Welcome Stockaholics to the trading week of January 4th! 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: Monday 9:45 a.m. Manufacturing PMI 10:00 a.m. Construction spending 10:00 a.m. Chicago Fed President Charles Evans 12:15 p.m. Cleveland Fed President Loretta Mester 6:00 p.m. Cleveland Fed’s Mester Tuesday Vehicle sales 10:00 a.m. ISM manufacturing 3:45 p.m. New York Fed President John Williams 3:45 p.m. Chicago Fed’s Evans Wednesday 8:15 a.m. ADP payroll data 9:45 a.m. Services PMI 10:00 a.m. Factory orders 2:00 p.m. Fed minutes Thursday 8:30 a.m. Initial jobless claims 8:30 a.m. International trade 9:00 a.m. Philadelphia Fed President Patrick Harker 10:00 a.m. ISM nonmanufacturing 11:00 a.m. St. Louis Fed President James Bullard 1:00 p.m. Chicago Fed’s Evans 3:00 p.m. San Francisco Fed President Mary Daly Friday 8:30 a.m. Employment report 10:00 a.m. Wholesale trade 11:00 a.m. Fed Vice Chairman Richard Clarida 3:00 p.m. Consumer credit
$15 Trillion Cashnami Crashes Dollar In 2020, Sparks Gold's Best Year In A Decade Global stocks added around $15 trillion in market cap in 2020 (pushing above $100 trillion for the first time ever)... Source: Bloomberg Which is an oddly coincidental number given that global liquidity has soared around $15 trillion in 2020... Source: Bloomberg That kind of 'tsunami' hasn't historically ended well (in the movies)... While much of the world grappled with soaring unemployment and plunging growth, Bloomberg notes that the 0.001% benefited from an unprecedented period for wealth creation. The world’s 500 richest people added $1.8 trillion to their combined net worth in 2020 for a total of $7.6 trillion, according to the Bloomberg Billionaires Index. Equivalent to a 31% increase, it’s the biggest annual gain in the eight-year history of the index and a $3 trillion jump from the market’s nadir in March. Source: Bloomberg The US topped China for the year with Europe lagging behind... Source: Bloomberg In Europe, only Germany's DAX managed a positive year with Spain's IBEX the biggest laggard... Source: Bloomberg A huge surge in November and December sent Small Caps above most of their peers in the US (from being the worst), rising over 18% in 2020 (after a 24% gain in 2019). Only Nasdaq beat them with its insane 47% rise (after a 38% rise in 2019). The Dow lagged, rising just 6.5%... NOTE - there has only been 2 down years for the S&P in the last 11 years... Source: Bloomberg Notice the machines went wild in the last hour, desperate to get stocks to close the year at record highs... Tech stocks soared over 40% in 2020, after being down over 20% at the lows in March. Energy stocks suffered the biggest plunge, down over 35% in 2020 (with Financials and Utilities also in the red)... Source: Bloomberg Momentum ended higher on the year, but since the vaccine headlines has been a big loser... Source: Bloomberg Growth massively outperformed value in 2020... Source: Bloomberg The USDollar's 6% drop in 2010 is the worst year since 2017 (but this misses the fact that the world's reserve currency has collapsed by 14% from its spike highs in March)... Source: Bloomberg Which left the dollar right at critical support from the 2018 lows... Source: Bloomberg Dollar's collapse helped spark gold's best year since 2010 (and new record highs above $2000 in the year)... Source: Bloomberg And Bitcoin screamed higher (up around 300% on the year - its best since 2017), but Ethereum was 2020's biggest winner, up over 470%... (and Ripple's recent collapse was among the biggest in crypto history)... Source: Bloomberg ETH remains well below its record high as Bitcoin soars well above its 2017 highs... Source: Bloomberg Of course, Cryptos surge this year is 'definitely' a bubble... but TSLA's 745% spike is 'fundamentally-backed'... Source: Bloomberg Which helped fuel the biggest short-squeeze in history... Source: Bloomberg But we do note that "most shorted" stocks began to retrace notably in the last week... Source: Bloomberg Before we move on from equity-land, we note that Tesla utterly dominated 2020, with 6.6 cents of every dollar traded on Wall Street going to the carmaker... Treasury yields collapsed in 2020 and while the long-end did recover somewhat, it remains down 75bps on the year (the biggest yearly drop in yields since 2014)... Source: Bloomberg ...as stocks soared higher!? Source: Bloomberg All yields hit record lows during the year but for us the two most notable prints of the year were 30Y below 100bps and 10Y below 50bps on March 9th... Source: Bloomberg Real yields crashed to record lows in 2020, plunging from a small positive to -110bps (and signaling more gains for gold)... Source: Bloomberg The collapse in yields leaves around $18 trillion of global negative yielding debt... Source: Bloomberg Silver also had its best year since 2010, rising almost 50% in 2020, while oil fell precipitously on the year, even with its recent hope-filled comeback... Source: Bloomberg Oil made headlines numerous times this year but its biggest moment was when the front-month traded down to a stunning -$40.32!!! Source: Bloomberg While gold hit new record highs, silver rallied more in 2020 but remains well below its 2011 highs... Source: Bloomberg Finally, this must be a sign... Taylor Swift has turned bear-ish... And who can blame her... Source: Bloomberg And it appears the worst is behind us, despite the constant fearmongering... 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-
Why A Year-End Rally Bodes Well For 2021 Welcome to the last day of 2020! It has been a devastating year in so many ways, yet for investors it has been quite rewarding. Much of the gains in 2020 have taken place the final two months, with the S&P 500 Index up more than 14% in November and December so far, the best end to a year since WWII. A big end of year rally could have bulls smiling in 2021. “Turns out a 10% or more gain the final two months of the year has equaled a higher S&P 500 the following year every single time since World War II,” explained LPL Financial Chief Market Strategist Ryan Detrick. “In fact, January was also higher every single time as well, so maybe this strong rally to end the year is a clue for higher prices into next year.” As shown in the LPL Chart of the Day, the S&P 500 gained an average of more than 18% the year following a 10% or more surge during the final two months of the year. Meanwhile, January was up 5 for 5 as well, rising an impressive 3% on average. Here’s what the average year looks like after the prior year gains 10% or more the final two months compared to a typical year. Once again, strong returns are the playbook historically. We wish everyone a happy and safe New Years Eve and we’ll see you in 2021! Fifty to Zero in 283 Days Thu, Dec 31, 2020 In a year with some pretty crazy charts, the one below is right up there with some of the best. After all the markets have been through this year, bot the S&P 500 and Long-Term Treasuries have seen nearly identical returns on a total return basis. That's right, with just a few hours left in the trading year, the S&P 500's total return in 2020 has been a gain of 17.6%, while Long Term US Treasuries, as measured by the B of A Merrill Lynch Long-Term Treasury Index has rallied 17.3%. What makes this nearly identical performance all the more incredible is that on March 23rd, the performance gap between the two was more than 50 percentage points. The fact that stocks and bonds have essentially seen identical returns this year isn't typical. The chart below shows the annual performance spread between the S&P 500 and long-term US Treasuries going back to 1978. During that time, the S&P 500 has historically outperformed long-term US Treasuries by an average of 3.9 percentage points per year, but the average gap in performance between the two has been over 15 percentage points. In the 43 years since 1978, there have only been seven other years where the performance spread between the two asset classes was less than five percentage points and just two years (1985 and 1992) where the performance spread was less than a percentage point. Back-to-Back Big Years for Technology Wed, Dec 30, 2020 With just two trading days (including today) left in 2020, the S&P 500 Technology sector is on pace for its second year in a row of rallying more than 40%. Going back to 1990, the only time the Technology sector experienced back-to-back returns of more than 40% was in 1998 and 1999. Back then, not only was the Technology sector up 40%+ in back-to-back years, but it was also up over 75% in both of those years. If you think markets are pretty crazy these days, they still have nothing on the last two years of the 1990s! In terms of cumulative returns, the Technology sector is up 210% since the last trading day of 2018, whereas in 1999 it was up 317% in a two-year span. What's also interesting to note about the last 31 years of returns for the Technology sector is how it has only experienced five down years, while the S&P 500 has been down in ten different years during that span. Furthermore, since 2009 there has only been one down year and the decline was a paltry 1.6%. Not a bad 12-year run! Given that the sector has more than doubled in the last two years, there have been some big individual winners. Topping the list with a gain of just under 400% is Advanced Micro Devices (AMD). On the last day of 2018, AMD traded hands for under $20 per share. Today's it's over $90. AMD has a lead of more than 100 percentage points over the next closest stock - NVIDIA (NVDA) - which is up 288%. Interestingly, there aren't a lot of major outliers to the upside compared to the sector's 210% gain, but that's because Apple (AAPL), the sector's largest stock, has paced the sector's gains by rallying more than 240%. On the downside, just four stocks in the Technology sector have declined in the last two years. The worst of these has been DXC Technology (DXC) which has lost more than half of its value, while Juniper (JNPR) and HP Enterprise (HPE) are down between 10% and 20%. Lastly, FLIR Systems (FLIR) has declined less than 2%, so depending on how it acts in the next two days, it could move into positive territory just as Intel (INTC) did yesterday after Third Point bailed it out and moved the stock barely into positive territory for the last two years. Growth Dragging on Small Caps Wed, Dec 30, 2020 In the past couple of weeks, we have frequently been keeping tabs on small-cap equities which have been particularly strong performers of late resulting in very overbought readings as well as extended valuations. More specifically, taking a look at growth-oriented small-caps, with only a couple days left in the year small-cap growth stocks—proxied by the Russell 2000 Growth ETF (IWO)—are on pace to have outperformed large-cap equivalents in 2020. On December 10th, IWO surpassed the S&P 500 Growth ETF (IVW) in terms of YTD performance, and even after pulling back in the past week, IWO is still in the lead. As a result of recent moves, there has been a sharp reversal on a relative basis between the two ETFs in the past week. In the chart below, we show the ratio of the Russell 2000 Growth ETF (IWO) versus the S&P 500 Growth ETF (IVW). This ratio took off beginning in the early fall meaning small-cap growth drastically outperformed large-cap growth. But the former's weakness in the past several days has put a halt to that move. As to just how sharp of a reversal this was, in the five days through yesterday's close, the decline in the ratio of IWO to IVW was the largest since June. Before that, April and March saw declines that were even larger. Not only was this one of the biggest drops in the relative performance of small-cap growth to large-cap growth in the past few months, but that also stands in the bottom 0.5% of all readings going back to 2000 when the ETF first began trading. Outside of this past spring, the only other periods that have also experienced this type of underperformance of small-cap growth relative to large-cap growth was at various points in 2011, 2008, and a handful of times in the early 2000s. Small-cap underperformance has not necessarily been broad though. For value stocks, small caps (IWN) have generally outperformed large caps (IVE) for the entirety of the new bull market. While there was a bit of a turn lower in recent days, it has been nowhere close to as dramatic of a move as growth stocks. In the charts below, we show average performance over the past week of Russell 2000 stocks broken into deciles based on their price to sales and price to book ratios. As shown, the most aggressively valued deciles have averaged the worst performance in the past week. Stocks with low P/S and P/B ratios have not been immune from the weakness, but they have held up significantly better.
Here are the current major indices pullback/correction levels from ATHs as of week ending 12.31.20- 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 12.31.20-
Stock Market Analysis Video for December 31st, 2020 Video from AlphaTrends ShadowTrader Video Weekly 1.3.21 Video from ShadowTrader
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 1.4.21 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. Monday 1.4.21 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! NONE. Tuesday 1.5.21 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 1.5.21 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 1.6.21 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 1.6.21 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 1.7.21 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 1.7.21 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 1.8.21 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. Friday 1.8.21 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- ($MU $BBBY $SMPL $WBA $STZ $RPM $MSM $CAG $UNF $HELE $ANGO $SGH $AYI $REVG $LW $WDFC $LNN $LNDC $SAR $RGP $GBX $ACCD $DCT $FC $NTIC $SCHN) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning January 4th, 2021 <-- click there to view!
haha ty! happy new year to you and yours as well! i hope all of you have an amazingly awesome new year ahead, especially after the kind of year we just had, at least on the health front globally. here's to hoping anyway! happy 2021 everyone!
Top of the morning Stockaholics community! Welcome to a new year, fresh start! Gotta say, but there's nothing like a fresh new trading day, week, month, quarter and year. Fresh clean slate baby! Happy trading to y'all's in 2021. GLTA and hope I you guys all kill it again this year. $$$
It's ba-ack! New year means earnings season is just around the corner! BTW, for anyone wondering, this monthly earnings whispers calendar for January 2021 only shows the confirmed release dates (as per Earnings Whispers).
not a bad start to kickoff the first trading day of the new year, eh? this kind of action will certainly get my interest back and quick! it's about time. we'll see if it actually sticks lol.
Haha I am a little surprised to see the market is this red on the first day of the year HNY to all btw
haha, i know and to think we're down this much, and also hit new ATHs (i think right? at least on an intraday basis for the dj30 and spx off the open this AM?). this is a much needed breather here. market has been going gangbusters for a while now lol. that being said, i admittedly can't get too overly crazy about the downside here *yet*. but, this is a good start at least, and for it being like you said the first trading day of the year. not too shabby
If the Dems sweep the Georgia runoff election tomorrow then I wouldn't be surprised to see the market reacting negatively for a very short term
