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Stock Market Today: December 24th - 28th, 2018

Discussion in 'Stock Market Today' started by bigbear0083, Dec 21, 2018.

  1. bigbear0083

    bigbear0083 Content Manager
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    Welcome Stockaholics to the trading week of December 24th!

    This past week saw the following moves in the S&P:
    [​IMG]


    Major Indices End of Week:
    [​IMG]
    [​IMG]


    Bird's Eye view of the Major Futures Markets on Friday:
    [​IMG]


    Economic Calendar for the Week Ahead:
    [​IMG]


    Sector Performance WTD, MTD, YTD:
    [​IMG]
    [​IMG]
    [​IMG]
    [​IMG]
    [​IMG]
    [​IMG]


    What to Watch in the Week Ahead:

    • Monday

    Christmas Eve holiday

    Stock market closes at 1 p.m.

    • Tuesday

    Christmas holiday

    Markets closed

    • Wednesday

    9:00 a.m. S&P/Case-Shiller HPI

    10:00 a.m. Richmond Fed surveys

    • Thursday

    8:30 a.m. Initial claims

    9:00 a.m. FHFA home prices

    10:00 a.m. New home sales

    10:00 a.m. Consumer confidence

    • Friday

    8:30 a.m. Advance economic indicators

    10:00 a.m. Pending home sales
     
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  2. bigbear0083

    bigbear0083 Content Manager
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    "Panic In The Air" - Stunned Traders Speechless At The Carnage
    CNN's Fear & Greed Index just hit 5... an all-time record low (most extreme fear)...

    [​IMG]


    Tough week in China...

    [​IMG]

    European stocks had an ugly week...

    [​IMG]


    And, if this holds up next week, will be the worst year for EU stocks since 2008...

    [​IMG]

    But since the trade war truce, US equities have dramatically underperformed...

    [​IMG]

    It was a total shitshow in US equities - Dow, S&P, Trannies down around 6% on the week, and Nasdaq and Small Caps down a shocking 8% or so...

    [​IMG]

    Not decoupled from the rest of the world after all...

    [​IMG]



    Worst week for Dow, Nasdaq since Oct 2008 (5th week lower in last 6)

    [​IMG]

    • Worst week for S&P since Aug 2011 (5th week lower in last 6)
    Just 300 more points lower in the S&P to catch down to financial conditions fair value...

    [​IMG]

    • Worst week for Russell 2000 since Sept 2011 (5th week lower in last 6)
    From the 52-week highs:

    • Dow -16%

    • S&P -17%

    • Nasdaq 100 -21% - BEAR

    • Nasdaq Composite -22% - BEAR

    • Trannies -23.6% - BEAR

    • Small Caps -26% - BEAR
    First it was the Russell 2000. Then the Nasdaq Composite. Today it's the Nasdaq-100 that crossed a bear-market threshold by retreating 20% from a peak. The index's record was set Aug. 29, the same day as the broader Nasdaq index.

    [​IMG]

    Why today? Blame the FAANG stocks. Facebook, Amazon.com, Apple, Netflix and Google/Alphabet together account for more than two-thirds of the Nasdaq-100's loss.

    [​IMG]



    Since The Fed, Gold, the dollar, and the long-bond are all up around 0.5%, while stocks collapsed around 6%...

    [​IMG]



    Year-to-Date it's carnage with Trannies and Small Caps down 16%, Dow and S&P down 10%, and Nasdaq Composite down 8%!!

    [​IMG]



    On the day, we can see where Fed's Williams tried desperately to jawbone markets higher - but ended up admitting that the balance sheet runoff is on auto-pilot...

    [​IMG]

    and then Navarro comments into the bell did not help...

    [​IMG]

    Bank stocks were a bloodbath - with Regionals have dumped the entire Trump Bump...

    [​IMG]



    Goldman Sachs was a disaster - down over 5% today alone (down 42% from highs)...

    [​IMG]



    VIX term structure remains inverted and spot VIX topped 31 for the first time since Feb today...

    [​IMG]



    Under the covers, there are some extremes:

    Put/Call (Open Interest) has collapsed...

    [​IMG]



    Nasdaq/NYSE New Lows is soaring...

    [​IMG]

    Which, as Bloomberg reports, is ominous at best. Since 1984, there were only eight days when a bigger proportion of shares did so, according to Sundial Capital Research. Two of them were in 1987 -- during the famous Black Monday crash, when the Dow Jones Industrial Average lost 23 percent in one day, and then again during the following session. The rest were in the aftermath of the collapse of Lehman Brothers in October and November 2008.

    There are more than hints of panic in the air,” Jason Goepfert, president of Sundial Capital Research, wrote in a note Thursday.

    There is clear evidence of wholesale selling on a level we rarely see.”

    And finally, the regime has changed dramatically with a mass exodus of smart money flows...

    [​IMG]

    None of this was helped the largest market cap company in the world suffering a death cross...

    [​IMG]



    Credit markets were a bloodbath this week with loans collapsing bidless...

    [​IMG]

    And HY spreads exploding...

    [​IMG]



    Bonds & Stocks were dumped the last two days...

    [​IMG]



    Treasury yields ended the week notably lower (though not as much as one would expect given the carnage in stocks, since we suspect some forced selling by Risk-Parity funds took some of the buying away)...

    [​IMG]



    10Y Yields closed below the key 2.80% level...

    [​IMG]



    And if cyclical stocks (relative to defensives) are right, Treasury yields have a long way to fall...

    [​IMG]



    The Dollar Index slipped on the week, but the last three days (post Powell) have been chaotic...

    [​IMG]



    Cryptos drifted lower today but had a huge week...Bitcoin's best week since Feb

    [​IMG]



    Gold and Silver managed gains on the week but copper and even more so crude were clubbed like baby seals...

    [​IMG]



    Gold pushed up to its 200DMA...

    [​IMG]



    Silver underperformed gold...

    [​IMG]



    WTI Crude tumbled to a $45 handle today...

    [​IMG]

    * * *

    Finally, we note the surge in USA Sovereign credit risk as the government heads for shutdown (and debt ceiling debacles)...

    [​IMG]

    On the macro side, things are not awesome...

    [​IMG]

    But it's not just the sovereign that is in trouble...

    [​IMG]
    David [email protected]


    The profits recession's already here. The GDP data showed that National Accounts earnings after-tax and w/ IVA & CCA are up 19.6% YoY as of Q3. Strip out these goodies and pre-tax profits are -0.3%. My advice is to fade the cheerleaders that populate the segments on bubblevision.


    127

    12:47 PM - Dec 21, 2018
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    Still... the worst December since The Great Depression - probably nothing, right?

    [​IMG]

    Actually, there are over $17 trillion reasons to worry!!

    [​IMG]

    Who could have seen that coming?

    [​IMG]

    We give the final word to none other than Dennis Gartman who said this morning - "Stock prices continue to plunge and there is nothing else that one can say other than that... the internals remain manifestly, harshly, overwhelmingly, one sidedly, shockingly, dismayingly, margin call-creatingly bearish"
     
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  3. bigbear0083

    bigbear0083 Content Manager
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    Authored by Lance Roberts via RealInvestmentAdvice.com,

    So far, the month of December has sucked.

    From Powell to Gundlach, to Trump, and a falling oil prices, there hasn’t been much “holiday cheer…”

    [​IMG]

    However, with the market very oversold, there is still hope that “Santa Claus” could soon appear.

    If we take a look back at history, going back to 1957, we find that only a small percentage of the time does the market decline for more than 4-weeks in a row without a reflexive bounce.

    [​IMG]

    The red vertical bars are every 4- or more consecutive negative return weeks as compared to the S&P 500. As you will note in the statistics, out of the total period of time analyzed 57% of weeks are positive versus 43% negative. Notice that “clusters” of 4- or more negative weeks occur around market peaks and bear markets as opposed to bullish market trending periods. The last cluster of periods was during the 2015-2016 correction.

    Of the total number of negative weeks, 33% were negative 4- or more weeks consecutively. However, those 4- or more negative weeks only accounted for a 14% of the total periods analyzed.

    However, what about the month of December only. The chart below is the same as the chart above but looks at ONLY the months of December.

    [​IMG]

    What we find is that of all the months of December going back to 1957, there have only been 9-December months that posted 4-consecutive negative weeks.

    While we are currently 3-weeks into a very brutal month of December, there is still hope of an oversold bounce to “sell” into heading into the new year. There is a case to be made for this as mutual, pension, and hedge funds “dress” their portfolios for year-end reporting. However, January could well see a resumption of pressure as mangers can sell positions with still large gains and defer taxes into 2020.

    Given the collapse in oil prices, the sharp rotation into bonds and rising volatility, it is highly likely that any rally over the course of the post-Christmas week should not be taken for granted.

    It could well be a “gift” for investors heading into 2019.


    Just something to think about as you catch up on your weekend reading list.

    Economy & Fed
    Markets
    Most Read On RIA
    Research / Interesting Reads
    “A good player knows when to pick up his marbles.“ – Anonymous
     
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  4. bigbear0083

    bigbear0083 Content Manager
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    Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2018-
    [​IMG]
    [​IMG]

    S&P sectors for the past week-
    [​IMG]
     
  5. bigbear0083

    bigbear0083 Content Manager
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    Average S&P 500 Stock Decline Exceeds 25%
    Dec 20, 2018

    The S&P 500 may not have reached bear market territory as an index yet, but of the 500 individual stocks in the index, more than 60% are down at least 20% from their 52-week highs. Overall, the average decline from a 52-week high is a staggering 25.7%! The chart below shows the distance each of the individual components is trading from their 52-week highs grouped by 10 percentage point ranges. As of Thursday afternoon, just 72 stocks in the S&P 500 are even trading within 10% of their 52-week highs. Meanwhile, 82 stocks in the index are down 40% or more with 24 of those 82 stocks down by more than half! Have their been uglier periods for the stock market? You bet. But not in a long time.

    So which stocks are down the most? There are actually a number of well-known names with stocks like General Electric (GE), Western Digital (WDC), Nvidia (NVDA), Halliburton (HAL), Wynn Resorts (WYNN), Micron (MU), and Applied Materials (AMAT) all having been more than cut in half.

    [​IMG]

    Is It Time For Santa?
    Posted by lplresearch

    So far it’s been rough for stocks in December, a month that has historically been bullish. How bad has it been? After 10 trading days, we’re off to the worst start to December since 1980! In fact, the S&P 500 Index is flirting with “worst month of 2018” status, currently held by October (-6.9%). Since 1957, when the S&P 500 started in its current form of roughly 500 stocks, December has never been the worst month of the year.

    Is there still time for a Santa Claus rally? “December has been a month to forget for equities so far, but there is a silver lining. Turns out, the majority of December’s gains tend to happen the second half of the month—so we still have time to believe in Santa,” explained LPL Senior Market Strategist Ryan Detrick.

    As our LPL Chart of the Day shows, December is historically a strong month that has tended to see the majority of its gains late in the month.

    [​IMG]

    Day Before Christmas: Tech and Small-Caps Best
    [​IMG]
    For decades we have been tracking the market’s performance around holidays in the annual Stock Trader’s Almanac. In the 52nd edition for 2019, data for DJIA, S&P 500, NASDAQ and Russell 2000 can be found on page 88. Of the eight holidays tracked, Christmas has been one of the most consistently bullish with respectable average gains occurring on the day before. Small-caps, measured by the Russell 2000 have been up 74.2% of the time on the day before Christmas with an average gain of 0.37% since 1987. NASDAQ is second best, up 67.7% of the time with an average gain of 0.42%. DJIA and S&P 500 have been softer with gains 61.3% and 58.1% of the time respectively. Volatility also tends to be subdued ahead of Christmas as well as the worst decline recorded by any of the four indexes was 0.69% by NASDAQ in 1997. NASDAQ also had the best day before performance, up a staggering 7.56% in 2000. The market did not get exactly what it was looking for from the Fed, but perhaps a pause in trading, to celebrate Christmas, will have some positive impact.
    [​IMG]

    Fed Delivers Dovish Hike; Markets Wanted More
    Posted by lplresearch

    The Federal Reserve (Fed) announced its fourth rate hike of the year, boosting the fed funds rate to a range of 2.25% to 2.5%.

    More importantly, policymakers lowered their expectations for future interest rate hikes in the new “dot plot” and acknowledged global financial conditions in the post-meeting policy statement. But it didn’t seem to be enough for markets, and Fed Chair Jerome Powell’s press conference seemed to only reinforce that impression.

    The dots were expected to tell the story. As shown in the LPL Chart of the Day, the median member forecast suggested the fed funds rate would rise to a range of 2.75% to 3% at the end of 2019 (or two hikes from current level), then peak at 3–3.25% at the end of 2020 before declining to a “longer-term” rate of 2.75%. This longer-term rate is the best current indicator of the perceived neutral rate, or where policy is neither restrictive nor accommodative for the economy

    [​IMG]

    Fourteen of the 16 policymakers contributing to the dot plot see the longer-term rate as 3% or below, which was unchanged from September’s iteration of the dot plot. However, 9 of 16 policymakers project the longer-term rate as 2.75% or below (up from 7 in September), and 4 believe the longer-term rate is in line with the current fed funds rate.

    “Investors’ attention has largely shifted to the Fed’s commentary on future policy and economic growth,” said LPL Research Chief Investment Strategist John Lynch. “However, we believe this cautious, gradual rate-hike path is the key to supporting moderate economic growth and manageable inflation.”

    Still, the S&P 500 Index slid 1.5% for the day after being up about 1% pre-announcement, and closed down on the day of a Fed rate announcement for the seventh straight time. Losses accumulated heavily during Powell’s post-announcement press conference, as investors were fixated on comments about balance sheet runoff, softening inflation, deteriorating global growth, trade tensions, and the Fed’s political independence.

    Markets may be jittery right now, but we encourage investors to focus on the fundamentals instead of the headlines. To us, yesterday’s rate hike and the new dot plots indicate the Fed sees enough evidence in economic conditions for rates to hover around the perceived neutral rate. However, the shift downward in 2019 projections shows the Fed has exercised its commitment to flexibility in predicting a slower path of hikes due to signs of weakness in the global economy. This dovish shift in projections aligns with the Fed slightly lowering its 2019 gross domestic product forecast to 2.3% growth (from 2.5% in September). We see these adjustments as another nod to basing policy decisions on incoming data.

    As mentioned in our 2019 Outlook: Fundamental: How to Focus on What Really Matters in the Markets, we expect the terminal fed funds rate to peak at 3% this cycle, implying three more hikes from the current fed funds rate. The Fed’s pragmatic, balanced approach increases our confidence in the Fed’s ability to execute policy effectively going forward.
     
  6. bigbear0083

    bigbear0083 Content Manager
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    Stock Market Analysis Video for December 21st, 2018
    Video from AlphaTrends Brian Shannon


    ShadowTrader Video Weekly 12.23.18
    Video from ShadowTrader Peter Reznicek
    (VIDEO NOT YET UP!)
     
  7. bigbear0083

    bigbear0083 Content Manager
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    Here are the current major indices pullback/correction levels from ATHs as of week ending 12.21.18-
    [​IMG]

    Here is also the pullback/correction levels from current prices-
    [​IMG]

    ...and here are the rally levels from current prices-
    [​IMG]
     
  8. bigbear0083

    bigbear0083 Content Manager
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    [​IMG]

    Here are the upcoming IPO's for this week-

    NONE.
     
  9. bigbear0083

    bigbear0083 Content Manager
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    Stockaholics come join us on our stock market competitions for this upcoming trading week ahead!-

    ========================================================================================================
    ========================================================================================================

    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! :cool:
     
  10. bigbear0083

    bigbear0083 Content Manager
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    Here is a look at this upcoming week's Global Economic & Policy Calendar-

    [​IMG]
     
  11. bigbear0083

    bigbear0083 Content Manager
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    [​IMG]

    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 12.24.18 Before Market Open:
    NONE.

    Monday 12.24.18 After Market Close:
    NONE.

    Tuesday 12.25.18 Before Market Open:
    NONE. (MARKETS CLOSED IN OBSERVANCE OF CHRISTMAS DAY IN THE U.S.)

    Tuesday 12.25.18 After Market Close:
    NONE. (MARKETS CLOSED IN OBSERVANCE OF CHRISTMAS DAY IN THE U.S.)

    Wednesday 12.26.18 Before Market Open:
    NONE.

    Wednesday 12.26.18 After Market Close:
    NONE.

    Thursday 12.27.18 Before Market Open:
    NONE.

    Thursday 12.27.18 After Market Close:
    NONE.

    Friday 12.28.18 Before Market Open:
    NONE.

    Friday 12.28.18 After Market Close:
    NONE.
     
  12. bigbear0083

    bigbear0083 Content Manager
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    And as promised here is the most anticipated earnings calendar for this upcoming trading week ahead-
    (NONE! :p)
    [​IMG]

    There will be no earnings thread for this week as there are obviously no companies reporting ER in this holiday-shortened trading week ahead. :p
     
  13. bigbear0083

    bigbear0083 Content Manager
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    Here is the CME Globex futures holiday schedule for the upcoming Christmas Day holiday this week-

    [​IMG]
     
  14. bigbear0083

    bigbear0083 Content Manager
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    seems like that could be ultimately where we're headed.

    here's my indices % performance table that i always post up as part of my weekly thread starter posts.

    so looks like about another roughly -6% or so to go to completely wipe out the so-called trump bump.

    interestingly, the small caps have already dipped into the red since inauguration day. i wonder if that is also the case for the trannies? for some reason my spreadsheet is failing to pull up any data for the transports...dang it.

    [​IMG]
     
  15. Three Eyes

    Three Eyes 2018 Stockaholics Contest Winner

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    ...and given market conditions, I bet companies that normally report the last week of a quarter (and their shareholders) are especially thankful for the holiday this time around!
     
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  16. stock1234

    stock1234 2017 Stockaholics Contest Winner

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  17. bigbear0083

    bigbear0083 Content Manager
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    Well, as was noted in here, there are no weekly earnings releases coming out next week largely due to the holidays.

    So, since we have no earnings to look forward to in this coming trading week ahead, I thought why not share EW's monthly earnings calendar for January 2019 to get you guys ready for the next round of earnings season. This is like a sneak peek for what's to come in these next couple of weeks ahead.

    Anyway, I'll still be putting out the regular "weekly" earnings calendars in here at the start of the new year, but just thought to share the monthly view in here as well.

    I hope everyone has a Merry Christmas and a Happy New Year! :D

    ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

    Here are the most notable earnings releases for the trading month beginning January 2019-
    ($NFLX $BAC $BA $BBBY $KBH $SGH $STZ $MA $JPM $C $GS $JNJ $UNH $WFC $AA $LRCX $CJPRY $SLB $ABT $LEN $UNF $AKS $BMY $LW$VLO $RPM $AXP $SMPL $SNX $MSM $WYI $CMC $HELE $FAST $PHM $CSX $INFO $CALM $LNN)
    [​IMG]

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

    StockJock-e Brew Master
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    Worst week in the markets in 10yrs? Did I read that right?
     
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  19. bigbear0083

    bigbear0083 Content Manager
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    yes sir!

    you know it's bad when you can say "worst since lehman" :p
     
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  20. bigbear0083

    bigbear0083 Content Manager
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    A Closer Look at Bear Markets

    The S&P 500 Index is inching closer to bear market territory (a 20% correction based on closing prices). Going back to World War II, we found there have been 14 bear markets, with seven taking place during a recession and seven without an accompanying recession.

    As the LPL Chart of the Day shows, the seven bear markets that accompanied a recession were quite painful, losing 37% on average. On the flipside, non-recessionary bears weren’t as painful. Looking at the previous four, three of them ended at 19% corrections (reaching the 20% threshold intraday). While stocks fell 34% in 1987 without an accompanying recession, conditions were quite different than they are now. Remember, the S&P 500 was up more than 40% year to date in August 1987, so a potential violent snapback was likely. “The bottom line is that you can have bear markets without a recession,” explained LPL Senior Market Strategist Ryan Detrick. “But, as we’ve seen over the past 40 years, if the economy is on firm footing, bears tend to stop around a 20% loss and the occurrences of a massive drop are quite limited.”

    [​IMG]

    Two Other Important Considerations

    Year to date, the S&P 500 is down 7.7%, yet earnings and gross domestic product (GDP) growth have been quite impressive, while stock valuations (price/earnings ratio, or PE) have compressed. We previously saw stocks pause amid a strong economic backdrop with a drop in PEs in 1984 (real GDP 7.3% and earnings 21%) and 1994 (real GDP 4.0% and earnings +19%). Both 1985 (26% S&P 500 returns) and 1995 (35% S&P 500 returns) rebounded with strong S&P 500 returns. Could 2019 continue this trend?

    Additionally, the midterm election year historically is the most volatile out of the four-year presidential cycle. In fact, since 1950, the S&P 500 in a midterm year has pulled back an average of 16.9%—the most out of the four-year cycle. The good news? From the closing low in a midterm year, a year later stocks have been higher 17 of the last 17 times. Given the S&P 500 just made a new closing low this week, could this actually be a potentially good signal?

    In the end, the largest market corrections take place during recessions. Will we have a recession in 2019? We don’t think so, and as we explained in our recently released Outlook 2019, we believe fiscal policy, business spending, and capital investment will help produce GDP growth of between 2.5-2.75% in 2019.
     

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