Stock Market Today: March 13th - 17th

Welcome Stockaholics to the trading week of March 13th!

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: Coupa Software

• Tuesday

Earnings: Volkswagen, DSW, HD Supply

Two-day Fed meeting begins

6:00 a.m. NFIB

8:30 a.m. PPI

• Wednesday

Earnings: Oracle, Guess, Jabil Circuits

8:30 a.m. Retail sales

8:30 a.m. CPI

8:30 a.m. Empire state survey

10:00 a.m. Business inventories

10:00 a.m. NAHB survey

2:00 p.m. FOMC statement, economic projections

2:30 p.m. Fed Chair Janet Yellen briefing

• Thursday

Earnings: Adobe Systems, Dollar General, JA Solar, Vivant Solar

8:30 a.m. Jobless claims

8:30 a.m. Housing starts

8:30 a.m. Building permits

8:30 a.m. Philadelphia Fed survey

10:00 a.m. JOLTS

• Friday

Earnings: Tiffany

9:15 a.m. Industrial production

9:15 a.m. Capacity utilization

10:00 a.m. Consumer sentiment

 

Dow Suffers Worst Week Of 2017 Amid Credit Carnage, Bond Bloodbath, & Crude Crash
To summarize - this week saw chaos in emerging market stocks, high yield credit, Treasuries, crude, copper, Chinese money markets, and risk-parity funds... and US stocks hung in there:



All we can say is...

If today's payrolls print was so awesome, why did stocks and the dollar tumble and gold and bonds rally?



Small Caps suffered the worst week since September... This was The Dow's worst week of 2017 which is sad at (up 5 of the last 6 weeks), note that NASDAQ very briefly tagged unch for the week at the open today...



VIX was pressured to ensure it closed the week below 11.55 (which is 2017's highest weekly close) - BUT FAILED! Highest weekly close for VIX in 2017





The Dow, S&P, and Nasdaq desperately clung to unchanged from pre-Trump-speech close...





Financials had the worst week in 2 months... with JPMorgan (green) down 2.5% off the Trump speech highs...





SNAP briefly Crackled then dropped... and today's options opening did not help...Snap put options outpaced calls over 3 to 1 on the first day the options traded since last week’s IPO.





Something is very broken with market internals - McClellan Oscillator is crashing as stocks hold near record highs...





This week saw Risk Parity funds suffering - the worst week for the stock-bond-vol strategy funds since the election...





And the delevering sparked selling across bonds and stocks...





High Yield bond prices crashed this week (back to its 200DMA) - the worst week since Feb 2016





Massive HYG outflows this week...





Treasury yields rose for the second week in a row to 2017 highs...





Today's rally in bonds saved the Treasury complex from its worst losing streak since 1974!!





The USD Index was on target for a strong week but today's disappointing earnings (and payrolls miss of the whisper number) combined with Wilbur Ross' comments on trade deals legged the USD notably lower... Today's drop echoes last week's moves almost perfectly - and erases practically all the dollar's gains on the week...





So the week's gains are erased today - despite a "good" jobs print - policy error? Note EUR surged on the week





EURUSD hit 1.07 - one-month highs, extending gains after chatter (denied) of rate hikes before the end of QE





Notably Wilbur Ross' comments on NAFTA and Japan sent both the peso and Yen surging today...





March continues to be ugly for commodities... this was copper's worst week since September





Crude saw its worst week since right before the election, tumbling to a $48 handle and erasing all the OPEC-Cut Deal gains...





Oil Vol is starting to pick up but has a long way to go...





Precious Metals were pummeled this week - gold and silver's worst week since the election...(NOTE gold managed to eke out a green day today - breaking an 8 day losing streak)





Bitcoin soared above gold - hitting $1327 intraday after payrolls.





Finally we leave you with this WTF chart of the month - the odds of a March rate hike have soared (Fed Funds Futures collapse) in aperfectly correlated way with the collapse in GDP growth forecasts - the exact opposite of what would be expected in any rational world...



March rate hike odds now 100%, and June is now above a 50% chance of a 2nd hike. Dear Janet, explain the above!

 

Here's how the major indices have fared WTD, MTD, QTD & YTD thus far in 2017-


Here are where the major indices stand since the Nov. 8th Presidential Election and Inauguration Day as of market close 3.10.17-


S&P sectors for the week-

 

March Options Expiration Week Historically Bullish

Stock options, index options, index futures, and single-stock/ETF futures all expire at the same time four times each year, March, June, September and December. This event is often referred to as Quadruple Witching or as we prefer to call it in the Stock Trader’s Almanac (page 78), Triple Witching.

March’s option expiration week performance is second only to December’s and has a bullish bias. DJIA and S&P 500 have recorded weekly gains in roughly twice the number of weeks as there have been declines. NASDAQ’s track record since 1983 is slightly softer with 21 advances and 13 declines, but all three indices have logged gains in options expiration week in eight of the last nine years. However, the week after tends to be bearish for DJIA and S&P 500. NASDAQ is mixed.



Seasonal Small-Cap Rally Nearing End

When the treacherous Ides of March and the festive remembrance of the patron saint of Ireland, Saint Patrick, approaches, the seasonal small cap rally often comes to a close. As illustrated on page 110 of the Stock Trader’s Almanac 2017 the Russell 2000 Index of small cap stocks begins to fade versus its large-cap counterpart in mid-March. The recent pullback in the market has many folks calling a top on an exhausted, overvalued market. Relax, the market is most likely consolidating its massive move from November and working off its rather overbought condition.

Trump’s first 100 days are about halfway over and things are heating up in DC. This ramped up political activity and the usually soft end of Q1 may push the market a bit lower before another leg up commences. We may end up getting a deeper correction after the next leg up in the Worst Six Months. But for now though the S&P 500 (along with the DJIA and NASDAQ) is holding pretty solidly above support – the Russell 2000 and the small caps less so.

In the chart below of the S&P you can see the breakdown from the overbought condition in the stochastic, relative strength and MACD indicators in the lower three panes. In the top pane the S&P has some serious support around 2280 – that’s about a 5% correction from the high. 2280 is at the upper end of the big December-January consolidation just after the December breakout. And it’s right on last month’s blue-dotted line pivot point and just below the current green dotted line pivot point support and the pink line 50-day MA. The next level of support is near 2200 just before the December breakout.

The Russell 2000 on the other hand is right at support of about 1355. This coincides with the December-January consolidation, the November high and its current green dotted line pivot point support. Lower support near 1305 aligns with the upper end of the initial November rally after the election, the early December low and January’s green dotted line pivot point support.


First 100 Days Update: February Weakness Avoided, March’s Thunder Stolen?

Including today it has been 45 calendar days (30 trading days) since President Trump was inaugurated into office. As of today’s close, S&P 500 has climbed 4.6% over that time period. Compared to past performance at this stage of the first 100 days in office, S&P 500 performance is well above average. The prospects tax reform, healthcare reform, less regulation and increased infrastructure and defense spending propelled S&P 500 higher through the typically soft/weak period in February. However, it now appears that the rollout of previously mentioned reform and spending could take longer than anticipated while the Fed also appears ready to raise rates again in March. Typical February weakness may have only been postponed. Absent some mild pullback and consolidation, the sizable historical gains in the chart above from early-March to mid-April may have already occurred.

Money It’s A Hit! Slow & Steady Fed Rate Hike Pace Wins the Race





Chair Yellen was her magnanimous self today in a speech this afternoon at the Executives’ Club of Chicago. She was especially accommodating (pun intended) in the Q/A after her speech, particularly when asked about the dinner conversation with her Economic-Nobel-Prize-winning husband and PhD Economics Professor Son.

The Chair reveled in the FOMC’s current successful navigation away from ZIRP (zero interest rate policy). She is also securing her legacy for when her term is up next year. All the governors have been traipsing about the country lately talking up a likely third hike in this tightening cycle on March 15 after their next meeting. The CME Group FedWatch Tool, based on the 30-Day Fed Fund futures prices, is now projecting an 80% chance of another hike at the next meeting.

The odds are quite high the FOMC will raise rates for the third time this cycle and the second time in three months. So unless something dramatically negative happens on the economic data calendar or geopolitically we will continue on the long slow path to interest rate normalization. To see how this cycle compares we updated and tweaked our performance table to show the DJIA performance after major Fed tightening cycles began.


This time around the market loves it. Let’s face it, rates are still incredibly low. Even at 0.75 it’s still extremely accommodative. And another thing, this whole range business is rather interesting. Theoretically, a 25 point increase in range doesn’t necessarily mean a 25 point change in the Fed Funds Rate. In fact, since the December 2016 hike the Effective Fed Funds Rate was at 0.55 for four days at the turn of the year, 0.56 on January 31 and 0.57 on February 28.

The real issue here is that this expansion and market rally is contrary to many of the detractors’ fears of imminent recession following rate tightening cycles. Perhaps economic growth is just beginning to find its footing, gain traction and gather momentum. The three steps and a stumble crowd may be sorely mistaken this cycle as it has been in several prior cycles. Every time the Fed raises rates does not necessarily cause a recession immediately. Ultimately it probably will, but not anytime soon.

It is clear in the next chart of the Effective Fed Fund Rate from the St. Louis Fed’s FRED database that there have been several long stretches of time when the Fed had a tightening bias and there was no recession for years! Some of the longer instances for example, roughly, are: 1961-1969, 1977-1979, 1987-1990 and 2004-2007. Sure there were some bears in there, but it’s clear it can take years for rate hikes to lead to recession.


The good news is we are just a year and three months into this cycle and economic readings are improving. I suspect the Fed has learned a few things since the stagflation days of the 1970s. Stocks and the economy appear to be on solid ground for the near future and barring the usual summer/fall correction we don’t expect anything sinister to transpire in the market at this juncture.

 

Strong Seasonal History for Select Cyclical Sectors in March
Posted by lplresearch

Searching for seasonal patterns in history can be a useful additional tool when analyzing sector performance and looking for a new idea. Here in March, we are encouraged by four sectors’ seasonal tendency to outperform the S&P 500 Index: energy, financials, consumer discretionary, and industrials. This relative outperformance stands out in our review of the last 20 years of S&P 500 returns in March, a month in which the index has on average generated positive returns 65% of the time.

The S&P 500’s average price change for March has been 1.8%, with a best return of 9.7% and a worst return of -6.4% since 1997. Comparing the price performance of an underlying sector or industry group with the broad-based index over a specific period can help identify potentially strong seasonal performers. However, performance is often driven by factors other than seasonality. There is no guarantee that historically strong performing sectors will continue to be strong, and even those sectors that are seasonally strong on average will have underperforming years.

The sectors and industry groups that have outperformed the S&P 500 in March on average since 1997 are highlighted in green in the table below; those that underperformed the index are highlighted in red.



Let’s take a closer look at three areas of historical S&P 500 sector relative strength over the past 20 years.

Energy Sector Has Outperformed S&P 500 by Average of 1.3% Since 1997

The energy sector has outperformed the S&P 500 in March by an average of 1.3%, with a high return of 10.3% and a low return of -6.3%. Digging deeper, the S&P 500 oil and gas industry index has outperformed the S&P 500 by 1.4% in March on average, with a high of 9.5% and a low of -5.3%.

Financial Sector Has Outperformed Broad-Based Stocks by Average of 0.9% Since 1997

The financials sector has also tended to outperform broad-based stocks during this period. The S&P 500 financial sector has outperformed by an average of 0.9%, with a high of 8.4% and a low of -3.1% since 1997. The S&P 500 consumer finance industry group outperformed the equity benchmark by 2.1% on average, with a high of 10.8% and a low of -7%.

Consumer Discretionary Sector Has Outperformed Broad-Based Stocks by Average of 0.7% Since 1997

Consumer discretionary has outperformed the S&P 500 by 0.7% on average, with a high of 3.2% and a low of -3.6% since 1997. Notably, the S&P 500 retailing industry group outperformed the equity benchmark by 1.9% on average, with a high of 8.3% and a low of -5.7%.

Industrial Sector Has Outperformed Broad-Based Stocks by Average of 0.7% Since 1997

Last, but certainly not least, the industrial sector has outperformed the S&P 500 by 0.7% on average, with a high of 3.8% and a low of -2.1% since 1997. We note that the S&P 500 building products industry group outperformed the equity benchmark by 3.9% on average, with a high of 24.9% and a low of -5.5%. In addition, the S&P 500 airlines industry group on average outperformed the equity benchmark by 2.6%, with a high of 15% and a low of -11%.

As always, please stay tuned to the LPL Research blog for continued reviews of S&P 500 seasonal patterns and data in the months ahead.

If Stocks Head Lower, Will High-Yield Corporate Bonds Follow?
Posted by lplresearch

After returning 17.1% in 2016, high-yield corporate bonds have caught many investors’ attention. Year to date, the sector as measured by the Bloomberg Barclays High Yield Index has already returned 2.6% (as of March 7, 2017). High yield is a fixed income sector, and it does offer attractive yields relative to higher-quality options. However, investors should be aware that high yield’s performance has equity-like characteristics, and it tends to track equity markets more than high-quality fixed income sectors such as Treasuries or municipal bonds.



As seen in the chart above, when the S&P 500 Total Return Index falls, the high-yield corporate index tends to follow. Year-to-date performance for the S&P index has also been stellar, returning 5.7% (as of March 7, 2017), but is the recent weakness in equity markets and in high-yield corporate bonds an early indicator of trouble ahead? Only time will tell if recent turbulence in high yield has been driven by investors’ profit taking after a strong start to 2017, or by an aversion to high relative valuations. Regardless, it is important to remember that although high yield is fixed income, it may behave more like equities at an inopportune time: when equity markets stumble and when higher-quality fixed income (like Treasuries) shines.

 

The Bespoke Report – Gr-Eight Expectations
Mar 10, 2017



Eight years ago this week, the greatest buying opportunity in the lifetime of just about everybody reading this note came and went with little fanfare (as is usually the case at bottoms and tops). Even if you missed the exact low, though, there have been plenty of opportunities along the way to hop on, as the second longest and third strongest bull market of all time charged ahead. In terms of strength, if the S&P 500 rallies 4% from its 3/1 high, the current bull will also move into second place in terms of strength as well. Is there still any path left to ride for this bull?

Of the current members in the S&P 500, 39 have posted quadruple-digit returns since 3/9/09 (that’s over 1,000%!), including three that are up over 6,000%! On the other end of the spectrum, just 16 current members of the S&P 500 are down in the last eight years. In order to save anyone the potential frustration of either not owning the biggest winners or maybe owning some of the losers, we will refrain from listing either list here to help ensure that we don’t ruin your weekend.

Have a great weekend!

 

Stock Market Analysis for Week Ending 3.10.17
Video from AlphaTrends Brian Shannon

 

Stockaholics come join us in our weekly market poll and vote where you think the markets will end this upcoming week ahead!-

• Weekly SPX Poll - Sentiment (3/13-3/17) <-- click there to cast your weekly vote for this upcoming week!

In addition we have our weekly stock picking challenge now up and running as well!-

• Stockaholics Weekly Stock Picking Contest for the Week of (3/13-3/17) <-- click there to post your weekly picks for this week!

We also now have a daily stock picking & market direction guessing challenge running here!-

• Stockaholics Daily Stock Pick Challenge & SPX Sentiment Poll for Monday (3/13) <-- click there to cast your daily vote & stock pick for Monday!

And finally we have a Fed poll now up and running as well. Will the FOMC raise rates this upcoming week ahead?-

• Fed Poll: Will the FOMC raise rates to 1.00% on Wednesday, March 15th @ 2:00PM ET? <-- click there to cast your vote!

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!

 

Here is the updated pullback/correction levels for the major indices as of this week-

 

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Here are the most anticipated ERs for this upcoming week ahead (I'll also have the earnings chart posted in here as well once it's ready)

***Check mark next to the stock symbols denotes confirmed earnings release date & time***

Monday 3.13.17 Before Market Open:

Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES!

Monday 3.13.17 After Market Close:

Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES!

Tuesday 3.14.17 Before Market Open:

Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES!

Tuesday 3.14.17 After Market Close:

Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES!

Wednesday 3.15.17 Before Market Open:

Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES!

Wednesday 3.15.17 After Market Close:

Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES!

Thursday 3.16.17 Before Market Open:

Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES!

Thursday 3.16.17 After Market Close:

Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES!

Friday 3.17.17 Before Market Open:

Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES!

Friday 3.17.17 After Market Close:

Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES!

NONE.

 

And as promised here are some of EW's most anticipated ERs due out for this upcoming week ahead:
($ARLZ $INSY $DG $ORCL $TACO $CXRX $ADBE $BREW $HLTH $DSW $YY $TIF $PPHM $OMER $TSQ $MNKD $KOPN $LEJU $BDSI)

 

Weekend Review 3.12.17: VIX, TLT, IBB, SPY, IWM, QQQ, AAPL, AMZN, FB, NFLX, TSLA, NVDA, SNAP, BA
Video from Justin Pulitzer

 

whelp this is a real bummer ... tos (thinkorswim) has removed live data/charts for the /dx (us dollar index futures) and /tf (russell 2000 futures) effective as of this week

no wonder justin pulitzer was having issues pulling up the /dx chart in his video above

edit: it would appear the culprit here is because both the /dx and /tf are ice products and charge $110/mo.

would have been nice if TDA would have communicated better on this issue ... i give them an F for a grade on this one.

only alternative for now is the use the spot currency ($dxy in this case)

 

Good morning Stockaholics! Happy Monday. Hope you all had a nice relaxing weekend in here and are ready for the new trading week ahead.

Here are your pre-market stock movers & news on this Monday morning-

• 3/13 Monday Market Movers & News: MBLY, YHOO, BA, IT, NAV, DISH, BLK, F, AMGN, AIG, GME, VOD <-- click there to open!

I hope you all have an awesome trading day & week ahead!

 

so ... is everyone more or less thinking we just chop it up around here until wednesday's fomc announcement?

unless something black swan happens it looks like the cash s&p will make it to 105 trading days in a row w/o a -1% down close today i believe ... inching ever so closer to the longest streaks we've seen since the 1970s which i believe is a little over 125 trading days or thereabouts

 

ya it's been so long that we haven't seen a -1% down move that i bet some people (newer investors mainly) will kind of freak out once we finally do have that minimum -1% down close. it'll likely feel like the end of the world for some of them who haven't experienced many (if any) of them lol. there was once a time not very long ago when a -1% move down was actually considered an average down day and would be yawned at haha.

honestly, i'll welcome the end to this particular streak. i think it would be nice to see a healthy correction for a change imo. this market has been a snore fest lately. i'm surprised the vix hasn't seen the 9-handle during this entire stretch (except for that weird down tick on the last fomc meeting announcement).

 

Not very many ERs to speak of here as the reporting season is all but done ... I wasn't even planning on posting this here but what the hey lol. Not really much else going on today.

Here are the companies reporting in the AM tomorrow.

($CIE $DSW $YY $VLKAY $HDS $PN $AMOT $TRIB $BONT $RDNT $ATRS $ENOC $WAC $EARS $NXRT $NEOS $VRTV $CUI)

Spoiler: CLICK HERE FOR THE EARNINGS TIMES & ESTIMATES!