Welcome Stockaholics to the trading week of September 14th! 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: What to Watch in the Week Ahead: Tuesday FOMC meeting begins 8:30 a.m. Import prices 8:30 a.m. Empire state manufacturing 9:15 a.m. Industrial production Wednesday 8:30 a.m. Retail sales 8:30 a.m. Business leaders survey 10:00 a.m. NAHB survey 10:00 a.m. Business inventories 2:00 p.m. Fed decision 2:30 p.m. Fed Chairman Jerome Powell briefing 4:00 p.m. TIC data Thursday 8:30 a.m. Jobless claims 8:30 a.m. Housing starts 8:30 a.m. Philadelphia Fed survey Friday 8:30 a.m. Current account 10:00 a.m. Consumer sentiment 10:00 a.m. St. Louis Fed President James Bullard
Big-Tech & Black Gold Battered As Bonds & Bullion Bounce Back "Margin Calls, Gentlemen!" Stocks are down for the second week in a row with Nasdaq leading the plunge (worst week in almost six months)... The Dow is back down 3% YTD... Source: Bloomberg In fact, FANGMAN (Facebook, Apple, Netflix, Google, Microsoft, Amazon, Nvidia) has lost over $1tn in market cap this week and still accounts for over 25% of the total market value of all S&P 500 comps. Source: Bloomberg Nasdaq and Small Caps both ended below their 50DMA. The S&P bounced off its 50DMA. The Dow tested down but never reached it... Breadth has been abysmal... Source: Bloomberg The internals remain ugly... Source: Bloomberg Stocks continue to catch down to credit's lack of exuberance... Source: Bloomberg Bonds were bid on the shortened week with the long-end down around 6bps... Source: Bloomberg 10Y Yields broke back below 70bps... Source: Bloomberg The Dollar rallied for a second week in a row Source: Bloomberg Cable crashed this week - worst week since March - amid Brexit anxiety... Source: Bloomberg Cryptos were all lower on the week (despite a big bounce back from last weekend's lows)... Source: Bloomberg Gold managed modest gains on the week as oil was monkeyhammered... Source: Bloomberg WTI was clubbed like a baby seal this week as inventories rose amid lifted production curbs... Gold futs managed to cling to $1950... Silver futures limped modestly lower on the week, unable to hold $27... Interestingly, Silver ETFs suffered their biggest weekly outflows in a year... Source: Bloomberg And finally, stocks (or bond prices) have a lot of downside if this chasm is ever to converge... Source: Bloomberg It can't be this easy can it? 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-
Election Charts You Need To See: Part 1 First off, our thoughts go out to everyone who was impacted by the tragic events of September 11, 2001—19 years ago today. It is a day to reflect and remember those who were lost. One of the top requests we’ve had here at LPL Research is for more charts on the election. Over the next week, we will share some of our favorite charts on this very important subject. Here’s how the S&P 500 Index performs under various presidents and congressional makeups. The best scenario has historically been a Democratic president and Republican Congress, while a Republican president and Democratic Congress has been the weakest. Building on this, a split Congress historically has been one of the best scenarios for investors. The best scenario under a Republican president is a split Congress, a potential positive for 2020 that has played out after the massive reversal in the stock market since March. Looking at the four-year presidential cycle shows that stocks haven’t been down during a year the president was up for a re-election since FDR in the 1940s, another bullish tailwind for 2020. Here’s another look at this, as stocks historically have done much better when there isn’t a lame duck president. Come back on Monday, as we’ll share some more election charts then. Active Managers Do an About Face Fri, Sep 11, 2020 The National Association of Active Investment Managers (NAAIM) has an index which tracks the exposure of its members to US equity markets. Each week, members are asked to provide a number that represents their exposure to markets. A reading of -200 means they are leveraged short, -100 indicates fully short, 0 is neutral, 100% is fully invested, and 200% indicates leveraged long. Two weeks ago, in our Bespoke Report, we highlighted the fact that the exposure index had moved to one of the highest levels in its 15-year history. Now, just two weeks later, these same active managers have reigned in their exposure considerably as this week's reading dropped from just under 100 to 53.1. This week's drop was the second-largest one week decline in the index's history and just the 10th time that the index lost more than a third (33 points) in a single week. The most recent occurrence was back in early March in the middle of the Covid crash, and every other prior period where the index saw a similar drop, the S&P 500 was also down every time by an average of 2.3%. Therefore, it's not much of a surprise to see the big drop this week given the big declines in the market. But what about going forward? Do big drops in the NAAIM Index mean a bounce back for markets or further declines? The Most and Least Heavily Shorted Stocks in the Russell 1,000 Thu, Sep 10, 2020 Below is an updated look at the most heavily shorted stocks in the Russell 1,000. Each of these 30 stocks has at least 15% of its equity float sold short. At the top of the list is Nordstrom (JWN) with 38.66% of its float sold short. With a YTD decline of 61.86%, the shorts have crushed it with JWN this year. With its huge portfolio of office and retail real estate, Brookfield Property REIT(BPYU) has the second highest short interest in the Russell 1,000 at 33.7%. BPYU is down 35.7% YTD. There are plenty of other well-known companies on the list of the most heavily shorted stocks. Examples include American Airlines (AAL), Virgin Galactic (SPCE), LendingTree (TREE), Wayfair (W), Dick's Sporting Goods (DKS), ADT, TripAdvisor (TRIP), Beyond Meat (BYND), and Kohl's (KSS). One name that is no longer on the list of most shorted stocks is Tesla (TSLA). When we provided an update on short interest back in February (a pre-COVID world), Tesla (TSLA) had more than 17% of its float sold short, but that number is all the way down to 8.3% as of the most recent filing. These 30 stocks with the highest short interest are down an average of 3.01% since last Wednesday (9/2) when the S&P 500 made its last closing high. That's actually a little bit better than the 3.55% average decline for the rest of the stocks in the Russell 1,000. And year-to-date, these 30 stocks are up an average of 0.60% versus an average gain of 0.81% for the rest of the index. That's not much of a difference! Below is a list of the 30 least shorted stocks in the Russell 1,000 as a percentage of equity float. None of these stocks have more than 0.71% of their float sold short, and they're mostly made up of more conservative names in the Health Care and Consumer Staples sectors. Johnson & Johnson (JNJ) has the lowest short interest as a percentage of float in the Russell 1,000 at just 0.36%. Microsoft (MSFT) -- one of the key mega-cap Tech names -- has the second lowest short interest, followed by Merck (MRK), Eli Lilly (LLY), and Medtronic (MDT). Somewhat surprisingly, Amazon (AMZN) is the sixth least shorted stock in the entire Russell 1,000. While AMZN is still thought of as a high-flying momentum name by many investors, its short interest levels tell a much different story, painting it as more of a non-cyclical stock like Pepsi (PEP), Procter & Gamble (PG), or Coca- Cola (KO). While the 30 most heavily shorted stocks in the Russell 1,000 are up 0.60% YTD, the 30 least shorted stocks in the index are up much more at +8%. This group has MSFT, AMZN, HD, and AAPL to thank for that strong performance! 5 Lessons Learned About Rising Rates While the direction of the 10-year Treasury yield over the last cycle was decidedly lower, as shown in LPL’s Chart of the Day, there were still six extended periods where it rose at least 0.75%, and in two of those it rose almost 2%. Looking ahead, economic growth below potential, slack in the labor market, and an extremely supportive Federal Reserve (Fed) may limit rate pressure in the near term, but with interest rates already low and massive stimulus in place, we believe the overall direction is likely to be higher. “Even in a falling rate period there are lessons from the last cycle about rising rates,” said LPL Financial Chief Investment Officer Burt White. “Among them: Careful when the Fed stops buying and sometimes the best defense is a good offense.” While every economic cycle is unique, the last cycle highlighted these key takeaways about periods of rising rates: Careful when the Fed stops buying. The two drivers of rising rates last cycle were economic growth and Fed bond purchases, also known as quantitative easing (QE). The Fed buys bonds to keep rates down, but the start of Fed buying has actually been the time when rates rise—likely on expectations that the purchases would help strengthen the economy. These periods also often followed large rate declines either because markets anticipated the start of Fed buying or the economy was faltering. The takeaway: unless the economy is really taking off, any rising-rate period may pause for an extended period, or even reverse, when the Fed backs off bond purchases. Sometime the best defense is a good offense. Lower-quality, more economically sensitive bond sectors actually performed well during periods of rising rates during the last cycle. Rate gains were largely driven by economic improvement rather than a large pick-up in inflation, and that’s typically a good environment for sectors like high-yield bonds and bank loans. The downside is that these are much riskier bond sectors and don’t provide the potential diversification benefits of higher-quality bonds during periods of stock declines. Don’t expect TIPS to provide much resilience because of their inflation adjustment. Treasury Inflation-Protected Securities (TIPS) are high-quality bonds that have provided a little extra insulation against rising rates compared to similarly dated Treasuries when inflation expectations increased. TIPS prices are adjusted for inflation, but even with the adjustment, they are still very sensitive to rates. Investment-grade corporates can both hurt and help. If credit spreads narrow when rates are rising, investment-grade corporates can post some solid gains in a rising-rate environment, but if spreads are holding steady or even widening, they can be very sensitive to changes in Treasury yields, potentially (although not often) even more sensitive than Treasuries. Mortgage-backed securities (MBS) have not provided as much insulation as corporates, but they also have had less downside. While MBS have certainly outperformed Treasuries during periods of rising rates, they have not performed as well as investment-grade corporates. But they also have come with less downside, losing only 1.4% in their worst performing period compared to a 4% loss during the worst period for corporates. With the Fed still providing strong stimulus and economic growth potentially poised to accelerate, we currently see an increased risk of rates moving higher. We are playing some offense with our equity exposure, which allows us to emphasize a focus on higher-quality bonds. Among bond sectors, we are emphasizing MBS and still prefer investment-grade corporates over Treasuries. History may not repeat, but if it rhymes, this positioning may help add resilience to a fixed income portfolio if rates extend their move off recent lows. Best and Worst Performing Stocks Since the 9/2 High Thu, Sep 10, 2020 Since the S&P 500 and Nasdaq peaked on September 2nd, we've seen rotation out of the post-COVID winners and rotation into laggards in the value space. Below we take a look at the best and worst performing stocks in the Russell 1,000 since the 9/2 high for the S&P. For each stock, we also include its YTD total return and its percentage change from the 3/23 COVID Crash low through 9/2. Capri Holdings (CPRI) is up more than any other stock in the Russell 1,000 since 9/2 with a gain of 17.43%. Even after the recent gains, however, Capri -- the holding company for brands like Michael Kors, Jimmy Choo, and Versace -- is still down 52.9% year-to-date. Only four other stocks are up more than 10% since 9/2 -- Beyond Meat (BYND), PVH, Virtu Financial (VIRT), and Reinsurance Group (RGA). Interestingly, BYND and VIRT are also up big (~80%) year-to-date, while PVH and RGA are both down more than 35% year-to-date. What stands out the most about the list of winners is that only one Technology stock made the cut -- Sabre (SABR). Most names come from the two consumer sectors including cruise-liners like Carnival (CCL), Royal Caribbean (RCL) and Norwegian Cruise (NCLH), Kohl's (KSS), Williams-Sonoma (WSM), Six Flags (SIX), Foot Locker (FL), and Ralph Lauren (RL). Both UBER and LYFT also made the cut with gains of 6% since 9/2. The 30 biggest winners since 9/2 are still down an average of 20% year-to-date, while the rest of the stocks in the Russell 1,000 are up an average of 1.46% YTD. While only one Technology stock made the list of biggest winners since 9/2, the sector accounts for two-thirds of the 30 biggest losers over the same time frame. As shown below, since 9/2, the six worst performing stocks in the Russell 1,000 and ten of the worst twelve all come from Tech. Notably, though, these 30 stocks that have all fallen more than 12% since 9/2 are still up an average of 5.6% YTD. Were it not for the horrid YTD performance of the Energy stocks that made the list, the average YTD gain would be even higher. Typical Early September Weakness Recovers Mid-Month Sells Off Month-End As of yesterday’s close the market was down more than the historical average performance in September. DJIA was down nearly -3.3%, S&P 500 was down -4.8%, NASDAQ was off 7.9%, Russell 1000 was down -5.2% and Russell 2000 lost 3.7%. Today’s rally looks like the beginning of a textbook mid-month recovery rally However, the second half of September has historically been weaker than the first half. The week after options expiration week can be treacherous with S&P 500 logging 23 weekly losses in 30 years since 1990. End-of-quarter portfolio restructuring, and window dressing can amplify the impacts of any negative headlines.
Here are the current major indices pullback/correction levels from ATHs as of week ending 9.11.20- Here is also the pullback/correction levels from current prices- Here are the current major indices rally levels from correction low as of week ending 9.11.20-
Stock Market Analysis Video for September 11th, 2020 Video from AlphaTrends ShadowTrader Video Weekly 9.13.20 Video from ShadowTrader (VIDEO 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 9.14.20 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. Monday 9.14.20 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! Tuesday 9.15.20 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 9.15.20 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 9.16.20 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 9.16.20 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! NONE. Thursday 9.17.20 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 9.17.20 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! NONE. Friday 9.18.20 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. Friday 9.18.20 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- ($FDX $ADBE $CBRL $ASPU $LEN $DAVA $BRC $CMD $ISR $APOG $ICMB $HMY $VNCE $CSBR $EARS $AFIB $OSH) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning September 14th, 2020 <-- click there to view!
Good day for the market after a lot of corporate deals being announced yesterday. A lot of biotech stocks running like crazy today
Will probably be selling my ORCL position today, a big if whether the TikTok deal will be approved by both the White House and Beijing
The FDX report tomorrow will determine if it can lead the transports to new highs. FDX is 12% of the IYT. Notably, /ES did not make it to 3400 today. Small caps are stronger today.
The good ol' FANG stocks aren't keeping up with the market, with the exception of AAPL. NFLX down, AMZN slightly down, GOOGL and FB flat.
These stocks ran up so much and they can’t go up forever. If these stocks have peaked for the short term though, will be interesting to see whether there are other stocks/non tech sectors that could lead this market higher
