Welcome Stockaholics to the trading week of October 24th! This past week saw the following moves in the S&P: Major Indices End of Week: Bird's Eye view of the Major Markets on Friday: Economic Calendar for the Week Ahead: Sector Performance WTD, MTD, YTD: What to Watch in the Week Ahead: Monday Earnings: BTB: Kimberly-Clark, Restaurant Brands, T-Mobile ATB: Visa, Zions Bancorp, Sonic 9:05 a.m.: St. Louis Fed President James Bullard speaks on the U.S. economy and monetary policy 9:45 a.m.: Markit manufacturing PMI 1:30 p.m.: Chicago Fed President Charles Evans discusses current economic conditions and monetary policy 2 p.m.: Federal Reserve Governor Jerome Powell speaks on the future of Treasury market settlement Tuesday Earnings: BTB: 3M, Caterpillar, DuPont, Eli Lilly, Fiat Chrysler, General Motors, Merck, Novartis, Procter & Gamble, United Technologies, Corning, Freeport-McMoRan, KeyCorp, KKR, Lockheed Martin, Pentair, Sherwin-Williams, Sprint, TD Ameritrade, Under Armour, Valero Energy, Whirlpool, AK Steel, II-VI, Janus, JetBlue, Spirit Airlines, TransUnion ATB: Apple, AT&T, Chipotle Mexican Grill, Capital One, Discover Financial, Express Scripts, Juniper Networks, Vertex Pharma, iRobot, Pandora Media, Panera Bread, Owens-Illinois 9 a.m.: Case-Shiller Home Price Index 9 a.m.: FHFA Home Price Index 10 a.m.: Consumer confidence 10 a.m.: Richmond Fed Survey 1 p.m.: $26 billion two-year Treasury note auction 1:20 p.m.: Atlanta Fed President Dennis Lockhart speaks on lending and investing in community development Wednesday Earnings: BTB: Biogen, Boeing, Coca-Cola, Comcast, GlaxoSmithKline, Mondelez International, Nintendo, Simon Property Group, Boston Scientific, Canon, General Dynamics, Hess, Nasdaq OMX, Norfolk Southern, Northrop Grumman, Southwest Air, State Street, Syndham Worldwide, Alliance Bernstein, Garmin, Generac, GrubHub, Owens Corning, Six Flags ATB: Samsung Electronics, Tesla Motors, Texas Instruments, F5 Networks, Arch Capital, Murphy Oil, Newmont Mining, NXP Semiconductor, Public Storage, Suncor, VMWare, Western Digital, Whiting Petroleum, Buffalo Wild Wings, Cheesecake Factory, Extra Space Storage, Groupon, Rent-a-Center, Shutterfly, Raymond James 8:30 a.m.: U.S. trade deficit 9:45 a.m.: Markit services PMI 10 a.m.: New home sales 1 p.m.: $34 billion five-year Treasury note auction Thursday Earnings: BTB: Barclays, Bristol-Myers Squibb, Celgene, Colgate-Palmolive, ConocoPhillips, Deutsche Bank, Dow Chemical, Ford, UPS, Volkswagen, Aetna, Alexion Pharma, Autoliv, Blackstone, Borg Warner, CBRE Group, CME Group, Dr. Pepper Snapple, Gannett, International Paper, Invesco, L-3 Communications, Marathon Petroleum, National Oilwell Varco, Nokia, Nomura Holdings, Potash, Praxair, Raytheon, Sirius XM Radio, Stanley Black & Decker, T. Rowe Price, Thermo Fisher, Brunswick, Cabela's, Cliffs Natural Resources, GNC Holdings, Lazard, Old Dominion Freight Line, Pinnacle Foods, Sealed Air ATB: Alphabet, Amazon.com, Baidu, Amgen, Deckers Outdoor, Aflac, Digital Realty Trust, Cirrus Logic, Columbia Sportswear, Cypress Semiconductor, Eldorado Gold, Flex, Fortinet, Federated Investors, VeriSign, Yamana Gold 8:30 a.m.: Jobless claims 8:30 a.m.: Durable goods 10 a.m.: Pending home sales 10 a.m.: Housing vacancies 11 a.m.: Kansas City Fed Survey 1 p.m.: $28 billion seven-year Treasury note auction Friday Earnings: Chevron, Exxon Mobil, A-B InBev, MasterCard, AbbVie, UBS, Ambev, BNP Paribas, Sanofi, AutoNation, Cabot Oil & Gas, Hershey, Phillips 66, Shire, Weyerhaeuser, Xerox, Apollo Global Management, Bloomin' Brands, CBOE Holdings, Legg Mason, Oaktree Capital, Tenneco 8:30 a.m.: Q3 GDP, advance 8:30 a.m.: Employment cost index 10 a.m.: Consumer sentiment
"It's Really Broken" - Divergences & Decouplings Dominate Week In Stocks, Bonds, FX Distracted much? US Macro data dumped this week... Something odd is going on... VIX is down 6 days in a row but stocks are not playing along... Bond-Stock correlation collapsed this week... Stocks and bonds decoupled last week on what appears to have been rate-locks ahead of the large Saudi issuance... Yuan's collapse overnight hasn't quite rippled through yet... just like last week... And today saw USD strength and stocks strength... 8 days in a row and the ubiquitous end of day ramp has not occurred (chatter about SEC probes of end of day ETF rebalancing shenanigans remain unconfirmed for now)... On the week, futures show the craziness, dips bought but lows retested...China session weakness (red arrows) Trannies ended the week red,, but the rest (even The Dow) managed to scramble back into the green for the weekend... The USD Index rose for the 3rd straight week led CAD weakness (and EUR)... Pushing the USD to the highest sicne Feb 2nd and higher on the year... Bonds rallied all week, with the same systemic pattern and a notable flattening of the curve... Gold was the week's winner among commodities with silver second, despite dollar strength, as copper and crude slipped... Charts: Bloomberg
Spoiler: Weekend Reading: Time To Be A Contrarian? Submitted by Lance Roberts via RealInvestmentAdvice.com, In yesterday’s post, I discussed Howard Mark’s view on being a contrarian. To wit: “Resisting – and thereby achieving success as a contrarian – isn’t easy. Things combine to make it difficult; including natural herd tendencies and the pain imposed by being out of step, particularly when momentum invariably makes pro-cyclical actions look correct for a while. (That’s why it’s essential to remember that ‘being too far ahead of your time is indistinguishable from being wrong.’) Given the uncertain nature of the future, and thus the difficulty of being confident your position is the right one – especially as price moves against you – it’s challenging to be a lonely contrarian.” The important point of his comment is that being too far ahead of a turning point (either bullish or bearish), even though ultimately being proved right, is still “indistinguishable from being wrong.” However, there is a huge difference between being making the right call early, particularly when the trend is changing from bullish to bearish, and making no call at all. The “buy and hold” mantra is essentially based on the premise that stocks rise much more often than they fall, and since you are either too stupid or lazy to actually understand how investing actually works, you are just better off making investments and forgetting about them. Hopefully, you will win. This is the equivalent of saying: “Since 8 out of 10 people who play ‘Russian Roulette’ survive the first pull of the trigger, the odds are in your favor of winning.” While that is entirely true, it is the 20% of the time you lose that matters most. The chart below shows the long-term view of the market, going back to 1920, as compared to GAAP valuations. This is a QUARTERLY price chart which also shows the points in history where valuations have collided with extreme overbought conditions. While hindsight is pretty clear about what happens given the current environment of weak economic and profit growth combined with high valuations and deteriorating technical underpinnings, the ultimate outcome took months to develop. Just as with the“boy who cried wolf,” warnings eventually fell on “deaf ears” at the point those warnings actually mattered. Currently, there is little argument the “bullish trend” remains intact. As such the mainstream analysis, if you can actually call it that, continues to the tout the inherent benefits of low cost, passive indexing and the ultimate “chase for yield.” However, it is here the real danger lies. Much of the monetary flows into passive indexes is actually NOT PASSIVE. When the eventual reversion comes, and it will, the pain inflicted on individuals, as is always the case, will turn “passive indexers”in “panicked sellers.” It is here that being a contrarian will pay its dividends. Unfortunately, as is too often the case, there are few individuals who actually “sold high” in order to “buy low” when the real long-term investment opportunities are “laid to bare.” In the meantime, here is what I am reading this weekend. Fed / Economy Why Won’t The Fed Raise Rates by Norman Mogil via SoberLook The Fed Has Made A Massive Policy Error by John Mauldin via ZeroHedge Draghi: So Far We So No Evidence Of Bubbles by Tyler Durden via ZeroHedge Zombie Banks Stalking Europe by David McHugh via AP Raoul Pal: A Recession Is Coming by Barbara Kollmeyer via MarketWatch Global Debt Exceeds Levels Of 2008 by Robert Samuelson via RCM Yellen: We May Not Know What We’re Doing by Jeffrey Snider via Alhambra Partners The LIBOR Wrecking Ball by Lisa Abramowicz via Bloomberg Economy: America’s Top Problem by Zac Auter via Gallup We Are Getting The Wrong Kind Of Inflation by Rex Nutting via MarketWatch Many Americans Balancing 2 or 3 Jobs by Paul Davidson via USA Today Economic Indicators Not Caught Up To Market by Joe Calhoun via Alhambra Partners Fiscal Policy: Cooking The Books by Ed Yardeni via Yardeni Research Subtle Forward Guidance: Best Practice by Eugen von Bohm-Bawerk via Bawerk.net Economy Cracking Under Too Much Debt by Adam Taggart via Peak Prosperity Markets Global Debt Investors: Led To Slaughter by Danielle DiMartino-Booth via Money Strong The Tide Is Going Out On Stock Pickers by Rachael Levy via BI The Single Worst Investment Today by Brett Owens via Forbes Barron’s Big Money Poll: Bulls Rule by Jack Willoughby via Barron’s Signs Of Strain Between Stocks & Bonds by Carla Fried via New York Times Beware Randomly Falling Markets by David Keohane via FT Alphaville The U.S. Has Its Own Oil Curse by Ellie Ismailidou via MarketWatch Dumb Chart Predicts Crash by Paul La Monica via CNN Money A Better Way To Index by Ironman via Political Calculations Debts, Deficits & Housing: The House That Fraud Built by Aaron Layman Interesting Reads Why Toxic Politics Can Foster Economic Crisis by Mohamed El-Erian via MarketWatch Kaepernick Or Peak Football As Ratings Decline by Stephen Carter via NY Post The Best Way 64% Can Boost Retirement Savings by Paul Katzeff via IBD Firing Line Conversation W/ James Grant by Neal Freeman via National Review Everything You Need To Know: Elections & Markets by Jeff Desjardins via Visual Capitalist 5 Books Clinton & Trump Should Read by Caroline Baum via MarketWatch Strange How China Keeps Posting 6.7% Growth by Leslie Shaffer via CNBC China’s Stable Growth & Price Of Reform by The Economist Fed, Damned If They Do Or Don’t by Anthony Mirhaydari via Fiscal Times History Will Judge Central Banks Harshly by Desmond Lachman via AEI Yellen & Fischer: Same Song, Same Book by Marc Chandler via RCM The End Of Stock Buybacks by Bryan Borzykowski via Morningstar The 1970’s Sans Inflation by Scott Sumner via The Money Illusion Don’t Wait For A Catalyst To Sell by John Hussman via Hussman Funds Bear Funds Go Into Hibernation by Dana Lyons via Tumblr How Yellen Rationalizes History’s Biggest Bubble by Jesse Felder via The Felder Report “The only reason a great many American families don’t own an elephant is that they have never been offered an elephant for a dollar down and easy weekly payments..” — Mad Magazine
Week before Election more bullish than week of or week after Election Day is (finally) just around the corner. Next week will be two weeks before and it is also the week after October options expiration. Over the past 22 years the week leans bullish with gains exceeding losses by a margin of nearly 2 to 1 and respectable across the board gains. However, this same week (not always the week after options expiration) has nearly the exact opposite track record in election years. Since 1952, DJIA and S&P 500 have advanced during the week only 37.5% and 31.3% of the time respectively. The week before election week has a bullish bias that exceeds election week and the week after. If Democrats Sweep on Election Day DJIA Returns Could be Below Average Six possible political alignments exist in Washington: Republican President with a Republican congress, Democratic congress or split Congress; and a Democratic President with a Democratic Congress, Republican Congress or split Congress. Data presented in the chart below begins in 1949 with the first full presidential term following WWII to focus on the modern era. First looking at just the historical performance of the DJIA under Democratic and Republican Presidents we see a pattern that is contrary to popular belief. Under a Democrat, DJIA has performed better than under a Republican. DJIA has historically returned 10.0% under Democrats compared to 6.8% under a Republican executive. Congressional results are the opposite and much more dramatic. Republican Congresses since 1949 have yielded an average 15.3% gain in DJIA compared to a 6.1% return when Democrats have controlled the Hill. Democrats in power of the two branches have produced an average DJIA gain of 7.4%, below the All Year average gain of 8.3%. This scenario is increasingly becoming more probable as the polls widen in favor for Hillary Clinton. With a Democratic President and a Republican Congress or a split Congress, DJIA has performed well averaging a 14.7% gain. The best scenario for all investors has been a Democrat in the White House and Republican control of Congress with average gains of 16.4%. 8th Year pattern back in play in an undecided election Whether looking at “All Presidential Election Years” or just “Eighth Years” in the charts below, the market is usually in rally mode near the end of October. Should the election go as polls suggest then the market will most likely track the “All Presidential Election Years” pattern to finish the balance of 2016. Should the election results be too close to call and trigger a recount in a state or possibly more, then the “Eighth Years” pattern would be back in play. An undecided outcome similar to November 2000 (an Eighth Year) would produce great uncertainty and could lead to declines similar to those that occurred then. DJIA dropped 5.1%, S&P 500 plunged 8.0% while NASDAQ imploded 22.9% (tech bubble burst, not likely to occur again as valuations are not as extreme now) in November 2000. In the undecided scenario, it would not be surprising to see the Fed skip a rate hike in December in order to provide some relief to the market. An end to gridlock in D.C. or an incumbent defeat Historically, S&P 500 performance from the end of July until the end of October has been a reliable indicator as to the outcome of November’s election (hat tip Sam Stovall of CFRA, formerly S&P Global Equity and Fund Research). When the period was positive, the incumbent party typically wins the election, when the period was negative, the incumbent usually lost. Overall in 18 presidential elections since 1944, the indicator was correct 15 times (83.3%). As of today’s close S&P 500 is down 2.2% since the last trading day of July. This would suggest an incumbent party defeat and a victory for Republican Donald Trump. While certainly a possibility, it is also a possibility that the market is increasingly unhappy with the prospects that the Democrats could sweep the election and retain the White House while reclaiming the House and the Senate. The end of gridlock in D.C. would introduce even more uncertainty for the market to cope with.
Monday morning ER: $TMUS $KMB $PETS $BOH $VFC $CYOU $SOHU $EXP $OPB $QSR $BCC $WAL $BMRC $PHG $BEAV $ACCO
Stockaholics come join us in our weekly market poll and vote where you think the markets will end this upcoming week ahead!- Weekly SPX Poll - Sentiment (10/24-10/28) <-- click there In addition we have our weekly stock picking contest now up and running as well!- Stockaholics Weekly Stock Picking Contest for the Week of (10/24-10/28) <-- click there We also now have a daily stock picking & market direction guessing challenge running here!- Stockaholics Daily Stock Pick Challenge & SPX Sentiment Poll for Monday (10/24) <-- click there And lastly we have a general market sentiment poll open now!- SPX - Up, Down, or Flat up to Nov. 8th? Vote! <-- click there And a Fed poll- Fed Poll: Will the FOMC raise rates to <0.75% on Wednesday November 2nd @ 2:00PM EST? <-- click there It would be awesome to see some of you regulars here at Stockaholics join us and participate on these sentiment polls & challenges! Have a fantastic weekend everyone!
October 21 2016 Market Wrap and Sector Watch Market still in consolidation mode. neither bears or bulls can take control. Big week for earnings next week. Market could be stuck till after the election.
ShadowTrader Video Weekly 10.24.16 - Questions from the crowd... Video from ShadowTrader Peter Reznicek
S&P 500 on track to complete 3-month losing streak Looking back to 1950, S&P 500 has completed 33 consecutive monthly losing streaks of three or more months. With six trading days left in October, S&P 500 needs to climb back above 2168.27 to avoid a third month. Should S&P 500 fail to reach this bar, it would actually be a positive for November as 20 of those past 33 streaks ended at three months and within one month of the end of all streaks, three months or longer, S&P 500 was higher 100% of the time with an average 4.72% gain. S&P 500 worst monthly losing streak since 1950 was nine straight in 1974. When this streak ended, S&P 500 also had the largest one-month gain, 16.3%.
Get ready for the busiest week for ER this week! ($AAPL $AMZN $TWTR $UA $TSLA $GOOGL $CMG $BMY $F $V $S $TMUS $FCX $GM $CELG $T $AKS $LUV $KMB $CAT $BX $CLF)
Here are the complete list of notable ER this week which includes the company name, ticker symbol, time of release and estimates: Monday Pre-Market: Monday After-Hours: Tuesday Pre-Market: Tuesday After-Hours: Wedesday Pre-Market: Wednesday After-Hours: Thursday Pre-Market: Thursday After-Hours: Friday Pre-Market:
A piece of news related to AAPL, QCOM, and INTC http://www.forbes.com/sites/ewanspe...nfirmed-slow-iphone-secret-chip/#4d8be1f931e7 It's bad news for AAPL that their big product has inconsistent levels of performance, and may anger consumers because they don't know if they're getting the "good iPhone 7" or the "bad" one. Nevertheless it's looking like this market will rally into 2018, so AAPL will be okay. Will buy AAPL if it pulls back below 110, but otherwise I think we can find other opportunities. Apple is trying to force Qualcomm to give them lower prices, and trying to make Intel a thing in their phone...we'll see how long it takes for the consumer to react, and how negatively they do.
Good morning Stockaholics! Happy Monday! Hope you all had a nice relaxing weekend. Spoiler: 10/24 Monday's Stock News Movers: TWX, T, MMM, CMCSA, DKS, WSM, VFC, MET, GSK, GNW, BA, AMTD, LNKD, AMZN 10/24 Monday's Stock News Movers: TWX, T, MMM, CMCSA, DKS, WSM, VFC, MET, GSK, GNW, BA, AMTD, LNKD, AMZN Good day Stockaholics! Happy Monday! Frontrunning: October 24 The CEO Behind AT&T’s Huge Time Warner Deal (BBG) AT&T-Time Warner deal sparks calls for scrutiny in Washington (Reuters) Wall Street’s $40 Billion AT&T Pledge Offers Fees and Risks (BBG) Bernie Sanders: Obama Administration “Should Kill” The AT&T-Time Warner Deal (Deadline) Oil prices under pressure as Iraq resists joining output cut (Reuters) Europe's Stocks Rise With Bonds on Earnings, Ratings, Politics (BBG) Battle for Mosul can shape or break Iraq further (Reuters) Suriname Said to Win Better Terms in $550 Million Overseas Sale (BBG) Calais migrants: France begins to clear 'Jungle' camp (BBC) Venezuela congress presses for Maduro trial in rowdy session (Reuters) Bankers Prepare for Brexodus From London (BBG) In battleground Florida, tough stance on felons may sap votes for Democrats (Reuters) Clinton, Kaine concerned over AT&T, Time Warner merger (Hill) Major banks mark first-ever international trade using blockchain tech (Reuters) Fake Divorce Is Path to Riches in China’s Hot Real Estate Market (BBG) Rockwell broadens its reach with $6.4 billion purchase of B/E Aerospace (Reuters) Name Now Awash in Controversy, Trump Readies New Brand (BBG) Bundesbank Says High-Frequency Trading Can Enhance Volatility (BBG) Putin’s Long Shadow in U.S. Campaign Fuels New Red Scare (BBG) America, land of opportunity? Not for young people, study says (McClatchy) China’s Dealmakers Are on a $207 Billion Spree (BBG) STOCK FUTURES NOW: FRIDAY'S MARKET HEAT MAP: FRIDAY'S S&P SECTORS: TODAY'S ECONOMIC CALENDAR: MOST ACTIVE TRENDING PRE-MARKET DISCUSSIONS (TICKER SYMBOLS ARE CLICKABLE!): TWX T TMUS ARIA KONE AKS VFC KMB AGEN LJPC WYNN EZU EWJ EPI QQQ EWW EWU EWA DGLY GM CMCSA AMTD FXI EWZ XOP TODAY'S EARNINGS CALENDAR: Monday Pre-Market: Monday After-Hours: THIS MORNING'S PRE-MARKET NEWS MOVERS: source: cnbc.com Time Warner — AT&T will buy the media giant for $85.4 billion in cash and stock, worth $107.50 per share compared to a Friday close of $89.48. Lawmakers are already promising heavy scrutiny of the deal because of competitive concerns. Separately, AT&T reported adjusted quarterly profit of 74 cents per share, matching estimates, and raised its dividend by a penny to 49 cents per share. 3M — 3M was upgraded to "overweight" from "equal weight" at Barclays, based on a recent pullback and a recovery in emerging markets, where 3M has significant exposure. Comcast — Macquarie upgraded the NBCUniversal and CNBC parent to "outperform" from "neutral," mentioning Comcast's DreamWorks acquisition, digital initiatives, and the focus on distribution and content highlighted by the AT&T/Time Warner deal and other transactions. Dick's Sporting Goods — Cowen upgraded the sporting goods retailer to "outperform" from "neutral," citing increased customer traffic and a rise in consumer satisfaction. Williams-Sonoma — Citi tapped the household goods retailer as a top holiday stock pick, mentioning easy comps and upbeat spending projections from industry sources. VF Corp. — The apparel retailer earned $1.19 per share for its latest quarter, four cents a share above estimates. Revenue fell below forecasts, however, and the company also cut its outlook for the full year. Jeans brands Wrangler and Lee are seeing declining sales, although outdoor brands like Vans and Timberland are growing, the company said. VF also raised its quarterly dividend by 14 percent to 42 cents a share. Kimberly-Clark — The consumer products company missed estimates by two cents a share, with adjusted quarterly profit of $1.52 per share. Revenue also fell short of estimates amid what the company calls a "challenging" economic and competitive environment. MetLife — MetLife is back in court today, trying to get the Financial Stability Oversight Council to remove its designation of the insurer as a "systemically important financial institution." Such a designation subjects companies to increased federal scrutiny, and MetLife feels that the designation is unjustified. GlaxoSmithKline —The drugmaker has filed for U.S. approval of its shingles vaccine Shingrix, which analysts feel has the potential for $1 billion in annual sales. Genworth Financial — Genworth struck a deal to be bought by China Oceanwide Holdings for $2.7 billion in cash. The $5.43 per share deal represents a 4.2 percent premium for the insurer's closing price on Friday. B/E Aerospace — The company will be bought by aircraft component maker Rockwell Collins for $62 per share in cash and stock. The value of the deal to buy the maker of aircraft interiors is worth $6.4 billion, not including assumption of debt. Boeing — Boeing is stepping up its participation in the market for aircraft replacement parts, according to a Reuters report which notes that the move puts Boeing in competition with some of its major suppliers. The replacement and repair market is worth an estimated $62 billion per year and growing. TD Ameritrade — The online brokerage and Toronto-Dominion Bank are buying brokerage Scottrade Financial for $4 billion. LinkedIn — Microsoft's deal to buy LinkedIn for $26 billion is getting more intense review from European Union regulators, according to The Wall Street Journal, which said officials have sent questionnaires to competitors about the possible deal. Amazon.com — Amazon saw its price target raised to $1,050 from $920 at Goldman Sachs, which maintains a "conviction buy" rating on the stock. Goldman cites both outperformance in Amazon's retailing operation, as well as growth in the Amazon Web Services business. Have a good trading day to everyone in here on this Monday!
