Friday
Apr182014

S&P 500 Higher or Lower from Here?

The S&P 500 staged a nice bounce back rally during this holiday-shortened work week, and it is now back above its 50-day moving average.  Has the all clear been sounded in the short term, or is there more pain to come?  Please take part in our weekly Bespoke Market Poll below by letting us know whether you think the S&P 500 will be higher or lower one month from now.  We'll report back with the results on Monday before the open.  Thanks for participating and have a great weekend!  Be sure to check out our current 10% discount offer on Bespoke Premium memberships if you have yet to do so.  

Will the S&P 500 be higher or lower than its current level one month from now?
Higher
Lower
  
Free polls from Pollhost.com
Thursday
Apr172014

Bespoke Premium: Subscribe and Save!

In celebration of Easter Weekend, Bespoke is offering a 10% discount on new subscriptions to our Bespoke Premium service.  In addition to the Model ETF Portfolio, Model Stock Portfolio, Trade of the Day and The Bespoke Report Newsletter that our entry-level clients receive, Bespoke Premium subscribers receive a huge array of daily commentary, unique analysis, and actionable advice via our numerous products.

Each day starts with The Morning Lineup, a data-packed summary of overnight markets, sector trends, and recent trading across multiple asset classes.  We've recently added a more complete commentary to The Morning Lineup that includes views on the markets collected from Bespoke's trading and research team.  Intraday, Bespoke Premium subscribers receive our B.I.G. Tips reports: actionable analysis on the market's recent trends, seasonality, positioning and direction that will alert you to opportunities in a timely and easily digestible fashion.  We also provide a daily summary of trends in the ETF world, including Bespoke's proprietary Trend and Timing calls for each of over 200 ETFs across all types of markets.  ETF Trends is a must-have for the regular ETF investor, whether passive or active.

Bespoke also publishes a range of weekly reports.  Each Tuesday, we rate every stock in the S&P 1500 using a proprietary blend of fundamental, technical and sentiment scores to arrive at a bottom line outlook in our Bespoke Stock Scores database.  On Thursdays, investors around the world eagerly anticipate the arrial of The Bespoke 50, a portfolio of our 50 favorite growth stocks from the Russell 3000.  The Bespoke 50 is up over 89% since inception and is beating the S&P 500 by 52.7% in that time period.

With earnings season in full swing, our full suite of earnings season reports will keep investors informed about the companies they own as volatility increases and surprises to the up and downside begin to roll in.  Make sure to take a look at our full list of earnings season products!

Finally, wrap up your trading day with The Closer, Bespoke's five page closing market summary packed with commentary, charts, analysis, and key information that moved markets over the prior 24 hours.  Everything you need is here, quickly summarized and easily readable but with enough content to keep you fully informed.

Sign up today for 10% off in addition to our five-day free trial.  If you don't like what you see, you can cancel free of charge.  When checking out, be sure to use the code 'easteregg' to receive your 10% discount.  Have a great long weekend!

Thursday
Apr172014

Key Earnings Reports Next Week

Next week will be extremely busy on the earnings front with no less than 550 companies set to report their first quarter numbers.  Below is a list of some of the largest and most widely followed companies set to report.

For each stock, we provide its report date and time along with some key statistics collected from our Interactive Earnings Report Database (available to Bespoke Institutional members).  

On Monday morning we'll hear from Halliburton (HAL), while Netflix (NFLX) is set to report Monday afternoon.  NFLX has gotten slammed over the last few weeks, and traders will be anxious to see if the sellers are proven right or wrong.  

Tuesday morning brings reports from United Tech (UTX) and McDonald's (MCD), while AT&T (T), Gilead (GILD), Amgen (AMGN) and Intuitive Surgical (ISRG) are set for Tuesday after the close.  Procter & Gamble (PG), Boeing (BA), Biogen (BIIB) and Delta (DAL) will report on Wednesday before the open, and then all eyes will be glued on Apple (AAPL) and Facebook (FB) on Wednesday after the close. 

Thursday will be the busiest day for earnings next week with an outrageously high 250+ companies set to report.  Some of the key names reporting on Thursday morning include Verizon (VZ), UPS, 3M (MMM), Caterpillar (CAT), General Motors (GM) and UnderArmour (UA).  Microsoft (MSFT), Amazon.com (AMZN), Visa (V), Las Vegas Sands (LVS), Baidu.com (BIDU), Starbucks (SBUX), Wynn Resorts (WYNN) and Broadcom (BRCM) will all report on Thursday evening.  Finally, Ford (F) and Colgate-Palmolive (CL) will finish off the week with reports on Friday.

Of the companies listed below, UTX, LMT, ISRG, UA and V have historically beaten earnings estimates at the highest rate (>90% of the time).  HAL, ISRG, AAPL, FB, QCOM, CELG, UA, AMZN, BIDU, V and WYNN have historically averaged the strongest gains on their report days.

Become a Bespoke Institutional member today to access our popular Interactive Earnings Report Database.

Thursday
Apr172014

Philly Fed Exceeds Forecasts

Despite the fact that manufacturing activity in the New York area was weaker than expected, manufacturing in the neighboring Philadelphia region came in better than expected this morning.  With economists forecasting a headline reading of 10.0, the actual level came in at 16.6.  This was the highest reading since September (20.0), and the ninth highest reading since the recession ended in 2009.

The table to the right summarizes the key components of the Philly Fed report and shows some pretty good strength in the internals.  Of the nine subcomponents, just three declined in April.  Meanwhile, we saw big increases in Shipments and New Orders.  The current level of the Shipments component is now at the highest level since March of 2011.  Just as the weather slowed down activity in the winter, better weather now is causing a snapback effect as conditions revert back to normal.

Thursday
Apr172014

Investor Sentiment Turns A Little Less Bullish

In spite of the equity market's rebound this week, individual investor sentiment took a slight turn for the worse this week.  According to this week's survey from the American Association of Individual Investors (AAII), bullish sentiment dropped from 28.48% down to 27.22%, while bearish sentiment increased from 34.11% to 34.25%.  These are small moves to be sure, but they come on the heels of big declines in bullishness and big increases in bearishness last week.  As has been the case throughout the entirety of this bull market, investors are quick to check out of the market, but slow to get back in.  Therefore, it will like take further improvement in equity prices before sentiment starts to rebound.

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Thursday
Apr172014

Jobless Claims Lower Than Expected

Initial jobless claims came in lower than expected for the second week in a row.  While economists were expecting first time claims to rise to 315K, the actual increase came in much smaller at a level of 304K, keeping claims right near multi-year lows.

With claims coming in right near multi-year lows for the second straight week, the four-week moving average fell to 312K.  This is also a multi-year low (lowest since August 2007), and it breaks a streak of 28 weeks where the four-week moving average did not make a new post-recession low.

On a non-seasonally adjusted (NSA) basis, jobless claims were also stellar.  Even though the NSA reading rose by 17.5K, for the current week of the year, jobless claims were the lowest since 2006, and well below the historical average of 391.3K for the current week dating back to 2000.

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Thursday
Apr172014

Blue Chips Versus The Internet

Since the momentum trade began to melt down in March, we've seen an increasing rotation out of high-growth and speculative trades into more staid names such as those that make up the Dow Jones Industrial Average.  While the Dow is no longer by any stretch of the imagination an "industrial" average given that it includes names such as American Express (AXP), Goldman Sachs (GS), and Visa (V), the Dow's components do serve as a broad cross section of the American economy and are comprised of large and stable companies; indeed, S&P Dow Jones Indices (owned by McGraw Hill) states that "while stock selection is not governed by quantitative rules, a stock typically is added only if the company has an excellent reputation, demonstrates sustained growth and is of interest to a large number of investors."  

Below is a trading range screen for the constituents of the Dow 30, showing how most of them have been bid up recently relative to their historical trading range.  It shows which stocks are furthest from their trend and may be poised for a reversal of recent trading patterns.  As you can see, more than 50% of the stocks in the Dow (18 of 30) are in "overbought" territory right now, meaning they are more than one standard deviation above their 50-day moving averages.

The Dow's sea of overbought conditions are contrasted by the second screen posted below.  This table shows the 30 largest internet companies, which have been hit with a sudden exit scramble by investors as the market has rotated out of momentum and towards stability.  Keep in mind, the overbought/oversold condition is assigned based on the historical behavior of each stock, not the market as a whole; overbought and oversold conditions account for whether a name is usually volatile.  

As overbought as the larger and more established names in the Dow have gotten, the internet stocks below have gotten as aggressively oversold.  It's hard to imagine either trend continuing at their current pace; the question for traders is when the trends in the Dow and among large internet companies will reverse towards each other.

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Wednesday
Apr162014

Housing Starts and Building Permits Weaker Than Expected

This morning's releases of Housing Starts and Building Permits for the month of March both came in weaker than expected.  For Housing Starts, economists were expecting a seasonally adjusted annualized rate of 970K, but the actual rate was just 946K.  Similarly, Building Permits for the month of March totalled 990K, which was below the consensus forecasts of 1,010K.

The table below breaks out each report by region and type of dwelling.  Two things are worth highlighting here.  First, while the levels of starts and permits were both less than forecasts, single family showed better growth than multi-family units.  Single family units typically have a bigger economic impact than multi-family units, so that is a positive.  The second important aspect of this month's report is the strength in the Northeast and Midwest.  Both of these regions saw weakness over the winter months, and the fact that they are now rebounding is a sign that weather played a large factor in the weakness, and is now having less of an impact.

Below, we have provided charts of Housing Starts and Building Permits for both the Northeast and Midwest.  In the Northeast, starts are currently right near their recovery highs, while permits are at their highest levels since the Summer of 2008.  In the Midwest, starts still have a ways to go before taking out their recovery high of 212K, while permits are still about 12K off their most recent peak.

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Tuesday
Apr152014

Looking for Answers? Check out Bespoke's New Report -- The Closer

What just happened?  

Investors and traders are having to ask themselves that question more and more these days with the way this market has been acting.  Today was a case in point -- after a strong open, the market sold off sharply into the red by mid-day, only to turn around on a dime at 1 PM and surge into the close.  What sparked this action and what does it mean?

If you're looking to get a better grip on the inner workings of the market so that you can both develop and then have faith in your investment strategies, our evening offering -- The Closer -- should benefit you greatly.  Published daily during the trading week after the close, the aptly named Closer provides to-the-point commentary and visuals to help you digest the day's action and prepare yourself for the next day.

Below is a look at our Closer report for today (4/15) so that you can see for yourself if it's something that you can benefit from.  Simply click on the thumbnail image of the report to view it in PDF format.

If you like what you see, you can receive The Closer in your inbox each day by signing up for either the Bespoke Premium or Bespoke Institutional services.  Both of these services also offer a plethora of other unique and actionable research products, which you can learn more about here.

As always, you can sign up for a 5-day trial to our services free of charge!  Head over to our Subscribe page now...

Tuesday
Apr152014

Pitiful Five Percenters

The Russell 3000 hasn't done great since the beginning of March (down 1.79%), but as always that figure masks some horrific performances within the index constituents.  We've noticed a few stocks have been down seemingly every day by big margins, so we screened the index constituents (as of today) for all stocks that were down 5% in one day 7 or more times since the 3rd of March.  We screened out stocks that have a low dollar value of less than $10 to eliminate any penny stocks or low dollar names that are volatile and trade with a large bid-ask spread.  There are 28 companies that have been down 5% or more at least 7 days since the start of March, and they have averaged an overall decline over the same period of -32.67%.  The one stock with a positive return over the period was ECYT, which doubled on March 21st following news EU regulators recommended approval of their new ovarian cancer drug.  Unsurprisingly, the names on the list are comprised almost entirely of biotech/pharmaceutical stocks with a few cloud/internet plays thrown in; only one stock in the list (CLDN) doesn't fall into one of those two categories.

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Tuesday
Apr152014

Homebuilder Sentiment Declines

With spring finally here, economists were expecting homebuilder confidence to show an improvement in April, but the increase was not as much as originally expected.  While the consensus forecast called for overall sentiment to increase to 49, the actual reading came in at 47 from last month's revised reading of 46.  The table to the right breaks down this month's report by category and by region.  In terms of the index's three major components, Future Sales was the only category that showed an increase in April, while Present Sales and Traffic were both unchanged.  With weather improving, one would have thought that traffic would have shown an improvement, but it looks as though we will have to wait for that.

On a regional basis, we would have expected sentiment to show an improvement in the Northeast, and that is exactly what it did, rising from 30 to 36.  In the South sentiment was unchanged at 48.  Meanwhile in the Midwest and West regions, sentiment declined.  With every region of the country now below 50, there are no areas of the country where more home builders view conditions as good than poor.  This month's drop in the West region was also notable due to the fact that sentiment has shown a sharp decline in the last three months, falling from 71 (its highest level in more than eight years) down to 45.  That is the largest three month decline in the history of the regional indices dating back to 2004.

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Tuesday
Apr152014

10-Year Yield Higher or Lower from Here?

At the end of 2013, consensus was that the yield on the 10-Year Treasury Note was headed above 3% and staying there.  Fast forward to today, and the 10-Year yield has done nothing but go down to its current level of 2.59%.  So which level do you think the yield on the 10-Year will hit first?  2% or 3%?  Please take part in our poll below to let us know.  We'll report back with the results shortly.

Which level will the yield on the 10-Year Treasury Note hit first?
2%
3%
  
Free polls from Pollhost.com
Tuesday
Apr152014

An Update on Breadth Levels

40% of the stocks in the S&P 500 remain above their 50-day moving averages.  As shown below, this level is still above the lows just below 25% seen earlier this year.

The reason the overall reading for the S&P 500 is still at 40% is because of the strength in Energy and defensive sectors like Utilities, Consumer Staples and Telecom.  Cyclicals like Industrials, Financials, Technology, Consumer Discretionary, Health Care and Materials have all seen the large majority of their stocks fall below their 50-day moving averages.  Until these readings for the cyclicals can get back above the 50% mark, the market's trend will remain downward.

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Tuesday
Apr152014

US Share of World Market Cap Plummets

During the initial escalation in Ukraine in February, US stocks held up well while Europe and other areas fell sharply.  Since the last Fed meeting in mid-March, however, the US has performed horribly while many areas around the globe have held up better.  

Below is a chart showing the percentage of world stock market capitalization that the US stock market makes up (courtesy of Bloomberg).  As shown, from the beginning of the fourth quarter (2013) through mid-March, the US made big gains in its share of world stock market cap.  That trend has been flipped on its head since peaking, however, and it's now down to 35.3% from a high near 37% just a few weeks ago.  As you can see in the chart, the US' share is right at the bottom of its one-year uptrend channel, so it looks like we're at a key inflection point.

The conflict in Ukraine seems to be heating up again, and outside of the Nasdaq, US indices are holding up better than European indices today.  Let's see if the US can start holding up better here relatively speaking and bounce off the bottom of its uptrend channel.

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Monday
Apr142014

Sovereign Yields Continue Lower

The top chart below shows the current yields on 10-year sovereign debt for some of the largest economies in the world.  In this chart we have also highlighted (in red) each G8 country to show where the yields on their long-term debt stand relative to the rest of the world.  Not surprisingly, most of the G8 countries have yields that are at the lower end of the spectrum.  Outside of Russia, which has its own country specific issues, the ten-year yields of the remaining seven countries are all in the bottom ten positions.  Japan currently has the lowest 10-year yield at a level of 0.61%, while Brazil has the highest with a yield of 12.6%!

Perhaps the most surprising aspect of current ten-year yields is that borrowing costs in the US are only the eighth lowest of the 24 countries shown.  US treasuries were once considered the safest of all fixed income investments.  Today, ten-year yields in the US are more than 100 basis points (bps) higher than ten-year yields in Germany and just 50 bps lower than 10-year yields of Spanish debt.  With regard to Spain, it was less than two years ago that there was a widespread concern over whether or not Spain would even be able to remain in the Eurozone!

While 2014 was a year where fixed income was once again supposed to underperform equities, so far the opposite has been the case.  In practically every major country, long-term sovereign debt yields are lower now than they were three months ago meaning that the prices of the bonds have risen.  As shown in the lower chart below, of the 24 major countries highlighted, the yields on ten-year debt have fallen for all but six countries, and outside of the Philippines and India, the increases in yields over the last three months have been less than ten bps.

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