Welcome Stockaholics to the trading week of August 15th! This past week saw the following moves in the S&P: Bird's Eye view of the Markets on Friday: Economic Calendar for the Week Ahead: Sector Performance WTD, MTD, YTD: What to Watch in the Week Ahead: Monday Earnings: Sysco, AngloGold Ashanti, Red Rock Resorts 8:30 a.m. Empire state survey 10 a.m. NAHB survey 4 p.m. TIC data Tuesday Earnings: Home Depot, Dick's Sporting Goods, TJX, Urban Outfitters, Momo, Popeyes Louisiana Kitchen, Advance Auto Parts, Cree 8:30 a.m. CPI; housing starts 9:15 a.m. Industrial production 12:30 p.m. Atlanta Fed President Dennis Lockhart Wednesday Earnings: Target, Staples, Lowes, Cisco, L Brands, NetApp, Eaton Vance, American Eagle Outfitters, Performance Food, CACI 2 p.m. FOMC minutes Thursday Earnings: Wal-Mart, Applied Materials, Gap, Ross Stores, Hormel Foods, Mentor Graphics, Nestle 8:30 a.m. Initial claims; Philadelphia Fed survey 10 a.m. New York Fed President William Dudley 4 p.m. San Francisco Fed President John Williams Friday Earnings: Deere, Estee Lauder, Foot Locker, Madison Square Garden, The Buckle
Stocks Extend Winning Streak To Longest In 4 Years Despite Deluge Of Dismal Data Productivity plunges... Retail Sales disappoints... Consumer's Confidence in their finances lowest since 2014... Weak China data... global bond yields at record lows... US yield curve back near cycle flats... US and Global GDP expectations at cycle lows... BUTbest week in oil in 4 months... simultaneous record highs in S&P, Dow, Nasdaq for first time since Dec 31 1999... "You're welcome" Before we start any of this "market" stuff... there is this - US 2016 GDP growth expectations crashed to cycle lows today... Despite global economic surprises reaching a 30 month high... global GDP expectations tumbled to cycle lows... This week was among the worst in 18 months for US economic data... The Dow and S&P machines worked hard to make sure they closed green... With VIX shoved back down into the close... Nasdaq is now up 7 weeks in a row - the longest streak since March 2012 - after which it tumbled 13%... Financials continued to catch down to the flattening yield curve... While the short-end underperformed on the week, Treasuries were bid across the entire complex on the week... 2s30s flattened over 6bps on the week - the most since Brexit, back near cycle lows... Cable was the week's biggest loser in FX land with Yen surging higher today whan Retail Sales hit... USD Index scrambled back to unchanged on the week... While the USD ended the week unch, crude soared, gold and silver tumbled to unch, and copper slid on weak China data... Gold and Silver had quite a ride since Payrolls... This was oil's best week in 4 months... on the back of a Saudi statement of hope... Charts: Bloomberg Bonus Chart: Italy... bwuahahahaha
Market Performance Around August Option Expiration Next week is options expiration week and mid-August is often better performing than the beginning and the end of the month. This strength is punctuated with a four-day string of bullish days that wrap the weekend from August 14 to 19. A bullish day is defined as a trading day in which the S&P 500 has risen greater than or equal to 60% of the time over the past 21 years. Unfortunately, this bullish cluster has not always resulted in full-week gains during option expiration. Both DJIA and S&P 500 have suffered a weekly loss in five of the last six August expiration weeks. VIX near seasonal low ahead of most volatile time of the year In the following chart, weekly bars of CBOE’s Volatility Index (VIX) are plotted with its 1-year seasonal pattern plotted below. In an average year, VIX typically reaches a low in July and then begins to steadily climb toward a high sometime during October and then begin to decline once again. Note how over the last year VIX has tracked its seasonal pattern rather closely. Since VIX does not measure actual volatility (daily price moves), let’s compare it to actual daily price swings of the S&P 500 since 1950. In the following table, the number of trading days where S&P 500 closed up or down greater than or equal to 1.5% appears next to the month. In the third column the total number of trading days in that month appears. Lastly the percentage of days greater than or equal to +/- 1.5% is calculated. August has the fourth highest percentage of days +/- 1.5%. October has the most which matches the 1-year seasonal pattern above. Election year pattern points to a September-October pullback At the close of trading yesterday, DJIA was up 6.3% year-to-date. S&P 500 was up a similar 6.7% and NASDAQ was up 4.1%. At these levels of performance DJIA and S&P 500 are slightly above average compared to past election years while NASDAQ is roughly in line with historical averages for this time of the year. Barring some disastrous exogenous event, the worst-case Eighth Year of Presidential terms scenario appears to be off the table. Now that the 8th Year scenario is highly unlikely let’s turn attention towards the more likely typical election year pattern for the remainder of the year. Although August is typically a weak month, this is not the case in election years. Since 1952, DJIA and S&P 500 have averaged gains of 0.8% and 1.0% respectively in election-year Augusts. NASDAQ is even stronger, up 2.9% on average since 1972. However, once August ends and September arrives, back-to-school and back-to-work time, weakness does creep back into the picture. Looking at the above three charts, an interim top is seen at the beginning of September for DJIA and S&P 500. NASDAQ strength tends to last slightly longer, until about mid-month September. Weakness then tends to persist until early- or mid-October before the market rebounds to close out the year on a positive note. 70.8% Chance of a Mid-August Rally In election years the full month of August tends to perform much better than in other years. Instead of lingering near the bottom of the performance standings, August sits near or at the top in election years. Within the month of August, strength has been most consistent on the 10th, 11th, 12th and 13th trading days over the past 24 years. S&P 500 and Russell 2000 have advanced over this four-consecutive day span 70.8% of the time with average gains of 0.9% and 1.1% respectively. DJIA and NASDAQ have not risen as frequently, but still maintain solid average gains of 0.7% and 1.4%. Part of the explanation for this strength can be traced to typical monthly cash inflows around the 15th and some of it is likely due to early month weakness setting up a rebound rally. This year the rally begins on the close of August 11 and lasts until the close on August 17. Four of the last six mid-August rallies in election years have been respectable. In 2008 the four-day span was negative across the board and in 1992 on S&P 500 advanced. Excluding 2008 only modest lift to election year seasonal pattern Earlier this week updated Eighth Year of Presidential terms seasonal pattern charts for DJIA, S&P 500 and NASDAQ were presented. At that time it was noted that the market had most likely shrugged of the 8th year curse and were once again tracking the typical election year course which includes strength in July and August before some weakness in September and October. In response to these charts inquiries were made regarding the impact that 2008 has on the election year pattern. This is quite reasonable given the magnitude of market declines in that year. DJIA shed 33.8% in 2008, S&P 500 plummeted 38.5% and NASDAQ plunged 40.5%. Losses were steep and rather consistent from start to finish in 2008 so it would seem that year could easily pull the overall election year performance lower. In the charts above, a fourth line has been added representing all election years excluding 2008. With 2008 removed there is virtually no change in the shape of the pattern and major rallies and pullbacks on the pattern remain intact. For DJIA and S&P 500, there was only an improvement of about 2% near the end. NASDAQ improved around 5%. The simple reason why there is just a modest improvement excluding 2008 is the number of election years since 1900. Our database has 28 election years since 1901 for DJIA, 21 since 1930 for S&P 500 and 11 since 1971 for NASDAQ. Even excluding 2008, the typical election year pattern still exhibits weakness in August and September, just a bit more on the mild side.
Stockaholics come join us in our weekly market poll and vote where you think the markets end this week! Weekly SPX Poll - Sentiment (8/15-8/19) <-- click there! in addition we have our weekly stock picks challenge here- Stockaholics Weekly Big Board Contest for the Week of (8/15-8/19) <-- click there! it would be great to see all of you regulars here at stockaholics participate!
This weeks market wrap and Sector Watch Video Nice consolidation week still leaning in the bulls favor but anything can happen.
ShadowTrader Video Weekly 8.14.16 - Seven Trading Ideas for Next Week Video from ShadowTrader Peter Reznicek
Biotech stocks pushing to get out of downchannels Spoiler for large images Spoiler There is interest in BIIB being acquired, possibly even by GILD.
gm traders Early movers: PPS, BBY, DECK, AGN, FB, ATVI, TWTR, TSLA & more Post Properties — The apartment real estate investment trust is being bought by rival MAA in a $4 billion stock swap deal. The two companies focus on apartments located in Sunbelt states. Xylem — The water treatment company is buying privately held Sensus for about $1.7 billion in cash. Sensus is a maker of smart meters and also provides data analytics services for various utility industries. Dollar General — The retailer's stock was downgraded to "hold" from "buy" at Jefferies, both on a valuation basis and from the potential threat of highly competitive pricing. Best Buy — Jefferies also downgraded Best Buy to "hold" from "buy," with the call based on a maturing cycle for 4K television sets. Deckers Outdoor — The maker of UGGS and other footwear was upgraded to "outperform" from "market perform" at Telsey Advisory Group, based on the idea that weather trends should be more favorable for Deckers than in the past. American Eagle — The apparel retailer's stock was upgraded to "buy" from "hold" at Deutsche Bank, based on valuation and the firm's expectation that American Eagle's second-quarter results will be Wall Street consensus. Valeant Pharmaceuticals — Mizuho upgraded the drugmaker's stock to "neutral" from "underperform," based in part on more optimistic management guidance. General Motors — Ride service company Lyft rejected buyout interest from the automaker. General Motors declined comment on the report when contacted by CNBC. Allergan — Hedge fund manager David Tepper increased his stake in the drugmaker by 981,700 shares to a total of 1.2 million shares during the second quarter. Tepper's quarterly Securities and Exchange Commission (SEC) filing also shows a new bet on Quorum Health and a 61 percent cut in his holdings in hospital operator HCA. Tiffany — The luxury goods retailer lost Nelson Peltz's Trian Fund as a shareholder during the second quarter, according to Trian's quarterly SEC filing. Trian took a 5.5 percent stake in Tiffany in 2007, but cut its investment in recent months and has now exited it altogether. Facebook, Activision Blizzard — The two stocks are among new investments by hedge fund manager Daniel Loeb's Third Point, according to a quarterly SEC filing. Third Point also exited its stake inSignet Jewelers. Tesla — Tesla removed the word "autopilot" from its China website following a Beijing crash involving a car operating in autopilot mode. Boeing — Boeing's KC-46 refueling tanker has been cleared for production by the Defense Department. That follows a delay in the program and some redesign work. IBM — IBM will announce a seven-year deal to provide cloud services to business software provider Workday, according to The Wall Street Journal. Twitter — Twitter has been in discussions with Apple about bringing the Twitter app to Apple TV, according to The New York Times. Such an agreement would allow Apple TV users to view National Football League games streamed by Twitter.
#ES_F $ES_F #SPY levels to watch 2186 / / 2174.50 / / 2162.75 #CL_F $CL_F #Crudeoil levels to watch 44.78 / / 43.95 / / 43.12
