Monday
Jul282014

More Bears than Bulls

There were more bears than bulls in our weekly Bespoke Market Poll.  As shown below, 49% of respondents said the S&P 500 would be higher one month from now, while 51% said the index would be lower.  Two weeks ago we saw 64% bulls and just 36% bears, so we've seen quite a shift in recent weeks as July comes to an end.

Monday
Jul282014

The Bespoke Morning Lineup: 7/28/14 Commentary

The below commentary excerpt is an example of what Bespoke Premium subscribers receive every morning in The Morning Lineup in addition to three pages of key headlines, charts, trends, and technical indicators.  We will be posting a sample of our commentary here each morning for the next several weeks.  If you're interested in receiving this report and our many others via email, try a 5 day free trial to Bespoke Premium today!

Low volatility in Europe following a good night in Asia has kept US equity index futures relatively subdued. In the immediate aftermath of the open last night there was some selling that took contracts down a few index points. There was also a ramp between the close in Tokyo and Europe’s opening trades, but broadly speaking the pits (or, more accurately, the servers supporting electronic trading) have been quiet thus far. Earnings this morning are a little light relative to the ridiculous release schedule the rest of this week but it’s been a very mixed set of data: A beat on EPS/revenue from Cummins (CMI, -0.43% Friday, -0.13% pre-market) isn’t being swallowed well, and although Tyson Foods (-0.58% Friday, -1.37% today) beat on revenue, an EPS miss and negative guidance is weighing on shares.

Treasuries rallied to close out the week Friday, but the yield on the 10-year finished out the week right where it ended the prior week (2.48%). Yields today are popping higher back towards trend from overbought levels, led by the belly of the curve where fives have jumped 2 bps in yield; while longer dated paper is performing better (+1.54 bps yield in thirties), the front end has been the safest place this morning with twos rising less than half a bp in yield in front of new supply this afternoon. Expect volatility in Treasuries the rest of the week, as seven auctions (including bills) take place.

Subscribers, please click the thumbnail below to access the full Morning Lineup. 

Saturday
Jul262014

Bespoke Market Intelligence -- The Most Interesting Things We Found This Week

If you're an investment professional, you've got to check out the things we're doing over at our sister site, Bespoke Market Intelligence.  Our survey analysis on industry groups and specific stocks has yielded big findings for our clients.  You can learn more about the survey reports we currently run and have for sale by clicking here.  To inquire about purchasing reports or running your own custom studies, you can reach us at this contact form or by calling 914-630-0512.

Below are the most interesting things we found this week from our work over at Bespoke Market Intelligence:

Deep Dive Quarterly Surveys: (Full-length reports on the below topics are currently available for purchase).

AAPL:  Throughout our survey volumes, 87-90% of existing iPhone owners consistently reply that they will purchase an iPhone when it is time to get a new smartphone.  We asked all iPhone owners which brand they owned before their current iPhone – and 83.5% replied Apple.  This suggests that, for the most part, projected retention rates for the iPhone are holding up.  In going through the same exercise for a number of popular Android brands (Samsung, HTC, LG, Motorola, Nokia), we found that only 67.4% owned one of those brands before owning their current Android phone.

NFLX:  Domestic Netflix subscribers have actually become progressively less price sensitive, and regardless of whether the price is $7.99 or $8.99 per month, subscribers view Netflix as a great value for their money.

Social Media:  With each survey we have run since August of 2013, the percentage of Facebook users who feel that the quality and relevance of ads has improved increased.  Snapchat, Twitter, and Instagram have a much better presence among 13-17 year-olds.  Lastly, visit frequency and time per visit has declined steadily for LinkedIn.

GMCR:  The Keurig received a very high net promoter score among its owners, which is usually an indicator of future organic growth.  Additionally, 45% of single-serve coffee brewer users agree that the ability to brew a full pot of coffee would make them more likely to purchase the Keurig 2.0.

GRPN:  The percentage of Groupon users who purchased at least one item on Groupon during the past three months declined to 43.5%, the lowest tally compared to our previous four survey volumes (a plurality of these users spent between $26-$50 per item).

Recent Traffic Trends of US Consumers

Has used the following website to purchase items online during the past month:

  • eBay: 20.5%
  • Zulily: 1.3%
  • Groupon: 16.8%
  • Amazon: 50.7%

Has shopped at the following stores during the past month:

  • Dillard's: 6.3%
  • Macy's: 24.7%
  • Bloomingdales: 1.8%
  • JC Penney: 20.5%
  • Kohl's: 26.0%
  • Sak's Fifth Ave: 1.4%
  • Nordstrom: 7.4%

Have shopped at the following drug stores during the past month:

  • CVS: 42.6%
  • Walgreens: 43.6%
  • Rite Aid: 18.3%
  • Duane Reede: 2.2%

Have shopped at the following retailers during the past month:

  • Target: 50.1%
  • Walmart: 65.1%
  • Dollar General: 19.1%
  • Family Dollar: 19.1%
  • Dollar Tree: 25.6%

Have visited the following restaurants in the past month:

  • Burger King: 22.4%
  • McDonald's: 49.5%
  • Sonic: 11.9%
  • Taco Bell: 26.9%
  • KFC: 14.6%
  • Jack in the Box: 8.3%
  • Panera: 18.1%
  • Pizza Hut: 13.0%
  • Denny's: 6.7%
  • Popeye's: 8.0%
  • Wendy's: 25.3%
  • Starbucks: 28.1%

Again, to learn more about our survey analysis and how to purchase, you can reach us at this contact form or by calling 914-630-0512.  Keep an eye on Bespoke Market Intelligence in the near term, because we've got a new product release due out in September that you'll definitely want to see.

Saturday
Jul262014

S&P 500 Higher or Lower from Here?

The S&P 500 finished the week 0.12 points higher than it started, but which way will it head from here?  Please take part in our 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 sign up for a 5-day free trial to our Bespoke Premium service to check out our just-published Bespoke Report newsletter.  Investors are going to need all the info they can get to stay on top of the heap of data that will hit the tape next week!  Use "summer" in the coupon code section of our Subscribe page to save 10% on the life of your membership.

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

Friday
Jul252014

The Closer Commentary 7/25/14 - End of Week Commentary

The below is an excerpt from tonight's edition of The Closer, sent to Bespoke Premium and Institutional clients each night along with graphs, analysis, and timing models for both single name equities and the market as a whole.

Geopolitics were center stage again this week but unlike last week volatility didn’t materialize.  The Nasdaq gained 0.39%, the S&P 500 was flat and the Dow sold off as earnings season chugged along.  516 companies reported this week, with 63% beating top-line estimates and 64% beating EPS.  205 S&P 500 companies have reported earnings thus far.

In other asset classes, Treasury yields zig-zagged through the week, ending up 1.5 bps lower in the 10 year than last Friday’s close.  The tail of the curve continued to rally, moving lower by 5 bps, almost entirely on Friday.  Credit spreads continued to edge a bit higher, oil rallied modestly, metals sold off, and industrial metals moved higher on stronger-than-expected global PMI data.  The dollar moved higher all week while EUR and GBP sold off; the NZD crashed as its central bank expressed concerns that the currency was too high.  International equity markets were led by Spain (+2.71%) and Hong Kong (+3.26%) led the way in USD terms.  Germany underperformed all week, and ended down 1.47%.

Have a great weekend!  GDP, FOMC, and NFP next week.

To continue reading, subscribers can click here.  Non-subscribers can gain access by signing up for a five day free trial.

Friday
Jul252014

Huge Week Ahead

It's a summer Friday, and most of Wall Street is looking to the beach, the mountains, or pretty much anywhere but their desks.  But when the weekend comes to a close Sunday night, it's going to be a grim return to the markets, because next week is set to be crazy.  In addition to earnings reports from more than 800 companies, there is a massive slew of economic data hitting the tapes.  In a quirk of the calendar, we get GDP, an FOMC decision and NFP...all in 48 hours between Wednesday and Friday.  Topping that off is an abundance of other indicators covering services, manufacturing, housing and the consumer.  Oh and if the volatile earnings and econ data wasn't enough for you, there are Treasury auctions galore: 3 month bills, 6 month bills and 2 year notes on Monday, 4 week bills and 5 year notes Tuesday, and finally 2 year floating rate notes and 7 year notes Wednesday.  In other words, get some R&R this weekend because next week will be anything but a snoozer.

If you're interested in earnings season plays, head over to Bespoke Premium to check out products like our Earnings Calendar, Interactive Earnings Database, and Earnings Triple Plays.  Sign up for a five day free trial now to receive The Bespoke Report tonight for free!

Friday
Jul252014

Most Volatile Stocks Reporting Next Week

From our Interactive Earnings Report Database and our Interactive Earnings Season Calendar, we pulled a list of the most volatile companies set to report earnings next week.  All of the companies below have at least 8 quarterly reports worth of data in our Interactive Earnings Database, and they have averaged a one-day change of +/-10% on their report days.  Just to clarify, for companies that report after the close, we're looking at its next day's change.  For companies that report in the morning before the open, we're looking at that day's change.  

As shown, ServiceSource (SREV), which reports next Thursday after the close, has historically averaged a one-day move of +/-17.30% on its report days, so its action next Friday is likely to be pretty wild.  Pacific Ethanol (PEIX) reports on Wednesday after the close, and it has averaged a one-day move of +/-16.36% following earnings.  Blucora (BCOR), Yelp (YELP) and Meru Networks (MERU) are the next three most volatile stocks reporting next week, all averaging one-day moves of more than +/-14%.  Some other notables on the list of volatile stocks reporting next week include Nutrisystem (NTRI) -- which reports on Tuesday PM, Tesla (TSLA) -- which reports next Thursday PM, and LinkedIn (LNKD) -- which reports Thursday after the close as well.  Both Tesla and LinkedIn average moves of just over +/-10% on their earnings report days.

Friday
Jul252014

40 Largest Companies Reporting Earnings Next Week

More than 800 US companies will report quarterly numbers next week, and below is a list of the 40 largest ones.  On Tuesday morning we'll hear from Pfizer (PFE), Merck (MRK), UPS and National Oilwell Varco (NOV) in the morning, and then American Express (AXP) and Amgen (AMGN) in the afternoon.  On Wednesday, Dominion (D) and Southern (SO) report before the open, followed by MetLife (MET) after the close.  Exxon Mobil (XOM), ConocoPhillips (COP), MasterCard (MA) and Time Warner Cable (TWX) are among a plethora of companies on deck Thursday before the open, and then Chevron (CVX) and Procter & Gamble (PG) close out the week on Friday morning.

The numbers included in the table below come from our Interactive Earnings Report Database, which you can learn more about at our Bespoke Premium client website.  For more in-depth earnings season analysis, including a full calendar of all companies set to report for the remainder of earnings season, become a Bespoke Premium member today.

Friday
Jul252014

Dollar Index Breakout

The US dollar has been gaining steam of late, with the euro and its closely correlated neighbor the Swiss franc also selling off.  Across the English channel, the pound has also come off its year-to-date highs since the start of July.  Meanwhile, the Japanese yen has been very stable.  The other two currency crosses included in the index are the Swedish krona and the Canadian dollar.  While the krona has been very weak versus the dollar since about mid-March as Sweden's economy has decelerated, the Canadian dollar has been the only major currency to gain any ground on the greenback.  As a result, the dollar index has broken out on its six month chart, and looks ready to make a run at its year-to-date highs up at 81.31 from January 31st.  

The year-to-date highs loom large though.  Dating back to the selloff in dollars following the "taper tantrum" last summer, the dollar has found support just above 79, a low put in back at the beginning of 2013.  The top of its channel has been the low 81 figure, which was initially set as resistance following a major gap down in the index last year in mid-September.  Since then, resistance has been tested three additional times, and will provide a stiff fight for dollar bulls to overcome if the index can pile on another 25 bps or so.

If the dollar does continue to rally, keep an eye on domestic-focused firms to outperform as international firms' sales are pressured by weaker overseas sales relative to the dollar.  Not sure if your portfolio has exposure to international revenues?  Head over to Bespoke Premium and check out our Interactive International Revenues Database.  We break down the domestic versus international revenues for every firm in the S&P 500 and Russell 1000, giving you a more precise view into whether your investments are focused on the US or exposed to risk in other countries.  The Interactive International Revenues Database is available to Bespoke Premium annual subscribers and Bespoke Institutional clients.

Friday
Jul252014

The Bespoke Morning Lineup: 7/25/14 Commentary

The below commentary excerpt is an example of what Bespoke Premium subscribers receive every morning in The Morning Lineup in addition to three pages of key headlines, charts, trends, and technical indicators.  We will be posting a sample of our commentary here each morning for the next several weeks.  If you're interested in receiving this report and our many others via email, try a 5 day free trial to Bespoke Premium today!

Markets in the Asia-Pacific region were mixed over night, but China continued to break out to the upside, with the Shanghai composite adding 1.02%. Hong Kong’s Hang Seng was also constructive but not quite as explosive as an extremely strong open stumbled into negative territory, then climbed the rest of the day. Japan was also extremely strong with a 1.13% gain in the Nikkei 225. India faltered, but the Sensex bounced off of the 26,050 level in the early afternoon in Mumbai after vicious selling dragged the index off its all-time highs. With a close back above 26,100 (the previous peak from July 7th before this weeks’ highs), it appears today was more of a consolidation day than anything else. Taiwan, another market that’s been strong lately, also had a rough day, losing 93 bps after Thursday’s close brought it into a resistance zone of ~9550 and prevented another run at new highs.

Europe opened broadly lower on the day, with notable early outperformance from Italy; the FTSE MIB index has tended to have extremely high “beta” lately; that is, outperforming aggressively on strong days for European markets as a whole, and underperforming on weak days for the market as a whole. But today the index's peak gain on day was around 30 bps, while the CAC 40, DAX, and FTSE 100 peaked at -45 bps, -8 bps and +10 bps for the day. Since that point (all indices hit their highs at roughly the same time), selloffs have been acute with Italy sitting on a decline of 14 bps, France down 68 bps, the DAX half a percent lower and UK equities 8 bps down from yesterday’s close. The EuroStoxx 50 is off 43 bps while the broader Bloomberg 500 index is more resilient, down 13 bps on the day. Greece is a massive outperformer, with stocks piling on 3.37% for the day; Russia is once again getting knocked with the Russian Cash losing 1.5% and the ruble edging lower versus the dollar for a second day in a row following the announcement of new EU sanctions against a limited range of Russian institutions and individuals.

Subscribers, please click the thumbnail below to access the full Morning Lineup. 

Thursday
Jul242014

The Closer Commentary 7/24/14 - Truli-a Zig Zag Day

The below is an excerpt from tonight's edition of The Closer, sent to Bespoke Premium and Institutional clients each night along with graphs, analysis, and timing models for both single name equities and the market as a whole.

Following the close we got even more earnings data: 93 companies reported, including Amazon (AMZN, +0.34% today, -5.7% after hours), Pandora (P, +4.25% today, -10.2% after hours), and Starbucks (SBUX, +1.66% today, -0.56% after hours).  SBUX  reported same store sales growth of more than 7%, making the paltry 1.8% increase for DNKN appear even more weak.  SBUX also beat on top and bottom line (67 cents EPS versus 66 expected; revenue growth of 11.2% year-over-year, slightly ahead of expectations).  P, for its part, delivered more profit than expected and had revenue inline with analyst expectations, as well as guiding revenue higher for Q3 and inline for the full year.  The market wasn’t satisfied, though, as shares cratered after hours.  Finally, AMZN reported higher-than-expected revenue (growing 23.2% versus the same period last year to $19.34 billion), but headcount surged, as did operating expenses from technology/content, fulfillment and marketing.  It would appear that investors’ patience continues to fray with AMZN CEO Jeff Bezos, whose company is generating plenty of cash (operating cash flow of $5.33 billion for the quarter) but not enough in profits.

Economic news today was very mixed.  Jobless Claims plummeted to their lowest absolute level since 2006 (284K) versus expectations of 307K while Continuing Claims fell by 10K to 2.5 million, its lowest level since June of 2007.  While wage pressure has not dramatically started to appear yet, it seems unlikely to remain in its current range given the current pace of job creation.  US Manufacturing PMI was disappointing though, coming in at 56.3 versus expectations for a more robust 57.5.  Then at 10:00 AM New Home Sales missed by a mile, with a huge downward revision to the previous month’s 504K print (now 442K).  This month’s figures came in at 402K far below the 475K consensus estimate from Street economists.  Finally, the Kansas City Fed Manufacturing activity index moved up to 9 from 6 previously, beating estimates of a flat reading versus last month.

The Treasury market read more into strong international data overnight (PMI beats for China, Germany, and the Eurozone) and an extremely strong initial claims print than the housing market weakness.   Ten year yields moved higher by 3.6 bps, while the belly of the curve bore the brunt of the selling, with five and seven year bonds both selling off 4.6 bps versus yesterday.  Thirty year bonds and other long duration Treasuries outperformed again, as did the short end; thirties were up 3.2 bps in yield while two year notes gained 2.4 bps in yield.  On the curve, two years versus ten years steepened slightly (1.3 bps) while fives versus thirties stayed true to form and flattened (1.5 bps).  The ten year TIPS auction at 1:00 PM wasn’t a source of volatility this time around as the auction cleared almost exactly where the when-issued version of bonds had been trading entering the auction.  The yield for the auction was 25 bps, an astoundingly low figure;  with ten year Treasuries closing today at 2.50% in yield, there’s virtually no real yield available, and the TIPS market shows it with a tiny yield.  But yields on TIPS have been positive for over 13 months now, although buying of the bonds has sent yields downwards by some 50 bps this year.

To continue reading, subscribers can click here.  Non-subscribers can gain access by signing up for a five day free trial.

Thursday
Jul242014

Bulls: An Endangered Species

The S&P 500 closed at an all-time high yesterday, but don't tell that to individual investors.  Looking at the latest sentiment figures from the American Association of Individual Investors (AAII), bullish sentiment dropped from 32.4% down to 29.6%.  This is the lowest weekly reading of bullish sentiment since 5/8.  While the 2.7 percentage point decline in bullish sentiment wasn't necessarily large, it is notable due to the fact that there are now fewer bullish investors (29.6%)  than bearish investors (29.9%).  The last time this happened was also back in May.

Normally, when the equity market is making new highs you expect to see bullish sentiment rise along with it.  Not so in this bull market.  In what has been a trademark of the last five years, investors with bad memories of the bear markets in 2000 and 2008 are determined not to make the same mistake again.  Therefore, the higher equities go, the more nervous they become.

Thursday
Jul242014

Jobless Claims Crater

If there has been one consistently positive data series in the multitude of economic data we are regularly bombarded with, it is jobless claims.  In this week's release, economists were forecasting claims to rise by 4K from last week's level of 303K.  The actual reading, though, came in 23K below forecasts at 284K.  So, how does 284K stack up against prior readings?  In order to find a lower weekly reading you have to go all the way back to February 2006!

With this week's lower than expected weekly reading, we also saw a sizable decline in the four-week moving average of jobless claims, which fell from 309.25K down to 302K.  This represents a new post-recession low and is the lowest level since April 2006.

On a non-seasonally adjusted (NSA) basis, jobless claims fell by 78.3K down to 292.3K.  For the current week of the year, this is the lowest reading since 2006, and is more than 100K below the historical average of 394.75K for the current week dating back to 2000.  With regards to the low NSA reading, we heard more than one comment dismissing the low reading as a seasonal distortion.  That's fair enough, but when you compare it to the same week of prior years this week's reading was still impressive.  Ironically enough, though, the same people who dismiss the NSA readings when they are  low are the same people who cite their importance towards the end of the year when seasonal distortions make them high.

Thursday
Jul242014

The Bespoke Morning Lineup: 7/24/14 Commentary

The below commentary excerpt is an example of what Bespoke Premium subscribers receive every morning in The Morning Lineup in addition to three pages of key headlines, charts, trends, and technical indicators.  We will be posting a sample of our commentary here each morning for the next several weeks.  If you're interested in receiving this report and our many others via email, try a 5 day free trial to Bespoke Premium today!

Equity index futures are trading up this morning after a volatile overnight session that saw the release of July Flash PMIs for the world’s three largest economic blocs: China, the United States and the Eurozone. Chinese Manufacturing PMI beat expectations by a point, jumping to an 18-month high, but global markets had a muted reaction: while spoos jumped by 2.5 points on the print there was an immediate retreat then steady wall of selling that took contracts almost five points off their overnight highs by midnight, two hours after the release of the PMI figure. Futures continued to decline after yet another weak European open but a wave of positive PMIs from that region quickly turned around both overnight index futures markets and cash equities for European countries.

In earnings, this morning results are broadly positive although homebuilders D.R. Horton (DHI, +2.06% yesterday, -3.23% pre-market) and PulteGroup (PHM, +2.01% yesterday, -0.71% pre-market) both had disappointing results. DHI missed on EPS badly and had a poor revenue quarter; PHM was even lighter on revenues but met EPS targets. With New Home Sales out at 10:00 AM EST (475,000 seasonally adjusted annual rate expected versus 504,000 prior) these names will face further downside risk in addition to their earnings prints. Also out today were Ford (F, -0.22% yesterday, +1.57% pre-market) and GM (-0.93% yesterday -2.19% pre-market). Extremely strong auto sales of late weren’t enough for Ford, where revenue missed estimates, but an EPS beat of 4 cents per share has the stock trading well. GM, meanwhile, delivered on revenue and met expectations on EPS. It’s interesting to note that the company whose revenue shrank year-over-year (Ford) is trading up, while the company that gained revenue on that basis (GM) is down prior to the market open.

In addition to New Home Sales, we got Jobless Claims at 8:30 AM (284,000 print versus 310,000 expected and 302,000 prior; continuing claims 2.50 million versus 2.51 million expected and 2.508 million prior), US Flash Manufacturing PMI at 9:45 AM (57.6 expected versus 57.5 prior), EIA Natural Gas Inventories at 10:00 AM, and the Kansas City Fed Manufacturing Index at 11:00 AM (6 expected versus 6 prior). After ten year yields nearly hit a new low for the year yesterday, printing trades around 2.449 bps, the complex is selling off on the back of very strong claims data.

Subscribers, please click the thumbnail below to access the full Morning Lineup. 

Wednesday
Jul232014

The Closer Commentary 7/23/14 - Industri-owch

The below is an excerpt from tonight's edition of The Closer, sent to Bespoke Premium and Institutional clients each night along with graphs, analysis, and timing models for both single name equities and the market as a whole.

In macro news tonight, the Reserve Bank of New Zealand has hiked rates, calling the current level of the NZD “unsustainable” and “unjustifiable”.  While a rate hike would normally be very bullish for a currency, the reaction to surly language from RBNZ head Graeme Wheeler has the market in sell mode, down 95 bps instantly in NZDUSD and –94 bps in NZDEUR.  The NZD has been very strong in virtually every cross this year due to its higher base policy rate; whether that “carry” trade of borrowing from a low rate and lending in a high one (being long NZD versus USD or EUR) remains to be seen.

There are too many earnings reports tonight to cover succinctly (85 names total), but TripAdvisor (TRIP, +3.06% today, -10.35% after-hours) is getting crushed on a large EPS miss despite better-than-expected revenue for the quarter.  Another web play, Angie’s List (ANGI, -3.97% today, -14.95% after-hours) is down big with a bigger loss than investors had been prepared for and lower revenue than had been expected.  Cheesecake Factory (CAKE, -0.81% today, -1.62% after-hours) had an EPS and revenue miss as well, as casual dining continues to lose out.  One winner is Facebook (FB, +2.92% today and +3.93% after-hours) delivering a double beat including revenue growth of over 60% versus a year ago.  Finally, Gilead Sciences (GILD, +1.13% today, -0.59% after-hours) crushed EPS estimates, earning $2.36 per share versus $1.80 expected.  Revenues were also higher, beating by over 10%, but shares are down post-market.

Economic data picks up a bit tomorrow as we get Initial Claims, Continuing Claims, Manufacturing PMI, New Home Sales and the Kansas City Fed Manufacturing Index along with the continued torrent of earnings.

To continue reading, subscribers can click here.  Non-subscribers can gain access by signing up for a five day free trial.