in US equities since October 2008 after an avalanche of intervention in the last 24 hours across the world and extended by 1600 Dow points as Trump unveiled his stimulus/testing plan... The last time the market rallied this much was 10/28/2008 - the day TARP was announced... But, overall, the market just suffered its fastest, most aggressive collapse into a bear market... ever... But even more ominously, the broadest measure of the US equity market - The NYSE Composite Index - has collapsed below the 2007 highs (despite trillions in added liquidity)... We're sorry but no clip better serves as an analogy for this Minsky Moment than this one... US equity markets ended the week on a stronger note, big gains overnight (limit up in futures), a plunge at the cash open, only to rebound when rumors hit that the President would declare a National Emergency (implicitly some fiscal largesse) and when he announced his plans, the market went vertical... this was the best day for stocks since 10/28/08... This was the market's worst week since Oct 2008, but Small Caps' 20% crash this week is the worst since 1987 (Small Caps' 3-week plunge of 30% is the worst ever) European stocks were hit hard this week too (Italy down over 23% on the week - worst week in history)... Source: Bloomberg And even Chinese stocks sold off with ChiNext hit hardest... Source: Bloomberg Direct-Virus-impacted sectors were monkeyhammered this week... Source: Bloomberg Banks were battered (but bounced today)... Source: Bloomberg VIX surged higher this week at an unprecedented pace, closing near record highs... The VIX term structure collapsed to its most inverted since Lehman this week... Source: Bloomberg Investment Grade credit crashed this week - by our record this is the biggest weekly spread decompression in history... Source: Bloomberg HY credit risk also exploded this week - again the biggest weekly decompression in our datasets... Source: Bloomberg Stocks and bonds were dumped unceremoniously this week... Source: Bloomberg As Risk-Parity Funds saw the biggest deleveraging losses in history... Bonds suffered a total bloodbath this week - despite the collapse in stocks, with the end of day seeing a melt-up in rates... Source: Bloomberg 30Y yields exploded higher this week after Sunday night's crash to record lows. Today saw 30Y spike to 1.79% intraday before tumbling back to 1.39% on the Fed's emergency QE today... Source: Bloomberg After collapsing to 69bps on Sunday night/Monday morning, this week's blowout on yields is the biggest ever... Source: Bloomberg But most worryingly, the Bond ETF world really started to break as massive, unprecedented discounts occurred in Treasury, Muni, and HY Credit ETFs exposing the illiquidity of the underlying assets... Source: Bloomberg In Munis, the SEC restricted short-sales in the ETF to try and maintain some order - it failed. Source: Bloomberg Before we leave bond land, we note that CMBX crashed back towards its lows as virus anxiety impacting malls and the credit collapse combine to benefit Carl Icahn's short... Source: Bloomberg And the market is now demanding practically 1 full percentage point cut in rates next week by The Fed... Source: Bloomberg The Dollar was massively bid this week as it appears key safe-haven flows - and liquidity demands - sparked a 'sell-everything-else' trade worldwide... (3 days this week were the biggest daily gains in the dollar since Nov 2016) Source: Bloomberg This was the biggest weekly gain for the dollar since Oct 2008 (Lehman)... Source: Bloomberg Japanese Yen had its worst week since Nov 2016... Source: Bloomberg This was the worst week for cryptos since April 2013 - a total bloodbath (yes, Bitcoin Cash is down over 50% this week)... Source: Bloomberg With Bitcoin crashing below $4,000 intraday Source: Bloomberg The surge in the dollar this week did not help but commodities were clubbed like baby seals as it seemed someone was mass liquidating everything in a scramble for cash... Source: Bloomberg This was WTI's worst week since Dec 2008 (and biggest 3-week drop ever)... Gold suffered its worst week since Sept 2011, smashed back below $1600... Silver also saw its worst week since Sept 2011... And perhaps the most stunning moves were in precious metals among all this chaos as gold slumped into the red for the year and high-flying palladium was destroyed... Source: Bloomberg Finally, this was the worst weekly loss for a 'diversified' book of bonds and stocks since Lehman... Source: Bloomberg And, if you're wondering where this ends, it's simple - below 2,000 for the S&P 500... as the last five years of equity market gains have been total delusion... Source: Bloomberg And if you thought The Fed's Trillion-dollar-plus care-package helped... it didn't! FRA-OIS spreads continued to blow out, strongly suggesting massive dollar shortages and/or fear of systemic bank credit risks... 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-
Signs Of A Washout? The S&P 500 Index’s historic slide continued yesterday, culminating in nearly a 10% loss for the day, and leaving the benchmark index officially in bear market territory, just 16 trading days after setting a record high on February 19. In addition, the S&P 500 has now moved more than 4% each day this week, leaving investors and professionals alike wondering when this volatility could end. While nobody knows for sure, one thing we always look for at market bottoms are signs of extremes, both from a sentiment and price perspective. From an anecdotal sentiment perspective, certainly fears of COVID-19 have reached the masses, with travel plans canceled and announcements of major events called off coming nearly every hour. However, investor survey data shows a similar story with the American Association of Individual Investors (AAII) Investor Sentiment Survey showing the highest percentage of bears since April 2013. In addition, the National Association of Active Investment Managers (NAAIM) Exposure Index, which represents the average exposure to US equity markets by the surveyed investment managers, reached its lowest level since September 2015. Following each of those instances, the S&P 500 rallied more than 13% over the next year. Another way of gauging sentiment can be from the internals of the market. While the S&P 500 is now well below its 200-day moving average, that doesn’t mean each stock in the index has moved below its respective 200-day moving average. In fact, regardless of the broad market’s trend, when less than 20% of the individual components of the index are trading below their 200-day moving averages, it is considered an extreme. As shown in the LPL Chart of the Day, Thursday’s sell-off left less 6% of the S&P 500 there, a number last seen in March 2009. “These are truly frightening times,” explained LPL Financial Senior Market Strategist Ryan Detrick. “However, it is important to remember that the signs of panic we are seeing are typically found at or near major market lows.” The Fastest Bear Market Ever The historic volatility continues, with the Dow Jones Industrial Average officially setting its fastest move from a new all-time high to a bear market (down 20% from the highs) in the 124-year history of the index. It took only 19 days for this to take place, which is far and away the new record. Not to be outdone, the S&P 500 Index is set to close down 20% from all-time highs today, doing this in only 16 days. Again, as of the time we are writing this blog, the S&P 500 is in bear market territory, but there always could be a chance for a late-day rally. “From major sports postponing their seasons, to travel bans to Europe, the economic impact of the coronavirus is growing exponentially with each passing day,” said LPL Financial Senior Market Strategist Ryan Detrick. “Markets are pricing in a potential recession and inevitable second quarter slowdown, but it is all about expectations. Should the virus be contained and the worst-case scenarios not materialize, now could be a nice opportunity for longer-term investors.” Last, one of Warren Buffett’s most famous quotes is, “Be fearful when others are greedy and be fearful when others are fearful.” We’ve seen many signs of extreme fear the past few days, but the CNN Fear & Greed Index hitting 1 earlier today is quite a historic level of fear. This proprietary indicator looks at multiple inputs (like put/call ratios, momentum, and volatility), but on a scale of 1-100, this morning’s 1 is the lowest level ever seen, besting the 2 it hit at the lows in December 2018. From a contrarian point of view, this could be quite meaningful. Source: CNN Business 03/12/20 Perspectives on Waterfall Declines Volatile market action over the several weeks warrants some much needed perspective into the history of these types of waterfall declines. Fortunately, we have this research on hand and have been examining the nature of deep, fast selloffs like we have experience here in early 2020 as well as the nature of the inevitable and often sharp recoveries. First of all yes, this time is different – and yet it’s not. The headline causes of each of these historic waterfall declines are all different and yet investor, trader and money manager behavior remains rather similar. Fear has once again exposed the market’s overvaluation and weaknesses. This time it’s the fear of the coronavirus pandemic and price war in the oil market that spills over into the rest of the financial. Like the previous occurrences of waterfall declines in the table and graphs below the market reacted to fear and sold off fast and hard. It’s too early to tell if this waterfall decline is over or how fast and far the recovery will be. As we continue to analyze the current situation a thorough review of the history of waterfall declines and their subsequent recoveries should provide some much needed perspective. Friday 13th, DJIA Attempting to Recover & End Losing Friday Streak Friday is a significant day of the week because it is the last day of trading and positions held over the weekend could be at higher risk of an exogenous event or an unanticipated headline. Pages 143 & 144 of the Stock Trader’s Almanac 2020 show the difference in Friday performance during bull and bear markets. Friday’s have been weaker in bear markets. However today, on a Friday the 13th of all days, DJIA is fighting to recover some of its losses this week and to end its streak of down Fridays at seven. Down Friday DJIA losing streaks of seven or more, like the current streak, are actually somewhat rare in history. Prior to this year, DJIA has had just six similar or longer down Friday streaks going back to 1950. The last streak of down Fridays was in March and April of 2017. The longest streak lasted nine Fridays beginning on the last Friday of 2000 and lasting into February 2001. In the above chart the 30 trading days before and the 60 trading days after the last six DJIA down Friday losing streaks of seven or more have been plotted to display the average performance before and after the last down Friday of the streak. (There are on average 21 trading days in a typical calendar month) Weakness and lower was the trend during the down Friday streak, but once the streak came to an end, DJIA was higher 60 trading days later. Last Stocks Above Their Moving Averages Fri, Mar 13, 2020 The massive declines over the past few weeks have left conditions extremely oversold. As we highlighted in yesterday's Sector Snapshot, breadth has been awful while there is no longer a single stock in the S&P 500 that is overbought (1 or more standard deviations above its 50-DMA). In fact, after yesterday's absolute washout, there is only a small handful of stocks that are above their 50 and 200-DMAs. In regards to the 50-DMA, less than 1% of stocks in the S&P 500 are above this average which is the first time that has happened since 2011. The only time in between that saw a similarly weak reading, although not quite hitting that under 1% requirement was back in December of 2018 when 1.19% of stocks were above their 50-DMA. As for the 200-DMA, only 5.59% are above that level. That is the lowest reading since March of 2009. The average stock is now 26.56% below its 50-day and 24.5% below its 200-day. The table below shows those 22 remaining stocks that are still above their 200-DMAs as of yesterday's close and the few that are also below their 50-DMA. Of these, only Regeneron (REGN), Kroger (KR), Digital Realty Trust (DLR), and Gilead Sciences (GILD) are also above their 50-DMAs. The only other stock in the index that is also above its 50-DMA is Cabot Oil and Gas (COG), though it is 11% below its 200-DMA. While these stocks have all held above their long term moving average recently, only GILD and REGN have risen since the index's high on 2/19. Selloff Erases All of US Market Cap Gains Since Election Day 2016 Thu, Mar 12, 2020 With the US stock market down nearly 7% yet again today, the total market cap of US companies as measured by the Russell 3,000 has fallen $11.5 trillion in less than a month. On February 19th, total US market cap was just over $35 trillion. It's at $23.8 trillion as of this morning. What makes this drop even more noteworthy is that $23.8 trillion was the market cap of US companies on Election Day 2016. At this point in time, all of the market cap gains seen since President Trump's election victory have been wiped out. Covid-19 Still Not Showing in Claims Thu, Mar 12, 2020 Given its more backward-looking nature, economic data has taken a backseat over the past few weeks, but this also makes more timely data like weekly jobless claims ever more important. While risk assets continue to get hammered, weekly jobless claims have still yet to show any major layoffs as a result of the coronavirus. In fact, claims were lower this week, falling to 211K compared to estimates of an increase to 220K. Last week's number was also revised lower by 1K (from 216K to 215K). While there still has not been any new low, that leaves jobless claims basically in the middle of the past year's range which historically is still a healthy level. Although claims were lower this week, the four-week moving average has risen for a third consecutive week to 214K. While at face value that may sound bad, there have been seven other such streaks, some of which ran for longer, in the past year alone. Now at 214K, the moving average is not at any new high either, only at its highest level since late January. In other words, the move higher in the moving average over the past few weeks has been far from dramatic and still is too early to call it a change in trend. Non-seasonally adjusted numbers also remain at historically low levels with this week's 200.2K print being the lowest of the current week of the year of this cycle. That is also over 100K below the 333.06K average for the current week of the year since 2000. Low Rates Send Mortgage Applications Surging Wed, Mar 11, 2020 Coronavirus fears have broadly sent rates lower over the past month. Currently, the national average for a 30-year fixed-rate mortgage stands at 3.68%; just off the low of 3.55% from earlier in the month. With mortgage rates now basically at their lowest levels since late 2016, homeowners have been quickly enticed to jump on these lower rates. Last week, weekly mortgage applications from the Mortgage Bankers Association showed a roughly 15% surge as rates were reaching record lows. In the time since then, the Fed's 50 bps cut came into effect and yields fell even further which led mortgage applications this week to surge 55.4%. That is the highest week over week increase in mortgage applications since November of 2008 when they had risen 112.1%. Outside of that period, we've only seen larger weekly increases a few other times since 1990. The spike was driven largely by refinancing applications which rose 78.6% week-over-week. As with the composite, that was the biggest weekly jump in refi applications since the housing bubble. Prior to that, once again you would need to go back to 2001 or the 1990s to find larger weekly increases in mortgage refinance applications.
Here are the current major indices pullback/correction levels from ATHs as of week ending 3.13.20- Here is also the pullback/correction levels from current prices- ...and here are the rally levels from current prices-
Stock Market Analysis Video for March 13th, 2020 Video from AlphaTrends Brian Shannon ShadowTrader Video Weekly 3.15.20 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 (3/16) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (3/16-3/20) <-- 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 3.16.20 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! Monday 3.16.20 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! Tuesday 3.17.20 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 3.17.20 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 3.18.20 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 3.18.20 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 3.19.20 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 3.19.20 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 3.20.20 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. Friday 3.20.20 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- ($NIO $HQY $FCEL $MOMO $FDX $CRWD $HUYA $NBEV $BE $MDB $BZUN $BILI $YY $COUP $MUX $FIVE $TME $MIK $CVSI $ACRX $ACN $GES $WPRT $OLLI $GIS $CPRX $PLCE $DRI $TLRD $ZTO $BAX $LEN $DLTH $HDS $CTAS $SMAR $WSM $TCOM $HIBB $REI $DBI $CTRA $GPL $CMC) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning March 16th, 2020 <-- click there to view!
Couple of market stats from this past Friday's market: It was the best day for SPX since Oct. 28th, 2018. It was the 10th best day ever and the best Friday on record. For the DJ30 it was the 12th best day in history. This past week was the first time since November 1929 where each day of the week featured 4% closes either up or down for the major indices. Wow! Lastly, I will leave you all with this. I see this image getting thrown about a lot on my Twitter news feed, seems like this really sums up the week perfectly. Rest up my friends! Have a great weekend ahead.
cant wait to see the craziness next week. got my eyes on BYND, hopefully it comes in to low 60s, so i can pick some up.
I was pretty fortunate and thought ENB was going to retest $50 CAD a few Monday's ago, sold out at $53. That same day was the start of this Corona correction, shortly after the Saudi / Russia spat which has lowered the BoC overnight rate by 100 basis points. I'm essentially only a TSX investor right now, the Canadian Divi Tax credit and all. Watched as long as I could today, pulled the trigger reinvesting in CM, ENB, PPL, IPL and EQB. The reason I did at that time is because Poloz and Morneau announced a conference and I believe that the market had absorbed all the negatives from the virus news. Everything is cancelled and postponed. I think at this point people know that many will be infected, and to me I don't view those numbers as being as much of a shock as the rest. When I started watching this, I thought 18K DOW was possible, it still is, but I think Trump will do whatever it takes to turn this around, and hate him or love him he will likely find a way. Up north here the BoC and Federal government announced significant steps today with more fiscal relief coming next week. Just my thoughts up north. Regardless if I am right or wrong (which more often than not I am), getting in these companies at a 7.5% dividend plus is a pretty amazing opportunity after this bull market which has gone on my entire investing life. Got to say, made these weeks very exciting. With the exception of IPL, I feel none are at risk of being cut. Have a good weekend all.
well this is kind of eye poppin' for me and maybe worth sharing in here as well. if the past few weeks have felt like '08 or worse in terms of the large trading ranges in the market indices, you'd be correct. believe it or not the past 10 day average daily % change for the SPX has actually surpassed the peak seen during the GFC as seen in the chart below
RIP retail this is only the start. I’m expecting JCP and Macy’s to BK this year from Covid19 https://www.cnbc.com/2020/03/14/cor...l-stores-outside-of-china-until-march-27.html
Oof now Nike closing all USA stores https://www.cnbc.com/2020/03/15/nik...-stores-in-the-us-because-of-coronavirus.html
Just stumbled across this during my weekend reads this afternoon and just thought it was worth sharing with all of you guys in here as well. So, we are now in the 10th official bear market for the SPX since 1950. Here are some notes on the previous 9 bears. Listed below are the max. % pullback on the bear, bear start, bear end, recovery back to new highs, and the catalyst for the bear. ====================================================================================== The Bear Market of 1956-1957: Max. Pullback: -21.5% Start: August 6th, 1956 Bottom: October 22th 1957. Recovery: Septemer 24th, 1958 (15 months to bottom; 11 months for recovery) Catalyst: The "Eisenhower Recession" of 1957-'58 that lasted 8 months. ====================================================================================== The Bear Market of 1961-1962: Max. Pullback: -28% Start: December 13th, 1961 Bottom: June 26th, 1962 Recovery: September 3rd, 1963 (7 months to bottom; 14 months for recovery) Catalyst: Flash Crash of 1961-'62: The "Kennedy Slide". Market came close to the bottom again during the Cuban Missile Crisis in Oct 1962. ====================================================================================== The Bear Market of 1966: Max. Pullback: -22.2% Start: February 10th, 1966 Bottom: October 7th, 1966 Recovery: May 4th, 1967 (8 months to bottom; 7 months for recovery) Catalyst: Financial Crisis/Credit Crunch of 1966. ====================================================================================== The Bear Market of 1968-1970: Max. Pullback: -36.1% Start: December 2nd, 1968 Bottom: May 26th, 1970 Recovery: March 6th, 1972 (18 months to bottom; 22 months for recovery) Catalyst: 1969-'70 Recession - a "mild one" that lasted 11 months. ====================================================================================== The Bear Market of 1973-1974: Max. Pullback: -48.2% Start: January 12th, 1973 Bottom: October 3rd, 1974 Recovery: July 17th, 1980 (21 months to bottom; 70 months for recovery) Catalyst: Oil crisis of 1973, 1973-'75 recession that lasted 17 months, stagflation (high unemployment & high inflation). ====================================================================================== The Bear Market of 1980-1982: Max. Pullback: -27.1% Start: November 21st 1980 Bottom: August 12th, 1982 Recovery: November 3rd, 1982 (21 months to bottom; 3 months for recovery) Catalyst: Volcker tightening and 1981-'82 recession that lasted 18 months. Recession ended in 1982, as bear market recovered to prior peak. ====================================================================================== The Bear Market of 1987: Max. Pullback: -33.5% Start: August 26th, 1987 Bottom: December 4th, 1987 Recovery: July 26th, 1989 (3 months to bottom; 20 months for recovery) Catalyst: Black Monday (Oct 19), but bottom was only in Dec. Recovery surprisingly long but Fed made a series of rate hikes in 1988 to fight inflation. ====================================================================================== The Bear Market of 2000-2002: Max. Pullback: -49.1% Start: March 27th, 2000 Bottom: October 9th, 2002 Recovery: May 30th, 2007 (31 months to bottom - 56 months for recovery) Catalyst: Dot-com crash, 2001 recession, 9/11. ====================================================================================== The Bear Market of 2007-2009: Max. Pullback: -56.8% Start: October 10th 2007 Bottom: March 9th, 2009 Recovery: March 28th, 2013 (17 months to bottom; 49 months for recovery) Catalyst: Housig bubble crash, Great Financial Crisis. ====================================================================================== The Bear Market of 2020-?: Max. Pullback: -26.7% (so far...) Start: February 20th, 2020 Bottom: ? Recovery: ? Catalyst: COVID-19. ====================================================================================== Conclusions: Worse the drawdown, larger the gain required to hit prior peak. -20% -> +25% to recover -25% -> +33% -30% -> +43% -35% -> +54% -50% -> +100% -60% -> +150% In other words, deeper the drawdown, longer the recovery. (eg, 1973-'74, 2000-'02, 2007-'09) ====================================================================================== Last but not least: Since 1950- Fastest crash: 1987 bear market (3 months) Fastest recovery: 1980-1982 bear market (3 months) 6 out of 9 bear markets came amid recessions. 3 of the worst bear markets came amid deep recessions (1973-'74, 2000-'02, 2007-'09). ====================================================================================== Sorry for the long post! Thanks for taking the time to read this.
Federal Reserve cuts rates to zero and launches massive $700 billion quantitative easing program https://www.cnbc.com/2020/03/15/fed...-700-billion-quantitative-easing-program.html Here we go, we are back to QE
Really glad to see you’re posting again @stock1234 admittedly have been quite concerned since Friday. Hope you’re feeling a lot better!
