Welcome Stockaholics to the trading week of February 19th! 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 Presidents Day holiday Markets Closed Tuesday Earnings: Home Depot, Walmart, Domino's Pizza, Cracker Barrel, Medtronic, Duke Energy, Six Flags, Extra Space Storage, Newfield Exploration, Henry Schein, MGM Resorts, Gannett, BHP Billiton 1:00 p.m. Treasury auctions $28 billion 2-year notes Wednesday Earnings: Delphi Automotive, Advance Auto Parts, Wendy's, Southern Co, Sturm Ruger, Cheesecake Factory, Host Hotels, Owens Corning, Continental Resources, Pandora Media, Invitation Homes, Kaiser Aluminum, Roku, Boston Beer, Avis Budget, Holly-Frontier 8:15 a.m. Minneapolis Fed President Neel Kashkari 9:00 a.m. Philadelphia Fed President Patrick Harker 9:45 a.m. Manufacturing PMI 9:45 a.m. Services PMI 10:00 a.m. Existing home sales 11:30 p.m. Treasury auctions $15 billion 2-year floating rate notes 1:00 p.m. Treasury auctions $35 billion 5-year notes 2:00 p.m. Federal Open Market Committee meeting minutes Thursday Earnings: Barclays, Axa, HP, Wayfair, First Solar, Intuit, Bloomin' Brands, Newmont Mining, Apache, Red Robin Gourmet Burgers, Hormel Foods, Chesapeake Energy, Solar Capital, Universal Forest Products, Wingstop 12:15 a.m. Fed governor Randy Quarles in Tokyo 8:30 a.m. Weekly jobless claims 10:00 a.m. New York Fed President William Dudley briefs press on Virgin Islands, Puerto Rico 12:10 p.m. Atlanta Fed President Raphael Bostic 1:00 p.m. Treasury auctions $29 billion 7-year notes 3:30 p.m. Dallas Fed President Robert Kaplan Friday Earnings: Royal Bank of Canada, Berkshire Hathaway, Cinemark, Public Service 10:15 a.m. New York Fed President Dudley at U.S. Monetary Policy Forum 10:15 a.m. Boston Fed President Eric Rosengren at monetary policy forum 11:00 a.m. Fed releases monetary policy report for 2018 1:30 p.m. Cleveland Fed President Loretta Mester at monetary policy forum 1:30 p.m. Kansas City Fed President Esther George at monetary policy forum 3:40 p.m. San Francisco Fed President John Williams on outlook
Massive Squeeze Sparks Best Week For Stocks In 7 Years As Dollar Crashes This week can be summed up thus... and thus... Year-to-Date, Gold is leading stocks as bonds get battered... But it was quite a week for stocks... Nasdaq, S&P - best week since Dec 2011 Dow - best week since Nov 2016 Small Caps - best week since Dec 2016 "Most Shorted" Stocks - biggest weekly short-squeeze since Nov 2016 VIX - biggest weekly drop since Nov 2016 US Treasury Yield Curve - 2nd biggest weekly flattening since Sept 2011 HYG (HY Bond ETF) - best week since Feb 2016 (despite record outflows) Dollar Index - 2nd worst week in 6 months Gold - best week since April 2016 Bitcoin - best week in 2 months Stocks were a one-way bet as mysterious dip-buyers picked up everything...except today's Mueller/Russians drop... On the day, Nasdaq ended red and Dow and S&P gave back pretty much everything into the bell... Futures show the real craziness of the swing as Nasdaq surged 10% off last Friday's lows... In the biggest short-squeeze since the election... The Dow broke through its Fibonnacci 61.8% retrace before pulling back on Russia indictment headlines... VIX closed back below 20... VIX yield curve still inverted (red) but dramatically less backwardated than a week ago (green) And WTF is going in SVXY!!!!! But adjusted for the collapse in price... Overall Vols came back this week but Rate-Vol seems more elevated than norms now... Treasury yields were mixed on the week with the long-end bid (-3bps) and the rest of the curve bear-flattening... 30Y remains in the range but notably lower in yield on the week... And 2s30s tumbled... The Dollar Index had an ugly week... Dollar's lowest weekly close since Dec 2014... The Dollar (down), Stocks (up) and Gold (up) were all one big happy family this week... A weak dollar sparked a bid across all commodities with copper leading the charge... Despite Copper's outperformance, it appears 10Y Yields have overshot for now... Cryptos had a great week... With Bitcoin back above $10,000 once again... Finally, as Gluskin Sheff's David Rosenberg notes, the new definition of economic strength when 60% of the incoming US data have come in shy of estimates this month and only 30% have topped expectations. The Citi surprise index has rolled over to four-month lows. Imagine what a weak economy must look like!
Spoiler: Weekend Reading: Hurricane Boost Dissipates Authored by Lance Roberts via RealInvestmentAdvice.com, The Trump Administration has taken a LOT of credit for the recent bumps in economic growth. We have warned this was not only dangerous, credibility-wise, but also an anomaly due to three massive hurricanes and two major wildfires that had the “broken window”fallacy working overtime. “The fallacy of the ‘broken window’ narrative is that economic activity is only changed and not increased. The dollars used to pay for the window can no longer be used for their original intended purpose.” If economic destruction led to long-term economic prosperity, then the U.S. should just regularly drop a nuke on a major city and then rebuild it. When you think about it in those terms, you realize just how silly the whole notion is. However, in the short-term, natural disasters do “pull forward” consumption as individuals need to rebuild and replace what was previously lost. This activity does lead to a short-term boost in the economic data, but fades just as quickly. A quick look at core retail sales over the last few months, following the hurricanes, shows the temporary bump now fading. The other interesting aspect of this is the rise in consumer credit as a percent of disposable personal income. The chart below indexes both consumer credit to DPI and retail sales to 100 starting in 1993. What is interesting to note is the rising level of credit card debt required to sustain retail sales. Given that retail sales make up roughly 40% of personal consumption expenditures which in turn comprises roughly 70% of GDP, the impact to sustained economic growth is important to consider. Importantly, the latest CPI, inflation, report showed a strong rise that was directly attributable to rising rent, health care, and oil prices. Even the previous increases in retail sales were primarily comprised of gasoline, which directly impacts consumers ability to spend money on other stuff, andbuilding products from rebuilding efforts. Importantly, what the headlines miss is the growth in the population. The chart below shows retails sales divided by those actually counted as part of the labor force. (You’ve got to have a job to buy stuff, right?) As you can see, retail sales per labor force participant was on a 5% annualized growth trend beginning in 1992. However, after the financial crisis, the gap below that long-term trend has yet to be filled as there is a 23.2% deficit from the long-term trend. (If we included the entirety of the population, given the number of people outside of the labor force that are still consuming, the trajectory would be worse.) The next chart below shows the annual % change of retail sales per labor force participant. The trend has been weakening since the beginning of 2017 and shows little sign of increasing currently. While tax cuts may provide a temporary boost to after-tax incomes, that income will simply be absorbed by higher energy, gasoline, health care and borrowing costs. This is why 80% of Americans continue to live paycheck-to-paycheck and have little saved in the bank. It is also why, as wages have continued to stagnate, that the cost of living now exceeds what incomes and debt increases can sustain. Yes, corporations will do well under the “tax reform” plan. Already compensation for the top 20% of income earners are seeing wages rise, while corporations have doubled their planned stock “buybacks” to boost earnings per share. But such does not increase the take-home pay for the bottom 80% of the population that drives the majority of economic growth long-term. Very likely, the next two quarters will be weaker than expected as the boost from hurricanes fade and higher interest rates take their toll on consumers. So, when mainstream media acts astonished that economic growth has once again slowed, you will already know why. Here is your weekend reading list. Economy & Fed All Eyes Turn To Jerome Powell by James Rickards via Daily Reckoning Trumps New Dark Money Man Takes Over by Nomi Prins via The Daily Reckoning Yellen’s Success At Fed Confirms Irrelevance by John Tamny via Forbes How Long Before Trump Turns On Powell by Bess Levin via Hive 2017-18 Economic Recovery Mocks “New Normal” by Peter Ferrara via Washington Times Soon To Pivot From Cheering Economy To Fearing Debt by Shawn Tully via Fortune Rules-Based Monetary Proposals Won’t Solve Problem by Nathan Lewis via Forbes Crumbling Infrastructure Is A Myth by John Merline via IBD Infrastructure Spending Won’t Transform America by George Will via IBD Real Correction Will Spring From Deficit by Kevin Williamson via National Review Markets 5-Reasons Not To Panic by Caroline Baum via MarketWatch How Trillions In Risk Parity Trades Could Sink The Market by Simon Constable via Forbes Nomura: You Will Have Another Chance To Buy Low Soon by Tyler Durden via ZeroHedge Market Volatility & Inflation by Edward Harrison via Credit Writedowns Who’s Really To Blame For The Crash by Mark DeCambre via MarketWatch Corrections Almost Always Test Lows Before Complete by Bryce Coward via Knowledge Leaders Interest Rates Pessimistic About Growth by Matthew C. Klein via FT The Rate Puzzle Is Coming Togetherby Sven Henrich via Northman Trader Stock Market Was Overdue For Fall by Jeff Sommer via NYT History Suggests Correction Isn’t Over by Ryan Vlastelica via MarketWatch Identifying A Market Bottom by Michael Brush via MarketWatch Don’t Freak Out by Jonathon Trugman via NY Post 3-Ways This Correction Can Play Out by Jesse Colombo via RIA Be Smarter Than Harvard by John Coumarianos vis RIA Research / Interesting Reads Record Short Treasury Bets Begs Reversion by Wolf Richter via Wolf Street It’s Hard To Predict How You’ll Respond To Risk by Collaborative Fund A New Mental Model For Investing by Microcap Club How A Bear Market Starts by Macromon via Global Macro Monitor We’ve Not Been Here Before by Kevin Muir via The Macro Tourist Volatility Speculators Storm Back In by Dana Lyons via The Lyons Share Gold Fireworks On The Horizon by Jesse Felder via The Felder Report “When an investor focuses on short-term investments, he or she is observing the variability of the portfolio, not the returns – in short, being fooled by randomness.” ― Nassim Taleb
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2018- S&P sectors for the past week-
Presidents’ Day: Long-Term Record Bearish Before & After Page 88 of the Stock Trader’s Almanac 2018, points out Presidents’ Day as the poorest performing holiday of the eight holidays that are tracked. Unlike the others, the trading day before and the trading day after this three-day holiday weekend are both down on average over the past 38 years. Depending on how February lays out in a monthly calendar, the Tuesday after Presidents’ Day is either the first trading day of option expiration week or the week after options expiration week. In the tables below, the years when Presidents’ Day occurs in the week after option expiration are highlighted. This year, Presidents’ Day falls in the week after options expiration. Since 2011, the market’s performance before and after the long holiday weekend has improved, most notably during the last four years. Some of this recent improvement could have been the result of sizable losses in January and the ensuing rebound rally. Recent market jitters, a tepid history on February’s option expiration day and a long holiday weekend could be sufficient reason for traders to trim positions this Thursday and/or Friday. The Year of the Dog Could Have Bulls Smiling Posted by lplresearch The Chinese New Year (often called the Lunar New Year) kicks off tomorrow (February 16), and with it comes the Year of the Dog. Although we would never suggest investing based on the zodiac signs—it is important to note that the Year of the Dog has historically been quite strong for equities. Since the Chinese New Year typically starts between late January and mid-February, we looked at the 12-month return of the S&P 500 Index starting in late January dating all the way back to 1950.* And wouldn’t you know it? The Year of the Dog is up more than 15% on average. Woof indeed. “The Chinese Zodiac says that 2018 will be a year of happiness and rest; but, it also looks like it could be a good year for equity bulls, as the S&P 500 tends to do very well during the Year of the Dog. In fact, out of the 12 zodiac signs, no year sports a better average return,” according to Ryan Detrick, Senior Market Strategist. We would like to stress one more time not to invest because of the zodiac sign, but wouldn’t it be something if man’s best friend could come through with more gains within the next 12 months? How Normal Is This Correction? Posted by lplresearch The S&P 500 Index officially pulled back into correction territory last week for the first time since early 2016. The widely accepted definition of a correction is a 10% decline from the most recent high. What made this correction so unique is that it was the first time the S&P 500 has ever gone from a new all-time high to a correction in nine days or less. Nonetheless, after one of the most tranquil equity markets in history last year, seeing a pickup in volatility in 2018 shouldn’t be a surprise. In fact, a continuation of the bull markets amid higher volatility was one of the main themes in Outlook 2018: A Return of the Business Cycle. We looked at all 36 S&P 500 corrections since 1980 last week, but we also think the max intra-year pullback, along with the total return for the S&P 500 for each calendar year starting in 1980, provides a few more helpful takeaways: The average max intra-year pullback is 13.7%; compare that to 2017’s 2.8%. Half of all years (19 out of 38) saw at least a 10% correction during the year. 13 of the 19 years with a correction finished higher on the year. The average total return for the S&P 500 during a year that had a correction was 7.2%. “The reality is a 10% correction is quite normal. In fact, years that have a correction but don’t fall into a recession tend to bounce back and usually finish green for the year. With our analysis suggesting a small chance of a recession over the next 12 months, recent weakness could prove to be a buying opportunity for long-term investors,” according to Ryan Detrick, Senior Market Strategist. For more on the recent pullback, what happened, where we could be going from here, and what investors could do; be sure to read what John Lynch, Chief Investment Strategist, wrote in our latest Weekly Market Commentary coming out later today.
Stock Market Analysis Video for February 16th 2018 Video from AlphaTrends Brian Shannon (VIDEO NOT YET UP!) ShadowTrader Video Weekly 2.18.18 Video from ShadowTrader Peter Reznicek (VIDEO NOT YET UP!)
Here are the current major indices pullback/correction levels from ATHs as of week ending 2.16.18- 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 2.19.18 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! (MARKETS CLOSED IN OBSERVANCE OF PRESIDENTS DAY!) Monday 2.19.18 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! (MARKETS CLOSED IN OBSERVANCE OF PRESIDENTS DAY!) Tuesday 2.20.18 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 2.20.18 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 2.21.18 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 2.21.18 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 2.22.18 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 2.22.18 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 2.23.18 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! Friday 2.23.18 After Market Close: Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES! NONE.
Stockaholics come join us on our stock market challenge threads for this upcoming trading week ahead!- ======================================================================================================== Stockaholics Daily Stock Pick Challenge & SPX Sentiment Poll for Tuesday (2/20) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (2/19-2/23) <-- click there to cast your weekly market vote and stock picks! ======================================================================================================== And finally, we have our mystery chart challenge now up as well! Weekly Mystery Chart & Technical Analysis Challenge (2/19-2/23) <-- 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!
And as promised here are the most anticipated earnings calendar for this upcoming trading week ahead: ($WMT $HD $ROKU $DPZ $CHK $OLED $AAOI $MGM $MDT $UCTT $FSLR $TTD $DUK $EXAS $SIX $P $STMP $TREE $CBRL $AAP $RIG $CTB $WLL $NBL $LNG $HLX $WLK $TPH $WAB $W $OC $APA $DVN $GRMN $HFC $GPC $SO $EGN $HSIC $LC $ECL $MOS $SLCA $DLPH $CAR) If you guys want the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning February 19th, 2018 <-- click there!
Just a reminder in here (as if I haven't already posted it enough! ) that U.S. markets are closed tomorrow (Monday, Feb. 19th) for Presidents Day. Here is the CME Globex holiday trading schedule for those of you who need to know what hours the futures will be open this holiday.
Happy Presidents' Day everyone. Hope you guys enjoy the day off today. Globex futures trade until 1pm eastern time today. This could certainly all change come tomorrow morning this time.
good morning! how was everyone's long weekend? ready for a new day fresh start. hope everyone has a great trading week ahead!
markets taking a bit of pause today after that big 6-day rip off the correction lows ... however nazzy still holding up nicely.
Now the NASDAQ has turned red as well We had a huge run last week and the dollar is stronger today, so not too surprising to see a little bit of a pause for stocks today
