Welcome Stockaholics to the trading week of December 23rd! This past week saw the following moves in the S&P: Major Indices End of Week: Major Futures Markets on Friday: Economic Calendar for the Week Ahead: Sector Performance WTD, MTD, YTD: What to Watch in the Week Ahead: N/A.
US Equity Markets Just Reached 'Record Euphoria' The bears have left the building and very few see anything potentially derailing this US equity market melt-up in the next 6-12 months... Source: RBC Leaving investors at record levels of euphoria... Source: RBC In July 2019, CFTC data on US equity futures positioning returned to the highs of January 2018 and September 2018, which in turn were in line with pre-Financial Crisis highs. This told us that institutional investor positioning was euphoric and that the US stock market was vulnerable to bad news. In August, positioning on this indicator fell sharply, getting about halfway back down to the May and December 2018 lows before stabilizing. This indicator has moved up again in 4Q19, and as of December 10th (the latest data available) was slightly above the levels that have marked significant peaks in the stock market over the past few years. Note that each of the recent peaks are associated with policy catalysts (Tax Reform, Trade War, Fed Cuts). And the 'extremest greed' since the peak in 2017... Source: CNN With the S&P 500 trading at its richest to its 200-day moving average since the peak in Jan 2018... Source: Bloomberg And in case you wondered why... it's the fun-durr-mentals, stupid!! Source: Bloomberg And as central bank liquidity has soared, volatility across every asset class has been clubbed like baby seal... Source: Bloomberg "You have meddled with the primary forces of nature, Mr [Powell], and I won't have it! Is that clear? ...There are no Russians. There are no Arabs. There are no Third Worlds. There is no West. There is only one holistic system of systems. One vast and immane, interwoven, interacting, multi-varied, multi-national dominion of dollars. Petro-dollars, electro-dollars, multi-dollars, reichmarks, rands, rubles, pounds and shekels... All necessities provided. All anxieties tranquilized. All boredom amused." Ok, having got that off our chest, let's look at the week in 'markets'... Chinese markets experienced all their exuberance on the first two days of the week... Source: Bloomberg European stocks were more mixed with Germany lagging (managing to get green today after the ridiculous ramp) and Italy leading with a big gain... Source: Bloomberg US equity markets were all exuberantly higher this week led by Nasdaq and Small Caps... While the week was celebrated as being bullish as all heck, we note that Defensive stocks dominated (and every day saw post-open selling in cyclicals)... Source: Bloomberg And while the early week was driven by yet more short-squeezes, the machines seemed to run out of ammo today... Source: Bloomberg And this has all happened amid a record $167 billion in equity outflows in 2019... Apple share hit a new all-time high, lifting the broad equity markets with its vast size. Apple has now added over hgalf a trillion in market in 2019 alone... as Fwd EPS expectations slump... WTF! Source: Bloomberg Notably, while bank stocks were higher on the week, they underperformed the broad market and decoupled from the steepening yield curve... Source: Bloomberg VIX was monkeyhammered into the open but came back during the day Does this look like normal price action to you? Source: Bloomberg Also, as we noted earlier in the day, the opening panic bid was created by extreme gamma driving the Dec S&P futs contract into its expiration at the open... Source: Bloomberg HYG notably decoupled from stocks today... Source: Bloomberg Treasury yields were unchanged today but higher across the curve on the week with the short-end dramatically outperforming... Source: Bloomberg But, the daily pattern of Asia buying, Europe selling, US (post-EU) buying continues... Source: Bloomberg Sending the yield curve up to the highs from early November, and notably rolling over... Source: Bloomberg After two down weeks, the dollar rallied back to pre-trade-deal levels... Source: Bloomberg Cable tumbled this week - post-election - suffering its biggest weekly loss since Oct 2017... Source: Bloomberg While US equities surged this week (along with the USD and bond yields), yuan was dead, seemingly glued to 7.00... Source: Bloomberg Silver was the week's biggest gainer (unusually) as crude tumbled on the day to lose the the crown... Source: Bloomberg Silver is back above $17 and back at pre-Thanksgiving slump levels... The dramatic silver outperformance sent it back to its strongest vs gold in December... Source: Bloomberg WTI Crude tumbled today, back to the top of its recent uptrend channel... Finally, yeah we know we're whining but still... this happened in 2019...the S&P 500 is up almost 29% while earnings expectations are down almost 5% Source: Bloomberg No really, it's not about fun-durr-mentals... Source: Bloomberg Four straight weeks higher for the S&P 500... Dear Bulls, thank The Fed... Source: Bloomberg
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2019- S&P sectors for the past week-
Trading Ahead of Christmas: Small-Caps & Tech Lead For decades we have been tracking the market’s performance around holidays in the annual Stock Trader’s Almanac. In the 53rd edition for 2020, data for DJIA, S&P 500, NASDAQ and Russell 2000 can be found on page 100. Of the eight holidays tracked, Christmas has been one of the most consistently bullish with respectable average gains occurring two days before and the day before. Next Monday, two days before Christmas, has been more bullish over the past 31 years with greater average gains and a greater number of advances. Small caps measured by Russell 2000 have enjoyed the most consistent strength on both days. Volatility also tends to be subdued ahead of Christmas as well. Prior to last year’s pre-holiday selloff, the worst decline recorded by any of the four indexes on either day was 1.63% by DJIA in 1997. 2019 Market Strength Could Give Election-Year 2020 A Boost Regardless of how you slice it, the DJIA, S&P 500 and NASDAQ have had a great year so far. As of today’s close, NASDAQ is best up nearly 33%. On a percent basis, this would be NASDAQ’s ninth best year since 1971. Based upon total points gained, it would be number one. S&P 500 is on track for its eleventh best year since 1930, up 27.35% so far. Based upon points gained, S&P 500 is also having its best year ever. DJIA has held its own but is the laggard of this group up a little more than 21%, good for nineteenth best since 1930, second best by point (2017 currently has a narrow advantage). Such strength could cause some concern that the market could be “borrowing” from next years performance. However, that does not appear to be entirely the situation. Using the years after the big years in the above table, the following seasonal pattern charts were produced for DJIA, S&P 500 and NASDAQ. Each chart contains the seasonal pattern of “All Years,” “Election” and “Year After Top 20.” DJIA and NASDAQ historically enjoyed better gains in the years after big gains than their respective election year average performance. S&P 500 exhibits a similar pattern in the beginning of the year, but by the end of the full-year it ended with nearly the same average performance. The Santa Claus Rally Feels Stronger Than It Is Fri, Dec 20, 2019 Recent performance of the S&P 500 has impressed as the index has risen 7 of the last 8 sessions and logged a series of all-time highs along the way. But as shown in the chart below, this solid performance is hardly an outlier relative to history when looking at the performance of the S&P 500 from the close on Thanksgiving Day through year end. As shown in the chart, this has definitely been a better run than typical but by no means is an outlier relative to history over the last 30 years. S&P 500 Drawdowns By Year Thu, Dec 19, 2019 If someone had told you on January 1st that the year would start off with fears of an economic recession in the US as Retail Sales showed their largest decline since 2009, and then that the US would be in a trade war with China where at one point the President ordered all US companies to start looking for an alternative to doing business in that country, you would have thought that 2019 would likely end up being a pretty volatile year. As if these two headwinds weren't enough, add to them that the President would have been impeached towards year-end, and you may have even asked, "How bad was the bear market going to be?" Well, there was no bear market in 2019, and for that matter, there wasn't even a correction! The chart below shows the maximum drawdown of the S&P 500 from a closing high for each calendar year since 1928. The average drawdown in a given year during this span has been a decline of 16.3%, and in 58 of the 92 years, there has been a decline of at least 10%. While years with a drawdown of at least 10% aren't uncommon, and this year there has been no shortage of potential headwinds, the maximum drawdown for 2019 has been less than 7%! While this year has been tame, don't forget that last year, the S&P 500 saw a drawdown of 19.8% on a closing basis as many of the headwinds we faced early on in 2019 were already priced in by the end of 2018. S&P 1500 Best Stocks of the Decade Wed, Dec 18, 2019 As the year and decade winds down, no recap would be complete without a discussion of the best-performing stocks of the decade. Since the S&P 1500 is up close to 200% in the last ten years, there have been a number of big winners. In the table below we list the 25 best-performing stocks that are currently in the S&P 1500 that were also around in their current forms ten years ago. Topping the list of biggest winners is a company most people have never heard of - Patrick Industries (PATK). Ten years ago, the stock was a microcap with a market cap of just $22.3 million, but during the last ten years, PATK's stock has rallied more than 4,500%! So what cutting edge technology is PATK involved with? 5G? AI? The Cloud? No, no, and no. According to the company's website, PATK is a major manufacturer and distributor of component and building products for the Recreational Vehicle, Manufactured Housing and Marine industries. There you have it. Not every big winner in the stock market has to be a tech company. While you may have never heard of PATK, the next two stocks on the list are much more of household names. Netflix (NFLX) has rallied just under 4,000% in the last decade while Domino's (DPZ) is up over 3,300%. Can you think of a better way to spend a cold winter afternoon than watching Netflix and dialing up some Domino's? Besides these three names, other notable stocks on the list of biggest winners include Broadcom (AVGO), United Rentals (URI), Regeneron (REGN), Ulta Beauty (ULTA), and Amazon.com (AMZN). Although AMZN already had a market cap of $58 billion ten years ago, it has defied all growth expectations and still managed to rally more than 1,200% this decade. When it comes to market cap, AMZN is clearly the exception more than the rule. So if you are looking to score one of the biggest winners in the next decade, you're unlikely to find one among the FANG stocks or in the mega-cap S&P 100 for that matter. Besides the 25 names listed below, another 17 have rallied more than 1,000% over the last ten years. Of those 42 total names, only three had market caps above $10 billion (Amazon.com, NVIDIA, and Mastercard), and just 15 even had market caps above $1 billion. Overall, the average market cap of the 42 ten-baggers was $3.3 billion at the start of the decade, while the median market cap was just $565 million. The fact that most of the biggest winners of the last ten years weren't large caps to begin with certainly doesn't mean that large-cap stocks are a bad investment. There are plenty of stocks that, even though they weren't the best performers, still performed admirably over the last ten years. Additionally, while the last decade has been great for the stock market, in the event that the next decade isn't as good, large-cap stocks are likely to collectively provide a lot more stability than their small and micro-cap peers. Worst Stocks of the Decade Wed, Dec 18, 2019 While there have been a lot of big winners in the stock market in the past decade, there have been a number of big losers as well. The table below lists the 15 stocks that are down the most over the last decade but still haven't been booted from the S&P 1500. The worst performing stock on the list is Frontier Communications (FTR) which is down over 99%! At the end of the last decade, FTR was a $117 stock, but in the span of ten years has managed to shed over $116 of that share price! After FTR, nearly all of the biggest losers are from the same sector. You guessed it! Energy. The only non-Energy stocks shown are JC Penney (JCP) and Acordia Therapeutics (ACOR). What's really unbelievable about the fact that the remaining twelve stocks on the list are from the Energy sector is that there are just 89 stocks in the S&P 1500 Energy sector. In other words, one out of every eight stocks in the sector is down 90% over the last decade. Who would have thought ten years ago that in the early stages of an Energy revolution in the United States and one of the longest bull markets in stock market history that so many stocks in the Energy sector would lose nearly all of their market value. It wouldn't be the stock market if it didn't surprise as many people as possible! Is It Time For Santa? December 17, 2019 December has been widely viewed as a strong month for stocks, with this year following suit so far. What many probably don’t realize, however, is the majority of the gains have taken place late in the month. “December has been a good month so far, but can it continue? Turns out, the majority of December’s gains have tended to happen in the second half of the month—so we still have time to believe in Santa,” explained LPL Senior Market Strategist Ryan Detrick. As Ryan Detrick and Jeff Buchbinder discussed on the most recent episode of the LPL Market Signals podcast, with new clarity on U.S.-China trade and the recent United Kingdom elections, there may be a good chance stocks could deliver another stellar performance during this festive time of the year. As our LPL Chart of the Day shows, December historically has been a strong month that has tended to deliver the majority of its gains late in the month. Don’t Fear the Repo December 18, 2019 The fourth quarter is winding down, and investors are getting nervous that volatility in the short-term lending market could flare up once again. Rates on repurchase agreements (repos) jumped in September 2019 amid a shortage of cash available to lend, forcing the Federal Reserve (Fed) to restore balance in the system by purchasing U.S. Treasuries and other securities from firms. We covered that episode in our blog, “The Repo Market’s Perfect Storm,” on September 27. The Fed’s actions eventually stabilized repo rates, and financial markets ultimately shrugged off the issue. The S&P 500 Index has climbed 7.3% since the end of September, and other credit markets barely registered the event. “September’s bout of volatility was concerning, but it was the perfect storm of unusual circumstances,” said LPL Financial Chief Investment Strategist John Lynch. “Volatility in the repo market could increase as quarter-end nears, but we expect a Fed intervention will smooth any bumps out.” Here are a few reasons we’re not concerned about a repo-market meltdown: Repo market volatility has been seasonal. As shown in the LPL Chart of the Day, repo market liquidity gaps are common around quarter-end as corporate demand for cash typically increases. To be sure, market dynamics could increase the likelihood of liquidity gaps. Treasury issuance will likely remain high amid a ballooning U.S. budget deficit, and companies’ cash needs will persist.
Here are the current major indices pullback/correction levels from ATHs as of week ending 12.20.19- Here is also the pullback/correction levels from current prices- ...and here are the rally levels from current prices-
Stock Market Analysis Video for December 20th, 2019 Video from AlphaTrends Brian Shannon (VIDEO NOT YET POSTED!) ShadowTrader Video Weekly 12.22.19 Video from ShadowTrader Peter Reznicek (VIDEO NOT YET POSTED!)
Stockaholics come join us on our stock market competitions for this upcoming trading week ahead!- ======================================================================================================== Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (12/23-12/27) <-- click there to cast your weekly market vote and stock picks! Stockaholics Weekly T/A Charting Challenge (12/23-12/27) <-- click there to participate! ======================================================================================================== It would be pretty sweet to see some of you join us and participate on these! I hope you all have a fantastic weekend ahead!
Here is a look at this upcoming week's Global Economic & Policy Calendar- (GLOBAL ECONOMIC AND POLICY CALENDAR NOT YET POSTED!)
Here are the most anticipated Earnings Releases for this upcoming trading week ahead. ***Check mark next to the stock symbols denotes confirmed earnings release date & time*** Monday 12.23.19 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. Monday 12.23.19 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! NONE. Tuesday 12.24.19 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. Tuesday 12.24.19 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! NONE. Wednesday 12.25.19 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. (MARKETS CLOSED IN OBSERVANCE OF CHRISTMAS DAY.) Wednesday 12.25.19 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! NONE. (MARKETS CLOSED IN OBSERVANCE OF CHRISTMAS DAY.) Thursday 12.26.19 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. Thursday 12.26.19 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! NONE. Friday 12.27.19 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. Friday 12.27.19 After Market Close: Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES! NONE.
And finally here is the most anticipated earnings calendar for this upcoming trading week ahead- () If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning December 23rd, 2019 <-- click there to view!
Haha at this rate we could see the DOW at 30K pretty soon Will be interesting to see how the market will do in January considering this market ran so much lately
^^ haha yeah and should the market close here, the nazzy would be closing at a new ATH for 10 consecutive days. that's something that hasn't been done since 1997. when this instance has happened the 6 month market return has been slightly red on average. however a year later it has been green every single time (6 for 6). not too shabby
Took profits and sold out of my gold mining stocks on Tuesday, looks like they continue to run today though
Looks like flat to up into end of the year, not trading much at all but I am just slowly buying some of the big losers of this year to bet for a bounce in January
