Welcome Stockaholics to the trading week of April 1st! 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 8:30 a.m. Retail sales (February) 9:45 a.m. Manufacturing PMI 10:00 a.m. ISM manufacturing 10:00 a.m. Construction spending 10:00 a.m. Business inventories Tuesday Monthly vehicle sales 8:30 a.m. Durable goods Wednesday 8:15 a.m. ADP payrolls 8:30 a.m. Atlanta Fed President Raphael Bostic 9:45 a.m. Services PMI 10:00 a.m. ISM nonmanufacturing 5 p.m. Minneapolis Fed President Neel Kashkari Thursday 8:30 a.m. Jobless claims 1 p.m. Cleveland Fed President Loretta Mester Friday 8:30 a.m. Employment report 3:00 p.m. Consumer credit 3:30 p.m. Atlanta Fed's Bostic
Stocks End Q1 With Best Start In 21 Years As Earnings & Bond Yields Plunge Summarizing Q1 in one chart: Stocks soared alongside a renewed surge in global money supply as top-down and bottom-up fun-durr-mental data collapsed... It seems the world's central banks have re-embraced their "don't panic" role as they see something that's just too scary for us average joes to be told... Global stocks and global bond yields have decoupled dramatically in Q1... We have seen this before...and it did not end well. Quite a quarter! Best quarter for world stocks since 2012 Best quarter for US stocks since 2009 Best quarter for oil since 2009 And... Chinese stocks were panic bid overnight, ending the quarter up 24% (China's best quarter since Q4 2014, and best Q1 since 2009)... European markets ended Q1 up 12.3% led by a 16.1% gain for Italy (best quarter and best Q1 since 2015) Best start to a year for S&P since 1998 US Stocks outperformed bonds dramatically as Gold and the dollar ended unchanged in Q1...as S&P earnings expectations tumbled by the most since Q1 2016 From the Mnuchin Massacre lows on Christmas Eve, the Nasdaq is up almost 25% and the Dow lagging at a mere 18.75%!! Trannies and Small caps were up most on the week, Nasdaq and S&P lagged... The S&P 500 manage to get back above 2800 but is still struggling to follow-through... LYFT IPO opened at $87.24 (after pricing at $72) but faded from the open...they defended $80 but that broke into the close... FANG stocks soared in Q1 by 23.5% - the best quarter since Q3 2013 Credit (HY CDX -100bps, IG CDX -24bps, biggest quarterly drop since Q1 2012) and equity (VIX -11.6 vols, biggest Quarterly drop since Q4'11) protection costs collapsed in Q1... Global sovereign bond yields plunged in Q1 (and Q4 2018) to their lowest since Jan 2018... (this is the biggest 2Q drop in sov yields since the growth crisis in 2016) US Treasury yields plunged in Q1 (extending Q4's collapse)... 30Y Yields are below 3.00%, 10Y below 2.50%, and the rest of the curve plunged... The US yield curve has now flattened for 8 of the last 9 quarters, plunging into inversion this week... Overall, the dollar trod water in Q1 (ending up around 1%) - the 4th quarterly rise in a row... Cable tumbled back to recent lows today after May's 3rd (and final) attempt to get her deal done failed... Cryptos managed gains on the week with Bitcoin back above $4000, but it is Litecoin that dramatically outperformed in Q1... Crude and Copper surged this week as PMs lagged... Gold eked out some gains for the second straight quarter as The Fed went full dovetard and after being dumped yesterday, found support at the 100DMA today... WTI soared in Q1 by the most since Q2 2009 (after collapsing in Q4)... Finally, we note that the markets have seen an unprecedented swing in their outlook for The Fed... Rescuing stocks (for now) from their 1037 analog...
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2019- S&P sectors for the past week-
April Almanac: DJIA’s Best Month April marks the end of our “Best Six Months” for DJIA and the S&P 500. On April 1st, we will begin looking for our seasonal MACD sell signal and corresponding early signs of seasonal weakness. Even in historically strong pre-election years the “Worst Six Months” have been lackluster on average. April 1999 was the first month to gain 1000 DJIA points. However, from 2000 to 2005, “Tax” month was hit, declining in four of six years. Since 2006, April has been up thirteen years in a row with an average gain of 2.3% to reclaim its position as the best DJIA month since 1950. April is third best for S&P and fourth best for NASDAQ (since 1971). The first half of April used to outperform the second half, but since 1994 that has no longer been the case. The effect of April 15 Tax Deadline appears to be diminished with numerous bullish days present on either side of the day. Traders and investors are clearly focused on first quarter earnings and guidance during April. Exceptional Q1 earnings and positive surprises tend to be anticipated with stocks and the market moving up in advance of the announcements and consolidating or correcting afterwards. Typical pre-election year strength does bolster April’s performance since 1950. April is DJIA’s best month in pre-election years (+4.0%), second best for S&P 500 (+3.5%) and third best for NASDAQ (+3.5%). Small caps measured by the Russell 2000 also perform well with gains (+2.8%) in seven of ten pre-election year April’s since 1979. First Trading Day of Q2: DJIA and S&P 500 Higher 75% of the Time According to the Stock Trader’s Almanac 2019, the first trading day of April is DJIA’s fifth best first trading day of all months based upon total points gained. Looking back at the last 25 years, in the tables below, we can see DJIA and S&P 500 have both advanced 75.0% of the time (up 18 of last 24) with average gains right around 0.4%. NASDAQ and Russell 2000 have slightly weaker track records but are both still up more frequently then down. Last year, April’s first trading day was dealt a blow with losses exceeding 2% by S&P 500, NASDAQ and Russell 2000. Good News Indicators Posted by lplresearch The Conference Board’s Leading Economic Index (LEI) is one of our favorite economic indicators. It is designed to predict future movements in the economy based on a composite of 10 economic indicators (like manufacturers’ new orders, stock prices, and weekly unemployment claims) whose changes tend to precede shifts in the overall economy. Last week, the LEI expanded for the first time in five months, along the way tying the all-time high set September 2018. Additionally, it is up 3% year over year (YoY). The combination of continued weak economic data around the globe and various parts of the yield curve inverting are leading many to surmise that a recession is likely imminent. The good news is that the LEI has not turned negative on a YoY basis, which it has done prior to every recession since the 1970s. And even when it has turned negative, it was another eight months on average before a recession officially occurred (with a median of six months lag time). For this reason, and because of its solid track record of predicting recessions, the LEI is a component of LPL Research’s Five Forecasters. As our LPL Chart of the Day shows, the LEI remains well above the 0% YoY threshold, which would be a definite negative—on multiple levels. “The reality is that many of the coincident economic indicators (like consumer spending, capital expenditures, and industrial production) have painted a very dour outlook,” explained LPL Senior Market Strategist Ryan Detrick. “Now the good news is that the more leading economic indicators like copper, money supply, and services have all shown marked improvement since the December lows.” 11 Things You Need To Know About The Yield Curve Posted by lplresearch Well, it finally happened—the yield curve inverted. Now note that it was the shorter end of the curve that inverted, as the 3-month Treasury bill (and 1-year T-bill) now yields more than the 10-year Treasury for the first time since 2007. This matters because an inverted yield curve is the bond market’s way of saying there is a potential recession on the horizon. “The yield curve inversion is something that nearly everyone is talking about, given its perfect track record at predicting recessions,” explained LPL Senior Market Strategist Ryan Detrick. “At the same time, however, we simply aren’t seeing other areas of the economy that would confirm a recession just yet, so there is more to this story.” Please note that there is no one true “yield curve,” as the yield curve simply looks at the yields of a shorter-dated fixed income instrument and compares it to a longer-dated one. In fact, the more commonly discussed 2-year/10-year yield curve spread hasn’t inverted, and it is actually above the early December 2018 lows. Here are 11 things worth considering regarding the yield curve. Each of the past 9 recessions back to the 1950s saw the 1-year/10-year yield curve spread invert approximately 14 months on average before a recession. Although a yield curve inversion preceded all 9 previous recessions, not all inversions led to a recession. For instance, the 3-month/10-year yield curve inverted in 1966 and 1998, with neither leading to an immediate recession. The shorter end of the yield curve has inverted, but the longer end is actually steepening. For instance, the 10-year/30-year yield curve has steepened most of this year. In past recessions, all parts of the curve inverted before a recession took place. Financial conditions aren’t tight, as tight conditions coupled with the yield curve inverting, historically has led to a recession. Investment-grade corporate and high yield spreads remain calm, however, suggesting that not all parts of the bond market are worried about an impending recession. Market participants have fully priced in a Federal Reserve (Fed) rate cut within the next year, potentially further flattening the curve. Should the economy gain steam during the second half of this year (which we think is possible) it will likely avoid a Fed rate cut, which should lead to a steeper yield curve. We have found that a spread between the 3-month/10-year yield curve has become much more predictive of a recession at -50 basis points (-0.50%). So this still is a clear concern, but a marginal inversion may not be so worrisome. Yield curves aren’t always perfect: Japan has had long stretches of inverted curves that didn’t lead to recessions. Additionally, both the United Kingdom and Germany have had inversions without recessions. The fed funds rate has been significantly higher during previous inversions. In fact, the fed funds rate has averaged more than 6% when the 1-year/10-year yield curve has inverted. It is only 2.4% currently. The previous 5 recessions began an average of 21 months after the 2-year/10-year yield curve inverted. Stocks actually did quite well initially after inversions as well, with the S&P 500 Index not peaking until over a year after the inversions and gaining nearly 22% on average at the peak. Various yields around the globe continue to sink, with nearly $10 trillion in global debt now yielding less than 0%. The German 10-year Bund, for instance, is beneath 0% for the first time since 2016. We think this is due more to a concern over the European slowdown, which has forced many to look to the United States as a safe haven for sovereign debt, thus pushing our yields much lower along the way. This concept is discussed in more depth in our latest episode of the LPL Market Signals podcast. As our LPL Chart of the Day shows, the S&P 500 has actually outperformed the average year the previous three times the 2-year/10-year yield curve inverted. To reiterate though, the 2/10 spread hasn’t inverted yet. In summary, an inversion on part of the yield curve may suggest trouble ahead for the economy, but don’t forget that economic growth and potential stock market gains can continue for years after the initial inversion. Additionally, with credit markets holding up well, employment still strong, and wages still increasing, we don’t yet see the necessary combination of worries that could suggest a recession is indeed imminent. The Bespoke Report — Good, Bad, Or Ugly? Mar 29, 2019 Stocks have basically held the line this week despite huge moves in interest rates and an ongoing rough run for global economic data. Curve inversion has many forecasting a recession, and we’ve seen a number of recent data releases that make us much more nervous about that outcome than we have been in almost a decade. On the other hand, the pivot to dovishness from global central banks, the relatively modest size and scale of yield curve inversion, some nascent signs of bottoming in global growth, and the nature of the plunge in interest rates are all reasons to not panic. Besides, despite all of the negativity US stocks have held up admirably well, and markets that trend higher on bad news are generally regarded as strong, rather than weak. In short, the outlook could be Good, Bad, or Ugly…depending how you read the tea leaves! A Strange Trip With Some Strange Leaders Mar 29, 2019 With sentiment where it was at the end of last year following the Q4 rout in equities, it’s safe to say that not a lot of investors were expecting double-digit gains in the first quarter. That’s exactly what we have seen in US equities, though, as the major averages are all up over 10% YTD heading into the final hours of the quarter. While the Dow has lagged many of its peer indices this year, it too is still on pace to finish Q1 with a gain of just over 10%. In the table below, we show how each of the 30 components in the DJIA have performed on a YTD basis as well as how much they have contributed to the index’s total gains. Remember, the DJIA is a price-weighted index, so the sole determinant of a stock’s weight in the index is its price. Looking at the table, you’re likely not the only one doing a double-take at the two stocks that top the list of best performers in the index so far this year. That’s right, Cisco (CSCO) and IBM have been the index’s two top performers in 2019 with gains of nearly 24%. Behind these two stocks, United Technologies (UTX) and Apple (AAPL) are the only two other stocks that are up 20% or more. To the downside, just five stocks in the DJIA are in the red on a YTD basis. Leading the way lower, Walgreens Boots (WBA), the newest stock in the index, has declined over 7%, but none of the four other stocks are down more than 3%. Because the DJIA is price-weighted, the best-performing stocks in the index haven’t been the biggest contributors to the YTD gains. The chart below shows how many points each stock in the index has contributed to the YTD gains. Looking at things this way, you may be surprised to see that Boeing (BA) still tops the list. With its 17% YTD gain and very high share price, BA has contributed 374 points to the DJIA’s upside this year, beating out the next closest component (AAPL) by 160 points! All else being equal, BA could fall another 23 points (6.0%) and it would still be the largest contributor to the DJIA’s YTD gains. Eyes on Jobless Claims Indices Mar 29, 2019 As we discussed in last night’s Closer and a blog post yesterday, weekly initial jobless claims moved back to 211K, the lowest in over two months and a pretty healthy print. While initial claims have been fairly volatile and more recent prints have been reassuring that recent highs are not a new trend, continuing claims have more steadily been working their way higher. We made a diffusion index of the 50 states using this data to get a better idea of the health of these labor market indicators. In these indices, higher readings indicate more state-level claims falling, while lower numbers indicate more state-level increases. The index for continuing claims continues to appear fairly healthy. The index number has fallen, meaning an increasing number of states have been seeing increases in jobless claims, but this is far outweighed by states still seeing declines. The diffusion index for initial claims, like the headline numbers, are telling a different story. On January 19th, the index had fallen as low as 15 which was the weakest reading since 2012. More recently, though, the number has been stronger, coming in at 28 this week; down from 30 last week. Averaging the two, the current reading is 36. Overall that is neither a strong or weak number, but it is still in stronger shape than the past several years lows in 2016. All in all, while claims have improved in the past few weeks and are not flashing recessionary signs, they should continue to be watched for signs of further deterioration. Shanghai Rips Into Quarter End Mar 29, 2019 Equities around the world have been looking to close out the quarter on a positive note, and China was no exception. With trade US and Chinese trade negotiators reportedly making progress in the always on the horizon trade deal, the Shanghai Composite ripped 3.2% higher in the last trading day of the quarter and nearly erasing all of the week’s prior losses. For the entire quarter, the index finished up just a hair shy of 24%, putting it at the top of the list in terms of major international stock market returns. While Chinese stocks finished the quarter strong, it is important to point out that during this consolidation phase the index has been in for the last several weeks, it has made a couple of lower highs. Ideally, we would like to see some follow-through next week from this Friday’s rally to break that string. One factor working in favor of Chinese equities is solid breadth. The chart below compares the performance of the Shanghai Composite to its cumulative A/D line over the last twelve months. Ever since late last year, breadth has been leading price to the upside. It started with a positive divergence in late 2018 when prices made a new low (red line) but breadth (blue line) hung in there and has continued right up through the middle of the month when the cumulative A/D line made a new high. As long as that trend continues to play out, Chinese stocks should continue their leadership.
Here are the current major indices pullback/correction levels from ATHs as of week ending 3.29.19- 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 (4/1) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (4/1-4/5) <-- click there to cast your weekly market vote and stock picks! Stockaholics April 2019 Stock Picking Contest & SPX Sentiment Poll <-- click there to cast your monthly market vote and stock picks! Stockaholics Q2 2019 Quarterly Stock Picking Contest & SPX Sentiment Poll <-- click there to cast your quarterly market vote and stock picks! Stockaholics Weekly T/A Charting Challenge (4/1-4/5) <-- 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 March 29th, 2019 Video from AlphaTrends Brian Shannon ShadowTrader Video Weekly 3.31.19 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 4.1.19 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! Monday 4.1.19 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! Tuesday 4.2.19 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 4.2.19 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 4.3.19 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 4.3.19 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 4.4.19 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 4.4.19 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 4.5.19 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! Friday 4.5.19 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- ($WBA $NVGS $FUV $STZ $GME $PLAY $TTNP $SIG $LW $ALT $SGLB $ANGO $EFOI $AYI $SMPL $RPM $SORL $DLTH $SECO $IPWR $OCX$SCHN $EXFO $ISCA $MTNB $CTRA $PAVM $BURG $RECN $EDAP $GRWG $ASND $NG $GBX $FSI $CYTX $LNDC $FC $VISL $GNUS $NTIC) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning April 1st, 2019 <-- click there to view!
Good Monday morning to all. Welcome to the new trading month and quarter! 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, month, and quarter ahead.
Morning Lineup – Springing Higher Apr 1, 2019 Equity markets around the world are kicking off the new quarter right where they left off in Q1. Is Asia, stocks are once again back to “Monday Rally Mode” as stronger than expected PMI data in China has provided a boost. Meanwhile, in Europe equities are higher following weaker than expected PMI data. Finally, in the US futures are up over 0.5% and holding onto those gains even after weaker than expected Retail Sales data for February. With just under an hour to go before the second quarter kicks off, we wanted to highlight one last aspect of Q1 that warrants mentioning. Throughout the quarter, we frequently highlighted the market’s strong breadth here in the US (and many other places around the world). With that breadth holding up strong throughout the first three months of the year, the S&P 500’s cumulative A/D line for the entire quarter went down as the strongest going back to at least 1990 when our records begin. The chart below shows the S&P 500’s cumulative A/D readings for each quarter going back to 1990. Not only was this quarter the strongest, but besides the first quarter of 2013, it wasn’t even really close as no other quarters even had a cumulative A/D line greater than 3,500!
Very good start for equities in Q2 Yields rebounding on strong economic data from China and here in the US, so banks are having a good day while high dividend sectors like utility and real estate underperforming
strong start indeed so, this isn't my chart, but thought i would share in here. interestingly, when the SPX is higher each of the first 3 months to start the year, like this year has started off, this month (april) and the rest of the year perform better than the average year. the final 9 months have been up 18 of 19 times (only 1987 was it red ). will we make it 19 of 20 this year?
WBA currently -12% after their earnings. Lucky thing for the price-weighted Dow, the share price is small.
