Welcome Stockaholics to the trading week of May 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: AIG, Shake Shack, Cirrus Logic, Avis Budget, Tyson Foods, Mohawk Industries, Iamgold, Texas Roadhouse, Tenet Healthcare, Skyworks Solutions, Sempra Energy 10:00 a.m. Factory orders 2:00 p.m. Senior loan officers survey Tuesday Earnings: Walt Disney Co, Allstate, DuPont, Beyond Meat, Alaska Air, Electronics Arts, Activision Blizzard, Martin Marietta Materials, Regeneron Pharma, Illinois Tool Works, Fiat Chrysler, Electronic Arts, Cheesecake Factory, Devon Energy, Thomson Reuters, Newmont Gold, Prudential Financial 8:30 a.m. International trade 9:45 a.m. Services PMI 10:00 a.m. ISM nonmanufacturing 10:00 a.m. Chicago Fed President Charles Evans 2:00 p.m. St. Louis Fed President James Bullard Wednesday Earnings: General Motors, CVS Health, KKR, American Electric Power, Fox Corp, Grubhub, Lyft, Alexion Pharmaceuticals, Etsy, Square, BarrickGold, Genuine Parts, Discovery, Scotts Miracle-Gro, Waste Management, Wendy’s, Jacobs Engineering, CF Industries, Twilio, TiVo, Zynga, PayPal 8:15 a.m. ADP employment Thursday Earnings: Bristol-Myers Squibb, Anheuser-Busch InBev, Uber, Ambev, Raytheon, JetBlue, ViacomCBS, Bausch Health, AmerisourceBergen, Yelp, Becton Dickinson, Hilton Worldwide, Danaher, Gannett, Gartner, Hain Celestial, Hess, Liberty Media, Ninetnedo, Murphy Oil, NRG Energy, Yeti, Dropbox, Allscripts Health 8:30 a.m. Jobless claims 8:30 a.m. Productivity and costs 3:00 p.m. Consumer credit Friday Earnings: Noble Energy, Bloomin’ Brands, Exelon, SeaWorld, Marriott Vacations, Siemens, ING, Lear 8:30 a.m. Employment 10:00 a.m. Wholesale trade
Mayday On May-Day - Stocks Slammed After Awesome April On China Threat, Dismal Data Something's wrong... After the best stock market gains in decades in April, May is off to an ugly start... with the biggest 2-day drop in since the March collapse The week started out so well, but the last two days have seen all the gains given back with S&P, Dow, and Nasdaq all red on the week (but Small Caps managed to cling to some gains) The Dow is down over 1300 points from yesterday's highs, and back below the 50% retrace line... Small Caps are back below the Dec 2018 lows... Source: Bloomberg Source: Bloomberg The last 3 days saw the worst performance of equal weight vs cap weight Nasdaq since 2008... Source: Bloomberg ...back to its weakest level in over six weeks... Source: Bloomberg Today was the worst day for FANG stocks since March 16th after reaching a new record high yesterday (and the first down week in the last six) Source: Bloomberg AAPL had its 8th straight day of panic-buying at the open and selling... (after an ugly session overnight following earnings)... AMZN hit a new record high at the close last night and has fallen ever since... Energy stocks were clubbed like a baby seal today, despite oil price gains... Source: Bloomberg Everyone was loving bank stocks until The Fed... Source: Bloomberg The most virus-impacted sectors reverted back lower the last two days... Source: Bloomberg An ugly end to the week for both IG and HY credit... Source: Bloomberg Mixed picture in Treasury-land this week with the short-end lower in yield and long-end higher (somewhat understandable after Boeing's massive issuance) Source: Bloomberg 10Y remains in a tight range... Source: Bloomberg The yields curve also remains range-bound, glued to the 50% retracement of the March steepening... Source: Bloomberg Just as we saw at the end of March, start of April, the USDollar has reversed its downtrend and rallied hard today... Source: Bloomberg Offshore yuan was monkeyhammered today - after Trump comments on pulling capital allocations - leading to its worst week since March Source: Bloomberg Big week for cryptos with Bitcoin leading the way... Source: Bloomberg Bitcoin tested back up to $9,500 this week... Source: Bloomberg A big mean reversion week... Source: Bloomberg Spot the odd one out in commodity land... Source: Bloomberg WTI Crude (June) has bounced back to its cliff-edge this week, unable to break above $20... Gold was lower on the week, hovering around the $1700 (futures) level... Similarly, Silver is strangely attracted to $15... Finally, spot the odd one out... Source: Bloomberg
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2020- S&P sectors for the past week-
US Manufacturing Sector Has Entered a Deep Recession It is a foregone conclusion that the US economy has entered recession, led by the consumer, which accounts for more than two-thirds of the US economy based on gross domestic product (GDP). The collapse of consumer spending was evident in March personal consumption expenditures data released on Wednesday that showed a record 7.5% month-over-month drop in consumer outlays. It would have been worse if we weren’t stocking our refrigerators and pantries. The manufacturing sector is also contracting sharply, not surprisingly given the business shutdowns that began in March. Investors had a glimpse of the extent of the hit to manufacturing in the business investment component of first quarter GDP, which revealed a sharp 8.6% annualized decline, durable goods orders for March, which fell 14.4%, and Markit’s preliminary Purchasing Managers’ Index (PMI) for manufacturing in April that came in at 36.9, a level consistent with a severe recession. Today’s Institute for Supply Management (ISM) PMI for manufacturing—the so-called official PMI—provided more evidence of the depth of the manufacturing downturn. As shown in the LPL Chart of the Day, the headline index fell 7.6 points to 41.5, better than Bloomberg’s consensus forecast of 36, but a level consistent with prior recessions. But that’s the good news. Peeling back the onion in this report reveals that the headline number was inflated by the supplier deliveries component. Normally, lengthening supplier delivery times reflect strong demand, which prevents suppliers from keeping up. However, in this environment, it reflects supply chain disruptions from lockdowns around the world related to COVID-19. The new orders and employment components of the report, which both fell more than 15 points to around 27, are better indicators of where manufacturing activity in the US is right now. The new orders number just missed the December 2008 level of 25.9, while the employment component hit its lowest level since 1949, putting the slump into proper perspective. “The more forward-looking components of the ISM report clearly indicate the manufacturing sector is in the midst of one of the sharpest contractions ever,” said LPL Financial Equity Strategist Jeffrey Buchbinder. “Given the close relationship between manufacturing activity and corporate profits, the 25% cut to S&P 500 earnings estimates for 2020 that we’ve seen since March 1 is probably not enough.” The ISM report points to a sharp upcoming drop in capital investment and a huge hit to earnings in the second quarter—potentially down 40% year over year (FactSet consensus is calling for a 38% year-over-year decline in S&P 500 earnings). Looking ahead, while the economic impact of the global lockdowns has been severe, we continue to be reassured by developing plans to reopen the economy, progress toward treatments and vaccines, and the resolve of Americans to get through this. We continue to expect a very strong rebound in manufacturing and the broad economy later this year. Silver Lining in Consumer Confidence Data The Conference Board’s Consumer Confidence Index (CCI) for April came in 86.9, falling more than 30 points from the prior month. The monthly drop was the biggest for the index since 1973, reflecting the severity of the economic impact of COVID-19 containment efforts. This piece of economic data is seen by some economists as a leading indicator for consumer spending and the US economic growth. The CCI measures consumers’ feelings about current and future economic conditions, including how respondents feel about their ability to gain employment. Some economists view the CCI as a lagging indicator, given the data tends to follow economic trends. When a recession is over and growth resumes, individuals who are not yet working may not feel the improvement. These individuals may remain uncertain about whether the economic climate has improved for quite some time. Consumer confidence has taken a hit from lockdowns related to the COVID-19 pandemic. In February, the index was at 132.6, just 5.3 points below an 18-year high reached in October 2018, when the CCI reached 137.9. Before that, one of the highest readings came in May 2000, when the CCI reached 144.7. The index is still well above the record low recorded in February 2009 at 25.3, suggesting it may have a bit further to fall from the April reading. It’s a foregone conclusion that a measure of consumer confidence would suffer as a result of the devastating job losses experienced since the lockdowns began. But there is a silver lining in this data. The expectations component of the survey actually rose 5.6 points from the prior month. ”This is one of the most difficult economic environments our country has ever faced and our resolve is being tested,” said LPL Financial Chief Investment Officer Burt White. “But as states begin to reopen their economies, we can start to see the other side of this crisis.” We’ll get there, supported by the massive fiscal and monetary stimulus out of Washington, D.C., and the Federal Reserve. This optimistic tone in the expectations component is great to see. Hopefully more is yet to come. Background on the CCI. The Conference Board, which was founded in 1916, measures the CCI. The board is an independent, non-partisan and non-profit, economic research organization that performs surveys and economic analysis. The Consumer Confidence Index started in 1967 and is benchmarked to 100 based on readings in 1985. The data is collected during the first 18 days of the month for release on the last Tuesday of the month. There are five questions asked of the survey’s 5,000 respondents each month. The first two ask respondents’ view of current business conditions and their six-month expectations. The third and fourth questions are about the labor market as well as six-month expectations. The last question covers family income expectations in six months’ time. Participants characterize conditions as good or bad, and jobs as hard to get or plentiful. Then responses are categorized as positive, neutral, or negative. More positive responses means a higher index, neutral and negative responses means a lower index. Global Central Banks All In The Federal Reserve (Fed), the European Central Bank (ECB), and the Bank of Japan (BOJ) all met in the last week and while the show of power was minimal compared to recent weeks, they collectively reasserted their resolve to do whatever is necessary to support the global economy through the COVID-19 economic crisis. Rates are being held about as low as they can go, significant new programs to enhance market liquidity and support lending are in place, and, as shown in the LPL Chart of the Day, asset purchases have accelerated. In fact, with April not yet completed, central bank assets have risen over $3 trillion, the biggest two-month jump on record. “The central bank response to COVID-19 has been fast, effective, and built to impress,” said LPL Financial Senior Market Strategist Ryan Detrick. “And the market is seeing it. It’s no coincidence that the market bottomed the day after the Fed rolled out a wide range of new programs addressing key areas of market and economic disruption.” Overview of Recent Central Bank Activity The Fed concluded its most recent two-day meeting on Wednesday, April 29. Prior to the meeting the Fed had expanded its program supporting municipalities by lowering the minimum size of the city or county to qualify. The Fed left its target rate unchanged at 0 – 0.25%. Through its policy statement and Fed Chair Jerome Powell’s comments, the Fed signaled that it is unlikely to remove its extraordinary policy support anytime soon, and we believe the Fed may hold its policy rate near zero into 2022. Asset purchases are currently open-ended and have expanded to include investment-grade and high-yield corporate exchange-traded funds. The BOJ met on Monday, April 27 and announced that it would lift its cap on buying government bonds, making purchases open ended, and triple the size of its corporate bond commercial debt purchases. The ECB met on Thursday, April 30 and announced new refinancing operations and that it would ease conditions on long-term loans to banks, encouraging banks to increase lending. With interest rates near zero, all major central banks have been expanding their economic support through new programs and increased asset purchases. Central bank are showing that in a time of crisis, their policy response is not limited to setting policy rates or even bond purchases. The expanded activity has all but eliminated the idea that the central banks are out of ammunition, both now and looking forward. There will come a time when these programs will end, balance sheets will unwind, and rates will rise. But until that time, central banks have shown that even prudent support in a time of economic distress is only limited by their imagination, keeping the old investing maxim “Don’t fight the Fed” alive even in an age of zero rates. Typical May Trading: A Month of Transition with Negative Predisposition Once again it is that time of the year where we increasingly see and hear “Sell in May.” But when exactly in May is the “best” time to sell? Based upon the last 21 years of data, the best time could be early in May. The month has opened well, on average, recently with strength on the first trading day and on the second trading day for the most part. Afterwards, DJIA, S&P 500, NASDAQ, Russell 1000 and Russell 2000 all tend to drift sideways to lower until around May’s sixteenth trading day or so. It is on this day the NASDAQ and Russell 2000 begin to rally to finish the month. Beware though, this late-May rally typically fizzles before it can exceed the highs reached earlier in the month. This is Still an Election Year We have all been rather preoccupied with the coronavirus pandemic, market volatility and our individual situation. Meanwhile there is still a U.S. Presidential Election taking place this year. And folks are beginning to wonder what the next political alignment might be and the ramifications that alignment has had on the market historically. Six possible political alignments exist in Washington: Republican President with a Republican congress, Democratic congress or split Congress; and a Democratic President with a Democratic Congress, Republican Congress or split Congress. Data presented in the chart below begin in 1949 with the first full presidential term following WWII. Election years are traditionally up years. Incumbent administrations shamelessly attempt to massage the economy so voters will keep them in power. But sometimes overpowering events occur and the market crumbles, usually resulting in a change of political control. Republicans won in 1920 (DJIA -32.9%) as the post-war economy contracted and President Wilson ailed. The Democrats came back during the 1932 (-23.1%) Depression when the Dow hit its lowest level of the 20th century. A world at war and the fall of France jolted the market in 1940 (-12.7%), but Roosevelt won an unprecedented third term. Cold War confrontations and Truman’s historic upset of Dewey held markets down through the end of 1948 (-2.1%). Recently the Great Recession and bear market of 2008 (-33.8%) helped put Obama and the Democrats back in the White House. 10-Day Advance/Decline Lines Running Hot Fri, May 1, 2020 The gains in the first half of the week lifted every sector but two—Utilities and Financials—above their 50-DMAs. Meanwhile, Health Care had even touched overbought territory (over 1 standard deviation above its 50-day) earlier in the week, making it the first sector to be overbought since late February. When it comes to another measure we monitor, the 10-day advance/decline line, conditions are more broadly appearing overbought. The 10-day advance/decline line measures the average number of daily advancers minus decliners in an index or sector over the last 10 trading days. Very high readings suggest that things have gotten extended in the very near term and downside mean reversion can be expected. Very low reading suggest the opposite. The 10-day A/D lines for sectors have been pretty strong recently indicating broad participation in the rally, but this has led these readings to become elevated indicating conditions may be running a bit too hot in the near term. Outside of the defensive sectors like Consumer Staples, Utilities, and Real Estate, every sector's 10-day A/D line has been in overbought territory at some point over the past week. The same can also be said for the 10-day A/D line for the S&P 500. We'd note, though, that while A/D lines are extended, they're not at extreme levels seen at other points over the past year. 50-DMAs in the Rearview Thu, Apr 30, 2020 Stocks have continued to rally this week and for many individual names, these gains have lifted them above their 50-DMAs. As shown in the chart below, over three quarters of stocks in the S&P 500 have now moved back above their 50-DMAs. Three sectors—Technology, Communication Services, and Health Care—have more than 90% of their stocks above their 50-DMAs with Health Care leading the way at 96.7%. Readings above 90% are very rare -- just as rare as the sub-10% readings we saw in March. As for the other sectors, similar to the S&P 500, Consumer Staples, Consumer Discretionary, and Materials all have over three-quarters of their stocks above their 50-DMAs. Meanwhile, Financials, Industrials, and Energy are lagging somewhat but still have more than half of their stocks above. The only two sectors that are truly lagging with just 32.1% and 38.7% above, respectively, are Utilities and Real Estate -- two defensives. Health Care and to a lesser degree Consumer Staples were the first sectors to see a large number of stocks trade above their 50-DMAs. This reading for both sectors saw a more gradual build throughout April. As for the rest, the percentage of stocks trading above their 50-DMAs has exploded higher and in a much more rapid fashion, especially within the past week. In fact, as recently as last Thursday, excluding Health Care and Consumer Staples, the highest reading across sectors was only 40.85% (Technology). The big pickup in the number of stocks moving above their 50-DMAs means two things. For starters, many stocks are clearing resistance at their averages which is a positive technical development. Second, many stocks are roughly around the same areas of their trading ranges and are moving higher together (strong breadth). Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.
Here are the current major indices pullback/correction levels from ATHs as of week ending 5.1.20- Here are the current major indices rally levels from correction low as of week ending 5.1.20- Here is also the pullback/correction levels from current prices-
Stock Market Analysis Video for May 1st, 2020 Video from AlphaTrends Brian Shannon ShadowTrader Video Weekly 5.3.20 Video from ShadowTrader Peter Reznicek (VIDEO NOT YET POSTED!)
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 (5/4) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (5/4-5/8) <-- click there to cast your weekly market vote and stock picks! ======================================================================================================== 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 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 5.4.20 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! Monday 5.4.20 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! Tuesday 5.5.20 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 5.5.20 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 5.6.20 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 5.6.20 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 5.7.20 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 5.7.20 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 5.8.20 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! Friday 5.8.20 After Market Close: Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES!
And finally here is the most anticipated earnings calendar for this upcoming trading week ahead- ($SHOP $ROKU $DIS $TSN $CVS $BYND $PYPL $SQ $ATVI $W $UBER $SRC $PINS $MRNA $REGN $L $JBLU $GOLD $ENPH $SWKS $SPCE $RACE $TTD $WAB $GM $PTON $ALK $ZNGA $TEVA $SYY $OXY $WYNN $NEM $PLUG $TWLO $TREE $LYFT $TMUS $WING $INSG $CHGG) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning May 4th, 2020 <-- click there to view!
Will very interesting to see how the market opens Monday to figure out what my next move will be, but looks like this is the playground for now.
Pretty confident that $CNFA has broken out here and can get near $0.90 as a first price target (within next week) with $1 being the next target. Increased volume is a confirmation of this breakout. https://theseedinvestor.com/featured-companies/canafarma-cnfa
I'm getting pretty bearish for this coming week. I feel like we are running out of bullets to prop this market up and the reality of depression type numbers will start to set in. All of the ammo thrown at this in the last few weeks and we were down on the week. Just watch what happens when there is no sugar this week. Just my $0.02
Warren Buffett sold more airline stocks, said he thinks there are too many airplanes. Carryover effect to BA/SPR/plane builders, and SIX/FUN/DIS (theme parks), and BKNG/EXPE (travel sites)?
I just read a similar story but that was old news dug up "for some reason". The story I read stated that he sold the airlines in 2019.
