Welcome Stockaholics to the trading week of October 1st! 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: T.B.A.
Trade Tantrums & Trump Turmoil Spark Best Quarter For US Stocks In 5 Years Summing the quarter up nicely... The World Is Down In 2018... STOCKS US stocks are outperforming the world still in 2018 with China worst... US equity markets close the quarter at their most-expensive in history... Best quarter for US stocks in 5 years... (S&P is up 11 of the last 12 quarters)... Dow Transports (green) and Industrials (blue) were best in Q3, Small Caps (red) were worst... World Stocks (Ex-US) eked out a modest 1.3% gain in Q3 - the first quarterly gain since 2017 - but Chinese stocks fel lfor the 4th quarter in a row... European Stocks were very mixed in Q3 with France's CAC outperforming and Italy's FTSEMIB the worst (collapsing in the last few days as budget headlines struck)... But in September, Italy was best - despite this week's collapse - and DAX worst... But September was much more mixed in the US... But Nasdaq closed September red - breaking its 5 month win streak. Small Caps also closed red in Sept, the first down month since February. S&P, however, eked out gains in September for its 6th straight monthly gain in a row... On the week, only Nasdaq closed green (notice the plunge midweek that was caught perfectly at unch)... "Most Shorted" stocks ended lower in September (first monthly drop since Feb) but soared in Q3... US Tech stocks outperformed financials for the 5th quarter in a row, soaring for 7 straight days (relative to financials) into month- and quarter-end... Despite surging rates, banks were battered in September. Only Citi managed to hold on to any gains in September among the big banks with Wells Fargo down almost 10%... And perhaps most notably, banks have given back all their post-Trump-election outperformance... FANG Stocks managed to cling to a gain on the quarter - the 7th quarterly gain in a row - and a small loss on the month, but barely... Tesla stood out in the month and quarter... Tesla is down 15% today... Which pushed GM back above TSLA as America's largest market cap automaker... US Stocks are in a world of their own... BONDS Thanks to a bloodbath in September, bonds ended the quarter notably higher in yield... September saw the biggest 10Y bond yield spike since April... The US yield curve flattened for the 7th month in a row (and 12th of the last 13)... And flattened for the 17th quarter in the last 19... On the week, all but 2Y ended the week lower - especially post-FOMC... HY bonds outperformed IG bonds notably for the 4th month in a row (and 3rd quarter in a row)... FX The Dollar Index ended Q3 unchanged for all intents and purposes - having traded in a very narrow range basically controlled by the ECB spike in Q2 (narrowest since Q2 2014)... Among the majors, Yen was weakest; cable, aussie, and loonie were strongest (marginally though), however, despite its weighting, it was yuan that warranted most attention... PBOC fixed the Yuan at its weakest since Aug 17th and offshore yuan sits right at critical support from its cycle lows... Emerging Market FX fell for the second quarter in a row led by Argentine Peso, Turkish Lira, Indian Rupee, and Russian Ruble (Mexican Peso was best in Q3)... Emerging Market FX in September was its best month since January, but was mixed under the surface with Argentine Peso worst (down over 10%) and Turkish Lira best (+7.5%) Cryptos were mixed in Q3 with Bitcoin and Ripple managing gains and Ethereum crashing 45%... Bitcoin is up on the quarter (first quarterly gain since Q4 2017) but down in September... COMMODITIES WTI dominated commodity-land in Q3 and silver was slammed (but there was some maniacal bid into the quarter-end)... Gold fell for the second quarter in a row (biggest drop since Q4 2016 and first quarterly close below $1200 since Q4 2016) Silver was ugly too - but bounced off its lowest levels since Jan 2009...back up near its 50DMA... And as Gold and silver drop, specs have plunged to unprecedented positioning... Oil headed for its longest string of quarterly gains in more than a decade as impending supply disruptions threaten to fracture a global market with little margin for error. The current front-month (Nov 18) contract is now up 5 quarters in a row... On the month, Copper and Crude surged (China stimulus hopes?) and Silver spiked into the close to end green... Gold/Silver was crushed on the last day on the month/quarter - the biggest daily drop since Nov 2017... On the week, Silver and Crude were the best performers... The real PhD in economics - Dr. Lumber - collapsed in Q3 - the biggest drop since 1993! (and September was its worst month since April 2011) Finally, US 'hard' economic data fell for the 3rd straight quarter - but stocks don't care...
Spoiler: Weekend Reading: Fiscal Irresponsibility Authored by Lance Roberts via RealInvestmentAdvice.com, Without much fanfare or public discussion, Congress has decided to push the U.S. into deeper fiscal responsibility. Earlier this week, the House passed another Continuing Resolution (CR) to keep the government from “shutting down” prior to the mid-term elections. “The House on Wednesday passed an $854 billion spending bill to avert an October shutdown, funding large swaths of the government while pushing the funding deadline for others until Dec. 7. The bill passed by 361-61, a week after the Senate passed an identical measure by a vote of 93-7.” For almost a decade, Congress has failed to pass, and operate, underneath a budget. Of course, without any repercussions from voters in demanding that Congress “does their job,” the path to fiscal insolvency continues to grow. The Committee For A Responsible Federal Budget made the following statement: “We’re pleased policymakers have likely avoided a shutdown and actually appropriated most of this year’s discretionary budget on time. But let’s not forgot that Congress did so without a budget and had to grease the wheels with $153 billion to pass these bills. That isn’t function; it’s a fiscal free-for-all.” Of course, with trillion-dollar deficits just around the corner, the negative impact from unbridled spending and debt increases will begin to reverse the positive effects from deregulation and tax reform. The bigger problem with the $854 billion CR just passed by the House, and awaiting the President’s signature, is that it only covers spending from now until December. Such means that by the time we get the full 2019 budget funded, with the annual automatic increases still in place, we will be looking at more than $2 Trillion in annual spending. Such will require further increases in debt issuance at a time when there are potentially fewer buys of Treasuries readily available. As shown in the chart below, with the major Central Banks reducing their balance sheets simultaneously, some of the more major buyers are being removed from the market. “Central bank balance sheets have shrunk by over half-a-trillion dollars since March. This decrease in global liquidity – in the face of a global slowdown – raises the risk of policy mistakes much higher than is commonly assumed.” – ECRI More importantly, next year, sequester-level budget caps will return. The last time budget-caps came into play Ben Bernanke launched QE-3 to offset the economic drag from reduced government spending. Given Central Banks are effectively “out of the game” for now, it is most likely Congress will just bust the budget and then spin it as a “Conservative victory” as they did this year. As the Committee for a Responsible Federal Budget previously stated: 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.” Just something to think about as you catch up on your weekend reading list. Economy, 2008 & Fed The ABC’s Of Trade For President Trump by Caroline Baum via MarketWatch Timing Is Everything by ECRI Further Tax Cuts, Further Fiscal Irresponsibility by Committee For A Responsible Federal Budget Aren’t Central Bankers Supposed To Forecast by Rex Nutting via MarketWatch Underemployment Is the New Unemployment by Leonid Bershidsky via Bloomberg The Catastrophic Threat To National Security: Debt by Rear Adm. Jamie Barnett via The Hill How Fed Rate Increases Affect The Economy by Mickey Levy via Economics 21 2-Reasons Surging Deficits Worry Meby Cullen Roche via PragCap Ford CEO: Tariffs Cost Us $1 Billion In Profits by Tyler Durden via ZeroHedge The Trade Wars Of Codependency by Stephen Roach via Project Syndicate Entitlement Crisis Is Looming by Yuval Levin & James Capretta via The Standard Will The Next Meltdown Be From A Refusal To Curb Debt by IBD Markets Ken Griffin: The Next Financial Crisis Will Hit In 12-24 Months by Tyler Durden via Zerohedge Buckle Up – October Is Almost Here by Mark Hulbert via MarketWatch Howard Marks: The 7-Worst Words In The World by Shawn Langlois via MarketWatch Do Spectacular Earnings Justing High Stock Pricesby Robert J Shiller via Project Syndicate The Biggest Bubble In The Biggest Bubble Ever by David Hay via Evergreen Gavekal The “Junkie Market” Is Back Again by Dana Lyons via The Lyons Share Why Mid-Term Elections Means Stocks Will Surge by Simon Constable via Forbes The Revenge Of Real Rates by Sid Verma & Luke Kawa via Bloomberg Are Strong Profits About To End by Ryan Vlastelica via MarketWatch Will The Fed Trigger The Next Crisis by Jesse Colombo via Forbes Could This Divergence Lead To A Correction? by Chris Kimble via SeeItMarket Most Read On RIA The Two Biggest Threats To This Bull Market by Lance Roberts 15-Bullish Assumptions by Michael Lebowitz How To Invest For A Hard Landing by Vitaliy Katsenelson Can You Feel The Complacency by Lance Roberts Kass: Tops Are Processes – Part Deux by Doug Kass Party Like It’s 1992 by Lance Roberts Research / Interesting Reads Do As They Say, Not As They Do by Jim Quinn via The Burning Platform Dalio: America Has 2-Years To The Next Recession by Tyler Durden via ZeroHedge Dotcom Crash Deja Vu by Patrick Hill via The Progressive Ensign Powell’s Standouts & Zingers by Wolf Richter via Wolf Street When Will The Everything Bubble Crash by Brandon Smith via Alt-Market Larry McDonald: It’s Going To Get Really Ugly by Christoph Gisiger via Finanz Und Wirtschaft How The Crisis Caused A Pension Train Wreck by Yves Smith via Naked Capitalism Blow To Mainstream Gun Narrative: Homicides Drop by Ryan McMaken via The Mises Institute 10-Years After Lehman: Bubbles & Zombies by Edward Chancellor via ThinkMarkets 5-Books To For The Coming Civil War by Joanne Freeman vis WSJ Trillion Dollar Deficits In An Age Of Prosperity by Hunt Lawrence via American Spectator Why We Care About Economic Freedom by Richard Rahn via Washington Times “There is only one side to the stock market, and it is not the bull side or the bear side, but the right side.” – Jesse Livermore
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2018- S&P sectors for the past week-
October’s First Trading Day Not So Great over Last 21 years Based upon data in the soon to be available Stock Trader’s Almanac for 2018 on page 86, the first trading day of October is DJIA’s fourth weakest of all monthly first trading days since September 1997. August, September and December have been weaker. S&P 500 has been down 11 of the last 21 years on the first trading day of October. DJIA’s record is slightly better with 10 declines and NASDAQ’s performance has been the worst of the group, down 11 times with an average loss of 0.35%. DJIA’s current four week streak of declines on Monday (or the first trading day of the week) could easily become five. What Does The Dow New High Really Mean? Posted by lplresearch It took nearly eight months, but the Dow finally closed at a new all-time high for the first time since late January. Various other indexes have been making new highs for a while now, which begs the question: What does it mean for investors that the granddaddy of all stock indexes came late to the party? “The Dow joining the ‘new high’ party is a nice sign, as historically when it goes seven months or more without a new high, the returns going out a full year after that initial new high have been much better than your average Dow returns,” explained Senior Market Strategist Ryan Detrick. As our LPL Chart of the Day shows, since 1950, there have been 15 other times that the Dow went at least seven months without a new high. Sure enough, a year later it was higher 12 times, with an impressive average return of 13.7%—more than a full 5% above the average 12-month return. Additionally, the returns three, six, and 12 months later were all better than the average returns as well. If this sounds familiar, that’s because we did a similar study a month ago when the S&P 500 Index made new highs for the first time since late January. The future average returns were quite similar, in that you saw stronger than average returns going out the next 12 months. So, does a new high in stocks tell us anything about the economy? Remember, we usually see stocks break down ahead of a recession, while they turn higher ahead of a recovery. Here’s the good news: New highs in the Dow have historically signaled a significantly lower chance of recession over the coming year. We looked at all the months that saw a new all-time high for the Dow going back to 1950. Sure enough, the U.S. economy fell into a recession only 0.8% of the time within the subsequent six months and only 2.2% of the time 12 months after a new high. Considering that 13.5% of all months have been in a recession over this same timeframe, one could say new highs for the index Charlie Dow created back in 1896 could be another great sign that the economy could still be humming a year from now. Trade Spat Unlikely to Fuel China’s Treasury Sales Posted by lplresearch China has started unloading Treasuries, signaling that they could use their $1.2 trillion in U.S. government debt as a potential bargaining chip in trade negotiations. As shown in the LPL Chart of the Day, China’s Treasury holdings declined to a six-month low in July. China’s Treasury holdings have also dropped for two straight months for the first time since November 2016. China may use its massive position in U.S. Treasuries to inflict economic pain on the United States by driving up borrowing costs, but we think the probability of significant selling is low. While China’s Treasury holdings have declined, they’ve fallen only about $12 billion, or 1%, over the last two months. The economic relationship between the U.S. and China is somewhat symbiotic: China extends credit to the U.S. (via Treasury purchases) so the U.S. can purchase goods from China (as its largest trading partner). If China sells enough Treasuries, the impact on the U.S. economy can significantly curb demand for Chinese goods, leading to an inevitable downturn in its own economy. China’s selling could also boost the yuan’s value versus its peers, which could weigh on demand for China’s exports. As shown in the chart, the yuan climbed 6% versus the U.S. dollar in June and July, in tandem with the selling. “While China sold Treasuries in June and July, we are still not concerned about China using its balance sheet as leverage in trade discussions,” said LPL Chief Investment Strategist John Lynch. “China has a lot to lose economically with this strategy.” Is This Really One of the Calmest Markets Ever? Posted by lplresearch As hard as it might be to believe, U.S. equities historically have been calm over the past few months. “If all you listened to was the news, you would think markets were having huge bouts of volatility. Turns out, that isn’t true at all, as the past three months have been among the least volatile in history,” explained Senior Market Strategist Ryan Detrick. As our LPL Chart of the Day shows, the S&P 500 Index has now gone 64 consecutive days without a 1% change either up or down, barely topping the streak of 62 days seen in 2014. Going back to 1990, only 1993, 1995 and 2017 had longer streaks without a 1% daily change, and those years are widely considered among the least volatile in history. How many people would be aware of this? We are willing to guess not many, as even we were surprised, and we do this each and every day. This reminded us of a recent stat in Barron’s, citing a survey from robo-advisory firm Betterment, in which 18% of the 2,000 people surveyed actually thought stocks had been down the past 10 years. Given the S&P 500 Index is poised for a tenth consecutive yearly gain in 2018 (on a total return basis), the perception that stocks have been down the past 10 years seems inconceivable. Let’s sum it up like this: When it comes to investing, we need to remove our biases and simply follow the facts. Most Heavily Shorted Stocks Tank in September Sep 28, 2018 We published our regularly updated Short Interest Report earlier today in order to show clients which areas of the market are seeing the biggest increases and decreases in short interest levels. A supplement to the report is the table below highlighting the most heavily shorted stocks in the S&P 1500. Notably, the most shorted stocks got crushed in September (through 9/27), falling 4.25% on average compared to a small gain for the S&P 1500. While the stock market was up in September, it wasn’t a great month for stocks that the shorts are bettign heavily against. Dillard’s (DDS) is the most heavily shorted stock in the entire S&P 1500 with 69% of its float sold short. Two other stocks in the index have more than 50% of their shares sold short — MiMedx Group (MDXG) and Lannett (LCI). Some of the other stocks on the list below that got hit the hardest in September include Applied Opto (AAOI), Ichor Holdings (ICHR), and Medicines (MDCO), which all fell more than 20%. Equities may have traded higher in September, but it looks like the shorts were still able to make plenty of money.
Stock Market Analysis Video for September 28th, 2018 Video from AlphaTrends Brian Shannon (VIDEO NOT YET UP!) ShadowTrader Video Weekly 9.30.18 - Stuck in the Mud Video from ShadowTrader Peter Reznicek
Here are the current major indices pullback/correction levels from ATHs as of week ending 9.28.18- Here is also the pullback/correction levels from current prices- ...and here are the rally levels from current prices-
Stockaholics come join us on our stock market competitions for this upcoming trading week ahead!- ======================================================================================================== Stockaholics Daily Stock Picking Challenge & SPX Sentiment Poll for Monday (10/1) <-- click there to cast your daily market vote! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (10/1-10/5) <-- click there to cast your weekly market vote and stock picks! Stockaholics October 2018 Stock Picking Contest & SPX Sentiment Poll <-- click there to cast your monthly market vote and stock picks! Stockaholics Q4 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!
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 10.1.18 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! Monday 10.1.18 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! Tuesday 10.2.18 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 10.2.18 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 10.3.18 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 10.3.18 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 10.4.18 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 10.4.18 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 10.5.18 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. Friday 10.5.18 After Market Close: Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES! NONE.
And as promised here is the most anticipated earnings calendar for this upcoming trading week ahead- ($COST $SFIX $PEP $STZ $SGH $PAYX $LEN $CALM $AYI $LW $SNX $RPM $PIR $ISCA $NG $LNDC $RECN) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning October 1st, 2018 <-- click there to view!
Facebook could face $1.6B fine in Europe over data breach. A couple ways to look at 50m accounts on Facebook. 1) That's like 3% of accounts? 2) What if it was Russian bots that got hacked?
nice futures kickoff to the new trading month and quarter tonight. hope everyone has a great trading week ahead.
good to be back from vacation, kind of stayed away from the markets while i was away, good to see Netflix made a turn around while i was gone.
Should We Fear October? Here it comes, the scary month of October. Many investors have bad memories of this month, mainly because it has had some spectacular crashes. In particular, 1929, 1987, and 2008 are a few of the years that saw October scar investors for a long, long time. Here’s some good news: Over the past 20 years, the S&P 500 Index has shown a higher average return in October than in any other month. And the good news continues. This is a midterm year and, sure enough, midterm years have actually been quite strong for stocks. “Incredibly, since 1982, the scary month of October has seen stocks fall only once during a midterm year. Not to mention it has been the best month overall going clear back to 1950 for all midterm years,” explained Senior Market Strategist Ryan Detrick. As our LPL Chart of the Day shows, October has been up 3.3% on average during a midterm year, ranking it as the best-performing month–ahead of the usually bullish months of November and December.
small cap index wanting no participation of today's move higher brent almost up at $85 and a fresh 4-year high same with wti...that just printed a new high today so playing catch up
