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The Bear Thread

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

  1. bigbear0083

    bigbear0083 Content Manager
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    The Strangest Top 25 List In Some Time
    Thu, Aug 13, 2020

    Look closely at the list of the top 25 performing S&P 500 stocks since last Thursday's close and tell us what's wrong with it? Do you see it? Keep looking, you'll figure it out. Yup. That's it! Not a single one of the 25 best performing stocks over the last week is from the Technology sector. In looking through the list of names, it's littered with stocks that were left for dead at varying points in the last several months. FedEx (FDX) is up nearly 18%. Casinos and cruise ships have been collecting dust and rust for the last five months, but the stocks of MGM and Royal Caribbean (RCL) are the second and third best-performing stocks in the S&P 500 over the last week.

    Not only are there no stocks from the Technology sector in the top 25, but there aren't even any in the top 50. To find a Tech sector stock on the list, you have to go all the way down to spot number 70 where Xerox (XRX) sits with its gain of 6.73%. Yeah. We were surprised too. Not only is XRX still a public company, but it's considered a tech stock.

    [​IMG]

    If you want to find a lot of stocks from the Technology sector, they are on the list of the 25 worst performers since last Thursday. Of the 25 names listed below, 12 are from the Technology sector. Not only that, but even many of the non-tech stocks listed like Illumina (ILMN), Netflix (NFLX), Activision Blizzard (ATVI), Marketaxess (MKTX), Electronic Arts (EA), and Hologic (HOLX) have very high tech characteristics behind their businesses.

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  2. bigbear0083

    bigbear0083 Content Manager
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    Jobless Claims Back Above 1 Million
    Thu, Aug 20, 2020

    Last week, initial jobless claims came in below one million for the first time in 21 weeks. Even though another sub-million print was expected, claims actually saw a dramatic increase rising to 1.106 million. The 135K increase week over week was the biggest single-week increase of the pandemic excluding the first two enormous jumps in the second half of March; both of which were increases of over 3 million. Even though that is a big jump from last week, the actual level of claims remains around some of the lowest levels since the pandemic began. In fact, despite the large increase this week, claims are still lower than they were two weeks ago.

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    On a non-seasonally, adjusted basis claims were 891.5K this week. That actually marks a third straight week with claims below a million as the level of this reading continues to offer a bit more of an optimistic view than the seasonally adjusted number. Although NSA claims remain around the lowest levels of the pandemic, there was not an improvement this week. The 52.8K increase week over week was the first rise in four weeks and was the third-largest increase since the first week of April.

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    As we have noted recently, the summer months through September have seasonally been a strong time for claims as the nonseasonally adjusted (NSA) number has tended to drift lower. The increase this week is out of the ordinary for this point in the year as it was the first time in the history of the data (since 1967) that NSA claims for the current week of the year (33rd week) were higher from the prior week. In other words, the rise in claims this week bucked a historically consistent trend of seasonal strength.

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    The big drop in claims last week benefitted the most recent reading for continuing claims (lagged an additional week to initial claims) which have continued to decline as they broke below 16 million for the first time since April 10th. The 604K WoW decline was slightly smaller than last week's 861K decline

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    For Pandemic Unemployment Assistance (PUA), initial claims were also higher, rising over 50K from last week. In total, claims (the headline number plus PUA claims) rose to 1.43 million from 1.33 million last week. Again while that is an increase from last week's lows, it is still around some of the strongest levels of the pandemic. Total NSA continuing claims for the last week of July (continuing PUA claims are lagged another additional week), on the other hand, fell slightly from 26.6 million to 26.4 million. That was entirely thanks to a drop in regular claims as PUA claims actually rose from 10.7 million to 11.2 million.

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  3. bigbear0083

    bigbear0083 Content Manager
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    Philly Fed in a Funk
    Thu, Aug 20, 2020

    On the back on Monday's weaker Empire Fed survey, today's release of the Philadelphia Fed's Business Outlook Survey similarly showed a slowdown in activity during August. The headline index fell 7 points to 17.2. While that is a third consecutive expansionary reading, it also marked back to back declines. That means that the region's manufacturing sector has continued to grow, but at a decelerating pace in the past two months.

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    Like the headline number, many of the individual categories also remain in expansion territory but were lower than last month. The only readings to rise month over month were the indices for Delivery Times, Inventories, and Prices Received. Inventories as well as the index for Unfilled Orders were the only ones to be in contraction in August.

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    Demand continues to improve with both the indices for New Orders and Shipments showing another expansionary reading in August, but both were also lower indicating demand did slow somewhat. While the index for New Orders remains at a healthy level historically, in the upper quartile of all readings since 1980, Shipments are at a more muted level in just the 38th percentile.

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    As for employment metrics, there was a slowing in the Number of Employees hired in the region with that index falling from 20.1 to 9. That 11.1 drop was the biggest change of any sub-index this month and with respect to that index, this month's decline was in the bottom 5% of all monthly changes. Not only did the index for Number of Employees fall, but so did the index for Average Workweek, although it still remains in the upper end of its historical range.

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  4. bigbear0083

    bigbear0083 Content Manager
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    Not Much Pickup in New Highs
    Wed, Sep 2, 2020

    Every day in our Daily Sector Snapshot, we provide a look at the net percentage of S&P 500 stocks that are making new 52-week highs (percentage of new 52 week highs minus the percentage of new 52 week lows). Even though the S&P 500 has continued to hit new highs recently, the same cannot be said for much of the individual stocks that the index is comprised of. Historically for the S&P 500 when it has reached all-time highs, the average reading on the net percentage of new highs has stood at 12.35%. Today, it is around 5 percentage points lower at 7.33% and is off the post bear market low peak of 10.1% from July 23rd. The same can also be said for each of the eleven sectors. At the moment there is only one sector, Materials, that is currently at its highest level since the bear market low. Every other sector is currently off-peak with no stocks reaching new highs in Energy, Real Estates, and Utilities. Meanwhile, Consumer Staples has seen its share of stocks at new highs fall the most dramatically recently with the reading as of yesterday's close the lowest since August 13th. Financials also continue to show positive readings but those remain far more muted than what was observed prior to the pandemic. On the other hand, unsurprisingly the sector with the highest net percentage of new highs currently is Technology at 16.9%, but that too is off the peak of nearly 20% from just about a week ago. Granted, for Tech that reading has generally been trending higher recently as it also has for Health Care, Industrials, Communication Services, and Consumer Discretionary.

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  5. bigbear0083

    bigbear0083 Content Manager
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    Historic August Opens Door To Worst Month Of The Year

    What a month August has been so far, with the S&P 500 Index up more than 7%, for the best August since 1984. Not to be outdone, this is the first time in history August saw two separate 6-day (or more) win streaks. Last, with one day to go, the S&P 500 has gained 16 days so far this month, for the most since 16 in April 2019. Meanwhile, it is the most up days for any August since 2003.

    “Well, 2020 has laughed at many of these things, but be aware September is indeed the worst month of the year on average,” explained LPL Financial Chief Market Strategist Ryan Detrick. “But what caught our attention was both September and October have a negative return during election years, with October the worst month of the year. Could investors get election jitters again in 2020?”

    As show in the LPL Chart of the Day, September tends to be a weak month. In fact, it is the weakest month on average since 1950. Additionally, the last two times August was up more than 5% were 1986 and 2000; the S&P 500 fell 8.5% and 5.4% in September those years.

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    Breaking things down by just an election year shows that August actually tends to be strong. That obviously played out this year, but now will the weakness we usually see in September and October play out?

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    Finally, after today, the S&P 500 will be up 5 consecutive months. Looking at the other years that saw a similar summer rallies, there tended to be more strength the final 4 months of the year, with only the Federal Reserve policy mistake of December 2018 blemishing this impressive track record.

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    Yes, this record equity run is extremely stretched, but we would continue to use any pullbacks as an opportunity to add to longer-term core equity holdings, as the economy continues to come back quicker than most expected.
     
    Onepoint272 likes this.
  6. bigbear0083

    bigbear0083 Content Manager
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    Correction Crushing Sentiment
    Thu, Sep 10, 2020

    With the Nasdaq entering a correction in under a week and the S&P 500 dropping just over 7% from last Wednesday's closing high to Tuesday's low, investor sentiment has understandably taken a hit. After a four-week stint in which the percentage of investors reporting as bullish in the American Association of Individual Investors (AAII) survey stayed above 30%, this week less than a quarter of respondents are bullish. At 23.71%, bullish sentiment is at its weakest level since the first week of August when it was 23.29%. Additionally, the 7.09 percentage point decline was the largest one week drop in bullish sentiment since mid-June when it fell 9.91 percentage points.

    [​IMG]

    The decline in optimism was obviously met with a similar-sized increase in pessimism. The percentage of investors reporting as bearish rose 6.68 percentage points this week to 48.45%. That is the highest reading since the last week of July when bearish sentiment stood slightly higher at 48.47%. It was also the largest one week gain to bearish sentiment since June 18th. As shown in the chart below, that is at the high end of the past few months' range but is still off the highest readings of the pandemic when more than half of respondents reported as bearish.

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    With the big moves in bullish and bearish sentiment, the bull-bear spread moved deeper into negative territory (which it has been in for a record 29 weeks now) falling from -10.97 to -24.74 this week. That brings the spread back to similar levels to the end of July. Since the pandemic began, there have only been five other weeks that the spread has been lower: the last week of July, June 25th, May 7th and 14th, and April 23rd. In other words, bearish sentiment continues to dominate.

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    Meanwhile, over a quarter of respondents are neutral on the market. 27.84% of respondents to the AAII survey reported as expecting no change in the S&P 500 over the next six months which was little changed from 27.43% last week and is basically right in line with the average of 25.77% since the bear market low in March.

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  7. bigbear0083

    bigbear0083 Content Manager
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    Pullback Seen Around the World
    Wed, Sep 9, 2020

    Through yesterday's close, the S&P 500 has fallen just under 7% from its high on September 2nd. Compared to other major global stock markets that we track in our Global Macro Dashboard, only China has also fallen over 5% in the past week. The average global stock market of these 23 markets is down 1.8% since 9/2. Only three—South Korea, Sweden, and the UK—have risen in the past week. In other words, stocks have dropped around the globe but the US and China's declines have far outpaced the rest of the world.

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    One interesting point of the past week is these declines have only brought US stocks off of their 52-week highs. As of last Wednesday, whereas US equities were at a record high, the average global stock market was over 10% below its 52-week high. As shown below, other than the US, the only other country that was within 1% of a 52 week high last week was China; the second-largest decliner in the past week. After those large declines in the past week, the US and China stand out far less than they did last week in terms of distance from 52 week highs.

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    That dynamic of the US outpacing its global peers is nothing new though. As shown in the chart from our Global Macro Dashboard below, the US has consistently outperformed the rest of the world over the past ten years (a rising line indicates outperformance and vice versa). While its relative strength has been more mixed over the past ten years, China has similarly seen its equities outperforming recently.

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  8. bigbear0083

    bigbear0083 Content Manager
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    Active Managers Do an About Face
    Fri, Sep 11, 2020

    The National Association of Active Investment Managers (NAAIM) has an index which tracks the exposure of its members to US equity markets. Each week, members are asked to provide a number that represents their exposure to markets. A reading of -200 means they are leveraged short, -100 indicates fully short, 0 is neutral, 100% is fully invested, and 200% indicates leveraged long. Two weeks ago, in our Bespoke Report, we highlighted the fact that the exposure index had moved to one of the highest levels in its 15-year history. Now, just two weeks later, these same active managers have reigned in their exposure considerably as this week's reading dropped from just under 100 to 53.1.

    This week's drop was the second-largest one week decline in the index's history and just the 10th time that the index lost more than a third (33 points) in a single week. The most recent occurrence was back in early March in the middle of the Covid crash, and every other prior period where the index saw a similar drop, the S&P 500 was also down every time by an average of 2.3%. Therefore, it's not much of a surprise to see the big drop this week given the big declines in the market. But what about going forward? Do big drops in the NAAIM Index mean a bounce back for markets or further declines?

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  9. bigbear0083

    bigbear0083 Content Manager
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    The Most and Least Heavily Shorted Stocks in the Russell 1,000
    Thu, Sep 10, 2020

    Below is an updated look at the most heavily shorted stocks in the Russell 1,000. Each of these 30 stocks has at least 15% of its equity float sold short.

    At the top of the list is Nordstrom (JWN) with 38.66% of its float sold short. With a YTD decline of 61.86%, the shorts have crushed it with JWN this year.

    With its huge portfolio of office and retail real estate, Brookfield Property REIT(BPYU) has the second highest short interest in the Russell 1,000 at 33.7%. BPYU is down 35.7% YTD.

    There are plenty of other well-known companies on the list of the most heavily shorted stocks. Examples include American Airlines (AAL), Virgin Galactic (SPCE), LendingTree (TREE), Wayfair (W), Dick's Sporting Goods (DKS), ADT, TripAdvisor (TRIP), Beyond Meat (BYND), and Kohl's (KSS).

    One name that is no longer on the list of most shorted stocks is Tesla (TSLA). When we provided an update on short interest back in February (a pre-COVID world), Tesla (TSLA) had more than 17% of its float sold short, but that number is all the way down to 8.3% as of the most recent filing.

    These 30 stocks with the highest short interest are down an average of 3.01% since last Wednesday (9/2) when the S&P 500 made its last closing high. That's actually a little bit better than the 3.55% average decline for the rest of the stocks in the Russell 1,000. And year-to-date, these 30 stocks are up an average of 0.60% versus an average gain of 0.81% for the rest of the index. That's not much of a difference!

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    Below is a list of the 30 least shorted stocks in the Russell 1,000 as a percentage of equity float. None of these stocks have more than 0.71% of their float sold short, and they're mostly made up of more conservative names in the Health Care and Consumer Staples sectors.

    Johnson & Johnson (JNJ) has the lowest short interest as a percentage of float in the Russell 1,000 at just 0.36%. Microsoft (MSFT) -- one of the key mega-cap Tech names -- has the second lowest short interest, followed by Merck (MRK), Eli Lilly (LLY), and Medtronic (MDT).

    Somewhat surprisingly, Amazon (AMZN) is the sixth least shorted stock in the entire Russell 1,000. While AMZN is still thought of as a high-flying momentum name by many investors, its short interest levels tell a much different story, painting it as more of a non-cyclical stock like Pepsi (PEP), Procter & Gamble (PG), or Coca- Cola (KO).

    While the 30 most heavily shorted stocks in the Russell 1,000 are up 0.60% YTD, the 30 least shorted stocks in the index are up much more at +8%. This group has MSFT, AMZN, HD, and AAPL to thank for that strong performance!

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  10. bigbear0083

    bigbear0083 Content Manager
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    Retail Sales Growth Slows But Still Positive
    Wed, Sep 16, 2020

    With the weekly $600 UI benefits expiring during the summer, consumer spending took a hit in August as Retail Sales showed slower than expected growth. At the headline level, Retail Sales grew 0.6% compared to forecasts for growth of 1.0%. Ex Autos and Ex Autos and Gas, growth came in slightly better at 0.7% but still shy of forecasts. In addition to the weaker than expected August reading, July’s sales were also revised lower from 1.2% down to 0.9%. While Retail Sales still showed growth, the report was underwhelming on just about all fronts.

    While the level of growth was weaker than forecast, breadth within this month’s report was once again positive as nine out of thirteen different sectors saw m/m gains. The big leader by far was Bars and Restaurants which grew 4.7%, followed by Clothing, Furniture, and Building Materials which all saw month-over-month gains of over 2%. On the downside, Sporting Goods and Food and Beverage Stores both saw sales contract over 1%. Based on these moves, we’re still seeing a continuation of the trend of Americans returning to their prior spending habits before the onset of COVID.

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    While the monthly pace of retail sales is back at all-time highs, the characteristics behind the total level of sales have changed markedly in the post COVID world. In our just-released B.I.G. Tips report, we looked at these changing dynamics to highlight the groups that have been the biggest winners and losers from the shifts.
     

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