Welcome Stockaholics to the trading week of June 3rd! 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 Monthly auto sales 9:10 a.m. Fed Vice Chair Randal Quarles 9:45 a.m. Manufacturing PMI 10:00 a.m. ISM manufacturing 10:00 a.m. Construction spending 12:40 p.m. Richmond Fed President Tom Barkin 9:45 p.m. San Francisco Fed President Mary Daly Tuesday 7:00 a.m. Chicago Fed President Charles Evans on CNBC’s “Squawk Box” ahead of 2-day conference on ‘Monetary Policy Strategy, Tools, and Communication Practices (A Fed Listens Event)’ 9:55 a.m. Fed Chair Jerome Powell opening remarks and takes questions at 2-day policy conference, Chicago Fed 10:00 a.m. Factory orders 3:45 p.m. Fed Governor Lael Brainard at Chicago Fed conference 6:45 p.m. Dallas Fed President Robert Kaplan, Chicago Fed conference Wednesday 8:15 a.m. ADP 9:45 a.m. Fed Vice Chair Richard Clarida, Chicago Fed conference 9:45 a.m. Services PMI 9:45 a.m. Atlanta Fed President Raphael Bostic on housing in Atlanta 10:00 a.m. Fed Governor Michelle Bowman at Senate Banking Committee 10:00 a.m. ISM nonmanufacturing 11:15 a.m. Boston Fed President Eric Rosengren, Chicago Fed conference 2:00 p.m. Beige book Thursday 7:45 a.m. ECB rate decision 8:30 a.m. Jobless claims 8:30 a.m. International trade 8:30 a.m. Productivity 8:30 a.m. Labor Costs 10:00 a.m. QSS 1:00 p.m. New York Fed President John Williams at CFR Friday 8:30 a.m. Employment 10:00 a.m. Wholesale trade 3:00 p.m. Consumer credit
Trade Turmoil Wipes $5 Trillion Off Global Stocks In Worst May Since 2010 Global Equity markets lost almost $5 trillion in May, more than they did in December! Everything was going so great too... But, on the week, spot the odd one out... Big week for China, thanks to a huge PBOC-panic liquidity injection... Europe's worst month since early 2016... Not helped by Deutsche Bank closing at record lows... All major US equity indices were down this week, led by Trannies and Small Caps... (today was a one-way street lower after Europe closed) Biggest weekly drop for the S&P 500 since December US equity markets had an ugly month - the first losing month of the year and worst May since 2012... This was the Dow's 6th straight weekly loss (longest losing streak in 8 years) But still remain comfortably green on the year... All the major US equity indices are back below their 200DMAs... The S&P broke below the key 2800 level... Semis suffered their worst month since Nov 2008... As the broad S&P tech sector tumbled... S&P Energy sector plunged... Credit markets blew wider in May (led by HY) and for now, VIX is holding in (even with its curve inversion) HY Spreads are shouting their warning that something is up... Treasury yields collapsed around 35bps on the month and accelerated lower this week despite talking heads claiming pension rebalancing would bid stocks and offer bonds into month-end... This is the biggest May drop in yields since 2010, slamming yields to their lowest in years... 10Y hit 2.13% intraday as the yield plunge accelerated... The yield curve crashed in May, inverting out to around the 15Y maturity... With 3m10Y plunging to -22bps... Inflation breakevens collapsed - the biggest monthly drop since December... The Dollar Index rose for the 4th month in a row And as the Dollar surged, EM FX cratered... Cryptos managed to hold on to the week's gains after yesterday's ugliness... This was Cryptos best month since August 2017... Ugly week for commodities broadly with crude getting crushed but gold managed solid gains... And Gold managed gains on the month as WTI collapsed... WTI's worst month since November, tumbling back below $54...And worst May since 2012 Gold's best month since January, soaring back above $1300... And finally, the market is pricing in 1 rate-cut in 2019 and 2.5 rate-cuts by the end of 2020... Stocks will have to sink considerably for those expectations to come true...
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2019- S&P sectors for the past week-
Next Week's Economic Indicators - 5/31/19 Fri, May 31, 2019 This week's economic data came in split down the middle with 12 releases coming in worse than the prior period or estimates and another 12 improving. A remaining 3 met expectations or were unchanged from the previous period. We noted this same pattern in our Matrix of Economic Indicators for April. The FHFA's House Price Purchase Index for the first quarter was the first release of a shortened week coming in unchanged from the previous quarter at 1.1%. Monthly FHFA and Case-Shiller prices also came out on Tuesday with both showing slower home price growth. Later that morning the Conference Board's readings on Consumer Confidence came in stronger than both forecasts and the April reading. The final release Tuesday, the Dallas Fed's Manufacturing Activity, disappointed at -5.3 versus expectations of 6.2. On Wednesday, the Richmond Fed's Manufacturing Activity index also came in below expectations but was stronger than the April reading. The second release of Q1 GDP was revised lower but less than expected with growth for Q1 now sitting at 3.1% QoQ SAAR. While consumption growth was stronger, that came thanks in part to inflation measures falling below estimates. Retail and Inventories grew more than expected in April as seen in their Thursday release. Pending home sales were also notably weak. Friday data was better with Personal Income and Spending numbers both beating estimates. Michigan Sentiment was the final release of the week with a reading of 100.0 versus forecasts of 101.5, both below the 102.4 reported in preliminary data. With 34 releases, the data slate picks up next week. Monday we will get some important manufacturing data including the final data for May for the Markit PMI and ISM Manufacturing. Revisions for durable goods and the broader factory orders numbers for April will follow up on Tuesday. As next week is the first week of June, on Wednesday ADP will release their employment data for the month of May. This is expected to show fewer jobs created than April. The service portions of Markit PMIs and ISM will also come out Wednesday morning. In addition to the usual Thursday weekly releases, Nonfarm Productivity and Unit Labor Costs for the first quarter are expected. The Employment Situation Report with its Nonfarm Payrolls number will round out the week in economic data on Friday morning. Trend Analyzer - 5/31/19 - Oil Oversold, Metals Move Higher Fri, May 31, 2019 We mentioned yesterday that half of the major index ETFs were sitting at extremely oversold levels at the start of trading yesterday. Small gains helped to at least lift some of these ETFs off of these levels, but a sizeable gap lower at today's open brought them right back—if not to a greater degree—into oversold territory. While every major index ETF is sitting on a loss over the past week, small and mid-caps have been handily underperforming. These also are all the ones that are still extremely oversold. The Core S&P Small-Cap ETF (IJR) has seen the worst of these declines down 3.8%. This has also tanked gains for the year as it now has the lowest YTD gain of the group. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more. Peeking at commodities, similar to equities, oil has been taking it on the chin. Yesterday alone, in spite of supply data that would have indicated stronger prices, WTI crude futures fell just under 4.5% adding to its second straight week of declines; a total decline of 12.95% in that time. On these declines, Oil ETFs (USO and DBO) and the Energy fund (DBE) have all reached extreme oversold levels whereas they were neutral last week. Conversely, precious metals ETFs have not been shaken by headlines of China raising tariffs on these commodities. The Precious Metals ETF (DBP) in addition to each of the gold ETFs (GLD, DGL, and IAU) have been some of the best performing commodity ETFs this week. The gold ETFs are hovering just under a half of a percent gain and DBP has seen a bit weaker performance gaining 0.23%. While these have been outperforming most commodities, the Agriculture Fund (DBA) has been doing so to an even greater degree with more than quadruple the gains of the next best performer, Gold Trust (IAU). This move has brought DBA towards the upper end of its long term and persistent downtrend channel. This also means DBA is just outside of overbought territory as well. DJIA Six Week Losing Streaks Fri, May 31, 2019 Barring a 700+ point rally into the close (hey, anything is possible), the DJIA is on pace for its first six-week losing streak since June 2011 and the 32nd such streak going back to 1900. As of this writing, the DJIA is down 6.46% over the course of this current losing streak, which would go down as the mildest six-week losing streak for the index since June 1976 and the fifth 'mildest' six-week losing streak on record. The chart below highlights each of the DJIA's prior six-week losing streaks since 1900 and shows how much the index declined during each one of them. Start a two-week free trial to Bespoke Institutional to access all of our research and interactive tools. While there have been quite a few six-week losing streaks for the DJIA in its history, it is not common for them to go on into a seventh week. As shown in the chart below, just seven of the DJIA's 32 prior six-week losing streaks have last seven or more weeks, and a 7-week losing streak stretching to an eighth week is practically unheard of with just one way back in 1923. Time For A June Swoon? Posted by lplresearch Well, it finally happened. The S&P 500 Index pulled back more than 5% from its all-time high, marking the first 5% pullback of 2019. As we have discussed many times over the past two months, the odds were high that some type of pullback or even correction (10% or more off the highs) was likely after the 25% surge off the December 2018 lows. May likely will be the first negative month of the year (down nearly 6% with two days to go) and likely will be the first time stocks closed in the red in May since 2012. Now, seasonality hints to more volatility ahead, as June doesn’t have the best history for stocks. “We finally had a 5% pullback, but the bad news is June can be a tricky month for stocks,” explained Senior Market Strategist Ryan Detrick. “Going back the past 20 years, only September has been worse on average, and returns have been quite poor in June after a big drop in May.” As our LPL Chart of the day shows, stocks have tended to be weak in June over various periods. Here are six thoughts to chew on as we turn the calendar: When the S&P 500 has lost 5% in May (like it could in 2019), June’s performance has been weak. May has lost 5% or more only four other times in the past 50 years, and stocks subsequently fell more than 5% in June twice. However, when the S&P 500 has been up more than 10% year to date heading into June (like it could in 2019), the S&P 500 has gained 9 of the past 12 times (going back 50 years), and has been higher 1.9% on average. Equity markets in Greece, Brazil, India, Argentina, and Australia are all very strong. If we were truly entering a global recession, we would see more broad-based global weakness. The Chicago Board Options Exchange (CBOE) daily put/call ratio surged to its highest level since late December yesterday, suggesting a good deal of fear is coming into the market – a necessary recipe for a bottom to form. Only 31% of the components in the S&P 500 are above their 50-day moving average. This is nearing washout levels, but could need to go down to 20% before the ultimate low can form. Still, we are getting closer. The American Association of Individual Investors (AAII) Investor Sentiment Survey has more than 40% bears, the highest since the start of 2019. That’s another sign fear is spiking, and pessimism could be a bullish contrarian signal. DJIA and S&P 500 Up Six Straight on June’s First Trading Day According to the Stock Trader’s Almanac 2019 (page 86), the first trading day of June is the sixth best first trading day of all twelve months with DJIA gaining a cumulative 299.85 points since 1998. Over the past 24 years, DJIA’s first trading day of June has produced gains 70.8% of the time with an average gain of 0.04%. Sizable losses in 2002, 2011 and 2012 limit overall performance. S&P 500 has advanced 66.7% of the time. NASDAQ has been slightly weaker at 58.3% as has the Russell 2000 at 62.5%. Following three straight losses from 2010 to 2012, DJIA and S&P 500 have advanced six straight years on the first trading day of June. Typical June Trading: Any Early Gains Tend to Fade Over the last twenty-one years, the month of June has been a rather lackluster month for the market. DJIA, S&P 500 and Russell 1000 have all recorded average losses in the month. NASDAQ and Russell 2000 have faired better with modest average gains. Looking at the chart above, shaded areas highlight areas of strength during the month. Historically the month has opened respectably, advancing on the first and second trading days. From there the market then drifted sideways and lower into negative territory just ahead of mid-month. Here the market rallied to create a nice mid-month bulge that quickly evaporated and turned into losses. The brisk, post, mid-month drop is typically followed by a month end rally lead by technology and small-cap. This June could turn out better than average as a result of a strong start to the year and weakness in May. Strong Starts Weak Mays Boon for June Our previous analysis of big gains the first four months indicated weakness was in store for the merry month of May. Now that the market has indeed suffered this May the outlook for June is a boon at least historically speaking. The table below shows the top 20 first four month gains for the for the S&P 500 with the subsequent changes for May, June, Rest of the Year, “Worst Six Months” May-October, 2nd half July-December and full year performance. While most of the full year gains are clearly logged in these big first-four-month gains, there still upside to be had in the latter part of the year. May is weakest and May 2019 has delivered market declines so far, down -4.9% for the S&P 500 as of today’s close. However, after big starts, 7 of the 9 subsequent May declines were followed by big gains in June (highlighted in green). So, while we do not anticipate much upside over the next 5 months or so, June is set up for a boon.
Here are the current major indices pullback/correction levels from ATHs as of week ending 5.31.19- 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 Pick Challenge & SPX Sentiment Poll for Monday (6/3) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (6/3-6/7) <-- click there to cast your weekly market vote and stock picks! Stockaholics June 2019 Stock Picking Contest & SPX Sentiment Poll <-- click there to cast your monthly market vote and stock picks! Stockaholics Weekly T/A Charting Challenge (6/3-6/7) <-- 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!
Stock Market Analysis Video for May 31st, 2019 Video from AlphaTrends Brian Shannon ShadowTrader Video Weekly 6.2.19 Video from ShadowTrader Peter Reznicek
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 6.3.19 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! Monday 6.3.19 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! Tuesday 6.4.19 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 6.4.19 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 6.5.19 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 6.5.19 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 6.6.19 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 6.6.19 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 6.7.19 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. Friday 6.7.19 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- ($CRM $GES $CLDR $SFIX $BOX $MDB $TIF $CIEN $COUP $FIVE $CBRL $AEO $DOCU $CPB $SMAR $GME $APPS $CTK $ZM $NAV $AMBA $DOMO $DCI $UNFI $GWRE $SJM $CAL $SAIC $PVTL $SIG $CSWC $HOME $OESX $GIII $VRA $CMD $ESTC $BYND $KIRK $OLLI $HQY) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning June 3rd, 2019 <-- click there to view!
2Q GDP steady at 1.2% last week, so much for 3.2 or whatever, looks like a significant slowdown still developing.
Well Friday was the end of the month and we closed near the bottom, was thinking we might see a gap up on Monday just because that would avoid a lower monthly low so early. We got a sell signal since last month closed below the 10 month ma.
Good Monday morning to all, welcome to June! 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 has a great trading day and week ahead.
Morning Lineup - Still Cloudy on the Tariff Front Mon, Jun 3, 2019 There wasn't a whole lot of news in either direction over the weekend over the escalating tariff situation between the US, China, and the ever-growing list of other countries that the current administration has threatened. As a result, US futures are moving in the path of least resistance (lower), while rates are lower. That being said, yields and equity futures are off their overnight lows. It's a big day for economic data to kick off the week and it's going to be a busy week in terms of Fed speakers, so if the FOMC was looking for an opportunity to send a message to the markets that they are incorrect in pricing an 88% chance of a cut by September, now is the time to do it. With the continued weakness in the equity market last week, the percentage of oversold US stocks is really starting to pile up. As shown in the chart below, through Friday's close, nearly 40% of all S&P 500 stocks were trading more than one standard deviation below their 50-DMA. The last time we saw a reading this negative was on January 3rd.
