Welcome Stockaholics to the trading week of May 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 Earnings: AutoNation, Under Armour, Marriott, Cardinal Health, Choice Hotels, Cleveland-Cliffs, Mylan, ON Semiconductor, Zimmer Biomet, Simon Property Group, Ambac Financial, Datadog, Cabot, Caesars Entertainment, Tilray Tuesday Earnings: Toyota, Allianz, Duke Energy, Vodafone, Honda Motor, Ingersoll Rand, Casper Sleep 6:00 a.m. NFIB small business survey 8:30 a.m. CPI 9:00 a.m. St. Louis Fed President James Bullard 10:00 a.m. Philadelphia Fed President Patrick Harker 2:00 p.m. Federal budget 5:00 p.m. Cleveland Fed President Loretta Mester Wednesday Earnings: Cisco, Jack in the Box, Tencent, Sony 8:30 a.m. PPI 9:00 a.m. Fed Chair Jerome Powell Thursday Earnings: Brookfield Asset Management, Applied Materials, NortonLifeLock, Petrobras, Aurora Cannabis 8:30 a.m. Jobless claims 8:30 a.m. Import prices 10:00 a.m. Fed vice chairman Randal Quarles testifies before Senate Banking Committee 1:00 p.m. Minneapolis Fed president Neel Kashkari Friday Earnings: JD.com, VF Corp 8:30 a.m. Retail sales 8:30 a.m. Empire state manufacturing 9:15 a.m. Industrial production 10:00 a.m. JOLTS 10:00 a.m. Business inventories 10:00 a.m. Consumer sentiment 2:00 p.m. TIC data
Wall Street Soars As Main Street Struggles With Lo' Rates, No Jobs, & Mo' Deaths Record-Watch: For the first time ever, more than half the US population is not working; over 76,000 Americans dead from COVID-19; the US economy is contracting at record pace; earnings expectations are collapsing at near record pace; interest-rates at record lows (and imputing negative rates by year-end); and stocks are soaring at their fastest pace ever... As we noted earlier, there was one especially scary aspect of today's jobs report that has not gotten enough publicity, namely that as BofA writes, the employment to population ratio plunged to a record low, with only 51.3% of the population working. Inversely, this means that in April, 49% of the US population was not working. Source: Bloomberg We do note that FF futures spiked when The Fed announced Jay Powell would hold a speech next week (theoretically enabling him to jawbone down any expectations of negative rates)... The Nasdaq composite was up 5 days in a row - the best streak since Dec2019 (when it went 10 days in a row without a drop)... Sending Nasdaq green for 2020 - as if all those dead and unemployed people never mattered... Source: Bloomberg Because fun-durr-mentals are so bad, it must be good!! Source: Bloomberg Meanwhile, the nation is split politically between lockdown-deniers and stay-at-home-ers; and Democrats (who politicized the DoJ to entrap Flynn and launch a coup against Flynn) have demanded an IG probe into Barr's politicization of The DoJ; and states/cities are demanding Federal bailouts for what they have over-promised their voters and benefactors for decades.... Small Caps and Nasdaq are up 38% from the 3/22 lows... But volume has collapsed as stocks have gained... Source: Bloomberg Stocks piked to end the day on the highs as the Fed Funds futures market "tightened" away from negative rates expectations... Source: Bloomberg It's the Internet, stupid! Source: Bloomberg FANG stocks are up 5 straight days (and 7 of last 9)... Source: Bloomberg Bank stocks were mostly higher on the week but quite volatile... Source: Bloomberg Airlines were down on the week but Hotels managed gains... Source: Bloomberg Overall, the median stock (Value Line Geometric index) is drastically underperforming the broader market... Source: Bloomberg HY was better this week but IG bonds lagged... Source: Bloomberg A very choppy week for bonds ended with the curve notably steeper (30Y +13bps, 2Y -4bps) Source: Bloomberg 10Y spiked today - despite the dismal jobs data (on more Fed taper and Powell speech headlines)... Source: Bloomberg New record all-time lows for 2Y and 5Y yields... Source: Bloomberg The dollar ended the week unchanged... with weakness in the last two days as negative rates started to rear their ugly head... Source: Bloomberg Source: Bloomberg Bitcoin pushed up to $10,000 today... Source: Bloomberg Notably gold and Bitcoin surged as negative rates came into the picture (and gold dipped today as negative rates were priced out)... Source: Bloomberg Commodities were all higher this week... Source: Bloomberg But oil - again - was the big winner...though largely sideways $23-25... Gold and Silver decoupled a few times this week... GLD inflows continue their streak (30 days straight and counting)... Source: Bloomberg Finally, as we noted earlier, the Nasdaq is now bigger than the rest of the world's stock markets put together...
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2020- S&P sectors for the past week-
Market Too Far Ahead of Economy? Another 3.2 million Americans filed for unemployment last week bringing the seven-week total to 33.5 million. This is an unprecedented streak for an unprecedented time, and it highlights the significant impact that the coronavirus pandemic shutdown is having. One small positive aspect of this week’s number is the fact that it is a decline from the previous reading which lends further support to the possibility that the market’s lows of March could be the bottom and that bottom could hold based upon the historical correlation of jobless claims and past market bottoms that we covered in a recent post. However, the seven-week total is an unsettling number that suggests the road back to “normal” could be longer than the market appears to currently expect. It is getting increasingly more challenging to envision 33.5 million Americans returning to work as quickly as they left. And with NASDAQ returning to positive for the year in today’s trading it may be time to wonder if the market’s brisk recovery is possibly too far ahead of the actual economy. One early sign that the rally may be getting well ahead of the economy can be seen in the following chart of cumulative daily advance/decline lines for NYSE, NASDAQ, Russell 2000 and the S&P 500. The recent trend since the end of April has been lower while the indexes have managed to move modestly higher. This suggests that fewer and fewer stocks are still participating in the rally. Historically when this persisted the major indexes frequently failed to move meaningfully higher and often turned lower. Market Gains in Celebration of Mother’s Day With just a few days remaining to Mother’s Day, today’s post is also a reminder. Over the last twenty-five years on the Friday before Mother’s Day the Dow Jones Industrials have gained ground seventeen times. On the Monday after, DJIA has advanced seventeen times over the same time period. Average gain on Friday has been 0.20% and a respectable 0.36% on Monday. However, in five of the last eight years, the Monday following Mother’s Day has been down. Last year, DJIA suffered its worst post Mother’s Day loss, off 2.38%. Group Breadth Improving From a Record Low Base Fri, May 8, 2020 After a disastrous late February and early March period, breadth among S&P 500 groups cratered to the point where not a single one of the S&P 500's 24 industry groups were above their 50-day moving average. Before the most recent occurrence, that's something we hadn't seen since early 2019. While there have been numerous instances in the last few years where every industry group was below its 50-DMA, the most recent period was unique in that it lasted more than four full weeks (21 trading days). Going all the way back to 1990, there has only been one other period where every industry group was below its 50-day moving average for as long as it just was. That was during the depths of the financial crisis in the 21-day stretch ending 11/3/08. It took a bear market of more than a year to finally reach that level back then, but this time around, it took less than two months. Besides that period, there has never been another four-week stretch where every industry group was below its 50-day moving average. Overall breadth readings have already improved in terms of industry groups above their 50-day moving averages, but at this point, the number of industry groups with rising 50-day moving averages remains extremely depressed at just 8.3% as of midday Friday. Similar to the streak above, during the most recent period every group had a declining 50-day moving average for 26 straight days, and that was also the longest such streak since 2008. Granted, this is a lagging indicator and should improve the longer equities remain around current levels, but it once again serves as a reminder of how steep the declines actually were. Sector Relative Strength Fri, May 8, 2020 Although the S&P 500 (SPY) is down around 1% over the past week, there are two sectors that have made a push higher: Communication Services (XLC) and Technology (XLK). While these moves have left both sectors in overbought territory, a snapshot from our Trend Analyzer tool shows that Tech's rally has brought it into the green YTD. Technology's outperformance is nothing new. As shown in the relative strength charts from our Sector Snapshot below, Technology has been a serial outperformer versus the S&P 500 for pretty much all of the past year (a rising line indicates outperformance versus the S&P 500 and vice versa). As for the other sectors, Health Care has also seen some drastic outperformance over the past few months. Communication Services and Consumer Discretionary have also seen some outperformance in recent weeks. Contrary to Technology, Energy, Financials, Industrials, and Materials have all been consistent underperformers over the past year. Performance on Earnings Days Fri, May 8, 2020 Roughly 1,300 companies have reported since the start of earnings season on 4/13 when the first of the big banks kicked things off. For those stocks that have beaten EPS estimates, the reaction has not been as strong as past years with just a 9 bps difference between this earnings season and all seasons since 2001. On the other hand, those that have missed EPS have not been as badly punished dropping 0.86% compared to an average drop of 3.56% since 2001. For all stocks, the average gain of 0.79% this earnings season is much stronger than the 0.06% gain of all other seasons. With stock price reactions being generally positive this season, most of the gain has come at the open. Stocks reporting earnings have gapped up an average of 1.24%. But intraday they have tended to sell-off, averaging a 0.44% decline from open to close.
Here are the current major indices pullback/correction levels from ATHs as of week ending 5.8.20- Here are the current major indices rally levels from correction low as of week ending 5.8.20- Here is also the pullback/correction levels from current prices-
Stock Market Analysis Video for May 8th, 2020 Video from AlphaTrends Brian Shannon ShadowTrader Video Weekly 5.10.20 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 (5/11) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (5/11-5/15) <-- 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 5.11.20 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! Monday 5.11.20 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! Tuesday 5.12.20 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 5.12.20 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 5.13.20 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 5.13.20 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 5.14.20 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 5.14.20 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 5.15.20 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! Friday 5.15.20 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- ($UAA $AMAT $CLF $MAR $CSCO $CPE $JD $INO $KOS $ON $TLRY $CAH $ACB $AN $WIX $SDC $GBDC $NCLH $DUK $NBEV $ICPT $SPG $CYBR $DDOG $CEVA $MYL $CHH $HMC $ET $LOGI $OAS $NVAX $ZBH $PRTK $ABUS $GWPH $VCTR $SALT $WVE $GNC $AMRX $ETR $NOG) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning May 11th, 2020 <-- click there to view!
SIlver is where its at right now. IT has been following the market more so than Gold since the drop. Looks like Gold ran out of steam and buyers are jumping onto silver.
I've got some MRNA. It's up 27% for me. Tempted to sell but if they win the vaccine lottery, it' should go way up, no? Also, just a quick shout-out to Bezos! I stupidly bought some AMC last week when it was going up. It immediately tanked. This rumor Amazon might buy them shot it back up, sold it +20%.
q's lookin' like it wants to test ATH territory ... now just a few % off the pre-covid pandemic high ... never thought we'd see a V recovery for any of the majors this quick, but sure enough nazzy has nearly retraced 100% of the covid crash
MRNA has been nice for me, in at $29.66, up around 119% now The 21 billion market cap seems like a little bit too crazy though for a company with no drug in the market, but I guess I will try to ride it a little longer
