Welcome Stockaholics to the trading week of January 13th! 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: Monday Earnings: Shaw Communications 10:00 a.m. Boston Fed President Eric Rosengren 12:40 p.m. Atlanta Fed President Raphael Bostic 2:00 p.m. Federal budget Tuesday Earnings: Citigroup, JPMorgan Chase, Wells Fargo, Delta Air Lines, First Republic Bank, Wipro, IHS Markit 6:00 a.m. NFIB survey 8:30 a.m. CPI 9:00 a.m. New York Fed President John Williams at London School of Economics 1:00 p.m. Kansas City Fed President Esther George Wednesday Earnings: Bank of America, BlackRock, Goldman Sachs, UnitedHealth, US Bancorp, PNC Financial, Alcoa, Eagle Bancorp, Hancock Whitney 8:30 a.m. PPI 8:30 a.m. Empire state manufacturing 10:45 a.m. Philadelphia Fed President Patrick Harker 12:00 p.m. Dallas Fed President Robert Kaplan 2:00 p.m Beige book Thursday Earnings: Morgan Stanley, Taiwan Semiconductor, Bank of NY Mellon, Charles Schwab, PPG Industries, HomeBancShares, Bank of the Ozarks, People’s United Financial 8:30 a.m. Initial claims 8:30 a.m. Retail sales 8:30 a.m. Import prices 8:30 a.m. Philadelphia Fed 8:30 a.m. Business leaders survey 10:00 a.m. Business inventories 10:00 a.m NAHB 4:00 p.m TIC Friday Earnings: Schlumberger, Citizens Financial, Fastenal, Kansas City Southern, Regions Financial, State Street, First Horizon 8:00 a.m. Philadelphia Fed President Patrick Harker 8:30 a.m. Housing starts 9:15 a.m. Industrial production 10:00 a.m. Consumer sentiment 10:00 a.m. JOLTS
Tech Stocks Soar, Bonds Snore, As Oil Suffers Worst Week In Six Months Well that was a week... China was mixed on the week with larges caps flat to down and small cap tech soaring... Source: Bloomberg European stocks were also mixed with Germany dominating and UK lagging... Source: Bloomberg DAX tested up to its record high... Source: Bloomberg In the US the picture was a little less mixed with Small Caps unable to hold gains while Nasdaq soared (but late-day weakness today spoiled the party)...Nasdaq 100 is up 5 weeks in a row (and 14 of the last 16 weeks) Source: Bloomberg Dow crossed above 29,000 for the first time today... Source: Bloomberg Futures give a much clearer picture on the week's craziness however... Breadth has worsened as this market surged higher... Source: Bloomberg Defensives handily outperformed cyclicals on the week... Source: Bloomberg Value stocks relative to Growth plunged to a new cycle low Source: Bloomberg US Defense stocks soared to a new record high... Source: Bloomberg And then there's AAPL (up 15 of the last 16 weeks)... Source: Bloomberg Credit protection costs collapsed further this week and equity protection also plunged with VIX back to a 12 handle... Source: Bloomberg Notably VIX Call volumes are soaring as the fear index plunges... Source: Bloomberg HY Bond risk dropped to its lowest since 2019's April lows... Source: Bloomberg Treasury yields tumbled the last two days, leaving them unchanged since Monday's close and marginally higher on the week... Source: Bloomberg 30Y is back below the pre-Iran-missile-strike levels... Source: Bloomberg Bund yields also surged as the European corporate bond market saw a record-smashing $100 bn of issuance (and that means lots of rate-locks)... Source: Bloomberg The Dollar dipped today but ended the week higher (after two down weeks)... Source: Bloomberg Big week for cryptos with Litecoin and Bitcoin Cash leading... Source: Bloomberg Bitcoin surged after Soleimani's death, testing up towards $8500 before fading back a little... Source: Bloomberg Oil was the week's biggest loser as copper and PMs clung to the green... Source: Bloomberg Gold ended the week above the Soleimani-dead levels... WTI Crude dropped over 6% on the week - its worst week since July 2019... Finally, we have seen this kind of liquidity-fueled decoupling before... Source: Bloomberg And The Fed just let its balance sheet shrink by the most since May... Source: Bloomberg Is reality looming?
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2020- S&P sectors for the past week-
January Expiration Week: Mixed Bag Last 21 Years Over the past thirty-seven years, since 1983, the S&P 500’s performance during January’s option expiration week has been a tepid. Friday has been up 21 and down 16, and the entire week has been down five-plus times for every four times it has been up. However, in the past twenty-one years (1999-2019), the S&P 500’s performance has taken a turn for the worse with expiration day falling ten times with an average loss of .08% and the full-week declining 14 times with an average loss of 0.74%. DJIA and NASDAQ have similar track records since 1999. 378 Days since Last 10% S&P 500 Correction & Still Counting There is little doubt that 2019 was a good year for the market. DJIA advanced 22.3%, S&P 500 climbed 28.9% and NASDAQ jumped 35.2% in 2019. Even for a pre-election year, those gains are above average. Gains of this magnitude also have a tendency to cause some uneasiness as valuations are generally getting stretched and thoughts turn to profit taking or the possibility of a pullback or a correction. S&P 500 completed its last correction (defined as a 10% or greater decline, but less than 20% because that would be a bear market then) on December 24, 2018 after falling 19.8%. That was 378 calendar days ago and it was the fifth correction of the current bull market that begun on March 9, 2009. Since 1948, the current bull market is the second longest in duration and magnitude. The longest was 4494 calendar days from December 4, 1987 through March 24, 2000. S&P 500 gained 582.1% during that bull while enduring five corrections. Even though it has been 378 days since the last does not mean one is imminent. S&P 500 has gone as along as 2553 calendar days without a correction before (October 1990 through October 1997). How Stocks Do During Geopolitical Events It was a volatile night for the U.S.-Iran conflict. S&P 500 Index futures dipped 1.5% and global markets swung after Iran shot several ballistic missiles at U.S.-Iraqi military bases. Markets recovered their losses overnight on news that there were no American casualties, but tensions remain high in the Middle East. As concerns over the Iran conflict continue to build, we’ve received many questions asking what this could mean for the market outlook. We discussed our initial thoughts regarding the conflict in our January 6 blog, but we believe it is important for investors to remember that there have been many times historically when stocks stood strong in times of conflict. In fact, the best ever annual Dow Jones Industrial Average gain was in 1915 during World War I. “No doubt worries over Iran have investors on edge,” explained LPL Financial Senior Market Strategist Ryan Detrick. “Stocks could be volatile for a while, but the impact to stocks from geopolitical events historically has tended to be short-lived.” As our LPL Chart of the Day shows, the S&P 500 fell 5% on average in 20 major geopolitical events dating back to the attack on Pearl Harbor in 1941. However, the S&P 500 recovered those losses in fewer than 50 calendar days on average. A special thanks to Sam Stovall of CFRA for sharing the data below with LPL Research. Why The First Five Days Of 2020 Could Have Bulls Smiling The first five days of 2020 are in the books. Although the headlines have been quite scary, equities have picked up right where they left off last year. In fact, after the first five trading days of the new year, the S&SP 500 Index is up a respectable 0.65%. Jeffrey Hirsch of The Stock Trader’s Almanac follows and tracks many interesting seasonal patterns. One that we find very interesting states that how stocks perform the first five trading days of a new year could indicate how the full year will go. Now, we’ll be the first to admit no one should invest based only on this adage, but the results have been quite compelling. We did some research and found that when S&P 500 returns in the first five trading days of a new year have been higher, the full-year total return for the S&P 500 has been positive 80% of the time. Compare that to returns being up only 60% of the time when the first five days have been lower, and we have something that has our attention. What about big gains? Well, when those first five days have been up more than 2%, the full year return has been positive a very impressive 16 of 17 times! Only 2018 didn’t follow suit when the first five days were up 2% or more. “Should you ever invest for a full year purely because of the first five days? We would emphatically say no,” explained LPL Financial Senior Market Strategist Ryan Detrick. “But put in context, this seemingly random bit of info does have a very impressive track record. It is only a small piece of the pie, but the good news is we still don’t see any major warning signs that this bull market is over just yet.” As shown in the LPL Chart of the Day, when the S&P 500 has gained more than 0.65% the first five trading days of a new year—like 2020—the full year has finished in the green 31 out of 35 times, with a very solid 17.2% average annual return. Although we aren’t expecting gains quite that large in 2020, it does help support the case for the bull for at least the rest of this year. Sector Valuations Stretched Fri, Jan 10, 2020 The S&P 500 is currently up 1.4% year-to-date, but as shown below, only three sectors are outperforming the index -- Technology, Communication Services, and Industrials. Given Tech's massive weighting of more than 23% in the S&P, its 3.2% YTD gain has a big impact on the overall market's gain. Tech's huge weighting is also the reason why eight of eleven sectors are underperforming the S&P. We continue to see elevated P/E ratios. The S&P's trailing 12-month P/E is currently 21.9, while Real Estate is at 49.9, Technology is up to 27.5, and Consumer Discretionary is at 25.3. The only sector with a P/E ratio below 19 is Financials at 14.5. Absolute levels of valuations like the chart above don't tell you much. The chart below shows where valuations stand for sectors relative to levels seen over the last ten years. As shown, the S&P 500's current P/E ratio is higher than 97.9% of all other P/E readings seen for the index over the last ten years. That's high! And three sectors have valuations in the 98th percentile or higher, with Technology at the top at 100%. Over the last ten years, Tech's P/E ratio has never been higher. "Take my crude, please" Fri, Jan 10, 2020 Crude oil is just about as popular or maybe even less popular than tobacco these days. Sure, there was a brief spike in prices following the US drone strike on Iranian general Soleimani last Thursday night, but ever since then, crude oil has done nothing but trade lower. Just the fact that crude only managed to rally 3% in the lead up to what many thought to be a full-blown war with Iran shows just how out of favor crude is. This isn't the first time crude hasn't been able to hold onto gains either. As noted earlier this week, besides the last week, there have been two other periods of heightened tensions between the US and Iran over the last year where one would have expected prices to rally, but instead they sold-off. When a stock consistently opens at one price and then closes lower than it opened, it's considered a negative as it signals that investors are selling into strength. Applying that logic to crude oil confirms just how out of favor it has become. This week alone, the daily closing price has been lower than its open on all five days. The chart below shows daily streaks where crude oil closed below its opening price going back to the start of 2009. While the current five-day streak isn't anything to write home about, we would note that even before this past week's tensions in the Middle East, in late September/early October there was a streak of 13 trading days where the commodity closed lower than it opened, and that was the longest losing streak since at least the early 1980s! Before that, there was another streak of 7 trading days in July. In other words, two of the five longest streaks since 2009 where crude oil closed below its open both occurred in the last six months. Dow 29,000? Fri, Jan 10, 2020 By posting this, we're probably jinxing it, but the DJIA is on the verge of topping another 1,000 point threshold less than two months after first topping 28,000. While the media makes a big deal of each of these thresholds, we would note that the road to 29,000 from 28,000 is only 3.4%. That's hardly a momentous move. Since Trump became President in January 2017, though, 29,000 would be the 10th 1,000-point threshold that the DJIA would cross under his watch. The table below lists the date that the DJIA first crossed each 1,000-point threshold throughout history. For each level, we also include the number of calendar days that elapsed between the first cross of that threshold and the prior one, how large a percentage gain that the 1000-point threshold represents versus the prior one, and then how many times the DJIA has crossed each threshold (on a closing basis) both to the upside and downside. One of the most notable aspects of the table in our view is that even though each threshold is a smaller percentage than the prior one, there have been so few crosses (above and below) of most of the thresholds since the Dow first crossed 19,000 after the 2016 election. 19,000 was only crossed once, and six of the other nine thresholds since then haven't been crossed more than ten times. That's indicative of a market that has been rallying and not looking back. Uncovering Trends With Sector Relative Strength Charts Fri, Jan 10, 2020 Our Daily Sector Snapshot does a great job of consolidating key fundamental, technical, and breadth info for the eleven major S&P 500 sectors. Our trading range charts show the path of each sector over the last year with overbought and oversold levels overlaid with the sector's price and 50-day moving average. We also include relative strength charts which show how the sector has been performing versus the S&P 500. When the relative strength line is rising, the sector is outperforming the S&P and vice versa for a falling line. Below we have pulled both the trading range charts and the relative strength charts from our Daily Sector Snapshot for each sector. Most sectors have been performing well on an absolute basis lately and are trending nicely higher, but in many cases the sector relative strength charts tell a different story. Both the Communication Services and Consumer Discretionary sectors are in uptrends and have broken out to new highs recently, but their relative strength versus the S&P 500 leaves a lot to be desired. Communication Services has merely been performing inline with the S&P over the last year, while Consumer Discretionary fell off a cliff versus the S&P in the early part of Q4 2019 and has just started to recover. Consumer Staples performed well versus the S&P over the first two-thirds of 2019, but performance versus the market plummeted from late summer through year-end as the yield curve un-inverted and investors shifted into Tech, Health Care, and Financials. Energy is the only sector that has not been in an uptrend for the better part of the last year, and thus its relative strength chart has basically been a straight path lower. More recently, the slope of Energy's relative strength decline has started to flatten, and we've seen some outperformance lately as geopolitical tensions heat up. Even with the improvement, though, the sector still has a lot of work to do to turn around versus the rest of the market. The Financial sector has performed exactly in-line with the S&P 500 over the last year, but things looked a lot worse in mid-2019 when the yield curve was inverted. Once rates started to tick higher again and the slope of the yield curve turned positive in Q4 2019, the Financials really took off. That shifted the sector's relative strength from negative to positive, but over the last few weeks we've seen a slight downtick as the Financials have traded more sideways. The Health Care sector has been on a tear for the last three months, but it hasn't been enough to shift its relative strength back into positive territory versus the S&P over the last year. The rise of Elizabeth Warren's poll numbers held back Health Care in 2019, and once Warren's numbers started to dip, the sector took off. That's the reason you see Health Care's relative strength really picking up since making a low last October. The Industrials sector broke out to new highs recently after trading sideways for most of 2019, but its relative strength has been mostly trending lower since peaking in the first quarter last year. Materials has seen its relative strength completely collapse to start 2020. While the S&P is up 1.4% year-to-date, the Materials sector has fallen 3%. That type of underperformance does major damage on a relative strength basis. Real Estate (REITs) had very positive relative strength for most of 2019, but this rate-sensitive sector has struggled mightily over the last few months as the yield curve has un-inverted. The price chart for Real Estate has broken its uptrend and is struggling to hang onto its 50-day moving average. With the S&P in a steep uptrend, a near-term downtrend for a sector causes its relative strength chart to collapse. Remarkably, the Technology sector is the only one with an upward sloping relative strength chart that's solidly in positive territory. This tells you that Tech has been the main (and only) area of true outperformance in the US equity space over the last year. At some point this is sure to reverse, and when it does, the S&P is going to struggle given Tech's weighting in the index. Relative strength for Utilities looks very similar to that of other defensives like Consumer Staples and Real Estate. You saw strong outperformance for Utilities at the start of Q4 2019, but it has given it all back and then some since then.
Here are the current major indices pullback/correction levels from ATHs as of week ending 1.10.20- Here is also the pullback/correction levels from current prices- ...and here are the rally levels from current prices-
Stock Market Analysis Video for January 10th, 2020 Video from AlphaTrends Brian Shannon ShadowTrader Video Weekly 1.13.20 Video from ShadowTrader Peter Reznicek
Stockaholics come join us on our stock market competitions for this upcoming trading week ahead!- ======================================================================================================== Stockaholics Daily Stock Pick Challenge & SPX Sentiment Poll for Monday (1/13) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (1/13-1/17) <-- click there to cast your weekly market vote and stock picks! ======================================================================================================== 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 1.6.20 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! Monday 1.6.20 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! Tuesday 1.7.20 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 1.7.20 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 1.8.20 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 1.8.20 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 1.9.20 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 1.9.20 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 1.10.20 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! Friday 1.10.20 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- ($JPM $APHA $BAC $DAL $UNH $C $WFC $INFO $GS $BLK $PNC $FRC $USB $SLB $PPG $FAST $WIT $LMNR $KSU $TSM $WNS $SJR $AA $BK $CSX $MS $JBHT $HOMB $SCHW $RF $OGI $STT $BBCP $CFG $HWC $WAFD $PRGS $EGBN $OZK $BEDU $PBCT $FHN $INDB $VOLT $BMTC) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning January 13th, 2020 <-- click there to view!
Good Monday morning traders and welcome to a new week, fresh start! Here is this morning's pre-market news thread for those of you wanting to get a quick read before today's open- <-- click there to read! Hope everyone in here has a great trading week ahead!
TDOC breaking out today. I'm thinking it hits R3~$140 this year. Of course, it needs to make it above R1 first
A pretty good day for me, TDOC, TSLA, LK, and MOMO are all soaring for whatever reason I just woke up so I didn’t check any news yet Growth stocks seem to be on a tear today. Got lucky by getting out of ABMD last Friday, might think about getting back in at some point. Got in SIX for a bounce play last Friday, not looking too good right now
FIVE getting hammered. Have never been to this store before, are they selling higher quality things than Walmart and Target at $5
