Welcome Stockaholics to the trading week of July 2nd! 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 9:45 a.m. Manufacturing PMI 10:00 a.m. ISM manufacturing 10:00 a.m. Construction spending Tuesday Monthly vehicle sales 10:00 a.m. Factory orders Wednesday July Fourth holiday Thursday 8:15 a.m. ADP employment 8:30 a.m. Initial claims 9:45 a.m. Services PMI 10:00 a.m. ISM nonmanufacturing 2:00 p.m. FOMC minutes Friday 8:30 a.m. Employment report 8:30 a.m. International trade
The Second Half can't be any worse that the first, right? H1 2018 was ugly for most... WORST Bitcoin Worst Start To A Year Ever German Banks At Lowest Since 1988 Onshore Yuan Worst Quarter Since 1994 Argentine Peso Worst Start To A Year Since 2002 US Financial Conditions Tightened The Most To Start A Year Since 2002 Global Systemically Important Banks Worst Start To A Year Since 2008 Global Stocks Worst Start To A Year Since 2010 China Stocks Worst Start To A Year Since 2010 German Stocks Worst Start (In USD Terms) Since 2010 Global Economic Data Disappointments Worst Since 2012 Emerging Markets, Gold, Silver Worst Start To A Year Since 2013 High Yield Bonds Worst Start To A Year Since 2013 Offshore Yuan Worst Month Since Aug 2015 Global Bonds Worst Start To A Year Since 2015 Treasury Yield Curve Down Record 16 Of Last 18 Quarters BEST US Tech Stocks Best Start To A Year Relative To Financials Since 2009 Dollar Index Best Quarter Since Q4 2016 WTI Crude Best Month Since April 2016 Bloodbath As the 'global synchronous recovery' narrative collapsed with Global Macro Surprise Index collapsing to six year lows at the fastest pace since 2012 (which led The Fed from Operation Twist to QE3...) And as the economy slowed, US financial conditions tightened dramatically... * * * STOCKS World Stocks are red to end H1 2018 - they just suffered their worst first-half of a year since 2010... World Stocks have lost almost $10 trillion since their peak in January... China's Shanghai Composite suffered its worst start to a year since 2010... Europe was mixed in H1 with DAX the biggest loser as trade wars hit the big export economy (and Italy suffering on political crisis)... With German banks back to 30-year lows... In US equity-land, the bounce in the S&P in the last 24 hours (off unchanged for the year) has saved the major US equity market index from its worst start to a year since 2010. US equity market volatility has been very different in 2018 so far... Trannies had an ugly month but the rebound of the last 24 hours rescued the rest of the majors into the green for the month... However, The dow (blue below) struggled all afternoon and ended June with swoon... Trannies were worst on the week but all major US equity indices closed red... The Dow managed to make it back to unch briefly midweek before the selling resumed... 24,425.84 was the magic number for The Dow to end June green (and 24,330 is the 200DMA) but it failed miserably and closed below the 200DMA for the 4th day in a row Bank stocks were unable to hold their post-CCAR gains...(selling off after Europe closed) Tech outperformed financials by the most to start the year since 2009... Global banks were a bloodbath in H1... * * * BONDS Global Bonds suffered their worst quarter since Q4 2016 (and worst start to a year since 2015)...back into an interesting zone of support/resistance US treasury yields are all higher on the year (though the massive flattening between 2Y and 30Y is very evident)... 30Y Yield are actually lower in Q2... And In June, 10Y and 30Y yields are lower...collapsing at the long-end since The Fed hiked rates... One glance at the above and it is clear that the yield curve is collapsing... In fact Q2 makes the 6th straight quarterly flattening in a row (and 16th quarter in the last 18 that the 2s30s curve has flattened) High yield bonds suffered their worst start to a year since 2013, dramatically underperforming stocks... But it was investment grade credit that really collapsed... CURRENCIES The Dollar Index soared in Q2 - up 5%, its best quarter since Q4 2016 (and breaking a 5 quarter losing streak)... And the biggest driver of the dollar's spike - a collapsing Yuan... (June was the worst month for offshore Yuan since the Aug 2015devaluation and Q2 was the worst quarter for the onshore Yuan since 1994) Emerging Markets were a bloodbath... With the Argentine Peso (apart from the black market bolivar) the worst in the world... Cryptos were a bloodbath In Q2 (and in June)...Ripple is 2018's biggest loser for now - down 79% YTD... An odd week though this week with Bitcoin notably outperforming the rest of the crypto space (maybe finding support around the $6000 level)... Bitcoin worst month since March (down 4 of 6 this year) and down for 2nd quarter in a row This is Bitcoin's worst start to a year ever... And HODLers are hoping this is not an echo of Nasdaq 2000... COMMODITIES June was the best month for WTI Crude since April 2016 (up 8 of the last 10 months)... And is up 4 quarters in a row to the highest since Nov 2014 The last two weeks have seen WTI explode higher - the best two weeks since August 2016 - as Copper and PMs have drifted lower... This is the worst start to a year for gold and silver since 2013 (notice how every time silver gets its head above water in 2018, someone hits it). * * * And finally, the SMART money has reaccelerated its exit of this market in the last month... And as the SMART money exits, Millennial men are storming in... View image on Twitter
Spoiler: Weekend Reading: #MAMI – Make America More Indebted Authored by Lance Roberts via RealInvestmentAdvice.com, I have spilled a lot of digital ink over the last few years on the trajectory of debt, spending and the impact of fiscal irresponsibility. Most of it has fallen on “deaf ears” particularly in the rush to pass “tax reform” without underlying fiscal restraints. To wit: “The recently approved budget was an anathema to any fiscally conservative policy. As the Committee for a Responsible Federal Budget stated: ‘Republicans in Congress laid out two visions in two budgets for our fiscal future, and today, they choose the path of gimmicks, debt, and absolutely zero fiscal restraint over the one of responsibility and balance. Passing fiscally irresponsible budgets just for the sake of passing “tax cuts,” is, well, irresponsible. Once again, elected leaders have not listened to, or learned, what their constituents are asking for which is simply adherence to the Constitution and fiscal restraint.’ I then followed this up this past Monday with “3 Myths Of Tax Cuts” stating: ‘Tax cuts do not pay for themselves; they can create growth, but in the amount of tenths of percentage points, not whole percentage points. And they certainly cannot fill in trillions in lost revenue. Relying on growth projections that no independent forecaster says will happen isn’t the way to do tax reform. As the chart below shows there is ZERO evidence that tax cuts lead to stronger sustained rates of economic growth. The chart compares the highest tax rate levels to 5-year average GDP growth. Since Reagan passed tax reform, average economic growth rates have only gone in one direction.'” The reason for the history lesson is the CBO (Congressional Budget Office) has just released a new report confirming exactly what we have been saying for the last two years. “In CBO’s projections, the federal budget deficit, relative to the size of the economy, grows substantially over the next several years, stabilizes for a few years, and then grows again over the rest of the 30-year period, leading to federal debt held by the public that would approach 100 percent of gross domestic product (GDP) by the end of the next decade and 152 percent by 2048. Moreover, if lawmakers changed current laws to maintain certain policies now in place—preventing a significant increase in individual income taxes in 2026, for example—the result would be even larger increases in debt. The federal government’s net interest costs are projected to climb sharply as interest rates rise from their currently low levels and as debt accumulates. Such spending would about equal spending for Social Security, currently the largest federal program, by the end of the projection period.” My friends at the Committee for a Responsible Federal Budget summed up the issues well. Debt Is Rising Unsustainably. Spending Is Growing Faster Than Revenue. Recent Legislation Will Substantially Worsen the Long-Term Outlook if Extended. High And Rising Debt Will Have Adverse and Potentially Dangerous Consequences (Will lead to another financial crisis.) Major Trust Funds Are Headed Toward Insolvency. Fixing the Debt Will Get Harder the Longer Policymakers Wait. While the CRFB suggests that lawmakers need to work together to address this bleak fiscal picture now so problems do not compound any further, there is little hope that such will actually be the case given the deep partisanship currently running the country. As I have stated before, choices will have to be made either by choice or force. The CRFB agrees with my assessment. “CBO continues to remind us what we’ve known for a while and seem to be ignoring: the federal budget is on an unsustainable course, particularly over the long term. If policymakers make the tough decisions now – rather than wait until there’s a crisis point for action – the solutions will be fairer and less painful.” I am not hopeful. With government dependency at record levels as a percentage of disposable incomes (22.05%), the outlook for the economy will continue to become less bright as Government transfer payments only offset a small fraction of the increase in pre-tax inequality. These payments fail to bridge the gap for the bottom 50% because they go mostly to the middle class and the elderly. With wage growth virtually stagnant over the last 20-years, the average American is still living well beyond their means which explains the continued rise in debt levels. The reality is that economic growth will remain mired at lower levels as savings continue to be diverted from productive investment into debt service. The “structural shift” is quite apparent as burdensome debt levels prohibit the productive investment necessary to fuel higher rates of production, employment, wage growth, and consumption. Many will look back at this point in the future and wonder why governments failed to use such artificially low-interest rates and excessive liquidity to support the deleveraging process, fund productive investments, refinance government debts, and restructure unfunded social welfare systems. Instead, those in charge continue to “Make America More Indebted.” As individuals, we must realize we can only depend on ourselves for our financial security and work to ensure our own fiscal solvency. As my father used to preach: “Hope for the best, prepare for the worst, and remember the best rescue is a self-rescue.” Be hopeful. Just don’t be dependent. Just something to think about as you catch up on your weekend reading list. Economy & Fed U.S. Should Roll Out The “Red Carpet” by Caroline Baum via MarketWatch If Trade War Is Good, Why Are Companies Planning Layoffs? by Ben Popken via NBC News Will Baby Boomers Leave Us Busted? by Judd Gregg via The Hill The Next Recession Is Set To Start by Adam Taggart via Peak Prosperity The Truth About Socialism by Lawrence McQuillan via FEE Free Government Money For All by Simon Constable via Forbes Everyone Loses In A Trade War by Robert Samuelson via RCM Fed Rosengren: Time To Prepare For The Next Recession by Tyler Durden via ZeroHedge Supreme Court Unleashes A Tax Nightmare by Grover Norquist via USA Today Trade War Chess by Richard Berman via The Washington Times 60-Hours Of GOP Dysfunction On Spending by Brian Riedl via Manhattan Institute The Real Cost Of A Trade War by Mukhisa Kituyi via Project Syndicate The Cost Of Providing Health Care To Illegals – by David Catron via The American Spectator The New Tax Form Is More Complicated Than Ever by Jim Tankersley via NYT Markets BofA: The €800 Billion Cliff by Tyler Durden via ZeroHedge Machines Warn Of Significant Downside Risk by Shawn Langlois via MarketWatch This Dow Level Could Be Triggering A Buy Signal by Mark Hulbert via MarketWatch Asset Prices Are Divorced From Economic Reality by Macromon via Global Macro Monitor 3-Charts: Why Emerging Market Stocks Are Getting Crushed by Mark DeCambre via MarketWatch Bulls Toeing The Trendline by Dana Lyons via The Lyons Share Implicit Dangers Of Passive Investing by Derek Bergen via Value Expectations The Dramatic Expansion Of Corporate Bonds by Timothy Taylor via Conversable Economist Yield Curve Sends A Recession Warning by Matt Phillips via NYT All That Repatriated Cash Went To Buybacks, And Then Some by Dr. Ed Yardeni via Yardeni.com Perspective On Value by Jeff Troutner via Equis Partners Mark It On Your Calendar by Kevin Muir via The Macro Tourist The Next Bear Market Will Spark A Retirement Crisis by Howard Gold via MarketWatch Most Read On RIA The Myth Of Buy And Hold Investing – Part IV by L. Roberts, M. Lebowitz & J. Coumarianos The Beer Bet by Lance Roberts The Titanic May Be Soon Hitting The Ice by Doug Kass Everyone’s Got A Plan by Lance Roberts Are Stock Multiples Moving Targets? by John Coumarianos The Psychological Side Of Retirement by Danny Ratliff, CFP Research / Interesting Reads Risks Pile Up Quietly In Corporate Bond Market by Wolf Richter via Wolf Street 15-Million Retirees Face Declining Standard Of Living by Patrick Hill via The Progressive Ensign Forget Saving More, Work Longer by Jessica Dickler via CNBC I Delivered Packages For Amazon, It Was A Nightmare by Alana Semuels via The Atlantic When Buffett Retires, Break Up Berkshire Hathaway by Tim Mullaney via MarketWatch There Will Be Another Financial Crisis by Doug Lynn via The Toll Online.com Inequality In America: 40-Million In Poverty by Tyler Durden via ZeroHedge A New Global Debt Crisis Has Begun by James Rickards via Daily Reckoning Buy High/Sell Low With Index Funds by Rob Arnott via Research Affiliates Don’t Rush To Take Social Security by Dan Caplinger via Motley Fool Retiring With Debt? by Susan Tompor via USA Today Do You Have Enough To Retire by Christine Benz via MorningStar It Ain’t What You Don’t Know That Gets You In Trouble by Cliff Asness via AQR Capital Mgmt “ Wall Street is a street with a river at one end and a graveyard at the other.” – Fred Schwed, Jr.
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2018- S&P sectors for the past week-
July 4th Week: Not As Bullish As it Used to Be Jun 29, 2018 Next Wednesday is July 4th, and because the holiday falls right smack in the middle of the week, it is also likely to be a week where many people look to take extended weekends on either end of the holiday. That doesn’t mean it will be a quiet week in terms of economic data, though. Not only is next Friday the Non-Farm Payrolls report, but we’ll also be getting both the ISM Manufacturing (Monday) and the ISM Services (Thursday) reports, as well as FOMC Minutes (also Thursday). With fewer people at their desks and plenty of data, don’t be surprised if there is a pickup in volatility. In terms of the US equity market’s historical performance during the week of July 4th, it has historically been positive. Since 1945, the S&P 500 has seen an average gain of 0.71% during the week of July 4th with positive returns 70% of the time. In years where the market was already up YTD heading into the holiday week, returns were even a little better at 0.78% with positive returns 75% of the time. For these calculations, we have used the S&P 500’s returns from the Friday before July 4th to the Friday after. In those cases where July 4th fell on a Friday or Saturday (in which case the markets were closed on the 3rd), performance was measured in the week before. The chart below shows the S&P 500’s July 4th week returns since 1945. Looking at the chart, what really stands out is how consistently positive the S&P 500 was in the 25 years that followed WWII. From 1945 – 1969, the S&P 500 was up during the July 4th week in every year but one (1950), and in that one down year it only fell 0.11%. Since then, though, the bullish trend for the week has waned. While the S&P 500’s return is still positive, it has not been nearly as consistent to the upside with gains just 58% of the time. Third Quarter Blues Posted by lplresearch After snapping a nine-quarter win streak with a 2.0% drop in the first three months of the year, the Dow appears poised to bounce back this quarter. Here’s where things get interesting: the third quarter of a midterm year has historically been one of the worst quarters of the four-year presidential cycle. So should investors be worried? “Buckle up, as the calendar isn’t doing anyone any favors over the next few months. In fact, out of the four-year Presidential Cycle, the next quarter has been among the worst for stocks,” explained LPL Research Senior Market Strategist Ryan Detrick. As our LPL Chart of the Day shows, only the second quarter of an election year has posted worse average returns. The Next Quarter Has Bears Growling Source: LPL Research, FactSet 06/28/18 Before you start questioning your long-term strategy, there is good news: as the chart also shows, this quarter has actually been higher nearly two out of every three times. So what’s that mean? The average is skewed by a few big drops. A closer look reveals that large declines during the recession years of 2002 (-18%), 1990 (-15%), and 1974 (-24%) are drastically tilting the results, while 1998 saw a 12% drop in the third quarter amid the Asian Financial Crisis. With expanding earnings, strong housing data, improving retail sales, and near-record highs in confidence, we see very little reason to expect a recession over the next 12-18 months—let alone next quarter. Could trade tensions play the Asian Financial Crisis’ role we saw in 1998? Though it can’t be ruled out, if you’re making comparisons to 1998, the Dow bounced back more than 17% in the fourth quarter that year. Also note in the chart the nine-month stretch following the historically weak upcoming quarter, which has posted an annualized return of nearly 18%. Although we wouldn’t be surprised to see equity volatility persist through summer, it may prove fruitful to stick to your long-term investment plan in the third quarter. We would be a buyer on weakness—focusing on small caps, value, U.S., and emerging markets. Click here for more on our views on how trade will impact stocks, the economy, and fixed income. Midterm Elections Dampen July’s Performance July historically is the best performing month of the third quarter however, the mostly negative results in August and September make the comparison easy. Two “hot” Julys in 2009 and 2010 where DJIA and S&P 500 both gained greater than 6% and a strong performance in 2013 have boosted July’s average gains since 1950 to 1.2% and 1.0% respectively. Such strength inevitability stirs talk of a “summer rally”, but beware the hype, as it has historically been the weakest rally of all seasons (page 70, Stock Trader’s Almanac 2018). Midterm-year July rankings are something of a mixed bag, ranking #5 for DJIA and S&P 500, averaging gains of 1.2% and 0.8% respectively (since 1950); while NASDAQ (since 1974) and Russell 2000 (since 1982) midterm Julys rank #11 and #12. NASDAQ has only advanced in three of the last ten midterm Julys with an average loss of 2.4%. Russell 2000 has advanced only twice in its last eight with an average decline of 4.3%. Contracting S&P 500 Trailing 12-Month P/E Ratio Jun 28, 2018 While the S&P 500 is up about 1% year-to-date, earnings strength has caused its trailing 12-month P/E ratio to actually contract 1.78 points from 22.37 at the start of the year down to 20.59 as of this writing. Below we show how trailing 12-month valuations have changed both year-to-date and over the last 12 months. Year-to-date, every sector with the exception of Consumer Discretionary and Utilities has seen contraction in its P/E ratio. The Energy sector has seen the biggest contraction, but it also started the year with the second highest valuation. Along with Energy, there are five other sectors that have seen contraction of 2.5 points or more in their P/E ratios — Materials, Industrials, Consumer Staples, Telecom, and Financials. The Technology sector is up 10% year-to-date, and even it has seen contraction in its P/E ratio due to earnings strength. As shown in the table, Tech’s P/E started the year at 23.63, and it’s now down to 22.55. The one sector that has seen an expansion in its trailing 12-month P/E ratio is Consumer Discretionary, which has jumped 1.62 points YTD from 23.49 up to 25.12.
Stock Market Analysis Video for June 29th 2018 Video from AlphaTrends Brian Shannon (VIDEO NOT YET UP!) ShadowTrader Video Weekly 7.1.18 Video from ShadowTrader Peter Reznicek (VIDEO NOT YET UP!)
Here are the current major indices pullback/correction levels from ATHs as of week ending 6.29.18- 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 7.2.18 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. Monday 7.2.18 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! Tuesday 7.3.18 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 7.3.18 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! NONE. Wednesday 7.4.18 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. (MARKETS CLOSED IN OBSERVANCE OF 4TH OF JULY!) Wednesday 7.4.18 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! NONE. (MARKETS CLOSED IN OBSERVANCE OF 4TH OF JULY!) Thursday 7.5.18 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 7.5.18 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 7.6.18 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. Friday 7.6.18 After Market Close: Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES! NONE.
Stockaholics come join us on our stock market competitions for this upcoming trading week ahead!- ======================================================================================================== Stockaholics Daily SPX Sentiment Poll for Monday (7/2) <-- click there to cast your daily market vote! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (7/2-7/6) <-- click there to cast your weekly market vote and stock picks! Stockaholics July 2018 Stock Picking Contest & SPX Sentiment Poll <-- click there to cast your monthly market vote and stock picks! Stockaholics Q3 2018 Quarterly Stock Picking Contest & SPX Sentiment Poll <-- click there to cast your quarterly market vote and stock picks! ======================================================================================================== It would be pretty awesome to see some of you join us and participate on these! I hope you all have a fantastic weekend ahead!
about to head off for the week soon...again, i want to wish everyone on stockaholics a great 4th of july (as well as all of your families & friends)! since i won't be around all next week, is it possible someone could hit up this link here each morning before market open- https://money.cnn.com/data/premarket/ and just simply screen cap and post the morning pre-market pic? much appreciate it! catch you guys next weekend! enjoy the day off and early market closing this week everyone! fireworks and bbq time! whoo!
I can take care of it if you all don't mind it being posted around 3AM eastern time. Working night shift all week next week so I can do it before I head home. Have a great and safe trip Cy!
Looks like the /ES hit that 2700 area and had a little bounce, but appears we may test that support once again.
2700 and non-above is a buy zone. Could collapse, ideally, as far as 2650, for a really strong buy point
Ok. I said last week that I had exited 75% of my long for profit taking 2735. I decided to exit the remaining 25% at 2714 at break even. I hope to re-enter long somewhere non-above 2700
