Welcome Stockaholics to the trading week of September 2nd! 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 Labor Day holiday U.S. markets closed Tuesday Earnings: Coupa Software 9:45 a.m. Manufacturing PMI 10:00 a.m. ISM Manufacturing 10:00 a.m. Construction spending Wednesday Monthly vehicle sales Earnings: American Eagle Outfitters, Michael Cos, Vera Bradley, Pivotal Software, Slack, Cloudera 8:40 a.m. International Trade 10:00 a.m. QFR Q2 12:30 p.m. Fed Governor Michelle Bowman speaks 2:00 p.m. Beige book Thursday Earnings: Ciena, Navistar, Barnes and Noble, John Wiley, Signet Jewelers,Donaldson, Zoom Video, CrowdStrike, Dave and Buster’s, DocuSign 8:15 a.m. ADP employment 8:30 a.m. Initial claims 8:30 a.m. Productivity and costs 9:45 a.m. Services PMI 10:00 a.m. ISM nonmanufacturing 10:00 a.m. Factory orders Friday 8:30 a.m. Employment 10:00 a.m. QSS Q2 12:30 p.m. Fed Chairman Jerome Powell speaks
Yuan Crashes Most In 25 Years As August Ends With Bonds & Bullion Bid Well that was quite a month... High(Low)lights... China's Renminbi suffered its biggest monthly loss since 1994 EM FX tumbled to a record low, worst month in a year US Treasury yields plunged in August by most since Sept 2011 (to record low yields at the long-end) US Yield Curve flattened most in August since Jan 2016 (to its flattest since 2007) Bund yields tumbled 26bps to record lows - the biggest monthly drop since June 2016 (Brexit vote) Treasury 'VIX' spiked most in August since May 2009 Iron Ore Futures (Singapore) suffered their worst month ever... Gold has the best August dollar gains since Feb 2016 Silver had best August percentage gain since June 2016 (Brexit vote) Source: Bloomberg US equities ended the month lower with Trannies and Small Caps worst, Dow and S&P the least worst... Source: Bloomberg Only The Dow Industrials and Transports are green from last week's Trump tantrum (S&P unch)... NOTE - last minute panic-buying Defensives dominated the month... Source: Bloomberg The Dow managed to get back above its 100DMA but faded into it at the close today... Buybacks saved stocks numerous times this month... Source: Bloomberg And while short-squeezes were used to keep stocks afloat, their surges were weaker and weaker... Source: Bloomberg And... as @TaviCosta notes, another one bites the dust. This beauty was the #2 performer in the S&P 500 since March of ’09! Just broke down from multi-year support line as well. Source: Bloomberg Bonds Treasury yields utterly collapsed in August (30Y was down over 60bps at its lowest)... The biggest monthly drop in the long-bond's yields since Sept 2011 Source: Bloomberg 30Y ended the week below 2.00% for the first time ever... Source: Bloomberg A bloodbath for bond bears... Source: Bloomberg And the yield curve collapsed (3m10Y) holding its inversion for Source: Bloomberg And 2s10s closed the week inverted (biggest 2-month flattening since Jan 2015)... Source: Bloomberg And before we leave bondland, we note that 30% of global IG corporate debt is now trading at a negative yield!! Source: Bloomberg FX The Dollar rallied in August helped by Yuan weakness slightly offset by Yen strength... Source: Bloomberg The broad trade-weighted dollar is at an all-time record high... Source: Bloomberg EURUSD tumbled back below 1.10 for the first time since May 2017 Source: Bloomberg Emerging Market FX tumbled to record lows... Source: Bloomberg Cryptos ended in the red for the month after yesterday's plunge (Litecoin the biggest loser)... Source: Bloomberg With Bitcoin back below $10k... Source: Bloomberg Commodities Silver's best month since the Brexit vote (June 2016) and Gold rallied but crude and copper were clubbed like baby seals... Source: Bloomberg Cotton fell for a fifth straight month in August, the worst such run in more than 14 years, as slowing demand feeds expectations for a global surplus. Iron Ore Futures (Singapore) suffered their worst month ever... Source: Bloomberg Silver led the precious metals but Platinum had a big month (up most since Jan 2017) Source: Bloomberg Gold ended the week unchanged but well up from Trump's tantrum... But Silver dramatically outperformed (up for the 7th week of the last 8)... Source: Bloomberg With Silver at its highest since April 2017 Source: Bloomberg Gold continues to track the surge in negative-yielding debt volumes almost perfectly... Source: Bloomberg Finally, bonds and stocks had a very different month, you decide which you trust more... Source: Bloomberg Will it be 1998 or 2013? Source: Bloomberg While August saw a flood into safe-havens like bond and bullion, volatilities are notably divergent in Treasuries and Gold relative to other asset classes... Source: Bloomberg
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2019- S&P sectors for the past week-
Day after Labor Day Bullish for Small Caps In the last 21 years, DJIA, S&P 500, NASDAQ and Russell 2000 have all registered average gains of exceeding 0.2% on the Tuesday after the long Labor Day weekend. NASDAQ and Russell 2000 have been up five of the last seven years, but DJIA, S&P 500, NASDAQ and Russell 2000 all declined on the day in 2017 and 2018. On Wednesday the market’s performance has been varied. DJIA has performed the best, up 71.4% of the time with an average gain of 0.12%. S&P 500 is worst, up only 38.1% of the time with an average loss of 0.005%. Typical September Trading: Choppy Early Gains Fade Late September is the final month of the third quarter and historically it is essentially tied with August as worst month of the year. Since 1950, September is ranked last for DJIA, S&P 500, NASDAQ (since 1971) and Russell 1000 (since 1979). Small-caps, measured by the Russell 1000, have fared slightly better, but historical average performance is still negative. Over the last 21 years, September has generally opened tepidly with mixed performance depending on index with Russell 2000 often rising the most through mid-month. However, after mid-month gains have tended to fade quickly and turn into losses by month’s end. Sizable losses in 2001, 2002, 2008 and 2011 weigh heavily on average performance. Down Friday/Down Monday Levels Not Reclaimed Yet Technically speaking, the market has settled into a range between 2815 and 2945 on the S&P 500. S&P 2815 is a support level we have been tracking for some time now that sits at the intraday high back on November 7, 2018 where the market failed last fall before the 20% correction ran its course to the Christmas Eve low. The good news is the 2815 has held here this time unlike the ~2700 level last fall. The bad news or at least the technical case for no new highs is that the S&P has yet to clear the 2945 level, which was the intraday high on Friday August 2 that was the beginning of two back-to-back Down Friday/Down Mondays, which has a negative indication if not quickly reclaimed. Fund Flows Still Feeble Fri, Aug 30, 2019 Below is an update of fund flows data from the Investment Company Institute including mutual funds and ETFs. In the tables below, we show dollar fund flows for total mutual funds plus ETFs along with ETFs alone. Obviously, mutual fund flows have been persistently negative for a long time now, but ETF flows are making up for that in many ways. The combined data only goes back to 2013, but over that period total ETF flows are in the 99th percentile for all ETFs...and that includes a string of drawdowns in domestic equity ETF flows over the last few weeks. Combined, ETF plus mutual fund flows are a better measure of total sentiment than mutual funds alone. While ETF fund inflows are only just off record highs, combined mutual fund and ETF fund flows are down across the past week, month, three months, and year for all equity funds, domestic only equity funds, and global equity funds. On the other hand, bond funds have seen the same torrid inflows that have been picked up in mutual fund flows for a long time now: since 2013, total bond inflows to ETFs are near the 97th percentile for all periods. For ETFs plus mutual funds, recent inflows are less dramatic but still very, very large; that’s especially true for the municipal bond space. We also note commodity funds have seen a pickup in net flows of late. To provide further context, below we show rolling 13 week fund flows for the total equity space as well as domestic funds only. While ETFs have seen material inflows, combined mutual and ETF flows are still materially negative, with total equity mutual fund plus ETF flows at a record size. B.I.G. Tips - Years Like 2019: August Edition Thu, Aug 29, 2019 We’ve highlighted the chart below comparing 2019 to 1998 a number of times over the last several weeks, and the similarities between the performance of the S&P 500 in each year has continued right up through the end of August. While the pullback from the highs this Summer hasn’t been as severe as it was in 1998, the timing of both and the subsequent periods of backing and filling has been striking. A continuation of the similar patters certainly wouldn’t be a positive in the short term, but the silver lining is that Q4 1998 was exceptionally strong. As we do throughout the year, in our most recent B.I.G. Tips report we compared the S&P 500's trading pattern this year to all other years in order to see which ones were the most similar. With those similar years, we then analyzed how the S&P 500 performed for the remainder of the year in order to help come up with a framework for what to expect for the rest of this year. It shouldn't surprise anyone that 1998 made the list, but a number of other notable years also had strong similarities to the pattern of 1998 with very different outcomes as well. Russell 2000 (IWM) Testing Support Wed, Aug 28, 2019 Unlike large-cap major indices like the Dow or S&P 500 which managed to reach record highs earlier this year, so far in 2019, the small-cap focused Russell 2000 never managed to so much as retest the highs from around this time last year. In fact, in the past year, other than the final leg down to December lows and the subsequent rally back up to previous levels in early 2019, the Russell has been in a range between support and resistance from last fall. This support and resistance can actually be traced back even further to the highs and lows of late 2017 and early 2018. This year has seen more tests of these support levels after May declines and once again this month. At the beginning of August, the Russell collapsed through flat 50 and 200-DMAs finding relief at the bottom of this range. Since then, the index has been bouncing between this support and the 200-day with the most recent failed test of its 200-DMA coming just last week. Over the past few sessions, while it has not closed significantly below, intraday the index has breached these critical support levels. Fortunately, today the index is seeing some mean reversion from its extreme oversold levels as it is up rather than breaking out of the range to the downside. What's Driven the S&P 500? Wed, Aug 28, 2019 In last night's Closer, we showed the biggest contributors to the S&P 500's gain so far in 2019 as well as the stocks that have weighed on the index the most. Given the S&P's 14% YTD gain, it's probably not surprising to hear that only one stock in the entire S&P 500 has weighed on the total index performance by at least 20 bps: Pfizer (PFE). On the other hand, 11 different stocks have added at least 20 bps to total index performance in 2019. We show the 10 best and worst-performing stocks this year by the overall contribution to the S&P 500's performance in the table below. As shown, mega-cap Tech like Microsoft (MSFT) and four of the five FAANG names have been the biggest contributors. When you add them all up, they've accounted for roughly 26% of the S&P's gain this year. Two credit card companies -- Mastercard (MA) and Visa (V), and two retailers -- Walmart (WMT) and Home Depot (HD) -- have also been big contributors to gains. At the industry group level, health care stocks related to Pharmaceuticals, Biotech, and Life Sciences are one of only two industry groups to weigh on S&P 500 performance this year. Energy is the other standout with a 4% decline. Software & Services is the best performer, driving 3.3 percentage points of the S&P's 14% gain this year. Media & Entertainment, Retail which includes Amazon (AMZN), and tech Hardware are the only other groups that have added at least 1% to the total 14.46% gain for the S&P 500 so far in 2019. While YTD numbers look really great, things are not so hot versus this time last year; the S&P 500 is actually slightly lower year-over-year. As a result, the gap between the contribution of gainers and those of decliners is much narrower. Only four stocks drove a gain of at least 20 bps for the headline index over the past year: Microsoft (MSFT), Procter & Gamble (PG), Mastercard (MA), and Visa (V). We note that the top ten gainers are almost exclusively very blue-chip stocks: large tech companies, credit card networks, and some consumer names. Only the cell phone tower REIT American Tower (AMT) is unusual in this list of big-cap, well-known stocks. Losers are concentrated in Health Care, Banks, and Tech. While Alphabet (GOOG), Apple (AAPL), and Amazon (AMZN) aren't down drastically versus last summer, their market caps are big enough to have cost a lot of performance for the S&P 500's overall performance. Smaller cap stocks like NVIDIA (NVDA), DuPont (DD), AbbVie (ABBV), and Schlumberger (SLB) are a verry different story. At the industry group level, there have been more decliners than gainers, though only Energy and Banks have cost the index more than 80 bps; on the flip side only Software has been a greater than 80 bps gainer. Defensive industry groups like Utilities, Household & Personal Products, and Real Estate have all driven the S&P 500 higher while cyclical industry groups like Capital Goods and Tech Hardware have weighed. This Isn't Normal Wed, Aug 28, 2019 Being long bonds these days probably feels like being long tech stocks in the late 1990s. Every day you look at your portfolio, you expect it to be higher than the last time. This month through yesterday, the Merrill Lynch 10+ Year US Treasury Index is up over 10% and that doesn't even include the rally we are seeing today. If the gains we have seen so far hold up into month-end, it will go down as just the 5th month since 1978 that long-term treasuries gained more than 10% in a single month. The last time we saw this large of a move in the long-term Treasury market was more than 10 years ago in November 2008, and before that you have to go all the way back to February 1986. In other words, this kind of move isn't normal. Besides the fact that long-term Treasuries are up over 10% this month, August marks the fourth straight month of gains for the asset class, and while that may not sound like much, the last time we saw a streak of four or more months of gains was in January 2015. With all these gains, the Merrill Lynch 10+ Year Treasury Index is up over 22% YTD. 22%! Consumer Confidence Defies Pessimism August 28, 2019 U.S. consumers are feeling especially empowered these days, despite growing pessimism about the economic outlook. As shown in the LPL Chart of the Day, Consumer Confidence Pushes Through Trade Uncertainty, the Conference Board’s Consumer Confidence Index fell to 135.1 in August. Still, that’s the fifth-highest reading of the economic cycle, an impressive feat given trade tensions and other global headwinds. August’s strong consumer confidence reading was driven by a 19-year high in consumers’ views of present economic conditions. That’s no surprise to us, as steady gains in wages and jobs typically support consumer spending. Fiscal stimulus implemented in 2018 provided an extra boost of income through lower tax rates and added tax credits, and lower oil prices have allowed consumers to allot more income to discretionary spending. “Consumer spending has been one of the most encouraging trends in the economy lately, thanks to a solid U.S. labor market,” said LPL Financial Chief Investment Strategist John Lynch. “It’s difficult to see a near-term economic downturn with such a strong undercurrent from the U.S. consumer.” A U.S. economy carried by the consumer isn’t a bad situation to be in. After all, consumer spending accounts for about 70% of gross domestic product, so healthy consumer activity could carry the expansion on its own. However, U.S. businesses need to transition into leadership at this point in the cycle. As we mentioned in Tuesday’s blog, capital expenditures (capex) need to rebound as the cycle matures to help sustain the expansion. Unfortunately, trade uncertainty has increasingly weighed on corporate sentiment, so a resurgence in capex may not be possible without a U.S.-China trade resolution.
Here are the current major indices pullback/correction levels from ATHs as of week ending 8.30.19- 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 Tuesday (9/3) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (9/2-9/6) <-- click there to cast your weekly market vote and stock picks! Stockaholics September 2019 Stock Picking Contest & SPX Sentiment Poll <-- click there to cast your monthly market vote and stock picks! Stockaholics Weekly T/A Charting Challenge (9/2-9/6) <-- 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 August 30th, 2019 Video from AlphaTrends Brian Shannon ShadowTrader Video Weekly 9.1.19 Video from ShadowTrader Peter Reznicek
Here is a look at this upcoming week's Global Economic & Policy Calendar- (GLOBAL ECONOMIC AND POLICY CALENDAR NOT YET POSTED!)
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 9.2.19 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! (NONE. U.S. MARKETS CLOSED IN OBSERVANCE OF LABOR DAY.) Monday 9.2.19 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! (NONE. U.S. MARKETS CLOSED IN OBSERVANCE OF LABOR DAY.) Tuesday 9.3.19 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 9.3.19 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 9.4.19 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 9.4.19 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 9.5.19 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 9.5.19 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 9.6.19 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! Friday 9.6.19 After Market Close: Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES! NONE.
And finally here is the most anticipated earnings calendar for this upcoming trading week ahead- ($LULU $AEO $CIEN $MDB $COUP $PANW $ZM $CLDR $NAV $CRWD $CONN $MIK $BRC $NSSC $HQY $TUFN $VRA $DOCU $WORK $HOME $SIG $KIRK $GSM $EGAN $SMAR $BITA $ZLAB $DOMO $PVTL $DCI $ZUMZ $LE $GIII $AVAV $SAIC $SCWX $CSTL $PD $GCO $JW.A) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning September 2nd, 2019 <-- click there to view!
Manufacturing in contraction territory based on the ISM this morning I guess not too surprising since in most parts of the world manufacturing has been very weak for awhile
I hope nobody was affected by the hurricane here by the way, the strength of the hurricane was pretty remarkable Not the best weekend for this country with the hurricane and the mass shooting
Pretty negative day for the market but safe haven sectors like utility, real estate and staple holding well and actually in the green
I got the 2900 retrace level that I had predicted. I have two long positions that average about SPX 2900 and so I'm set with an initial entry situation. I don't care, as I said, whether it goes up or not, at this level. If it collapses, enter more; if goes up, determine when to profit take. I could say much more, but I shall refrain at this point.
