Stock Market Today: April 30th - May 4th, 2018

Welcome Stockaholics to the trading week of April 30th!

This past week saw the following moves in the S&P:



Major Indices End of Week:




Bird's Eye view of the Major Futures Markets on Friday:



Economic Calendar for the Week Ahead:



Sector Performance WTD, MTD, YTD:








What to Watch in the Week Ahead:

• Monday

Earnings: McDonald's, Allergan, CNA Financial, Transocean, Akamai, Cognex, TrueBlue, Whiting Petroleum, Loews, Dana, Diamond Offshore,Vornado Realty, Tenet Healthcare, Texas Roadhouse

8:30 a.m. Personal income

9:45 a.m. Chicago PMI

10:00 a.m. Pending home sales

10:30 a.m. Dallas Fed manufacturing

• Tuesday

FOMC meets

Vehicle sales

Earnings: Apple, Merck, Pfizer, Archer Daniels Midland, Under Armour, Aetna, Cummins, Johnson Controls, Seagate Technology, Tapestry,Western Union, Gilead Services, Snap, Juniper Networks, TransDigm, Encana, American Tower, Wellcare Health, Scotts Miracle-Gro,Anadarko Petroleum, Fiserv, Tanger Factory Outlet, Concho Resources, Devon Energy, Rowan Cos, Allstate

9:45 a.m. Manufacturing PMI

10:00 a.m. ISM manufacturing

10:00 a.m. Construction spending

• Wednesday

Earnings: CVS Health, Tesla, Kraft Heinz, AIG, Square, Spotify, MasterCard, Wayfair, Clorox, Estee Lauder, Humana, Yum Brands, Tableau Software, Express Scripts, Beazer Homes, Pioneer Natural Resources, Fitbit, Apache, Avis Budget, Molson Coors Brewing, Wyndham Worldwide, Norwegian Cruise Line, Cedar Fair, Madison Square Garden, Valvoline, Cirrus Logic, Williams Cos, Prudential Financial

8:15 a.m. ADP employment

2:00 p.m. FOMC interest rate decision/statement

• Thursday

Earnings: DowDuPont, Bayer, Kellogg, Pandora, GoPro, Adidas, CBS, Wingstop, Sotheby's, Blue Apron, Teva, Becton Dickinson, Cigna, Canadian Natural Resources, Weight Watchers, Activision Blizzard, GGP, Magellan Midstream, KKR, Icahn Enterprises, Regeneron, Cardinal Health, Shake Shack, Windstream, New York Times, Avon Products

8:30 a.m. Jobless claims

8:30 a.m. International trade

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

Earnings: Berkshire Hathaway, Newell Brands, VF Corp, BNP Paribas, Aon, Buckeye Partners, CBOE Holdings, CenterPoint, Alibaba, Celgene,Virtu Financial

8:30 a.m. Employment report

 

Breakaway Bounce In Techs Truncated As Strong Stats Stir Sellers
It was supposed to be a blockbuster day for the Nasdaq following yesterday's blowout earnings from Amazon, and solid results from Intel and Microsoft. The anticipation of a surge in the tech index was so great it prompted Gartman to quickly close out his Nasdaq short and... the Nasdaq went nowhere all day!



Even Amazon's surge, which at one point hit an all time high of $1,638, or up nearly $120, faded most of the move, and at last check was up only $50, having wiped out more than half of its record gains.





Call it deja vu all over again: the pattern that we had seen for much of earnings season was again in force, as after reporting strong outstanding results, all the tech giants had a tough time holding on to all their gains. At its high of the day, the S&P 500 Information Technology Sector was up 1 percent, but by midday it dropped into the red. It’s a pattern that’s plagued this earnings season: Even though companies are beating earnings predictions at the fastest rate ever, stocks have remained relatively flat since JPMorgan kicked off reports.

It wasn't just tech with the notable moves however, as two two biggest U.S. oil explorers also reported earnings, which were a study in contrasts: Chevron beat every analyst estimate, while larger rival Exxon Mobil Corp. fell short on both production and profit. As Bloomberg summarized this divergence, for Chevron, it was about rewarding long-suffering investors who had funded costly natural gas projects in Australia for more than a decade. For Exxon, Chief Executive Officer Darren Woods is tasked with rebuilding an asset base that analysts say didn’t receive enough investment over the past 10 years.



And here a stunning statistic from Bloomberg: Exxon Mobil has lost $47 billion in market value in the past 12 weeks, or about the size of one Halliburton

Meanwhile, in other asset classes, moves were bizarre too, with yields on 10-year Treasuries dropping...




... even as the curve resumed its bull flattening. Treasuries advanced Friday led by long end, erasing early losses triggered by strong 1Q GDP and employment cost index; yields and curve spreads moved to session lows as USD/JPY dropped below 109 for first time in a year, and as sharp reversal in technology and energy sectors capped gains for U.S. stocks.



Indeed, despite today's GDP beat and stronger Employment Cost Index, the dollar initially ramped higher, only to slump to session lows.



There were two prevailing explanations for today's lack of enthusiasm: either investors were debating whether corporate earnings are strong enough to offset signs the economy may be cooling, or today's economic data was strong enough to assure another imminent rate hike, further flattening the yield curve and leading to a policy error.

All perfectly contradictory, of course.

Elsewhere, the U.K. posted the worst quarterly GDP figures since 2012...



... and the pound plunged.



Lackluster numbers also came out of France and Spain, however they were not lacking enough luster to push the euro lower!

The comatose session extended to crude oil which was drawn to the $68-a-barrel level as a geopolitical risk premium in the market limited losses.



And the worst news: after all of that, the S&P closed unchanged on the week.

 

Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2018-



S&P sectors for the past week-

 

Start of “Worst Six Months” for DJIA and S&P 500

May officially marks the beginning of the “Worst Six Months” for the DJIA and S&P. To wit: “Sell in May and go away.” Our “Best Six Months Switching Strategy,” created in 1986, proves that there is merit to this old trader’s tale. A hypothetical $10,000 investment in the DJIA compounded to $975,223 for November-April in 67 years compared to $116 loss for May-October. The same hypothetical $10,000 investment in the S&P 500 compounded to $705,504 for November-April in 67 years compared to a gain of just $8,615 for May-October.

May has been a tricky month over the years, a well-deserved reputation following the May 6, 2010 “flash crash”. It used to be part of what we called the “May/June disaster area.” From 1965 to 1984 the S&P 500 was down during May fifteen out of twenty times. Then from 1985 through 1997 May was the best month, gaining ground every single year (13 straight gains) on the S&P, up 3.3% on average with the DJIA falling once and two NASDAQ losses.

In the years since 1997, May’s performance has been erratic; DJIA up ten times in the past twenty years (three of the years had gains in excess of 4%). NASDAQ suffered five May losses in a row from 1998-2001, down – 11.9% in 2000, followed by eleven sizable gains in excess of 2.5% and four losses, the worst of which was 8.3% in 2010. Since 1950, midterm-year Mays rank poorly, #9 DJIA and NASDAQ, #10 S&P 500 and Russell 2000, #8 for Russell 1000. Losses range from 0.1% by Russell 1000 to 1.9% for Russell 2000.

Traders Unload Tech, Industrials…Buy Health Care, Utes, and REITs
Apr 27, 2018


This earnings season has been very strong by almost every measure when it comes to the numbers coming out of corporate America. But as investors know, the ultimate gauge is how stock prices react to earnings reports.

In general, what we’ve seen this earnings season is an initial positive stock price reaction to the news followed by a large batch of selling throughout the trading day.

We measure the one-day stock price change in reaction to earnings for every company that reports quarterly numbers. We also break that one-day price change into two parts — the initial gap that share prices experience when they open for trading following their earnings report, and the change from that gap at the open of trading through the close of trading that day (open to close % change).

Below we show how much the average stock that has reported earnings this season has gapped up or down at the open by sector. We also show how much the average stock that has reported has moved from the open to the close of trading.

For all stocks that have reported earnings this season, the average move has been a gap up of 0.40% at the open followed by decline of 0.30% from the open to the close. This means investors are initially bidding shares up on earnings before sellers come in during the trading day.

A few sectors stand out. First off, both Industrials and Technology have seen shares bid up at the open on earnings optimism, but they’ve sold off hard throughout the trading day. The average Industrial stock has gapped up 0.90% at the open following earnings only to sell off 1.60% from the open to the close. For Tech stocks that have reported, they have averaged a gap up of 0.40% and then an open to close decline of 1.20%. For these two sectors, positive earnings news appears to have already been priced in.

Other sectors have seen their stock prices do well this earnings season. Consumer Discretionary, Energy, and Financials have all seen initial gaps higher and continued buying throughout the trading day. Health Care, Utilities, and Real Estate (REITs) have seen a wave of buyers come in during regular trading hours. Utilities and Real Estate stocks that have reported have averaged gains of more than 1% from the open to the close. We don’t view shifts out of Tech and Industrials and into Utilities and Real Estate as a very bullish signal.

For more earnings season analysis, start a two-week free trial to any one of our three membership levels.



Earnings Season’s Biggest Winners and Losers…So Far
Apr 25, 2018

The average stock that has reported earnings this season (since 4/10) has fallen in price on its earnings reaction day (the first trading day following a stock’s earnings report).

Below is a list of the stocks that have posted the biggest one-day gains in reaction to their earnings reports. For stocks that report after the close, we use the next day’s price change. For stocks that report before the open, we use that day’s price change.

As shown, Limelight Networks (LLNW) has seen the best response of any stock on earnings this season with a one-day gain of 21.71%. Just two other stocks have seen gains of more than 15% on their earnings reaction days — Ericsson (ERIC) and Santander (SC).

Six other stocks have posted gains of more than 10% — SANM, STNG, HLX, USNA, LRN, and TRU. Other notables on the list of biggest earnings season winners include Netflix (NFLX), Six Flags (SIX), Intuitive Surgical (ISRG), American Express (AXP), and CSX.



While 9 stocks have gained more than 10% on their earnings reaction days so far this quarter, 13 have fallen more than 10%. The three worst performers in reaction to earnings have been Skechers (SKX), trivago (TRVG), and Pier 1 Imports (PIR). All three of these stocks fell more than 20% in response to earnings. Bed Bath & Beyond (BBBY) just missed falling 20% with a one-day decline of 19.95%.

Other notables on the list of biggest earnings season losers include Philip Morris International (PM), Freeport-McMoRan (FCX), IBM, 3M (MMM), and United Rentals (URI).

Sign up for a Bespoke Premium free trial for more in-depth earnings season analysis.



Putting GDP In Perspective
Posted by lplresearch

The Commerce Department announced that the U.S. economy grew 2.3% year over year in the first quarter (based on gross domestic product), better than the consensus estimate of 2.0%, but beneath last quarter’s 2.9% and the 3.2% rate seen in the third quarter of 2017. On the surface, the data hardly seems encouraging, but a look under the surface suggests more optimism may be warranted.

“As our LPL Chart of the Day shows, the first quarter has been far and away the worst quarter since 2000. However, things tend to bounce back in the second quarter, as it has been the strongest quarter over the same period,” according to Ryan Detrick, Senior Market Strategist.



One thing to note is that while consumer spending was weak, it was offset by strong business investment. Weather could also have played a role in the consumer weakness after some spending was pulled forward in the fourth quarter, likely due to post-hurricane recovery and anticipated tax gains.

“We continue to expect U.S. growth to accelerate over the rest of the year, supported by a strong job market, fiscal stimulus, business investment, and a potential rebound in consumer spending,” summarized Detrick.

Can Oil, Rates & Stocks Rally Together?

Well, yes, sometimes, rarely actually. In case you were not up at 5am ET today for my on-air chat with Brian Sullivan (@SullyCNBC) who is now hosting CNBC’s Worldwide Exchange (@CNBCWEX) show, you missed amongst other things, in light of the current rising oil and rate and shaky stock environment, our discussion on the history of stocks being able to sustain a rally or uptrend when both oil prices and interest rates were on the rise.

The 10-Year closed above 3% yesterday spooking stocks along with the fear of peak earnings and growth deceleration. I think folks have over reacted a bit, but with the Worst Six Months (May-October) upon us, it’s worth taking note.

Initially I was hard-pressed to find an instance in history when oil, rates and stocks all maintained a sustained rise. Sully and the CNBC stats folks did not uncover any either. However, when I reconnoitered the data sets, time frames and reference points I made a potentially significant discovery.

Using the St. Louis Fed’s trusty and handy FRED® Database tool, I found that when comparing the NASDAQ 100 index to oil prices and interest rates we did have a noteworthy occurrence from late 1998 to early 2000 when all three rallied together. In the chart above I have crudely (pun intended) highlighted this period with a yellow circle and red arrows.

With the adjustments I made for the vast differences in price levels of interest rates, crude oil and the NASDAQ 100, the present somewhat resembles 1998-2000. I am not suggesting the market is at a similar juncture at this point in time – at least not yet – and perhaps I am a bit guilty of torturing the data, but nevertheless I find this discovery thought provoking.

For comparison with slightly different data sets that go back further so we can compare the halcyons day of the 1970s stagflation and epically high interest rates along with embargo and crisis fueled crude prices. As you can see stocks were unable to maintain a sustained rise until rates and oil came down in the mid-1980s.

 

Stock Market Analysis Video for April 27th 2018
Video from AlphaTrends Brian Shannon


ShadowTrader Video Weekly 4.29.18 - Weekly opposing hammers and other quagmires
Video from ShadowTrader Peter Reznicek

 

Here are the current major indices pullback/correction levels from ATHs as of week ending 4.27.18-


Here is also the pullback/correction levels from current prices-


...and here are the rally levels from current prices-

 

​

Here are the most anticipated ERs for this upcoming week ahead (I'll also have the weekly earnings calendar posted in here as well once it's out)

***Check mark next to the stock symbols denotes confirmed earnings release date & time***

Monday 4.30.18 Before Market Open:

Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES!

Monday 4.30.18 After Market Close:

Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES!

Tuesday 5.1.18 Before Market Open:

Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES!

Tuesday 5.1.18 After Market Close:

Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES!

Wednesday 5.2.18 Before Market Open:

Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES!

Wednesday 5.2.18 After Market Close:

Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES!

Thursday 5.3.18 Before Market Open:

Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES!

Thursday 5.3.18 After Market Close:

Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES!

Friday 5.4.18 Before Market Open:

Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES!

Friday 5.4.18 After Market Close:

Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES!

NONE.

Here are the scheduled earnings before the market open on Monday morning (4/30/18)-
($MCD $AKS $AGN $ON $EPD $FDC $USCR $L $ARNC $MOH $AMG $HTA $IEX $NSP $PEG $GVA $DO $IRMD $DAN $CNA $CTB $ARLP $AWI $MCY $AHGP $BWP $KMPR $CPLP $EDR $CUBI $DSPG $RMBL $SNN)

 

Stockaholics come join us on our stock market challenge threads for this upcoming trading week ahead!-

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• Stockaholics Daily Stock Pick Challenge & SPX Sentiment Poll for Monday (4/30) <-- click there to cast your daily market vote and stock pick!

• Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (4/30-5/4) <-- click there to cast your weekly market vote and stock picks!

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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:

 

And as promised here is the most anticipated earnings calendar for this upcoming trading week ahead-
($AAPL $BABA $TSLA $SQ $MCD $SNAP $SHOP $AKS $CELG $MA $CHK $AGN $UAA $FRED $GRUB $PFE $STX $CVS $ATVI $ON $OLED $BP $GILD $FDC $EPD $L $MRK $WLL $USCR $ANET $TEVA $SWKS $COHR $LL $FEYE $AET $ARNC $W $GPRO $APRN $CGNX $AKAM $MOH)


If you guys want to view the full earnings post please see this thread here-

• Most Anticipated Earnings Releases for the week beginning April 30th, 2018 <-- click there to view!