Welcome Stockaholics to the trading week of December 10th! 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 10:00 a.m. JOLTS Tuesday 6:00 a.m. NFIB survey 8:30 a.m. PPI Wednesday 8:30 a.m. CPI 2:00 p.m. Federal budget Thursday 8:30 a.m. Initial claims 8:30 a.m. Import prices Friday 8:30 a.m. Retail sales 9:15 a.m. Industrial production 9:45 a.m. Manufacturing PMI 9:45 a.m. Services PMI 10:00 a.m. Business inventories
Goldilocks Is Dead: Stocks Slammed Despite Trade-Truce, OPEC Deal, & Jobs Gains In a week in which we got a trade-truce, the market all but pricing out any Fed hawkishness, and Alberta cutting crude production and an OPEC deal; stocks in Europe and US collapsed... Let's hope for The Santa Claus Rally... any day now... China ended the week marginally higher (having erased almost all of the post-Truce gains)... European markets were a bloodbath however, led by Germany... (down over 6% from its Monday exuberant highs to its lowest in 2 years) Deutsche Bank ended the week below $8... Before we start, everyone seemed to crow about the jobs print this morning as a 'Goldilocks' number - well they were half right - Gold is the only asset green... Futures how the real chaos this week... Bloomberg's Cameron Crise notes that yesterday's crazy dump and pump was only the 13th time since 1980 that the S&P rallied more than 2.8% but still closed lower from the previous day. Six such episodes occurred during the 2001 and 2008 recessions. The last time it happened was in May 2010 amid the European debt crisis, as my colleague Luke Kawa noted. On the cash side it was an ugly week... with Trannies down 8%!!! (worst week since 2011), Small Caps worst week since Jan 2016 This happened despite utter desperation from Fed's Bullard and Brainard suggesting uber-dovishness. The Dow and S&P back into the red for 2018 and Nasdaq up less than 1% (and Trannies and Small Caps are ugly) All the major US equity indices plunged back below key technical support levels... The S&P 500 'Death Crossed' today...(the last time it death crossed was Jan 2016 as the S&P dropped 13%) "Most Shorted" Stocks were squeeze Monday morning and Thursday afternoon, but ended the week lower... Financials were FUBAR this week - plunging most since March to the lowest since Sept 2017 Regional Banks were crushed... (notably the Monday surge tagged the 50DMA which seemed to trigger stops) And the big banks bloodbathing... Global Systemically Important Banks are down 33% from the highs and have erased all post-Trump gains... FANGs are down 24% from their highs... With NFLX leading the collapse... (down 11% from Monday highs) AAPL tumbled below $170 to six-month lows...down 27% from its highs and in the red for 2018 And Alphabet ended the week red for 2018... Credit markets continued their collapse... HY and IG closed at cycle wides... And LevLoans crashed... On record outflows... Bonds were right after all... Stocks enjoyed 24 hours of excitement on Sunday/Monday before catching down to reality... Treasury yields tumbled all week led by the long-end... 10Y Yield dropped to key support... With dramatic flattening... 2s5s are down for 8 of the last 9 weeks... And inverted... Inflation breakevens soared early on as WTI spiked on the OPEC deal, but lost contact as the day wore on... The Dollar ended the week marginally lower - but had a very wild ride... Interestingly, while stocks all tumbled, erasing trade gains, offshore yuan ended the week notably higher - the best week for Yuan since January! Cryptos crashed again... PMs rallied on the week, copper tumbled... On the heels of the OPEC 'deal', WTI jumped over 5% - its best week since June...BUT it seems like $54 is the limit for WTI for now... Amid all the chaos, gold jumped almost 2%, the best week for the precious metal since March... Additionally, despite Yuan's best week in 11 months, gold outperformed to its strongest since October... Silver broke back above its 50DMA... Finally a chart that fascinates us - the price of a barrel of oil in ounces of silver - it seems 5 ounces is just too rich for demand... Don't forget - last week was the best week for stocks in 8 years... followed by this week's worst drop since the March tech wreck. Finally, a little context for this post-trade-truce week - China is higher, Europe has collapsed, and US stocks have tumbled...Xi wins? And this plunge has happened as the eurodollar market has priced in massive dovishness... And if cyclical stocks are right, bond bears face a serious bloodbath right ahead... If the US economy/market cannot handle positive real interest rates, what is with this "world's greatest economy" narrative? Macro data suggests Goldilocks is dead...
Spoiler: Weekend Reading: Which Yield Curve Really Matters? Authored by Lance Roberts via RealInvestmentAdvice.com, So, have you heard the one about the “flattening yield curve?” It almost sounds like the start of a bad joke because there have been so many discussions during this past year on it. However, it has been largely dismissed under the “this time is different” scenario as trailing economic data has remained strong and the recent stock market struggles are believed to only be temporary. As I discussed yesterday, however, it is quite likely the message being sent by the bond market should not be dismissed. Bonds are important for their predictive qualities which is why analysts pay an enormous amount of attention to U.S. government bonds, specifically to the difference in their interest rates. This data has a high historical correlation to where the economy, stock, and bond markets are generally headed in the longer-term. This is because volatile oil prices, trade tensions, political uncertainty, the strength of the dollar, credit risk, earnings strength, etc., all of which gets reflected in the bond market and, ultimately, the yield curve. But which yield curve really matters? It depends on whom you ask? “The rate on the 2-year has already jumped above the shorter-term 5-year note, a move that suggests the ‘economy is poised to weaken,’ DoubleLine Capital’s Jeffrey Gundlach told Reuters in an interview on Tuesday. Gundlach, a noted bond investor, has been warning investors to be cautious.” – CNBC “Michael Darda, the chief economist at MKM Partners, says people may be too focused on the wrong data. ‘Recession forecasting is fraught with difficulty, so it’s important that we don’t make it more difficult than it has to be by focusing on the wrong indicators, or, at a minimum, less reliable one. It is the difference between the 10-year and the 1-year that everyone should worry about.” – CNBC “While inversions have been reliable recession indicators in the past, the most important relationship — between the 3-month and 10-year government notes — is not inverted and thus hasn’t triggered the likelihood of a contraction ahead.” – CNBC Wait, so which is it? My answer is a bit different. When I am looking at technical indicators for the market it is not just “one” signal I am looking at, but several. The reason is that sometimes a single indicator can provide a “false” signal. For example, the 200-dma has had several violations which did NOT lead to bigger declines. Therefore, there have been numerous articles questioning the efficacy of that moving average as an indicator. However, if you combine the 200-dma with a couple of other indicators to “confirm” the signal being sent, then some of the false readings can be removed. This same premise applies to the yield curve. While the 3-5 yield spread is currently in negative territory, it has not been confirmed by other yield spreads across the spectrum. As shown in the chart below, the best signals of a recessionary onset have occurred when a bulk of the yield spreads have gone negative simultaneously. However, even then, it was several months before the economy actually slipped into recession. However, as I addressed previously, as with all measures, technical or otherwise, it is the trend of the data which is more important to your outlook than the actual number itself. It is correct that the longer-dated yield curve has not turned negative as of yet. However, the market is already beginning to adjust to the reality the economy is beginning to weaken, earnings are at risk, valuations are elevated, and the support from Central Banks has now reversed. So, which one am I watching? All of them. Just something to think about as you catch up on your weekend reading list. Economy & Fed Much Ado About Very Little From The Fed by Caroline Baum via MarketWatch High Earners Are Making The Fed’s Job More Difficult by Danielle Dimartino-Booth via Bloomberg Did Trump Finally Blink On China Tariffs? by Allan Golombek via RCM American Capitalism Isn’t Working by David Leonhardt via NYT Powell, The Fed & Data Dependency by Joe Calhoun via Alhambra Partners Some Advice For Trump In Dealing With The Fed by Robert Samuelson via RCM The End Of Trump’s Economic Sugar High by Patrick Watson via Forbes Too Much Of A Good Thing Is Boring by Scott Sumner via The Money Illusion Less Inflation Gives Fed Room To Pause by Ed Yardeni via Yardeni Research Economy Forces Both Trump & Xi To Play Ball by Stuart Eizenstat & Anne Pence via The Hill The Worst Deal In History – Theresa May’s Surrender by David Brown via The Gatestone Institute Nearly 2/3rd Of Non-Citizen Households Are On Welfareby Joe Schaefer via LibertyNation Markets The Reason The Market Sold Off Is Worse Than You Think by Richard Breslow via Zerohedge This Is A Leading Indicator Of Market Peaks by Upfina Don’t Blame The Strong Dollar by Mark Hulbert via MarketWatch Higher Equity Prices Ahead By Byron Wein via Real Clear Markets Weighing The Evidence For A Year-End Rally by Dana Lyons via The Lyons Share 3-Charts Show Housing Bubble & Potential Tech Wreck by Shawn Langlois via MarketWatch The Tale Of Two Bond Kings by John Coumarianos via CitiWire Cash Continues To Be A Good Position by JC Parets via AllStar Charts Early Wins For WallStreet Could Derail Santa Rally by John Crudele via NY Post 3-Reasons To Own Long Bonds As Short Rates Rise by Cullen Roche via PragCap Most Read On RIA Did The Market Miss Powell’s Real Message by Lance Roberts The Tale Of Two Bond Kings by John Coumarianos The Market Doesn’t Care How Fantastic Your Stocks Are by Vitaliy Katsenelson Don’t Forget Supply & Demand Drives Stock Prices by David Robertson China’s “Trump & Dump” or “He Said, Xi Said” by Doug Kass What Your Financial Plan Says About You by Richard Rosso Is The Bull Back? Or Is It A Bull Trapby Lance Roberts Yes, Virginia…A Santa “Rally” Is Coming by Michael Lebowitz Misdiagnosing The Risk Of Margin Debt by Lance Roberts Watch Research / Interesting Reads What America Has Done To Its Youth Is Appalling via James Ostrowski via LewRockwell.com Borrowing To Pay For Your Kid’s College Is A Bad Idea by Camilo Maldonado via Forbes 5-G Smartphones Are Coming In 2019 by David Goldman via CNN Zuckerberg No Show Highlights FB’s Bad Business Model by Jonathon Trugman via NY Post I Quit FB and IG And Am A Lot Happier by Christina Farr via CNBC 2018 Taxes – What You Need To Know by Paul Katzeff via IBD Inside The World’s Most Elite Trader’s Club by Alastair Marsh via Bloomberg Blockchain’s 0.00% Success Rate by Andrew Orlowski via The Register Have Investors Stopped Chasing Returns by Kevin McDevitt via Morningstar Why The Yield Curve Inverts by Mike “Mish” Shedlock via MishTalk.com “I Pencil’s” Faith In Freedom by Lawrence Reed via FEE “Successful investing is anticipating the anticipation of others.“ – John Maynard Keynes
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2018- S&P sectors for the past week-
Next Week’s Economic Indicators Dec 7, 2018 It was a busy week in economic data with 33 releases out of the US. Of these 33, only 10 beat estimates or the previous period’s reading while about half came in worse than expected. Manufacturing data kicked this week off with Markit Manufacturing PMI coming in slightly below estimates and the ISM Manufacturing Index saw a healthy beat, although prices paid missed big. Tuesday had no scheduled releases. Wednesday only saw mortgage applications and the Fed’s Beige Book release as all other releases were postponed or canceled due to the observance of President George H.W. Bush’s funeral. Things picked up with a busy end to the week. Thursday we saw the counterparts to Monday’s releases with Markit Services PMI and ISM Non-manufacturing index both coming in strong. The week concluded with a weaker Nonfarm Payrolls report indicating a slowdown of an extremely hot labor market. Next week will be a bit lighter but still busy economic slate. The JOLTS report will start off the week as the only indicator on Monday. Tuesday we will get small business optimism data as well as producer prices which are both expecting downticks. Consumer prices will follow up on Wednesday with the Treasury’s monthly federal government budget statement coming later in the day. Import and export price indices come out on Thursday alongside jobless claims, which has now seen multiple weeks of increases off historic lows. It will be an end loaded week with retail sales, industrial production, capacity utilization, preliminary Markit PMIs, and inventories all releasing Friday morning. Yield Curves Near Inversion Dec 6, 2018 On Tuesday, the front end of the yield curve inverted as 3-year yields rose above 5-year yields. Other front end curves, by that measure, while not there yet, have also begun to dip to cycle lows. The 10-year minus 3-month spread is at its lowest level since 2007. Despite being at a low for the current cycle, the curve remains around 40 bps from inversion. In the charts below we look at various yield curves over the past 15 years; this time frame allows us to see the curve’s movement leading up to the last recession. Perhaps the most widely followed curve, the 10 year versus the 2-year spread, is also at levels it has not seen since 2007. Although it is picking up slightly today as yields across the board fall, 2s10s is looking much more ominous at only 13 bps away from becoming inverted. This will be the main curve that investors will keep their eyes on; expect to see it ad nauseam in headlines if it moves those 13 bps lower. Shifting our focus to the longer end of the curve, spreads are off of lows from earlier in the year, but may not have quite bottomed just yet. The 10-year versus the 5-year spread has recently fallen back down towards these lows. Even longer maturities like the 30-year versus the 10-year have a higher spread still and has much more clearly made a bottom. It is important to note, leading up to the previous recession this curve was not inverted for long. Most of the bottoming occurred with a normal—albeit very flat—curve. 2018 Commodity Performance Dec 4, 2018 Below is a look at the 2018 YTD performance of major commodities. As shown, natural gas is up 47.2%, which is by far the biggest gainer of the bunch. Wheat and orange juice are the only other two commodities in the green on the year with gains of 5%+. While corn and gold are down single-digit percentage points, the remaining five commodities in the chart are down more than 10%. Silver and copper lead the way lower with declines of 15%+, while coffee is down 14.6%, platinum is down 13.5%, and oil is down 12.1%. Below are trading range charts for four of key commodities in the chart above — oil, gold, natural gas, and silver. The green shading in the chart represents between two standard deviations above and below the 50-day moving average. Moves to the top of this range are considered overbought, while moves to the bottom of the range are considered oversold. Oil’s sharp decline from its highs a couple months ago has widened out its trading range dramatically, and it’s still trading right near the bottom of its range after a bounce over the last couple of days. To get back to overbought levels from here, oil needs to rally 50%! Natural gas, on the other hand, is trading at the top of its trading range after experiencing a dramatic spike higher in November. For the two precious metals, gold has started to trade positively lately after breaking out of its long-term downtrend with a series of higher lows over the last few months. The same can’t be said for silver, though, which hasn’t made as positive of a move as gold. Time for Santa? Posted by lplresearch 2018 has been a rocky year with a big dose of volatility, but could a late-year rally be in store for investors? History says it is quite possible. “Although the well-known Santa Claus rally is technically the last five days of the year and the first two of the new year, you can’t deny the fact that December tends to bring with it good vibes and stocks gains,” explained LPL Senior Market Strategist Ryan Detrick. As our LPL Chart of the Day shows, since 1950, no month has a higher average return or has been higher more often than the month of December. With Federal Reserve Chair Jerome Powell opening the door to potentially fewer interest rate hikes in 2019, the last component likely needed for a rally is some type of agreement between the United States and China regarding the ongoing trade issues. Given the G20 summit is this weekend, many are expecting some type of potential resolution to be announced. Stay tuned! Last, an interesting stat: December has never been the worst month of the year for stocks. That’s right—since 1950, the S&P 500 Index has never had its largest monthly drop in December. Given that the worst month this year was October with its 6.9% drop, history would say to not expect a similar big drop to end 2018. Typical December Trading: Strength Early and Late, Choppy Between Historically, the second trading day of December, today, has been a modestly bullish day with S&P 500 advancing 36 times over the last 68 years (since 1950) with an average gain of 0.13%. To find a worse second trading day of December, you would have to go all the way back to 1932 when S&P 500 dropped 3.86%. Trade remains a concern, but today’s sell off appears to have been triggered by economic growth fears caused by a flattening Treasury yield curve and 5-year yields dipping below 2-year yields. As we have repeatedly noted, the Fed is the biggest risk to the market and the economy. These fears could lead to a larger than usual amount of choppy trading during the first half of December. Historically December has opened with strength and gains over its first five trading days before beginning to drift. By mid-month all five indices have surrendered any early-month gains, but shortly thereafter Santa usually visits sending the market higher until the last day of the month and the year.
Stock Market Analysis Video for December 7th, 2018 Video from AlphaTrends Brian Shannon ShadowTrader Video Weekly 12.9.18 Video from ShadowTrader Peter Reznicek (VIDEO NOT YET UP!)
Here are the current major indices pullback/correction levels from ATHs as of week ending 12.7.18- Here is also the pullback/correction levels from current prices- ...and here are the rally levels from current prices-
Stockaholics come join us on our stock market competitions for this upcoming trading week ahead!- ======================================================================================================== Stockaholics Daily Stock Pick Challenge & SPX Sentiment Poll for Monday (12/10) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (12/10-12/14) <-- click there to cast your weekly market vote and stock picks! ***TRIAL RUN: Stockaholics Weekly T/A Charting Challenge (12/10-12/14)*** <-- click there to participate! ======================================================================================================== It would be pretty sweet to see some of you join us and participate on these! I hope you all have a fantastic weekend ahead!
Here are the most anticipated ERs for this upcoming week ahead (I'll also have the weekly earnings calendar posted in here as well once it's out) ***Check mark next to the stock symbols denotes confirmed earnings release date & time*** Monday 12.10.18 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! Monday 12.10.18 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! Tuesday 12.11.18 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 12.11.18 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 12.12.18 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 12.12.18 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 12.13.18 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 12.13.18 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 12.14.18 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. Friday 12.14.18 After Market Close: Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES! NONE.
And as promised here is the most anticipated earnings calendar for this upcoming trading week ahead- ($ADBE $AEO $SFIX $COST $DSW $PLAY $CIEN $PVTL $ASNA $INSE $FRAN $GTIM $CDMO $ASPU $ARWR $DLHC $CASY $PLAB $VRA $NCS$NX $TLRD $SEAC $ROAD $CHKE $IRET $OXM $NDSN $FTI $VERU $PHX $CIVI $SKIS $SMMT $PURE $STRM $MMMB $AXNX) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning December 10th, 2018 <-- click there to view!
The french want have the right written they how referendum on every part of the laws... so Europe buy buy.... det pfff.... that is the objective of yellow vest ,the gaz is not the problem, the news are wrong.
You mean the US news? There's a lot of problems with those guys focusing on the wrong things. If you mean here, well I'm more in the "listen" rather than "talk" stage of French politics.
@Frankenstein we have been tag teaming this market lately. I make it on the downside you catch the upside. Gotta love this volatility, and how the markets have been trading so technically man.
