Tuesday
Jan132015

Huge Negative Reversal

The S&P 500 was up more than 1.4% at its highs this morning, but an afternoon of vicious selling has left the index now down 0.80% on the day and down more than 2% from its highs.  Ugly action for sure.

Below is a look at where the ten S&P 500 sectors were at their highs this morning, and how much they have fallen from those highs.  As shown, the declines have been steep across the board, but it's Technology -- which was up the most at its highs -- that has given the most back (and then some).  Energy and Materials have also suffered big declines, and they were the two sectors up the least at their highs.  

So how does the market perform following negative reversals like we've seen today?  Check out the The Closer report this evening for the stats.  Sign up for a free Bespoke Premium trial today to access the The Closer.

Tuesday
Jan132015

JOLTS Job Openings Still Growing; Quits Give Up Some Gains

The JOLTS survey for November saw some mixed trends.  Total job openings and the job openings rate edged to new highs - indicating strong demand for labor - but quits did not accelerate.  The trend higher in quits is still positive, but unless quits accelerate it will be hard to see further acceleration in wage gains as measured by average hourly wages or average weekly wages.  It's also important that layoffs declined and have remained in an anchored range.  Overall, the November JOLTS report was indicative of a positive trend in labor markets, but not indicative that the inflection point in wage trends has arrrived.

Tuesday
Jan132015

NFIB 100

Forget about the Dow 18,000 hats, today we need a hat to celebrate "NFIB 100".  For the first time since October 2006, the NFIB Index of Small Business Optimism rose above 100 and posted its largest two-month increase in over a year.  While economists were forecasting the index to come in at a level of 98.5, the actual reading came in at 100.4.

In each month's NFIB survey, respondents are asked what the number one problem they face in their business is.  The table to the right summarizes the various categories where this month's responses fell and shows the change relative to last month.  As has typically been the case over the last several months, Taxes top the list this month at 27%, and are followed by Government Requirements/Red Tape at 22%.  Behind those two government related problems, the next closest category is Poor Sales at just 11%.  

On a combined basis, the 'government' problem of Taxes and Red Tape currently stands at a record 49%.  This can be looked at in one of two ways.  On the one hand, one could argue that government is stifling economic activity through high taxes and red tape.  Looking at it from another perspective, though, these figures are a lot less worrisome.  Given that respondents have to choose one category, the fact that actual issues related to the running of their business (like Poor Sales, Labor, Inflation, etc) are not at the top of their list of problems, it indicates that business is actually on pretty solid footing.

 

Tuesday
Jan132015

Internet Stocks Stuck in a Rut

Back in March of last year, the Internet group -- which had a stellar 2013 -- hit its highs of the current bull market.  Since last March, the group has been trading in a slightly downward sloping trend channel, and it's off 13% from its highs.  As many other areas of the market have surged over the last 10-12 months, the Internet group -- which is as "momentum, growth" as it gets -- has been stuck in a rut.  Outside of the Energy sector, Internet names are some of the most beaten down and oversold in the market.

Below is a look at our trading range screen for 30 of the largest Internet stocks so you can see where they currently stand within their individual ranges.  The black vertical "N" line represents each stock's 50-day moving average, and moves into the green or red zone are considered oversold or overbought.

As shown, half of the stocks in the screen are currently in oversold territory, and nearly all are below their 50-day moving averages.  Internet giants like Priceline (PCLN), Netflix (NFLX), Google (GOOGL) and Amazon.com (AMZN) are already down 6%+ year-to-date, so 2015 has certainly not marked a turning point yet.

Monday
Jan122015

Analyst Sentiment Dropping Like a Stone

Another earnings season kicks off after the close Monday, and judging by the pace of estimate revisions, analysts are increasingly worried.  Over the last four weeks, companies with negative analyst revisions outnumbered companies with positive revisions by 278.  This works out to nearly 19% of the stocks in the index, and is close to the lowest levels we have seen in a year.  In fact, the pace of revisions is more negative than it has been heading into any earnings season in at least a year.

Earlier today, we sent out a detailed note to Bespoke Premium clients, which helped to quantify what investors should expect this earnings season based on the current pace of analyst revisions just as earnings season is kicking off.  We also helped to answer the question of how much is specific to the energy sector, and show how sectors have performed in similar situations based on the current pace of analyst revisions.  If you are a client and wish to view the report, please click on the link below.  If you are not currently a Bespoke Premium client, subscribe to our free trial today for instant access.

Analyst Sentiment Heading Into Earnings Season

Monday
Jan122015

Still Bullish

Amidst all of the volatility to start the year, most investors remain bullish.  As shown below, bullish sentiment came in at 58% in our weekend Bespoke Market Poll compared to bearish sentiment of 42%.  Bullish sentiment has now been above 50% in our Bespoke Market Poll since the start of the fourth quarter.  This is the longest stretch of >50% bullish sentiment since we began running our poll at the start of 2012.

Friday
Jan092015

S&P 500 Higher or Lower from Here?

Mark Twain once said, "If you don't like the action in the market in 2015, just wait a few minutes."  Okay, maybe that's not the original quote, but you get the point.  The market has gotten off to a crazy start to the year.  So which way will it head from here?  Please let us know by taking part in our Bespoke Market Poll below.  All you have to do is tell us 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!

There's still time to sign up and read our 2015 Bespoke Report outlook piece.  This 161-page report covers everything investors need to know about the market and investing heading into the new year.  Sign up for a 5-day free trial to Bespoke Premium to view the report today!

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
Jan092015

4th Quarter Earnings Season Begins Monday

Earnings season begins next Monday, but as shown in the chart below highlighting the number of earnings reports by day, things don't really heat up until late in the month.  

Below is an abbreviated version of our interactive earnings season calendar (available to Bespoke Premium and Institutional members) highlighting the companies set to report earnings next week.  The key reports to watch include Alcoa (AA) on Monday, CSX and KB Home (KBH) on Tuesday, JP Morgan (JPM) and Wells Fargo (WFC) on Wednesday, Bank of America (BAC), Citigroup (C) and Intel (INTC) on Thursday, and Goldman Sachs (GS) on Friday.

Sign up for a 5-day free trial to our Bespoke Premium service to check out the full version of this season's calendar.

Thursday
Jan082015

The Bespoke Earnings 50 -- Most Volatile Stocks on Earnings

Don't look now, but earnings season begins next Monday when Alcoa (AA) reports its fourth quarter number.  As we do prior to each earnings season, below is our updated list of the Bespoke Earnings 50 -- the 50 most volatile stocks on earnings.  

To make the list, the stock has to have at least 12 quarters (3 years) worth of earnings reports in our Interactive Earnings Report Database (available to Bespoke Institutional members), trade at more than $5/share, and average a move of at least +/-11% on the first trading day following its quarterly earnings report.  (For stocks that report after the close, we look at their next-day change.  For stocks that report in the morning, we look at that day's change.)  

Below is this quarter's list of the 50 most volatile stocks on earnings.  As shown, Groupon (GRPN) is at the top of the list with an average one-day move of +/-17.94% in reaction to earnings.  That's a move of nearly 20% to the upside or downside following each quarter!  

Broadsoft (BSFT), Inteliquent (IQNT), Ubiquiti Networks (UBNT) and Silicon Graphics (SGI) round out the top five -- all averaging moves of more than +/-14.75% on their report days. 

Netflix (NFLX) is another stock that is extremely volatile on earnings.  Historically, the stock has averaged a one-day change of +/-14.15% on its report day.  Given its price of $331.41/share, that's an average move of $47/share.

Some other notables on the list include Keurig Green Mountain (GMCR), First Solar (FSLR), Pandora (P), Priceline (PCLN) and Intuitive Surgical (ISRG).

If you're a trader looking for action this upcoming earnings season, this list is a great starting point!

If you like low-volatility earnings plays, the list below is the opposite of the one above.  It contains the stocks that have historically been the least volatile on their earnings report days.  These names have averaged moves of less than +/-1.40% on the day of their quarterly earnings reports over the last 14 years.  You'll notice that most of these stocks are in the Utilities sector.

Looking for more in-depth earnings season analysis?  Check out all of the earnings-related products included with our Bespoke Premium and Bespoke Institutional services.  Sign up today ahead of this quarter's kick-off next Monday.

Thursday
Jan082015

The Closer: Actionable Daily Commentary From Bespoke

Every night, Bespoke Premium and Institutional clients receive The Closer, our daily market recap and summary of the day's action.  Each edition comes with fresh analysis, charts, proprietary models, and the most important news and trends of the day's trade, giving you a complete rundown of the market day.  If there was an important development in the market, it's covered in The Closer.  In Tuesday's recap of market action, we noted the following:

Given the lack of news catalysts over the last several days, pronounced volatility and low liquidity, we don’t see a fundamental reason for equities to trade lower after such an impressive intraday reversal today. Given the violence of the move to the bottom of the S&P 500’s trend and the reversal today, we would anticipate that the next round of volatility will be to the upside.

Yesterday, there were several moves across asset classes that we identified as supportive of the thesis that we had hit a short term market bottom, including a shift in the term structure of volatility, higher oil, a move lower in high yield CDS spreads, a rally in stocks, and higher ten year Treasury yields.  We noted:

While it’s generally an extreme challenge to forecast short-term price movements, we believe that today’s bounce will continue for the next few days.  If it does, the pattern would be to a new all-time high another 3.25% above current levels.  Risk-reward is never entirely one-sided, but based on this analysis, we believe the trend is to the upside from here.

Please click on the links below for copies of The Closer from Tuesday and Wednesday.  Also included are analysis of the Fed's minutes from yesterday, intraday price action recaps, and economic data analysis.  Trials of Bespoke Premium are free: sign up today!

The Closer 1/6/15 - You're-ope Not Helping!

The Closer 1/7/15 - Bottom In?

 

Thursday
Jan082015

Jobless Claims Higher Than Expected

Jobless claims fell by 4K this week to 294K, but the decline was a little less than economists were forecasting (290K).  While claims were a little higher than expected, though, they still remained below 300K for the sixth straight week and the 16th week in the last 17.

The four-week moving average for claims saw the slightest of declines this week falling from 290.75K down to 290.5K.  This marks the third straight week that the four week moving average has had a 290 handle.  It has now also been 10 weeks since we have seen a new post-recession low in the four-week moving average (279K on 10/31/14).

On a non-seasonally adjusted (NSA) basis, jobless claims rose by 35.6K to 425.4K.  While that jump may seem alarming at first glance, looking at the chart below shows that NSA claims always rise at this time of year.  In fact, it is more than 130K below the average of 559.2K for this week going back to 2000, and the lowest for the current week since at least then.

Thursday
Jan082015

Bearish Sentiment Spikes

In spite of yesterday's rebound in equities, investor sentiment on the part of individual investors turned less bullish this week as investors appear to be a little more cautious heading into the New Year.  According to the weekly survey from the American Association of Individual Investors, bullish sentiment dropped to 41.01% from last week's total of 51.74%.  While the reading is still above average, the one week decline of 10.73 percentage points was the largest weekly decline since January 2014.

As bullish sentiment declined, bearish sentiment spiked.  After last week's reading of 19.31%, bearish sentiment increased to 27.7%.  This is the highest weekly reading since 10/16 (the October lows) and the largest one week increase since 1/30/14.  While this week's sentiment levels showed big reversals from the bullish readings at the end of the year, if the market sees a couple of more days like Wednesday, expect those sentiment readings to turn right back around.

Wednesday
Jan072015

Most Countries Still Oversold

The action in global stocks over the last few days has left 25 of the 30 largest country ETFs in oversold territory.  Below is our trading range screen highlighting the trend.  For each ETF in the screen below, the black vertical "N" line represents its 50-day moving average.  Moves into the red zone are considered "overbought", while moves into the green zone are considered "oversold".  Throughout this bull market, oversold levels have generally offered up good buying opportunities, but there's always the risk that the "buy the dip" trade will finally fail to pan out.  

The only country ETF on the list that is currently in overbought territory is FXI (China).  Two others -- Phillipines (EPHE) and Turkey (TUR) -- are above their 50-day moving averages, while South Africa (EZA) and the US (SPY) are below their 50-days but not oversold.  Some of the most oversold countries at the moment include France (EWQ), Italy (EWI), Spain (EWP), Sweden (EWD), Switzerland (EWL) and the UK (EWU) -- all Euro-area markets.  

Just a few countries are in the green for the year, while most are down in the 1-3% range.  Some of the country ETFs that have already seen 4%+ declines in 2015 include Canada (EWC), Italy (EWI), Malaysia (EWM), France (EWQ) and Colombia (GXG).  While the Russian ETF (RSX) is still 20% below its 50-day, it's actually one of the few countries that's up on the year.

Wednesday
Jan072015

Bespoke CNBC Appearance (1/6): Impact of Strong Dollar

Bespoke's Paul Hickey appeared on CNBC's Fast Money on Tuesday (1/6) to discuss the impact of the rising dollar on us equities.  To view the segment, pease click on the image below.  For a more detailed look at the report we discussed on the segment as well as our 2015 Bespoke Report, sign up for Bespoke Premium today.

Wednesday
Jan072015

Best Russell 1000 Stocks Through 1/6

By just about all accounts, 2015 has gotten off to a rough start for the bulls.  Through Tuesday's close, 896 of the stocks in the Russell 1000 were down on the year.  Of those, 242 are down more than 5%, while 26 stocks have already lost 10% of their value.  In the midst of the carnage, there are some (we stress some) stocks that have bucked the trend and risen this year. 

An even smaller number of stocks are up more than 5% of the year.  In fact, there are a total of just 12, which we have highlighted in the table below.  The most surprising name on the list is also the top stock on it, and that is Twitter (TWTR) with a gain of just over 8%.  After a just awful 2014, things have started off positive for Twitter in 2015.  Perhaps all the insider selling to close out the year put a bottom in for the stock.  There is still a lot of year left in 2015, though, so only time will tell.  Besides Twitter, other notable names on the list include Newmont Mining (NEM), Merck (MRK), and Simon Property Group (SPG).  In terms of sector representation, Financials make up half of the names on the list with six.