Welcome Stockaholics to the trading week of August 1st! This past week saw the following moves in the S&P: Bird's Eye view of the Markets on Friday: Economic Calendar for the Week Ahead: Sector Performance WTD, MTD, YTD: What to Watch in the Week Ahead: Monday Earnings: Diamond Offshore, Tenet Healthcare, Alliant Energy, Williams Cos, AMC Entertainment, Loews, WR Grace 9:45 a.m. Manufacturing PMI 10 a.m. ISM manufacturing; construction spending Tuesday Earnings: Procter & Gamble, Pfizer, Cummins, Honda Motor, AIG, CVS Health, Aetna, Archer Daniels Midland, Genworth Financial, Seagate Technology, Royal Caribbean, Avon Products, Electronic Arts, Newfield Exploration, Solar Capital, Etsy, Fitbit, Steve Madden, Tableau Software, La Quinta July vehicle sales 8:30 a.m. Personal income Wednesday Earnings: Time Warner, Tesla Motors, Allstate, Agrium, Continental Resources, Virtu Financial, Clorox, Transocean, Marathon Oil, Kate Spade, Iamgold, Occidental Petroleum, Herbalife, Tesoro, Delphi Automotive, MetLife, 3D Systems, Sunoco Logistics, Noble Energy, Humana, HollyFrontier 8:15 a.m. ADP employment 9:45 a.m. Services PMI Thursday Earnings: Kraft Heinz, LinkedIn, Toyota, Siemens, Regeneron, Church & Dwight, Alcatel-Lucent, Apache, SeaWorld, Time Inc, Motorola Solutions, Priceline, Symantec, Activision Blizzard, FireEye, Zillow, Weight Watchers, Lionsgate, El Pollo Loco, Zynga 8:30 a.m. Initial claims 10 a.m. Factory orders Friday Earnings: Weyerhaeuser, Allianz, Virgin America, Buckeye Partners, Liberty Interactive 8:30 a.m. Employment report; international trade 3 p.m. Consumer credit
S&P Hits Record Highs After BoJ, GDP Disappointment This happened... So this seemed appropriate... Some high-/low-lights: Nasdaq best month since Oct 2015 FANG's best week since July 2015 S&P longest narrow trading streak in 45 years HY Credit's worst week in 3 months Crude's worst month in a year USD Index worst week in 3 months Yen's biggest 2-month surge since Dec 08 Gold's best week in 2 months (up 7 of 9 weeks) July saw the post-Brexit central-bank-buying-spree-driven surge continue...but it was a month of two halves (early ramp, later 'stability'), July was best month since March for the Dow, S&P, Small Caps, and Trannies but Nasdaq was the biggest winner (best month since Oct 2015)... Stocks led the month, despite a collapse in oil (worst month in a year), but bonds and bullion were bid too... While stocks surged to start the months, they end with the longest narrow (<1%) range in 45 years... (Ryan Detrick, senior market strategist at LPL Financial, noted on Twitter that Thursday marked the 11th straight day the S&P 500 closed inside a 1% trading range, the first time this has ever happened, according to records going back to 1970. So for the first time since at least the Nixon administration, stocks have been stuck inside an insanely tight window.) On the week, Trannies are down 2 weeks in a row, The Dow lost for the first time in 5 weeks, S&P battled with 2175 all day to extend the streak of wins to 5 weeks... but Small Caps and Nasdaq comfortably held 5 weeks straight wins... VIX was utterly crushed to 11.77 to desperately get S&P 500 above 2175 for a green close on the week...BUT FAILED FANG stocks were the big driver for NASDAQ... best week in a year... Here is Dow Futures for the last 24 hours - total chaos last night as The BoJ hit but no matter what there was a bid... Dow and Trannies were red on the day... Stocks were maintained by Oil algos... Credit markets suffered this week, despite equity exuberance, with HY's worst week in almost 3 months... Note that following today's dismal GDP data (after The BoJ's disappointment) traders bought everything... The USD Index tumbled today (3rd biggest drop of the year and worst week in 2 months) as Yen surged (most in 6 weeks)after Kuroda's disappointment (and shitty GDP gives The Fed yet more excuses)... The last 2 months have seen the biggest surge in Yen since Dec 08... Treasury yields crashed over the last 24 hours as BoJ and GDP disappointed... with the yield curve back near cycle flats/lows... Bonds and stocks decoupled at the GDP print... This was Crude's worst month since July 2015 (down 3 of the last 4 weeks) Ugly week for crude, copper flat, but PMs surged... Crude tracked USD index all day... With Sept 2016 WTI breaking its 200DMA and back below Doha Fail Lows...and YTD red Charts: Bloomberg
August’s First Trading Day Often Falls From the Stock Trader’s Almanac 2016 (page 86), it is known that the first trading days of each month combined gain more points than all other days. However, the first trading day of August does not contribute greatly to this phenomenon ranking fourth from last place among other First Trading Days in the 2016 Almanac and second from last in the soon to be released 50th Anniversary 2017 Edition. In the past 21 years DJIA has risen just 33.3% (up 7, down 14) of the time on the first trading day of August. Several sizable gains in those up years, have mitigated the average first day percent change, but the median performance is a more sizable loss. Digger deeper and longer into August’s first trading day history reveals a modestly bullish trend for S&P 500 when the first trading day falls on a Monday. S&P 500 has been up on eight of the last 12 Monday August first trading days with an average gain of 0.3% since 1988. The long-term track record of Monday August first trading days, back to 1932, is 19 gains in 34 years (56% up). Neither the short-term nor long-term record makes an overwhelmingly compelling case to be long or short next Monday. However, First Trading Days so far in 2016 have been solid for S&P 500, up 5 straight since back-to-back losses in January and February. Super-Hot July Market Election Handicapping July’s big rally has pushed the DJIA well into incumbent winning territory. As you can see below this has not been typical July market action. The usual second half of July weakness never materialized. Once the market realized that Brexit was no imminent threat or a clear and present danger, stocks quickly erased the two-day post-Brexit selloff and rallied to new all-time highs on the DJIA and S&P 500 in relatively short order. Since economic data has not impressed the Fed enough and continues to ebb and flow every month, it’s unlikely we’ll see another rate increase until after the election. Earning season went off without a hitch as companies overall did not disappoint Wall Street much, though we were not overly impressed. Buoyed also by earnings numbers that mostly beat lowered forecasts and the promise of continued accommodative monetary policy for the foreseeable future, this rally has pushed the DJIA well above any of the rosiest scenarios for an election, which has historically, been a vote of confidence for the incumbent presidential party. The market had been rocking this July until midway through the Republican National Convention last week and has not budged this week during the Democratic National Convention this week. All the hype about overly raucous, contested conventions with riots in the streets has been largely standard fare with the usual lively and inspired outbursts from enthusiastic constituencies. Trump got a standard convention bounce along with the market last week. We will find out next week if Clinton’s convention bounce will appear and propel her odds of winning the White House and the stock market higher. But for now the rally appears to have stalled, making zero headway since last Wednesday. If anything we should all find at least some solace in the continued civilized, yet enthusiastic and sometimes heated debates of the open political process that this great nation continues to be built on. However, as two of the most unfavorable candidates head into the home stretch of a virtual dead heat presidential election campaign, things are bound to get uglier and spook the market.
August, a month of pops and drops Money flows from harvesting made August a great stock market month in the first half of the Twentieth Century. It was the best month from 1901 to 1951. In 1900, 37.5% of the population was farming. Now that less than 2% farm, August is amongst the worst months of the year. It is the worst DJIA and S&P 500 month from 1988-2015 with average declines of 1.3% and 1.0% respectively. August is also the worst month for NASDAQ (–0.4%) and Russell 2000 (–0.7%) over the same time period. However, in election years since 1952, Augusts’ rankings improve: #5 DJIA, #4 S&P 500, #1 NASDAQ (since 1971), #1 Russell 1000 and #1 Russell 2000 (since 1979). This year, the market’s performance in August will likely depend heavily on how July closes. Contributing to this poor performance since 1987; the shortest bear market in history (45 days) caused by turmoil in Russia, the Asian currency crisis and the Long-Term Capital Management hedge fund debacle ending August 31, 1998 with the DJIA shedding 6.4% that day. DJIA dropped a record 1344.22 points for the month, off 15.1%—which is the second worst monthly percentage DJIA loss since 1950. Saddam Hussein triggered a 10.0% slide in August 1990. The best DJIA gains occurred in 1982 (11.5%) and 1984 (9.8%) as bear markets ended. Sizeable losses in 2010, 2011, 2013 and 2015 of over 4% on DJIA have widened Augusts’ average decline. A strong August in 2014 of S&P 3.8% and NASDAQ 4.8% preceded corrections of 7.4% and 8.4% respectively from mid-September to mid-October.
come join us in our weekly market poll and vote where you think the markets end this week! Weekly SPX Poll - Sentiment (8/1-8/5) and also our monthly poll for august- Monthly SPX Poll - August 2016 Sentiment in addition we have our weekly stock picks challenge here- Stockaholics Weekly Big Board Contest for the Week of (8/1-8/5) and our monthly stock picks challenge for august here- Stockaholics August 2016 Big Board Contest it would be great to see all of you regulars here at stockaholics participate!
ER for this upcoming week ahead: $FIT $TSLA $REGN $ATVI $CVS $PFE $CHK $PCLN $FSLR $PG $STX $RGR $EA $TASR
What's the date on that data? SCTY had a 30-35% run these last few weeks. more than 50% if you go back to the gap down. I'd think a lot of those shorts have covered recently.
#ES_F $ES_F #SPY levels to watch 2174.50 / / 2162.75 / / 2151 #CL_F $CL_F #Crudeoil levels to watch 41.49 / / 40.69 / / 39.90
Early movers: SCTY, AMC, TJX, BUD, HOG, GS, HSY & more SolarCity — The solar equipment company will be bought by Tesla Motors in an all-stock deal that values SolarCity at $25.37 per share. Independent members of both boards approved the deal after Elon Musk and others involved in both companies recused themselves from the process. Diamond Offshore — The drilling contractor earned 16 cents per share for its latest quarter, beating estimates of three cents a share. Revenue was also above forecasts. Cost cutting helped the company offset lower oil process and lower demand for rigs. AMC Entertainment — The movie theater chain missed estimates by two cents a share, with quarterly profit of 24 cents per share. Revenue was also below forecasts. The company cited a lackluster film slate, which impacted the entire industry, but notes that the trend was already starting to reverse when the quarter ended. TJX — Goldman Sachs began coverage on the parent of TJ Maxx and other chains with a "buy" rating, saying its inventory put it into position to benefit during the back-to-school shopping season. Etsy — Citi initiated coverage on the online crafts marketplace with a "buy" rating, saying earnings estimates for Etsy are far too conservative and that it sees good prospects for margin expansion. Anheuser-Busch InBev — Susquehanna downgraded the beer brewer's stock to "neutral" from "positive," seeing few further catalysts now that the company's deal to buy SABMiller is close to the finish line. Harley-Davidson — The motorcycle maker's shares were upgraded to "outperform" from "neutral" at BMO Capital Markets, with the firm saying Harley is a good contrarian play with sentiment extremely negative and with management on an upbeat long-term path. European banks that trade in the U.S., such as Deutsche Bank, Royal Bank of Scotland, UBS, and Barclays, are in the spotlight this morning following the late Friday release of European bank stress tests. Most banks fared well, although RBS was among those cited for falling capital ratios. GlaxoSmithKline — Glaxo and a unit of Google parent Alphabet have formed a new company focusing on fighting diseases through bioelectronics means. The new company will be known as Glavani Bioelectronics, with Alphabet and Glaxo contributing about $715 million. Wynn Resorts, Las Vegas Sands — These and other casino companies operating in Macau could come under pressure, after new figures showed that gaming revenue in the Chinese territory fell for a 26th consecutive month in July. Goldman Sachs — Goldman Sachs received subpoenas relating to its dealings with Malaysian investment fund 1MDB, according to The Wall Street Journal. 1MDB is at the forefront of an international corruption probe. Hershey — Hershey is in the spotlight this morning following a New York Times article regarding a leaked internal memo at the Hershey Trust, which controls the chocolate maker. The paper said the memo reveals corrupt corporate culture and allegations of insider trading. Dollar Tree — Dollar Tree was upgraded to "buy" from "hold" at Deutsche Bank, while rival Dollar General was downgraded to "hold" from "buy," with the firm saying Dollar Tree had better profit margin prospects than its rival discount retailer.
