Welcome Stockaholics!

We are a new and fast growing financial forum! Sign up for free and let's talk stocks!

  1. Do you want to help develop this community? We are looking for contributions from investors and traders like you! What stocks do you follow? What is hot right now? Sign up and get in on the ground floor of the newest, fastest growing financial forum!
    Dismiss Notice
  2. You will notice a live chat widget on the right. Click in to join us and lets hear about how you nailed that last UWTI trade!
    Dismiss Notice

The Bear Thread

Discussion in 'Stock Market Today' started by bigbear0083, Apr 1, 2016.

  1. bigbear0083

    bigbear0083 Content Manager
    Staff Member

    Joined:
    Mar 29, 2016
    Messages:
    21,245
    Likes Received:
    7,838
    COVID-19 Collapse vs. Other Major Downturns
    Thu, Mar 19, 2020

    Even though equities rose today, the S&P 500 still remains over 28% off of the 2/19 high. As of yesterday's close, only twenty days after the S&P 500's peak, the index was down nearly 32% from that high. Below is a look at the current selloff from its high versus prior big selloffs since 1928. We all know about the 1929 and 1987 market crashes, but this one has even those beat in terms of the time it took to fall this much. And the two major peaks and subsequent bear markets of the 21st century both took basically a year to fall the same amount that we've fallen in just 20 trading days this time.

    [​IMG]

    ___________________________________________________________________________

    What's In Store For Unemployment
    Fri, Mar 20, 2020

    We've been keeping track of state jobless claim filings around the country as they've been reported in the media, and the numbers are grim. Based on a wide range of states that have reported just a couple of days' worth of statistics, filings look to be just shy of 1 million for the week (due to be reported next Thursday, March 26th). Of course, those numbers could come in much higher through the week. We saw one broker economics department estimate the total number at 2.5 million. We also like to look at Google Trends data, because it generally tracks claims pretty well. If the numbers from that unofficial data are even close to correct, the US is going to report somewhere between 1.3 million and 1.5 million initial jobless claims in six days.

    [​IMG]

    It's worth thinking about what that mechanically means for the unemployment rate. The chart below shows a range of four different unemployment rates that would come about from job losses as detailed. Assuming next week's onslaught of claims is only the beginning, it wouldn't take long to get to an unemployment rate near the highs around 10% from the last recession. If the US sheds more than a million jobs in the first week as a starting point this week, it's easy to see how fast the unemployment rate could rise.

    [​IMG]
     
  2. bigbear0083

    bigbear0083 Content Manager
    Staff Member

    Joined:
    Mar 29, 2016
    Messages:
    21,245
    Likes Received:
    7,838
    Records All Around Claims
    Thu, Mar 26, 2020

    No one was expecting a strong number for jobless claims this week as forecasts were predicting claims to come in at a record high. The median forecast was calling for claims to total 1.7 million compared to 282K last week which had been the highest reading since September of 2017. Instead, they practically doubled those forecasts coming in at a record 3.283 million. Fortunately, that was less than some of the most aggressive estimates like Citigroup which forecasted claims to be 4 million. This week's data is an unprecedented albeit anticipated jump in jobless claims. To put the size of the number into perspective, that is roughly 1% of not the US working population, but the entire US population! In the history of the data going back to 1967, there has never been a higher number in the level of claims (first chart below) or week-over-week change (second chart below). The previous high for jobless claims was 695K from October of 1982, almost one-fifth of this week's print. As for the week to week changes, the over 3 million increase in claims blew the size of the previous largest movements out of the water.

    [​IMG]

    The four week moving average typically helps to smooth out the week to week fluctuations of the high-frequency data, but considering the size of the move, the utility of the moving average is fleeting this week. The moving average has also reached a record high and experienced the largest one week increase on record.

    [​IMG]

    While it may not be much consolation given how horrific this week's numbers are, one silver lining is in the non-seasonally adjusted number. Before seasonal adjustment, jobless claims were slightly less staggering at 2.898 million. In other words, seasonal factoring does make the number of claims look higher than the actual amount reported. But that is still the largest weekly increase and highest number on record regardless of any seasonal patterns that may be affecting the number. Given more workers are continuing to stay home than return to work these numbers are likely to keep rising over the coming weeks.

    [​IMG]
     
  3. bigbear0083

    bigbear0083 Content Manager
    Staff Member

    Joined:
    Mar 29, 2016
    Messages:
    21,245
    Likes Received:
    7,838
    Sentiment Remains Bearish
    Thu, Mar 26, 2020

    Even though equities are rallying considerably this week, sentiment has been little changed. That's likely a function of the timing of this week's survey and the massive volatility. 32.9% of respondents in AAII's weekly sentiment survey reported as bullish this week. That's little changed from 34.4% last week. Meanwhile, the percentage of equity newsletter writers reporting as bullish in the Investors Intelligence survey has continued to fall with just over 30% reporting as bulls this week. That is the lowest level since the first week of 2019. Prior to that, there have only been 29 other weeks since 1997 with lower readings.

    [​IMG]

    [​IMG]

    The results are similar for bearish sentiment. AAII's survey saw bearish sentiment rise slightly from 51.1% last week to 52.07% this week. Bearish sentiment has now been above 50% for three consecutive weeks. That is the first time this has happened since March of 2009. Back then readings above 50% persisted for four weeks straight. Outside of that 2009 occurrence, the only other times that bearish sentiment remained above 50% for three weeks or more was in January, March, and July of 2008 and the late summer and fall of 1990. As for the Investors Intelligence survey, 41.7% are reporting as bearish which is the highest level since October of 2011. This week's reading is in the 96th percentile of all readings in the history of the survey.

    [​IMG]

    [​IMG]

    Neutral sentiment picked up about half of a percentage point this week to 15.03%. With the majority of investors reporting as bearish, this very low reading is in just the second percentile of all readings in the history of the survey.

    [​IMG]
     
    internationalstocks likes this.
  4. bigbear0083

    bigbear0083 Content Manager
    Staff Member

    Joined:
    Mar 29, 2016
    Messages:
    21,245
    Likes Received:
    7,838
    Country ETFs' Drawdowns and Rebounds
    Thu, Mar 26, 2020

    The COVID-19 pandemic has impacted equity markets around the globe. As shown in the table below, the equity markets of all the major global economies tracked in our Global Macro Dashboard (using each country's ETF as a proxy) are all well off their 52-week highs with only four—Taiwan (EWT), Switzerland (EWL), Japan (EWJ), and China (MCHI)—less than 20% away from the past year's high. While not as close as those four, the US is actually one of the countries that is closest to its recent high; down 'just' 23.2% after this week's rally. Brazil (EWZ), on the other hand, is currently the furthest below its 52-week high at 45.8%.

    [​IMG]

    The S&P 500 (SPY) peaked on February 19th and was down 34.1% from there at Monday's close. Including SPY, that Monday close has marked at least a temporary bottom for a number, though not all, of these country ETFs. Since then, SPY has risen over 15% and that is actually on the lower end of these countries' performance. The chart below shows how much each country's ETF has rallied off of their respective lows since the global sell-off began on 2/19. Russia has seen the biggest rebound having risen 28.18%. Granted, it also bottomed ahead of other countries putting in its low on March 18th. Even though it is down the most off of its 52-week high, Brazil is also one of the best performers since its low on Monday. South Africa and Canada have also risen more than 25% since their lows on Monday.

    [​IMG]
     
    internationalstocks likes this.

Share This Page