Welcome Stockaholics to the trading week of August 20th! 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: Estee Lauder, BHP Billiton, Anglogold Ashanti Tuesday Earnings: TJX, Kohl's, JM Smuckers, Red Robin, Toll Brothers, Medtronic, Pure Storage Wednesday Earnings: Target, Lowe's, LBrands, Momo, Royal Bank of Canada 10:00 a.m. Existing home sales 2:00 p.m. FOMC minutes Thursday Earnings: Alibaba, Gap, Autodesk, Intuit, Splunk, HP, VMWare, Hormel, Ross Stores 8:30 a.m. Initial claims 9:00 a.m. FIFA home prices 9:45 a.m. Manufacturing PMI 10:00 a.m. New home sales Friday Earnings: Foot Locker, Buckle 8:30 a.m. Durable goods 10:00 a.m. Fed Chair Jerome Powell speaks on Monetary Policy in a Changing Economy at the Federal Reserve Bank of Kansas City Economic Policy Symposium, Jackson Hole, Wyoming
Global Stocks Slump, US Stocks Jump Despite Economic Data Dump After a week like that, this seemed appropriate... Before we get started, let's note that all is not well in the world (despite the constant happy-talk on 'Murican media)... Global stocks are down 14% from their all-time-high in January... Year-to-Date... US Stocks are dominating... 31-month lows for SHCOMP as Chinese stocks had another ugly week... (3rd biggest weekly drop since Jan 2016) "The Chinese stock market does not reflect the speed of the Chinese economy" is what the mainstream media constantly wants to reassure. There's just one thing... Asia mega-tech (TATS - Tencent, Alibaba, Taiwan Semi, Samsung) crashed this week... European stocks were all lower too... But of course, US equities ended higher... again... The Dow and S&P are no up 6 weeks in a row - because noting else matters. NOTE Nasdaq ended the week lower... US macro data is the most disappointing in 11 months, but stocks love it... US stocks were on their own... And it was all defensives... Tesla was clubbed like a baby seal as Elon Musk's NYT confessional failed to create the "feel sorry for me" narrative he hyped for... (worst day since March and worst week for Tesla stocks since Feb 2016 - after the best week since May 2013) TSLA Bonds are leading... FANG Stocks were all ugly too... But AAPL is soaring to new record highs - holding well above the trillion dollar market cap level... Bonds were bid on the week too... 10Y Yields ended the week unchanged... Another week, another flattening in the yield curve... FX markets were once again an active space - but the dollar index ended the week modestly lower...(biggest drop in 6 weeks) Despite its bounce - after last week's collapse - EM FX ended the week lower (3rd week in a row)... The Turkish Lira surged over 6% after last week's 25%-plus collapse - this is the best week for the Lira since Oct 2008... After nine straight weeks of weakness, offshore yuan strengthened in the week...helped by the late headlines today... Year-to-date, the Argentine Peso and Turkish Lira are now tied for being the dirtiest shirt in the abattoir... Finally in currency-land, cryptos had a serious roller-coaster week with Ethereum crushed and Bitcoin outperforming but the latter half of the week saw a serious bid back in the crypto space... Commodities ended the week lower but the last two days have seen a notable rebound... WTI fell to lowest in 2 months breaking below recent range... this is the 7th weekly loss in a row - the longest losing streak since 2014. Spot Silver's weakest since Feb 2016 and has fallen for 10 straight weeks in a row. It's worst ever run... And finally, we will leave you with this... global risk assets are now tracking the contraction of the global central bank balance sheets (blue line below)... apart from US equities (green line below) - for now... NOTE - the orange line is the GSIBs (Global Systemically Important Banks) which are now in a bear market... what does that say about the state of the global economy?
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2018- S&P sectors for the past week-
Historical Bull and Bear Markets of the S&P 500 Aug 16, 2018 There’s been plenty of chatter lately about the current bull market becoming the “longest on record.” Below is an updated look at the length of the current bull market compared to past bull markets for the S&P 500. First things first, though. Until the S&P 500 closes at a new high, January 26th, 2018 represents the end point of the current bull market because that’s the date of the S&P’s highest closing point of the bull market. Thus, the length of the current bull market has been stopped at 3,245 days since January 26th (3/9/09-1/26/18). A bull market is most commonly defined as a 20%+ rally that was preceded by a 20%+ decline. If the S&P never closes above its January 26th closing level, and instead it goes on to fall 20% from that level, a new bear market will have begun with a start date of January 26th, 2018. Since we don’t know whether the S&P will go into a new bear market before it closes above its 1/26 high, or vice versa, we can’t extend the length of the current bull market past the 1/26 high point. Based on the most commonly used definition of bull and bear markets (20% rallies and declines using closing prices), below is a chart showing the length (in calendar days) of bull and bear markets for the S&P 500 since 1927. We’ve shaded bull markets in green and made them positive, while we’ve shaded bear markets in red and made them negative. The current bull market that has lasted 3,245 days is the second longest on record behind the 4,494-day bull market that ran from late 1987 through early 2000. Yes, the S&P 500 went from late 1987 to early 2000 without experiencing a single decline of 20% or more on a closing basis. If the S&P 500 went on to make a new closing high today, the current bull market would be at 3,447 days, which would still be more than 1,000 days less than the longest bull market on record. For the current bull to become the longest on record, the S&P 500 would need to move above its 1/26 closing high and then not experience a 20% decline from an all-time high through June 29th, 2021. Two things stand out the most in the chart below. The first is that bull markets last a lot longer than bear markets. Indeed, the average bull market since 1927 has lasted 981 calendar days, while the average bear market has lasted 296 days. The second is that US bull/bear market cycles became much longer lasting post-WW2. Below is a table showing the 13 post-WW2 market cycles for the S&P 500. The average bull market since WW2 has lasted 1,651 days and seen a gain of 152.4%. The average bear market has lasted 362 days and seen a decline of 31.8%. The current bull market’s gain of 324.6% over 3,245 days is more than double the length and strength of the average bull market. There is always a lot of debate about the 20% rally/decline definition of a bull market. That’s because there have been multiple 19%+ declines from a closing high that just didn’t quite make it to the 20% threshold for a new bear market. Shouldn’t the 19.92% decline back in 1990 be considered a bear market since the index was just 0.08% away from the 20% threshold? Or shouldn’t the 19.39% decline seen in 2011 be considered a bear as well? We try to be as consistent as possible with the data, so we’re always going to use some type of percentage threshold to measure bull and bear markets over time instead of trying to be subjective about them. And we would never try to say that one 19%+ decline should be considered a bear market while another 19%+ decline shouldn’t be. So for those that would rather use a 19% threshold for market cycles instead of the standard 20% threshold, below we offer a side-by-side comparison of the two. As you can see, the 19%+ threshold ends up adding 5 more bull and bear markets to the tally in the post-WW2 era. As mentioned earlier, the current bull market is the 2nd longest on record using the standard 20% threshold for bull and bear markets. If we use the 19% threshold, the current bull would rank as the third longest on record instead of the second longest. At Bespoke, we’ll likely always use the 20% rally/decline threshold as our definition for bull and bear markets. For investors out there that prefer to be subjective about it or include some 19% declines, that’s fine too! In regards to the current bull market, even if you include the 19% selloff in 2011 as its own bear market, the bottom line is that this bull has still been a really long one. There are two things to remember, though, for the time being. 1) As mentioned above, the current bull is actually not aging at this point until it takes out its January 26th high. And 2) — more importantly — bull markets don’t die of old age. Is Turkey a Reason to Sell EM? Emerging market (EM) equities have experienced significant selling pressure this month amid the U.S. and China’s ongoing trade dispute and the crisis in Turkey, which has sparked contagion fears and threatened to send the country into recession. After yesterday’s 1.8% decline, the MSCI EM Index is down 9.9% year to date, well behind the nearly 7% return for the S&P 500 Index. So is EM a sell now? Although we think EM contagion fears may be overdone, there has clearly been some fundamental deterioration in the space. As LPL’s Chart of the Day shows, earnings estimates for EM have come down in recent months, while U.S. estimates have continued to move higher. We know the adage: “Earnings drive stock prices.” There’s a lot of uncertainty, and EM can be extremely volatile in stressful times. So it’s a sell, right? Not necessarily. “Despite the Turkey situation, EM broadly has many solid fundamentals, including economic growth, favorable demographics, and attractive valuations,” says LPL Research Chief Investment Strategist John Lynch. “We look for an eventual compromise on trade, suggesting the potential for a pivot in EM performance.” EM volatility may continue for a little while longer as these clouds take time to clear. But once they do, we think investors who have maintained some exposure to EM will be glad they did. For suitable investors, we suggest modest EM allocations because of the risks involved, and continue to favor US large cap stocks for the majority of equity investing portfolios. Look for more of our thoughts on Turkey and EM in our next Weekly Market Commentary. Strong Midterm Years Weigh on Following Pre-Election Years Midterm years are notoriously a rough year for markets as presidents push through their most disruptive policy initiatives and battle the opposition party to retain congressional seats. But the last three midterm years, 2006, 2010 and 2014 have been strong followed by troubled pre-election years. 2007 brought us the major top of the Financial Crisis with the S&P up 3.5%. 2011 suffered a mini-bear from April to October that shaved 19.4% off the S&P, which ended the year down a fraction -0.003%. Another mini-bear transpired in 2015 with the S&P losing 14.2% from May 2015 to February 2016. The S&P finished 2015 off -0.7% for the year. From the chart below comparing 2018 to the previous three midterm years 2006, 2010 and 2014, it looks like we are setting up for above average midterm year market gains again followed by a weaker pre-election year prone to a bear market and a recession. Encircled in yellow, all four years suffered early-year declines in January/February. Looking forward from here the previous three midterm years had pullbacks that ended in July or August or September/October as was the case in 2014.
Stock Market Analysis Video for August 17th, 2018 Video from AlphaTrends Brian Shannon ShadowTrader Video Weekly 8.19.18 Video from ShadowTrader Peter Reznicek (VIDEO NOT YET UP!)
Here are the current major indices pullback/correction levels from ATHs as of week ending 8.17.18- 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 (8/20) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (8/20-8/24) <-- 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 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 8.20.18 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! Monday 8.20.18 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! Tuesday 8.21.18 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 8.21.18 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 8.22.18 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 8.22.18 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 8.23.18 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 8.23.18 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 8.24.18 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! Friday 8.24.18 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- ($BABA $MOMO $TGT $KSS $LOW $EL $TJX $TOL $MDT $SPLK $SJM $FL $URBN $COTY $PLCE $ADI $LB $DGLY $PSTG $VEEV $JLL $HRL $VMW $ADSK $QD $HPQ $RY $BITA $INTU $NM $GPS $TUES $ROST $NDSN $MYGN $WSM $RRGB $FLWS $PLAB $RGS $TTC $FLY $SAFM $FN) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning August 20th, 2018 <-- click there to view!
ShadowTrader Video Weekly 8.19.18 - How to Read Nuances in Market Profile Video from ShadowTrader Peter Reznicek
Interesting to see bonds doing pretty well today Maybe due to the comments from Trump. Bank stocks holding up ok though while sector like utilities isn’t exactly rallying. https://www.cnbc.com/2018/08/20/trump-takes-another-shot-at-fed-chairman-for-raising-rates.html Big tech stocks seem to be lagging today, stocks like AAPL, MSFT, and INTC, etc are all down
The SPX moved a little closer to a new ATH today, can we get there this week? Interest rates moving lower could become a tailwind for equities too especially the move today seems to be due to the comments from Trump rather than something wrong with the economy
The Real Longest Bull Market Ever Aug 20, 2018 We’ve read or heard a number of erroneous reports lately claiming that we’re about to set the record for the longest S&P 500 bull market on record. Since the S&P 500 made its last bull market closing high on January 26th, the bull market actually stopped aging on that date, and we’ve essentially been in limbo since. (You can read more on this topic in this post we published late last week.) But while the bull market for the S&P 500 really isn’t the longest on record, another major US index just set the record for its longest bull market ever. The Nasdaq 100’s current bull market has lasted 3,534 calendar days (from 11/20/08 through its most recent high on 7/25/18). As shown in the chart below, that’s easily its longest on record since the index began in 1985. While the current Nasdaq 100 bull is easily the longest on record, it’s still not the strongest. The 1990s bull that ran from October 1990 through July 1998 saw the index gain 787.37% before it eventually fell into a short bear market in July/August ’98. The current bull for the Nasdaq has only seen a gain of 624.41%. In addition to being in its longest bull market ever, the Nasdaq 100 is also in the midst of another record streak. As shown below, the index has now closed above its 200-day moving average for a record 536 trading days dating back to July 6th, 2016. That’s well above the 396-trading day streak that ended in May 2000 and the 451-trading day streak that ended in October 2014.
SCHW, AMTD open down 3-6% on news JP Morgan will provide free trading. For reference, IBKR is pretty flat at the open. https://www.marketwatch.com/story/d...t-jp-morgan-will-offer-free-trades-2018-08-21 The bank will roll out the new digital investing service next week, and anyone who downloads the mobile banking app or uses its website can get at least 100 free trades in the first year, according to a CNBC report, while Chase's private client users can get unlimited free trades.
