Welcome Stockaholics to the trading week of February 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: Sector Performance WTD, MTD, YTD: What to Watch in the Week Ahead: Monday Earnings: Alphabet, Clorox, Gilead Sciences, Ryanair, Sysco, Legg Mason, Leggett and Platt, Seagate Technology, Beazer Homes,Hartford Financial, ON Semiconductor 10:00 a.m. Factory orders 2:00 p.m. Senior loan officer survey 7:30 p.m. Cleveland Fed President Loretta Mester Tuesday Earnings: BP, Disney, Archer Daniels Midland, Viacom, Becton Dickenson, Genworth Financial, Owens-Illinois, Vertex, Plains All American, Skyworks Solutions, Chubb, Suncor, Unum, Oaktree Capital, Pitney Bowes, Tableau Software, Torchmark, Snap, Allstate, The Container Store, Estee Lauder, Ralph Lauren 8:30 a.m. International trade 9:45 a.m. Services PMI 10:00 a.m. ISM nonmanufacturing 1:00 p.m. $38 billion 3-year note auction Wednesday Earnings: General Motors, Eli Lilly, Chipotle Mexican Grill, Fireeye, Zynga, Sonos, Valvoline, Humana, Cognizant Tech, Cummins, First Data, Regeneron, Spotify, Take Two Interactive, Carlyle Group, Netgear, Boston Scientific, BNP Paribas, GlaxoSmithkline, Daimler, Toyota, O'Reilly Automotive, Metlife, Snap 8:30 a.m. Productivity and costs 1:00 p.m. $27 billion 10-year note auction 7:00 p.m. Fed Chairman Jerome Powell at town hall with educators Thursday Earnings: Twitter, News Corp, Kellogg, Marathon, Expedia,Mohawk, Western Union, Intercontinental Exchange, Sanofi, Total, Yum Brands, Expedia, IAC/Interactive, Mattel, WR Grace, Dunkin Brands, Fiserv, Tapestry, Tyson Foods, Andeavor Logistics, Virtu Financial, Hain Celestial, Sealed Air, Triumph Group, Cardinal Health, S&P Global, Penske Auto Group, Sealed Air, Fiat Chrysler 8:30 a.m. Initial unemployment claims 1:00 p.m. $19 billion 30-year bond auction 3:00 p.m. Consumer credit 7:30 p.m. St. Louis Fed President James Bullard Friday Earnings: Arconic, Hasbro, Cleveland-Cliffs, Ventas, Philips 66,Buckeye Partners, Exelon 10:0 a.m. Wholesale trade
Powell-Pivot Sends Gold To 8-Month Highs, Dow Up Sixth Straight Week What made The Fed stomp on the brakes and slam the monetary trajectory into reverse so fast? Probably nothing!! China's stock markets were levitated late Thursday, early Friday (after The Fed) back into the green for Shanghai Composite (tech heavy indices underperformed)... A Mixed week too in Europe with UK's FTSE outperforming and Spain and Italy underperforming... No "mix" for US stocks - they are all green. Trannies were best on the week with the rest of the majors holding around the same gains (Dow up 6 straight weeks) S&P, Dow, and Small Caps all lifted into the close to end green but Nasdaq ended red (Thanks to AMZN) Futures show today a little better - the surge on payrolls and again on ISM then fade from the European close... The major US equity indices all stalled at the 100DMA... Energy, Financials, and Tech continue to lead the market this year, though financials underperformed on the week... AMZN spoiled the party this week (down for 2 straight weeks, back into bear market)...and is unchanged since Jan 7th... VIX tumbled to a 16 handle and credit spreads crashed in the week... As the Fed's implied easing plunged... Treasury yields tumbled on the week after The Fed but rose today after good payrolls/ISM data... This was the biggest yield drop for 2Y since 2018... sending the curve notably steeper... (though hitting resistance once again) And the market shifted more hawkish on the day after the "good" data... The Dollar plummeted after The Fed flip-flop and only rebounded around half of the loss after good data today... Yuan was practically unchanged on the week after a big roller-coaster run higher then lower... Litecoin managed to rally on the week but the rest of the major cryptos continued their slide... Commodities are higher across the board this week, led by WTI... Gold had a second good week in a row - closing at the highest since May 2018... And against the Yuan, surged back to early Jan highs... WTI rose to its highest since November, back above $55... And the coldest week on record prompted a big sell-off in NatGas... As The Nattie/WTI ratio continues to re-normalize... Finally, we note that while macro surprises have exploded today (thanks to payrolls), earnings expectations continue to tumble (to six month lows)... Let's just hope its not 2018 deja vu all over again... And remember what is driving all this exuberance in stocks...
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2019- S&P sectors for the past week-
Now What? Posted by lplresearch What a year it has been. After the worst December for stocks in 87 years that contributed to the worst fourth quarter since the 2008–09 financial crisis, stocks have bounced back in spectacular fashion. In fact, with a day to go, stocks are looking at their best first month of the year in 30 years. What could happen next? “We like to say that the easy 10% has been made off the lows and the next 10% will be much tougher,” explained LPL Senior Market Strategist Ryan Detrick. “Things like Fed policy, China uncertainty, and overall global growth concerns all will play a part in where equity markets go from here.” With the S&P 500 Index about 10% away from new highs, we do think new highs are quite possible at some point this year. Positive news from the Federal Reserve (Fed) and China trade talks, as well as the realization by investors that the odds of a recession in 2019 are quite low could spark potential new highs. Remember, fiscal spending as a percentage of overall gross domestic product (GDP) is higher this year than it was last year. Many think the tax cut and fiscal policies in play last year were a one-time sugar high. We don’t see it that way and expect the benefits from fiscal policy to help extend this economic cycle at least another year—likely more. As we head into February, note that it hasn’t been one of the best months for stocks. In fact, as our LPL Chart of the Day shows, since 1950, February has been virtually flat, and over the past 20 years only June and September have shown worse returns. Overall, the market gains have been quite impressive since the December 24 lows, but we wouldn’t be surprised at all to see a near-term consolidation or pullback. A Fed Pause and the Flattening Yield Curve Posted by lplresearch Investors have increasingly positioned for a Federal Reserve (Fed) pause, which could portend a shift in fixed income markets. Fed fund futures are pricing in about a 70% probability that the Fed will keep rates unchanged for the rest of 2019, and the market’s dovish tilt has weighed on short-term rates. As shown in the LPL Chart of the Day, the 2-year yield has typically followed the fed funds rate since policymakers began raising rates in December 2015. While we expect one or two more hikes this cycle, there is a possibility that the Fed’s December hike was its last, which will likely cap short-term rates. Short-term yields have outpaced longer-term yields over the past few years, flattening the yield curve and raising concerns that U.S. economic progress may not be able to keep up with the Fed’s tightening. The spread between the 2-year and 10-year yield has fallen negative before every single U.S. recession since 1970. If the Fed pauses, the curve will likely reverse course and steepen as solid economic growth and quickening (but manageable) inflation drives longer-term yields higher. As mentioned in our Outlook 2019, FUNDAMENTAL: How to Focus on What Really Matters in the Markets, we’re forecasting the 10-year Treasury yield will increase significantly from current levels and trade within a range of 3.25–3.75% in 2019. “We remain optimistic about U.S. economic growth prospects, and recent data show inflation remains at manageable levels,” said LPL Research Chief Investment Strategist John Lynch. “Because of this, we expect the data-dependent Fed to be less aggressive than initially feared, as policymakers juggle these factors with the impacts of trade tensions and tepid global growth.” To be clear, investors shouldn’t fear a flattening yield curve given the backdrop of solid economic growth and modest inflation. Historically, the yield curve has remained relatively flat or inverted for years before some recessions started. Since 1970, the United States has entered a recession an average of 21 months after the yield curve inverted. Jobless Claims’ Historic Significance Posted by lplresearch Jobless claims have dropped to a 49-year low. Based on historical trends, this could signal that a U.S. economic recession is further off than many expect. Data released January 24 showed jobless claims fell to 199K in the week ending January 18, the lowest number since 1969 and far below consensus estimates of 218K. As shown in the LPL Chart of the Day, current jobless claims have been significantly lower than those in the 12-month periods preceding each recession since the early 1970s. Jobless claims have fallen out of the spotlight as the economic cycle has matured, but they could prove important again as investors’ recessionary fears increase. While most labor-market data serve as lagging indicators of U.S. economic health, jobless claims are a leading indicator. Historically, a 75–100K increase in claims over a 26-week period has been associated with a recession. “Last week’s jobless claims print was particularly impressive given the partial government shutdown and weakening corporate sentiment,” said LPL Research Chief Investment Strategist John Lynch. “The U.S. labor market remains strong and will help buoy consumer health and output growth this year.” Other predictive data sets have signaled U.S. recessionary odds are low. Data last week showed the Conference Board’s Leading Economic Index (LEI), based on 10 leading economic indicators (like jobless claims, manufacturers’ new orders, and stock prices), grew 4.3% year over year in December. In contrast, the LEI has turned negative year over year before all economic recessions since 1970. Because of its solid predictive ability, the LEI is a component of our Recession Watch Dashboard. Best S&P January Since 1987 Most major U.S. stock indexes rallied to new recovery and year-to-date highs today shrugging off some misses and weakness from Microsoft, DuPont and Visa. S&P 500 finished the month strong with a 7.9% gain. This is the best S&P January since 1987. This is also the third January Trifecta in a row. Last year the S&P 500 crumbled in the fourth quarter under the weight of triple threats from a hawkish and confusing Fed, a newly divided Congress and the U.S. trade battle with China, finishing in the red. 2017’s Trifecta was followed by a full-year gain of 19.4%, including a February-December gain of 17.3%. As you can see in the table below, the long term track record of the Trifecta is rather impressive, posting full-year gains in 27 of the 30 prior years with an average gain for the S&P 500 of 17.1%. Devised by Yale Hirsch in 1972, the January Barometer has registered ten major errors since 1950 for an 85.5% accuracy ratio. This indicator adheres to propensity that as the S&P 500 goes in January, so goes the year. Of the ten major errors Vietnam affected 1966 and 1968. 1982 saw the start of a major bull market in August. Two January rate cuts and 9/11 affected 2001.The market in January 2003 was held down by the anticipation of military action in Iraq. The second worst bear market since 1900 ended in March of 2009 and Federal Reserve intervention influenced 2010 and 2014. In 2016, DJIA slipped into an official Ned Davis bear market in January. Including the eight flat years yields a .739 batting average. Our January Indicator Trifecta combines the Santa Claus Rally, the First Five Days Early Warning System and our full-month January Barometer. The predicative power of the three is considerably greater than any of them alone; we have been rather impressed by its forecasting prowess. This is the 31st time since 1949 that all three January Indicators have been positive and the twelfth time (previous eleven times highlighted in grey in table below) this has occurred in a pre-election year. With the Fed turning more dovish and President Trump tacking to the center and meeting with China and market internals improving along with the gains, the market is tracking Base Case and Best Case scenarios outlined in our 2019 Annual Forecast. Next eleven month and full-year 2019 performance is expected to be more in line with typical Pre-Election returns. Sock It To ‘Em J. P. In line with our Base and Best Case scenarios from our 2019 Annual Forecast that we made back on December 20, 2018 Fed Chairman Jerome Powell (JP) has really toned down his rhetoric as of late and today the FOMC left interest rates unchanged. The Fed’s post meeting statement and comments were just what the market ordered: interest rates were left unchanged, flexibility on its balance reduction strategy, patience and data dependence. “The case for raising rates has weakened somewhat,” Powell said. Here’s what we wrote on December 20 in our 2019 Annual Forecast. Base Case – Something gives. Mild bear market bottoms soon or in early 2019 as Fed tones down rhetoric and holds off raising rates, Trump and the Dems work out a few deals and we have modest pre-election year gains in the 5-10% range. Best Case – Everything resolves quickly. Fed becomes accommodative. Trade deals are worked out expeditiously. Trump tacks towards the center and works with congress and does not get “Muellered.” Typical pre-election year gains of 10-15% for Dow and S&P 500 and 20-30% for NASDAQ Earnings season has also begun to deliver more positive surprises this week and the market has responded bullishly in kind, making it a virtual lock that our January Indicator Trifecta will be 3-for-3. The Santa Claus Rally and our First Five Days “Early Warning System” have both already registered positive readings. For our full-month January Barometer to not be positive the S&P 500 would need to drop 6.5% tomorrow. (Almanac Investor subscribers will be emailed the official results tomorrow after the close.) Plus, after the late Midterm Year correction, more normal Pre-Election Year gains are now likely in 2019. The Pre-Election Year or 3rd Year of the 4-Year Election Cycle is the best of the 4 by a wide margin. DJIA averages 15.8% since 1949 and NASDAQ Composite averages 28.8% since 1971. February Almanac: Small-Caps Tend to Outperform Even though February is right in the middle of the Best Six Months, its long-term track record, since 1950, is not all that stellar. February ranks no better than seventh and has posted paltry average gains except for the Russell 2000. Small cap stocks, benefiting from “January Effect” carry over; tend to outpace large cap stocks in February. The Russell 2000 index of small cap stocks turns in an average gain of 1.1% in February since 1979—just the seventh best month for that benchmark. In pre-election years, February’s performance generally improves with average returns all positive. NASDAQ performs best, gaining an average 2.8% in pre-election-year Februarys since 1971. Russell 2000 is second best, averaging gains of 2.5% since 1979. DJIA, S&P 500 and Russell 1000, the large-cap indices, tend to lag with average advances of around 1.0%. Not a subscriber? Sign up today for a Free 7-Day Trial to Almanac Investor to continue reading our latest market analysis and trading recommendations and get a full run down of seasonal tendencies that occur throughout each month of the year in an easy-to-read calendar graphic with important economic release dates highlighted, Daily Market Probability Index bullish and bearish days, market trends around options expiration and holidays. In addition, the Monthly Vital Statistics Table combines stats for the Dow, S&P 500, NASDAQ, Russell 1000 and Russell 2000 and puts them all in a single location available at the click of a mouse. The Bespoke Report — From Fed, Firm Footing Found Feb 1, 2019 The S&P 500 gained 1.6% this week as stocks reporting earnings continued to get bid higher. Based on stock performance this earnings season, investors got way too bearish leading up to the start of the Q4 reporting period in early January. With reports not coming in as bad as expected, there has been a rush to buy stocks that beat estimates. At the same time, stocks that have missed estimates have not been getting hit that hard. So far this year, stocks that have beaten EPS estimates have gained 2.64% on their earnings reaction days, while stocks that have missed EPS estimates have only fallen 1.92%. Normally, stocks that beat EPS only gain 1.9% on their earnings reaction day, while stocks that miss EPS normally fall ~3.5%. This year has been a huge outlier so far, but eventually we’ll see mean reversion back towards the long-term averages. Enjoy the earnings strength while it lasts! Along with in-depth earnings season coverage, there’s a lot more to discuss this week after the Fed’s rate decision on Wednesday and Friday’s blockbuster non-farm payrolls number. We cover everything you need to know as an investor in this week’s Bespoke Report newsletter. Have a great Super Bowl weekend. 5% Months Jan 31, 2019 7%? Bulls will take it! After an abysmal December, the S&P 500 is currently set to finish the month with its best January return since 1987. This month’s gain will mark the 16th time since the lows of the Financial Crisis in March 2009 that the S&P 500 has rallied more than 5% in a given month. The table below highlights each of the 15 prior months where the S&P 500 rallied more than 5% and shows how much the S&P 500 gained on the month as well as its performance on the last trading day of the month and the first trading day of the subsequent month. When looking at the table, a few things stand out. First, the first trading day of a month that follows a month where the S&P 500 rallied more than 5% has been extremely positive as the S&P 500 averages a gain of 0.84% (median: 1.01%) with positive returns 13 out of 15 times! In addition to the positive tendency of markets on the first day of the new month, there has also been a clear tendency for the S&P 500 to decline on the last trading day of the strong month. The average decline on the last trading day of a strong month has been 0.09% with positive returns less than half of the time. This is no doubt related to the fact that funds are forced to rebalance out of equities to get back inline with their benchmark weights. However, on those five prior months where the S&P 500 bucked the trend and was positive on the last trading day of a 5%+ month, the average gain on the first trading day of the next month was even stronger at 1.52% with gains five out of six times. Bespoke’s Sector Snapshot — Breadth Explosion — 1/31/19 Jan 31, 2019 Below is one of the many charts included in this week’s Sector Snapshot, which shows the percentage of stocks trading above their 50-day moving averages by sector. Breadth readings have exploded higher this week, with 80% of S&P 500 stocks now trading above their 50-day moving averages. Ten of eleven sectors have more than 75% of stocks above their 50-DMAs, while Consumer Staples is the only sector with a reading below 50%.
Here are the current major indices pullback/correction levels from ATHs as of week ending 2.1.19- 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 (2/4) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (2/4-2/8) <-- click there to cast your weekly market vote and stock picks! Stockaholics Weekly T/A Charting Challenge (2/4-2/8) <-- 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!
Stock Market Analysis Video for February 1st, 2019 Video from AlphaTrends Brian Shannon ShadowTrader Video Weekly 2.3.19 Video from ShadowTrader Peter Reznicek (VIDEO NOT YET UP!)
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 2.4.19 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! Monday 2.4.19 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! Tuesday 2.5.19 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 2.5.19 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 2.6.19 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 2.6.19 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 2.7.19 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 2.7.19 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 2.8.19 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! Friday 2.8.19 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- ($GOOGL $TWTR $SNAP $CLF $TTWO $ALXN $DIS $BP $CLX $SYY $GM $GILD $CMG $GRUB $EA $STX $SPOT $AMG $SAIA $RL $CNC $EL $UFI $GLUU $MTSC $JOUT $PM $GPRO $LITE $FEYE $SWKS $LLY $MPC $BDX $REGN $VIAB $ONVO $HUM $ARRY $PBI $ADM $BSAC) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning February 4th, 2019 <-- click there to view!
China cut incentives. https://www.fool.com/investing/2018/06/04/why-the-lights-went-out-on-solar-stocks-today.aspx
Good Monday morning to all. Here is this morning's pre-market news thread for those of you wanting to get a quick read before today's open- <-- click there to read! Hope everyone has a great trading day & week ahead!
Morning Lineup – Uneventful As Sunday’s Game Feb 4, 2019 If you thought last night’s game was a snoozefest, pre-market trading hasn’t been any better as futures have been trading on either side of unchanged all morning. We’re still right thick in the middle of earnings season, though, so the pace of news is likely to pick up later today, especially when Alphabet (GOOGL) reports after the close. Speaking of earnings season, they don’t get much better than the one we are in right now. At least in terms of how the stocks of companies reporting are reacting. The average performance of stocks on their earnings reaction days so far this earnings season has been a gain of 1.12%. If this pace keeps up for the remainder of the reporting period, it would be the best earnings season in terms of stock performance since the early stages of the bull market. That’s pretty impressive.
I guess the lower expectations help Many companies actullay lowered guidance when they reported. Anyway very interesting
Looks like risk on for equities continue This market pretty much hasn’t looked back after the FED became more dovish
The Sanders-Schumer proposal to limit buybacks could be a very big negative for the stock market Sens. Charles Schumer and Bernie Sanders outlined a plan Monday that would restrict how companies repurchase their own shares. One Wall Street veteran estimated that such a move could have a "meaningful" impact on stocks, which have relied on buybacks and Fed intervention during the bull run that started in 2009. The plan faces political roadblocks in the Senate and likely from President Donald Trump https://www.cnbc.com/2019/02/04/the...on-buybacks-could-have-meaningful-impact.html
Small Cap Relative Strength Near a Turning Point Feb 4, 2019 If you’ve been following the market pretty closely, you have no doubt seen the strong outperformance in small caps to kick off 2019. From a longer-term perspective, though, it’s pretty amazing to see that small caps have pretty much been trading range-bound with respect to large caps over the last ten years. The chart below shows the relative strength of the Russell 2000 versus the S&P 500 since the start of 2000. In the chart, a rising line indicates small cap outperformance relative to large-cap, while a falling line indicates that large caps are outperforming. While small caps saw steady outperformance from the start of 2000 right up until early 2006, since then it has been a series of shorter-term ebbs and flows where phases of outperformance by either large or small caps are measured in months rather than years and neither one takes a big lead over the other. To illustrate, since late January 2006, the Russell 2000 is up 114%, while the S&P 500 is up a nearly identical 115%. Looking at the more recent dynamics between small and large cap stocks, after finally starting to make up some ground versus large caps, small caps have approached a key potential resistance level that had previously acted as support. If the index’s relative strength manages to break above this level, it would set the stage for an even more meaningful rally and quite possibly lead to 2019 being a big year for small caps.
