Welcome Stockaholics to the trading week of April 17th! This past week saw the following moves in the S&P: Major Indices End of Week: Bird's Eye view of the 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: Netflix, United Continental, JB Hunt, M&T Bank, Celanese, Barracuda Networks, Pinnacle Financial 8:30 a.m. Empire State manufacturing 10:00 a.m. NAHB survey 4:00 p.m. TIC data Tuesday Earnings: Bank of America, Goldman Sachs, Johnson and Johnson, UnitedHealth, Charles Schwab, Comerica, Yahoo, Harley-Davidson, Progressive, Omnicom, GNC Holdings, Intuitive Surgical, 8:30 a.m. Housing starts 8:30 a.m. Business leaders survey 9:15 a.m. Industrial production Wednesday Earnings: BlackRock, Morgan Stanley, American Express, eBay, Morgan Stanley, US Bancorp, TD Ameritrade, Textron, CSX, Canadian Pacific Railway, Qualcomm, Abbott Labs, Steel Dynamics, SLM 2:00 p.m. Beige book Thursday Earnings: Travelers, Verizon, Blackstone, Philip Morris, ABB, Bank of NY Mellon, Alliance Data, PPG Industries, Imax, MGIC Investment, KeyCorp, Nucor, Janus, Visa, Sonoco Products, Sherwin-Williams, Mattel, NCR, Danaher 8:30 a.m. Weekly claims 8:30 a.m. Philadelphia Fed Friday Earnings: General Electric, Honeywell, NextEra Energy, Kansas City Southern, Schlumberger, Rockwell Collins, Stanley Black and Decker, SunTrust, Morningstar, Steve Madden 9:45 a.m. Manufacturing PMI 10:00 a.m. Existing home sales
"Mother Of All Bombs" Sends Stocks To 2-Month Lows Amid Safe-Haven Scramble Bank stocks down on earnings day... "inconceivable" And all it took to break the Trump trade was the mother of all bombs... The S&P and Dow closed the week at 2-month lows... All the major indices are below their 50-day moving average... Bank earnings were a bust - headlines looked good but hid a lot of ugliness - investors finally woke up... And banks are down hard YTD.. Treasury yields lower for 4th straight day. This was the 5th straight week of declines in 10Y yields and the biggest weekly drop in 10Y yields since June 2016 It seems bonds just got too attractive relative to stocks once again... The Dollar Index retraced over 50% of the Trump "Dollar too strong" plunge... Yen was the biggest mover on the week... As the Yuan strengthens against the dollar, Bitcoin has tumbled in the last few days... Gold, silver, and crude (though the daily win streak is over) gained on the week, copper and the industrial metals were hammered... * * * As we head into the long weekend, here are a few charts to consider... The 'real' data just isn't there... But that doesn't matter... (yet) The market also appears to be ignoring the panic-hedging... Bond-Stock correlation has normalized after breaking last year... echoing very similar structural shifts from 2007's top... Trumpflation trades are breaking down... And banks are waking up to the Treasury Curve collapsing... As is the VIX Term Structure...
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD thus far in 2017- S&P sectors for the week-
Post-Election Winners Down the Most Apr 13, 2017 The average stock in the S&P 1500 (contains large, mid, and small caps) is down 3.35% since the index peaked on March 1st. We broke the S&P 1500 into deciles (10 groups of 150 stocks each) based on stock performance from election day 2016 (11/8/16) through the March 1st equity market peak to see how the biggest post-election winners and losers have been doing during the current pullback. As shown, the decile of stocks that did the best during the post-election rally from 11/8/16 through 3/1/17 are down an average of 8.45%. Clearly investors have been selling the biggest “Trump Trade” winners since the beginning of March. Below is a list of the worst performing stocks in the S&P 1500 since the March 1st equity market peak. All of the names listed are down 20%+. Notables include Frontier Communication (FTR), AK Steel (AKS), Winnebago (WGO), US Steel (X), and First Solar (FSLR). It’s been just a brutal few weeks for these names. Wall Street Strategists Not Enthusiastic From Here Apr 12, 2017 At the end of 2016, we published this post on year-end price targets for Wall Street strategists. For 2017, the average strategist projected the S&P 500 to post a gain of 5.5%. That’s actually bearish relative to the average annual projection going back to 2000. As shown below, on average, Wall Street strategists collectively project a gain of 9.6% each year. In 2016, strategists predicted the S&P would gain 8.4%, which ended up being just 1.1 percentage points away from the actual gain of 9.5% seen last year. That was the closest they’ve ever gotten to hitting the mark. Normally, they’re about 5.5 percentage points above the actual year-end change. Bloomberg tabulates these year-end estimates from strategists throughout the year. As mentioned above, at the start of 2017, the average year-end price target for the S&P 500 was 2,362. That would have translated into a gain of 5.5% based on where the index began the year. So where do strategists stand now that we’re already into the second quarter? They’ve gotten slightly more bullish, but they’re still looking for hardly any gains. As shown below, the average Wall Street strategist currently sees the S&P 500 ending 2017 at a level of 2,414. That’s an additional gain of 3% from the S&P’s current level. Normally a sanguine bunch, strategists are currently rather apathetic. Stocks on the Cusp of Finally Making “The List” Apr 11, 2017 It may seem like just about every stock in the market has been hitting 52-week highs over the last few months, but within the S&P 1500 there are 451 stocks in the index that have not hit a 52-week high since the election. That’s nearly a third of the index! Among those stocks, some like Prologis (PLD) are within 1% of a new high, while others like Adeptus Health (ADPT) and Tidewater (TDW) are currently trading more than 90% below their 52-week highs. In other words, it is a very wide range. From a sector perspective, we all remember how Financials surged after the election, so it should come as no surprise that it is the only sector where less than 10% of the stocks in it haven’t hit a 52-week high since November 8th. On the other side of the spectrum, high yielding stocks underperformed post-election as interest rates rose, and that explains why at least half of the stocks in the Real Estate, Consumer Staples, and Utilities sectors haven’t hit 52-week highs since the election. Each morning when we update our daily charts of the stocks hitting new highs and new lows as part of the Morning Lineup, you may have noticed that it seems as though more often than not, once a stock first starts showing up on the “new highs” list, it tends to keep showing up over and over again going forward. This is your typical “breakout” pattern. With this in mind, we want to look for stocks that are not quite at new highs yet but are getting close. Once they make their new high, the sky is the limit. Earlier today we screened the S&P 1500 for all the stocks in the index that have not hit a 52-week high since the election but are currently within 5% of that level. While 41 stocks fit that criterion, we went through each of the charts to look for the names that are the least extended and have the most attractive chart patterns.
When Will The Bullish April Seasonality Start? Posted by lplresearch Hard to believe it, but in a few days, April will be half over. As we noted at the start of the month, April has historically been one of the best performing months for the S&P 500 Index. In fact, over the past 20 years, it has been the strongest month of the year. Per Ryan Detrick, Senior Market Strategist, “As strong as April has been in the past 20 years, here’s the catch—most of the gains have tended to occur in the second half of the month. In fact, as of April 14, the S&P 500 has been up only 0.2% on average, yet has finished up 2.0% by month end. In other words, the slow start to April in 2017 is perfectly normal, and history would suggest a bounce over the second half of the month is potentially still in play.” Big picture, the S&P 500 continues to cling to support from its upward sloping 50-day moving average, barely closing above this trendline yesterday (April 11, 2017) for the 105thconsecutive trading session—the longest streak in six years. The CBOE Volatility Index (VIX), meanwhile, closed above the 15 level (versus a median of 14.6 since the start of 2012) for the first time since the day after the U.S. election, suggesting some fear over geopolitical concerns could be creeping into the markets. To wrap it all up, consensus expectations are for earnings to have their best quarter since late 2011, and this could help to justify the big rally since the election. However, it’s likely to be anything but a smooth ride as volatility potentially heats up. Bulls Not Out Of Breadth Posted by lplresearch One year ago this week, April 12, 2016 to be exact, one of the more significant technical indicators, the New York Stock Exchange (NYSE) Composite Advance/Decline (A/D) line, broke out to a new high for the first time in a year. As we noted at the time, this type of internal market strength was a good sign for equities over the intermediate term, despite the skepticism expressed by many over equities and the economy. Fortunately this signal was correct, as just three months later (July 2016) the S&P 500 Index broke out to new highs for the first time in more than a year (May 2015). First a step back, an A/D line shows how many stocks are advancing versus declining on a various index or stock exchange. If more stocks’ prices are rising than falling, that is considered a sign of underlying strength and suggests that stocks may have room to run. The flip side is, if many stocks are declining yet the overall index hasn’t yet broken lower, it is a warning sign something could be wrong as relatively few stocks are propping up the index. Per Ryan Detrick, Senior Market Strategist, “A year ago when we saw the NYSE Advance/Decline line make new highs it helped support the bullish case for equities, no matter what scary headlines were out there—I’m looking at you Brexit and the U.S. election. Why bring it up now? It made another new all-time high last week— further supporting higher prices and the notion of buying on all inevitable dips.” As the chart above shows, market breadth can provide warning signs for future equity weakness. In both the late ‘90s and leading up to the financial crisis in ’07-’08, market breadth broke down ahead of equity prices. With new highs taking place currently for market breadth, this is one positive for the bulls as we enter earnings season and the historically tricky summer months. Last, the NYSE Composite A/D line is part of our Five Forecasters, which we examined in closer detail recently in How Much Is Left In The Tank?
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 (4/17-4/21) <-- click there to cast your weekly vote for this upcoming week! In addition we have our weekly stock picking challenge now up and running as well!- Stockaholics Weekly Stock Picking Contest for the Week of (4/17-4/21) <-- click there to post your weekly picks for this week! We also now have a daily stock picking & market direction guessing challenge running here!- Stockaholics Daily Stock Pick Challenge & SPX Sentiment Poll for Monday (4/17) <-- click there to cast your daily vote & stock pick for Monday! It would be pretty awesome to see some of you regulars join us and participate on these. I hope you all have a fantastic extended Eastern weekend ahead!
Earnings season begins! Here are the most anticipated ERs for this upcoming week ahead (I'll also have the earnings chart posted in here as well once it's ready) ***Check mark next to the stock symbols denotes confirmed earnings release date & time*** Monday 4.17.17 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! Monday 4.17.17 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! Tuesday 4.18.17 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 4.18.17 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 4.19.17 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 4.19.17 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 4.20.17 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 4.20.17 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 4.21.17 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! Friday 4.21.17 After Market Close: Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES!
Just something I like to look at going into earnings season is the ratio of insiders that have very positive insider trading to those that are very negative. For stocks over $15 and trade at least 500k shares a day the ratio is currently 20/285. They don't seem to be very optimistic about their own companies currently. fwiw
As promised here is EW's most anticipated earnings calendar for this upcoming week ahead: ($BAC $NFLX $GS $UNH $JNJ $IBM $GE $QCOM $VZ $SCHW $MS $CUDA $BX $PGR $V $MTB $HOG $ABT $UAL $CMA $RF $USB) Bank of America Corp. $22.34 Bank of America Corp. (BAC) is confirmed to report earnings at approximately 6:45 AM ET on Tuesday, April 18, 2017. The consensus earnings estimate is $0.35 per share on revenue of $21.58 billion and the Earnings Whisper ® number is $0.35 per share. Investor sentiment going into the company's earnings release has 73% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 66.67% with revenue decreasing by 2.07%. Short interest has decreased by 3.8% since the company's last earnings release while the stock has drifted lower by 3.7% from its open following the earnings release to be 14.8% above its 200 day moving average of $19.46. Overall earnings estimates have been revised higher since the company's last earnings release. On Thursday, April 13, 2017 there was some notable buying of 79,118 contracts of the $23.00 put expiring on Friday, April 21, 2017. Option traders are pricing in a 4.5% move on earnings and the stock has averaged a 1.5% move in recent quarters. Netflix, Inc. $142.92 Netflix, Inc. (NFLX) is confirmed to report earnings at approximately 4:05 PM ET on Monday, April 17, 2017. The consensus earnings estimate is $0.38 per share on revenue of $2.64 billion and the Earnings Whisper ® number is $0.40 per share. Investor sentiment going into the company's earnings release has 67% expecting an earnings beat The company's guidance was for earnings of approximately $0.37 per share. Consensus estimates are for year-over-year earnings growth of 533.33% with revenue increasing by 34.85%. Short interest has increased by 6.3% since the company's last earnings release while the stock has drifted higher by 0.6% from its open following the earnings release to be 20.9% above its 200 day moving average of $118.25. Overall earnings estimates have been revised higher since the company's last earnings release. On Thursday, April 13, 2017 there was some notable buying of 1,307 contracts of the $141.00 put expiring on Friday, April 21, 2017. Option traders are pricing in a 8.4% move on earnings and the stock has averaged a 9.6% move in recent quarters. Goldman Sachs Group, Inc. $223.32 Goldman Sachs Group, Inc. (GS) is confirmed to report earnings at approximately 7:35 AM ET on Tuesday, April 18, 2017. The consensus earnings estimate is $5.38 per share on revenue of $8.37 billion and the Earnings Whisper ® number is $5.38 per share. Investor sentiment going into the company's earnings release has 67% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 100.75% with revenue increasing by 32.06%. Short interest has decreased by 32.2% since the company's last earnings release while the stock has drifted lower by 5.4% from its open following the earnings release to be 10.7% above its 200 day moving average of $201.73. Overall earnings estimates have been revised higher since the company's last earnings release. On Tuesday, March 28, 2017 there was some notable buying of 2,232 contracts of the $230.00 call expiring on Friday, April 21, 2017. Option traders are pricing in a 3.9% move on earnings and the stock has averaged a 1.9% move in recent quarters. UnitedHealth Group, Inc. $164.96 UnitedHealth Group, Inc. (UNH) is confirmed to report earnings at approximately 5:55 AM ET on Tuesday, April 18, 2017. The consensus earnings estimate is $2.18 per share on revenue of $48.24 billion and the Earnings Whisper ® number is $2.21 per share. Investor sentiment going into the company's earnings release has 59% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 20.44% with revenue increasing by 8.34%. Short interest has increased by 29.9% since the company's last earnings release while the stock has drifted higher by 1.4% from its open following the earnings release to be 9.4% above its 200 day moving average of $150.78. Overall earnings estimates have been revised higher since the company's last earnings release. On Wednesday, April 12, 2017 there was some notable buying of 2,404 contracts of the $150.00 put expiring on Friday, June 16, 2017. Option traders are pricing in a 3.4% move on earnings and the stock has averaged a 2.6% move in recent quarters. Johnson & Johnson $124.99 Johnson & Johnson (JNJ) is confirmed to report earnings at approximately 6:40 AM ET on Tuesday, April 18, 2017. The consensus earnings estimate is $1.77 per share on revenue of $18.00 billion and the Earnings Whisper ® number is $1.78 per share. Investor sentiment going into the company's earnings release has 53% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 5.36% with revenue increasing by 2.96%. Short interest has decreased by 9.5% since the company's last earnings release while the stock has drifted higher by 10.7% from its open following the earnings release to be 5.5% above its 200 day moving average of $118.47. Overall earnings estimates have been revised lower since the company's last earnings release. On Tuesday, April 4, 2017 there was some notable buying of 9,453 contracts of the $125.00 call expiring on Friday, May 19, 2017. Option traders are pricing in a 2.8% move on earnings and the stock has averaged a 2.2% move in recent quarters. International Business Machines Corp. $169.53 International Business Machines Corp. (IBM) is confirmed to report earnings at approximately 4:10 PM ET on Tuesday, April 18, 2017. The consensus earnings estimate is $2.34 per share on revenue of $18.49 billion and the Earnings Whisper ® number is $2.38 per share. Investor sentiment going into the company's earnings release has 58% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 0.43% with revenue decreasing by 1.04%. Short interest has decreased by 24.4% since the company's last earnings release while the stock has drifted higher by 1.0% from its open following the earnings release to be 3.4% above its 200 day moving average of $164.02. Overall earnings estimates have been revised higher since the company's last earnings release. On Wednesday, April 5, 2017 there was some notable buying of 10,113 contracts of the $195.00 call expiring on Friday, October 20, 2017. Option traders are pricing in a 3.7% move on earnings and the stock has averaged a 3.5% move in recent quarters. General Electric Co. $29.56 General Electric Co. (GE) is confirmed to report earnings at approximately 6:30 AM ET on Friday, April 21, 2017. The consensus earnings estimate is $0.17 per share on revenue of $26.36 billion and the Earnings Whisper ® number is $0.18 per share. Investor sentiment going into the company's earnings release has 47% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 19.05% with revenue decreasing by 5.33%. Short interest has decreased by 16.3% since the company's last earnings release while the stock has drifted lower by 3.9% from its open following the earnings release to be 3.3% below its 200 day moving average of $30.58. Overall earnings estimates have been revised lower since the company's last earnings release. On Thursday, April 13, 2017 there was some notable buying of 7,485 contracts of the $29.00 put expiring on Friday, April 28, 2017. Option traders are pricing in a 2.5% move on earnings and the stock has averaged a 1.6% move in recent quarters. QUALCOMM Incorporated $52.79 QUALCOMM Incorporated (QCOM) is confirmed to report earnings at approximately 4:00 PM ET on Wednesday, April 19, 2017. The consensus earnings estimate is $1.20 per share on revenue of $5.88 billion and the Earnings Whisper ® number is $1.24 per share. Investor sentiment going into the company's earnings release has 70% expecting an earnings beat The company's guidance was for earnings of $1.15 to $1.25 per share. Consensus estimates are for year-over-year earnings growth of 16.50% with revenue increasing by 5.93%. Short interest has increased by 21.4% since the company's last earnings release while the stock has drifted lower by 4.6% from its open following the earnings release to be 14.1% below its 200 day moving average of $61.49. Overall earnings estimates have been revised lower since the company's last earnings release. On Tuesday, April 4, 2017 there was some notable buying of 8,675 contracts of the $57.00 call expiring on Friday, April 21, 2017. Option traders are pricing in a 5.5% move on earnings and the stock has averaged a 6.2% move in recent quarters. Verizon Communications $48.62 Verizon Communications (VZ) is confirmed to report earnings at approximately 7:00 AM ET on Thursday, April 20, 2017. The consensus earnings estimate is $0.98 per share on revenue of $30.59 billion and the Earnings Whisper ® number is $1.00 per share. Investor sentiment going into the company's earnings release has 60% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 7.55% with revenue decreasing by 4.91%. Short interest has decreased by 19.5% since the company's last earnings release while the stock has drifted lower by 3.3% from its open following the earnings release to be 5.5% below its 200 day moving average of $51.44. Overall earnings estimates have been revised lower since the company's last earnings release. On Wednesday, April 12, 2017 there was some notable buying of 7,348 contracts of the $48.50 put expiring on Friday, April 21, 2017. Option traders are pricing in a 2.6% move on earnings and the stock has averaged a 2.8% move in recent quarters. Charles Schwab Corp. $37.53 Charles Schwab Corp. (SCHW) is confirmed to report earnings at approximately 8:45 AM ET on Tuesday, April 18, 2017. The consensus earnings estimate is $0.37 per share on revenue of $2.05 billion and the Earnings Whisper ® number is $0.37 per share. Investor sentiment going into the company's earnings release has 74% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 27.59% with revenue increasing by 16.21%. Short interest has decreased by 0.7% since the company's last earnings release while the stock has drifted lower by 6.3% from its open following the earnings release to be 5.7% above its 200 day moving average of $35.52. Overall earnings estimates have been revised lower since the company's last earnings release. On Tuesday, March 28, 2017 there was some notable buying of 3,002 contracts of the $37.00 put and 1,660 contracts of the $41.00 call expiring on Friday, April 21, 2017. Option traders are pricing in a 4.7% move on earnings and the stock has averaged a 1.4% move in recent quarters.
Here’s the Most Important Earnings Reports to Watch (4/17-4/21) Apr 15, 2017 The first quarter 2017 earnings reporting period kicks into full gear next week. Below is a list of the 40 largest companies scheduled to report. Next to each stock, we include its historical EPS and revenues “beat rates” along with the % of time it has raised guidance. The “beat rates” are simply the percentage of the time the company has beaten analyst earnings or revenue estimates going back to 2001. We also include the stock’s average one-day move on its earnings reaction day (the first trading day following quarterly earnings) and its average absolute move (measures earnings day volatility). Netflix (NFLX) and United (UAL) are set to report on Monday after the close, while on Tuesday we’ll hear from a number of Dow stocks — JNJ, UNH, GS, IBM. On Wednesday morning we get results from Morgan Stanley (MS) followed by QUALCOMM (QCOM), American Express (AXP), CSX and eBay (EBAY) after the close. Thursday’s biggest companies include Verizon (VZ), Philip Morris (PM), Travelers (TRV) and Visa (V), while Schlumberger (SLB), General Electric (GE), and Honeywell (HON) round out the week with reports on Friday. Of the stocks set to report next week, Netflix (NFLX) is by far the most volatile, while Intuitive Surgical (ISRG) has historically averaged the best earnings reaction day returns. Bank of America (BAC) has actually been the worst performer of the bunch on earnings.
Does the fact that we have earnings this week, plus the North Koreans with their hysterically bad missile test, meaning they are more likely to nuke themselves than anyone else, mean a bullish week for the market?
I'm thinking of playing NFLX Monday for earnings. Here are my thoughts. Last year it had a huge earnings jump and took a lot of people by surprise. It closed at 99.80 and opened at 116.63. Basically, a $17.00 jump. Keeping that in mind.... If we go to the April Monthly expiration, which is this week, we can do two ratio spreads. A call ratio and a put ratio. I can collect .27 credit if I buy one 152.50 call and buy one 133 put and sell 2 157.50 call and sell 2 129 puts. This means my break even prices are 162.50 (Which covers me for a $20.00 move to the upside) and $125.00 (which covers me for a $18.00 move to the downside). The other good thing about this is, the don't announce until the morning. This means it has even less time to move around before the opening bell for gaps. My biggest concern is the theta decay. If it doesn't decay fast enough and we find ourselves trading at 152.50 or 133, normally I'd think I'd have a pretty large profit. But if options are still trading for a lot of money, I may only be breaking even at that point.
Im spending more and more of my viewing hours on NFLX, as it becomes more of an essential service, I forsee them raising prices a little bit which will boost their bottom line a lot!
