Friday
Jul112014

The Closer Commentary 7/11/14 - Weekly Recap

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.

The markets came off the 4th of July this weekend on a poor footing with the worst losses in over a month on Monday and Tuesday.  Wednesday was a turnaround on behalf of the Fed minutes, which threw fuel on the fire of a bond rally that had been underway since Treasuries started trading in the wee hours of Monday morning.  That rally totally reversed a move higher in yields the week before thanks to strong employment data.  Global economic data moved south and worries over Portuguese lender Banco Espirito Santos created a huge (by recent low volatility standards) move in global equities and yet more positive price action in lower risk bonds.  But the US equity bid persisted in the face of foreign worries with markets climbing off their morning lows Thursday and climbing modestly Friday. 

Alcoa (AA) and Wells Fargo (WF) got the second quarter earnings party started with better-than-expected results.  The week was a boring one in terms of economic data for the United States.  Overall, markets were down the most on the week since April, and the Vix kicked up from its lowest close since 2007.  Credit spreads also widened, and the USD edged higher thanks to concerns over global growth and European instability.  Data releases will once again grab hold of headlines in the US next week with a variety of output indices, price data and housing data set for release throughout the week.  Bespoke will be back on Monday morning with The Morning Lineup.  Have a great weekend!

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Friday
Jul112014

The Bespoke Morning Lineup: 7/11/14 Commentary

The below commentary 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 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!

The market is thanking goodness it’s Friday as a minor relief rally has set in for Europe, with equity indices reversing notably off of their lows yesterday. American equity futures responded in kind with a quick 5 points in the S&P 500 following the open in European trading, but have since traded gently lower since. Spoos are now sitting at 1960 even, pointing to an open 10 bps higher than yesterday’s close. Bond yields have fallen (as usual) in the long end of the curve, down 1.75 bps, while shorter-dated tenors are much more stable this morning.

Asian equities had a mixed session last night that saw the Nikkei open low, rally significantly, then fall apart and rally again a second time during afternoon trading. At the end of the day it closed down 34 bps, which was well off its lows of the day. Chinese equities performed better, up around 20 bps, while the AEX in Sydney rode stronger than expected housing data to a 40 bps gain. Meanwhile, recent market darling Indonesia had a brutal downdraft of 1.28% on news that reform-minded presidential candidate Joko Widodo’s bid for election isn’t safe; a dispute over results (still not announced) of the July 9 vote is brewing and that makes bullish bets on a growth in investment much riskier. India, another election beneficiary, is also hanging tough. The benchmark Sensex index is down three days in a row from its post-election peak, including another 1.37% in constant selling today.

European equities are trying to recover today after a horrible performance yesterday on concerns that Banco Espirito Santo would spark another round of European financial stress. Italy has popped 1.1%, but the gains are looking speculative as the Dax is leading the European market off its highs of the day literally as we write this. The index turned negative on the day in the last five minutes, and while other European indices are sitting on much larger gains intraday, the quick turn is disconcerting. As of now though, Portugal, Greece, Spain, Ireland, France, the UK, broad European indices, and most other equity markets are in the green versus yesterday’s painful close but coming off their highs notably.

High yield credit blew out the most since February over the last two days with the BAML High Yield Master II index’s spread to government bond yields increasing 14 bps in two days, a reflection of concerns over risk assets generally following a rough going for US equity markets. The concerns over the Portugal have also translated to a smaller bid for risk than existed a few days ago. Credit spreads remain at historically tight levels, with the HY index spread at 362 bps above Treasuries.

Wells Fargo is on the tapes this morning with second quarter earnings and the company managed to beat relatively muted expectations on the top line ($21.1 billion versus $20.8 billion expected), and EPS growth coming in at 3% year over year to $1.01 per share, right inline with expectations. WFC will probably be extrapolated broadly to the rest of the major banks, which we think is rash, especially given the divergent results between Wells and its peers last quarter. One bad sign for the other banks was a decline in gain on sale margins, a measure of mortgage production profitability. The decline is a sign of a combination of increased competition in the space while total production volumes remain challenged amidst a depressed housing market for first time buyers and underwhelming homeownership rates.

There’s no real economic data today but we do get Plosser and Evans speaking and the Treasury budget announcement at 2:00 PM. As a note, the light economic data slate this week will give us a chance to cover some international data developments in The Bespoke Report tonight. Details of Fed Speakers are below. Have a great finish to the week!

Friday 7/11 11:15 AM – Philadelphia Fed President Charles Plosser (FOMC voter, hawk), entrepreneurial issues. 

Friday 7/11 2:00 PM – Chicago Fed President Charles Evans (FOMC non-voter) and Atlanta Fed President Dennis Lockhart (FOMC non-voter), efficacy of Fed policy.

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Thursday
Jul102014

The Closer Commentary 7/10/14 - Big Thursday Downturn

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.

All that being said, Europe is looking awful right now, and releases this morning (all figures month-over-month) revealed a miss on the final June print for French CPI (0.0% versus 0.2% expected), French industrial output (-1.7% versus –0.2% expected), and Italian industrial output (-1.2% versus 0.2% expected).  The Eurozone is struggling and needs more economic support than the ECB can provide, despite the central bank’s best efforts to boost liquidity and demand via policy easing.  There are reasons to be optimistic (the possibility of real QE if the German economy joins the rest of the continent, the new minimum wage hike in Germany boosting demand and inflation, a bounce off of lows) but from our seats the breadth on European equity indices today is all we need to know.  The table at right shows the number of companies in each index which gained value today, as well as the country associated.

Turning away from European equities, American indices had a rough day today, but the pain was more concentrated in several sectors: Energy got taken to the woodshed, off almost 1 percent, consumer discretionary was off slightly less at –93 bps.  Industrials (-62 bps) and Financials (-53 bps) also underperformed, with the Materials sector losing 45 bps, just slightly worse than the market.  Defensive sectors were up to basically flat today, with Telecoms and Utilities putting in solid gains while the Health Care and Consumer Staple sectors were almost flat.  While the bull market feels overdue for a significant pullback at first blush (no such event taking place since the difficult summer of 2011), the behavior of stocks during the January pullback of 6% earlier this year and the relentless buying today off of a horrible open suggest to us that a double-digit move downward from the July 3rd highs is unlikely here.  We would be loathe to suggest that it’s impossible, because it’s not.  We would simply rate it as unlikely.

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Thursday
Jul102014

Bearish Sentiment Spikes

With the market showing some signs of increased volatility this week, investor sentiment took a turn for the worse.  In the latest sentiment survey from the American Association of Individual Investors (AAII) bullish sentiment declined slightly from 38.5% last week to 37.6% this week.  While the decline was small, bullish sentiment is now back down below its bull market average of 38.4%.

While bullish sentiment only saw a small decline, bearish sentiment spiked to 28.65% from 22.39%.  This was the largest one week increase since April 10th.  This week's trend in bullish and bearish sentiment readings is a continuation of the trend that has been in place for much of this bull market.  Individual investors are slow to embrace the bull, but at the first signs of trouble are quick to exit.

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Thursday
Jul102014

Jobless Claims Lower Than Expected

While it has largely been ignored amidst the weak international economic data and bank troubles in Portugal, Thursday's release of jobless claims was a bright spot.  While economists were expecting first time claims to come in at 315K, the actual level was 11K lower at 304K.  Since the recession ended in 2009, there have only been two other weeks where claims saw a lower weekly print.

With this week's decline in claims, the four-week moving average also declined, falling from 315K down to 311.5K.  This is now just 1K above the post-recession low of 310.5K that we saw six weeks ago at the end of May.

On a non-seasonally adjusted basis (NSA), jobless claims rose by 16.5K to 322.2K.  In spite of the increase, for the first week of July it is an extremely low level.  As shown in the chart below, the average level of NSA claims for the current week of the year is more than 100K above current levels, and there hasn't been a single year since the start of 2000 where claims for the first week of July were lower.

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Thursday
Jul102014

The Bespoke Morning Lineup: 7/10/14 Commentary

The below commentary 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 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 futures are sharply lower this morning as global economic data missed expectations overnight in several countries.  The Chinese trade balance fell as imports surged, bringing net exports down to $31.6 bln from $35.92 bln in May.  Then a slew of data missed in Europe: French and Italian industrial production, French CPI, and the UK trade balance all put in rough prints. Concerns over the Portuguese banking system also continue to put a shadow over equity markets, hitting European banks the hardest.

Japanese markets sold off by over half a percent overnight, underperforming the broader region which was mostly higher.  India also continued to underperform, and China was just short of flat for the day following their weak trade balance report.  Australia created more jobs than expected in June, but the unemployment rate ticked up from 6.0% to 6.1% sending the ASX higher and the AUDUSD cross lower on expectations of marginally more dovish monetary policy.  Other markets in the region managed to eke out gains, though, led by Indonesia, where stocks are continuing to accelerate upwards after polls indicated that reform-minded Joko Widodo would win the recent elections in that country.

In Europe, the picture is much worse, with broad indices down over 1.3%; the Euro Stoxx 50 is down 1.89%. France and Germany are off more than 1.5%, while the UK is struggling to carve out a bottom down almost 90 bps.  Italy and Spain are both getting absolutely pounded with 2.5% declines, and Portugal’s broad market index is off over 3.9%.  The bloodshed continues outside the EU: Norway is 2.15% lower, Russia is off 1%, Switzerland has declined by 1% and Sweden is 1.5% lower.  All told this has been a rough day in Europe by recent standards, with peripheral credit concerns once again rearing their head just as core Europe struggles with a decelerating economy in terms of prices and output.

In the midst of the chaos, the Bank of England held firm on rates and QE, with neither changed.  As a result the pound is moving lower versus the dollar, and the EUR is also trading downwards on the weak European data.  The rally in dollars is moving inverse to yields in the US where safe haven demand for Treasuries is strong.  Peripheral sovereign yields are widening versus lower-risk benchmarks like the bund and Treasuries, creating further demand for US paper.

The bid for Treasuries is centered on the belly of the curve with seven year notes the best performing in terms of benchmark issues, down 4.6 bps.  The whole curve is lower in yields, with twos shedding 2 bps, fives down 4.3 bps and tens 4 bps lower; long bonds are in outright rally mode down 3.2 bps.  S&P 500 futures are calling for an 88 bps lower open, down 17.25 points, and Dow futures are 140 points lower.  This is set to be the worst open for equities since March 3rd.

Before the markets open, take a moment to pause and reflect; the S&P 500 is up 6.73% for the year as of yesterday, and the market has been overbought for over a month now.  We’ve also seen a sustained period of low volatility of late.  While there are signs that the global economy is struggling (led by Europe), US economic growth is chugging along despite the horrific GDP print in the first quarter, led by the strongest jobs market in years and rising prices.  Businesses are relatively optimistic, and we would argue that the consumer is more stable than at any point since the last recession.  There are lots of reasons to be negative on the market today, but keep in mind how long and strong this bull market has run: a 5% or 10% correction is a healthy component of any bull market, and that should be considered the worst case scenario where we sit as of this morning.  It will take a lot more than a soft patch in global economic data and a bad turn for European equities to break the back of this market in the long run.

In economic data today, we get jobless claims and continuing claims at 8:30 (315,000 expected versus 315,000 prior and 2.565 million versus 2.579 million prior respectively) and wholesale inventories (0.6% month-over-month increase expected versus 1.1% previously) at 10:00 AM. EIA Natural Gas Inventories are released at 10:30 AM and there is a thirty year Treasury bond auction at 1:00 PM.  Below are the two Fed speeches scheduled for today.

1:15 PM – Kansas City Fed President Esther George (FOMC non-voter), the economy and monetary policy. 

4:30 PM – Fed Vice-Chair (FOMC voter, hawk), financial sector reform.

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Wednesday
Jul092014

The Closer Commentary - Normalized Minutes

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.

The Fed minutes today brought no major implications for equity investors as the Yellen Fed committed even further to policy normalization.  The minutes revealed the Fed will be tapering its purchases of Treasuries and Agency MBS over the next two meetings by $10 billion at each, leaving $15 billion in monthly purchases to be tapered at the October meeting.  That $15 billion taper (instead of waiting a month to taper the last $15 billion) is viewed by both the market and the Fed as a formality, rather than a tightening of policy.  The FOMC is also very focused on figuring out how exactly it will raise rates while still holding a massive securities portfolio.

Normally, the Fed would manage the Fed Funds rate by engaging in reverse repurchase agreements with dealer banks, crediting reserve accounts with Federal Funds.  Banks can then trade Fed Funds between themselves at mutually agreed interest rates.  Tightening the supply of Fed Funds drives up their “price” (interest rate), raising rates, and vice versa.  Normally, the Fed doesn’t pay interest on excess reserves, so the “dead money” of a bank’s excess reserves would need to be traded.  But large scale asset purchases have created a buildup of excess reserves: banks have had their Treasury securities swapped for reserves at the Fed, and the financial system has a net credit balance of those reserves above the level required by law.  So the Fed has been paying interest on excess reserves (IOER) to compensate banks for those deposits.  One of the current conundrums for the Fed is to figure out how to increase rates when that IOER is 25 basis points.  So the Fed will be forced to hike not only the Fed funds but also the IOER rate.  Furthermore, using reverse repos (taking in cash in exchange for Treasuries with an agreement to unwind the next day) the Fed will also be taking in cash from non-banks such as money market funds, forcing the banks to compete for funding at those rates.

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Wednesday
Jul092014

Stocks and Bonds Trading Increasingly in Unison

The chart below shows the rolling six-month correlation between the daily closing prices of the S&P 500 and the US Long Bond Future going back to 2000.  As you can see in the chart, there has been a major shift in the relationship between the two asset classes in recent months.  Last fall at this time, the rolling six-month correlation between the two was inversely correlated at -0.71.  This implied that when equities rallied, bonds declined and vice versa.  Since then, though, the correlation coefficient between the two asset classes has risen to +0.60, indicating that the two have been trading nearly in lockstep with each other.  This is the most positive correlation between the two since January 2007, and only the fifth period since 2000 that the two have been this positively correlated.

While extended periods where stocks and bonds have traded in similar directions have been rare since the start of 2000, from a longer-term perspective, the current level of correlation is a lot more common.  The chart below shows the same correlation as above, but it goes all the way back to 1980 rather than 2000.  As shown in this chart, periods where there was a high level of correlation between the two asset classes were a lot more common from 1980 to 2000.  In fact, whereas the average rolling correlation between the S&P 500 and the US Long Bond Future has been -0.28 since the start of 2000, from 1980 to 2000 the average was +0.34.

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Wednesday
Jul092014

The Bespoke Morning Lineup: 7/9/14 Commentary

The below commentary 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 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!

The pits in Chicago are feeling moody this morning, with spoos selling off slightly from a sharp, if modest, rally last night following the announcement of a strong quarter from Alcoa (AA).  The strong earnings report sent contracts up four points versus closing levels, but they have since moderated slightly; the current call for the open is a 17 bps gain versus yesterday’s close.

The Alcoa announcement, although a single data point, was a rather bullish indicator for both the earnings season and the global economy.  AA was able to boost profit by charging higher premiums versus major benchmarks of aluminum prices, a trend that indicates robust demand.  While the company is trying to focus on higher-margin parts of the aluminum value chain, much of its revenue still comes from old-fashioned aluminum smelting, a business levered to the health of the global economy.  For the second quarter of 2014, that exposure was a benefit as it helped AA beat estimates from Wall Street.

Asia-Pacific markets were rough last night as China, Australia, and Hong Kong all lost more than 1%.  India was off half a percent and Japan was unable to break even, finishing down about 8 bps.  For its part, Europe is having a much more mixed day, with most major markets down very modestly but a healthy smattering of green, led by the Euro Stoxx 50 index which is up 20 bps.  France is off modestly, while Germany is up by 8 bps.  The UK is underperforming, as is Greece.  Ireland is shrugging off Greek weakness but concerns over a default by Banco Espirito Santo has its Iberian peer Portugal down over 2.25%.  The default has come in the form of a delay on payment of short term notes, and as a result Portuguese government bonds are getting smoked, trading 14 bps higher versus Treasuries while most other countries in the periphery are flat to tighter.

The FOMC minutes release today will be closely watched by the markets for clues around the Fed’s dual mandate: price stability and full employment.  The minutes, which give a more detailed window into the FOMC’s policy discussions than the statement released last month, will be checked for references to rising prices and tightness in labor markets.  The base case here is that some members of the committee will have noted the rise in prices and higher demand for labor but been effectively shouted down by the rest of their peers.

For investors concerned with inflation, the worst case scenario would be no mention of rising prices or inflation, as this could be interpreted by the market that the Fed is asleep at the switch.  To be clear, our take is that the rise in prices we’ve seen recently is healthy, and core PCE, the Fed’s preferred measure of inflation, remains solidly below its 2% target; factor in some kind of “symmetrical” overshoot whereby inflation runs slightly higher than the target for a period of time and the recent rise in prices seems both modest and unlikely to provoke policy response.  This is especially true after years of low inflation and at times deflation.  All that being said, we would be surprised if there was no discussion of the acceleration in prices by the Fed.

When it comes to full employment, the market will be watching closely for any indication that the committee is adjusting its assessment of the labor market after the strongest 6 months of job creation since the 1990s.  The JOLTS report yesterday gave some indication of labor market tightening but the quit rate (a preferred indicator that Chair Yellen follows) is still well below the previous economic expansion’s baseline.  Another obscure labor market indicator is the number of unemployed that have been out of work at least 27 weeks.  Previously this group peaked at about 25% of the unemployed workforce but the current level is over 33%; this figure is falling very quickly, but remains notably elevated relative to history.

Broadly speaking, the Yellen Fed is being managed by policy makers that haven’t seen real inflation in over a generation, since Paul Volcker wrestled stagflation into submission at the start of the 1980s.  This, combined with a persistently anemic behavior of prices in response to policy action (zero interest rate policy, large scale asset purchases) has the Fed convinced that inflation is a very dim concern and the labor market will take further time to heal appropriately.  The FOMC is patient and determined, so our view is that the minutes will reflect a steady outlook, although noting a creep up in prices.

The Treasury curve is positioning for the 2:00 PM Fed Minutes and 1:00 PM ten year note auction by selling off, with the biggest move taking place in the five year sector.  The entire curve is higher in terms of yield this morning, and thirty year yields are up by 1.25 bps.  Part of this is due to positioning ahead of fresh supply in ten years this afternoon, but the market also appears to have gotten ahead of itself with a monster rally fading the labor data last week (as discussed in The Closer last night).

MBA purchase applications increased this morning, showing robust growth in purchase demand after last week’s stumble.  The only other economic data today is the EIA Petroleum Status Report at 10:30 AM.

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Tuesday
Jul082014

Unloading Recent Winners

After coasting through June and the July 4th holiday trading week, traders and investors have gotten a rude awakening since coming back to the office this week.  The average stock in the Russell 1,000 is down 1.90% this week.  While that's really not much in the scheme of things, it feels worse given how low volatility has been over the last few months.  

So what's leading the way lower this week?  Basically anything that has rallied since the market took off from its sideways trading range on May 21st.  If you came into this week holding onto recent winners, you're likely feeling the pain trade that was felt in March and April all over again.

Below we have broken up the Russell 1,000 into deciles (10 groups of 100 stocks each) based on stock performance from 5/20 through last Thursday's close.  The deciles are sorted from the 100 best performers over this time period (all the way to the left) to the 100 worst performers (all the way to the right).  For each decile, we have calculated the average change of its stocks so far this week.  

As shown, the stocks in the decile of the 100 best performing Russell 1,000 names during the 5/20-7/3 rally are down an average of 4.47% this week!  That's more than 2.3x the average decline for all Russell 1,000 stocks, and it's by far the worst performing decile of the group.  The second best 100 performing Russell 1,000 stocks during the 5/20-7/3 rally are down an average of 2.82% this week, which is the second worst performing decile of the group.  As you move across the spectrum of deciles from left to right, performance this week gets better and better, although all deciles are averaging declines.  The bottom line is that investors are taking profits in recent winners from an overbought market as we enter earnings season.  Who knows how long the selling will continue, but if you have been waiting for a pullback to get into names that had left you behind over the last few months, you're getting an opportunity.  Unfortunately, a lot of investors waiting for pullbacks have a difficult time pulling the trigger when the pullback finally comes.

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Tuesday
Jul082014

Bespoke CNBC Appearance (7/8/14)

Bespoke's Paul Hickey appeared on CNBC's Halftime Report yesterday to discuss the upcoming earnings season and whether or not the bar was set too high.  To watch the interview, click on the image below.

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Tuesday
Jul082014

Global Share of Market Cap: Core Europe Losing Out To Japan

We occasionally like to take a look at the "market share" for major global stock markets.  The figure represents the USD value, in percentage terms, of a country's equity market versus the total global value of equity markets around the world.  In our last update, the US share of global equities had plummeted from its recent highs.  Back in April, the US share of global equity value had fallen precipitously in one of its sharpest declines in years.  But since then, American equities have been performing well (the last two days notwithstanding), while many other global markets have moved sideways.  As a result, the US has climbed back to about the level it was at in the first quarter.

Elsewhere in the world, after tracking each other very closely through late 2013, Indian and Brazilian equity values have diverged aggressively.  Brazil made a half-hearted attempt to keep up when emerging market equities went bid as a group in the first quarter, but the election of Narendra Modi in India has been rocket fuel for Indian stocks and the Brazilian market is totally incapable of keeping up.  The result is a sharp divergence between the two BRICs.

Finally we turn to "core Europe": Germany and France.  As disinflation and broad-based economic weakness has continued throughout the Eurozone, European equities have struggled.  Looser policy from the ECB has tried to be supportive, but the USD value share of equities in the two largest European economies has faltered, ending a long, grinding gain in terms of global market cap.  Meanwhile, constructive economic data from Japan has put a fire under the Nikkei, and a stable yen have led to big gains for Japan's share of the global equity market.

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Tuesday
Jul082014

NFIB Reverses Lower From Six Year High

In what is going to be a slow week for economic data, today's release of the NFIB small business optimism report didn't start things off on a positive note.  With economists expecting the headline reading to come in at a level of 97.0 from last week's reading of 96.6, the actual reading was 95.0.  As the commentary with today's report noted, The Optimism Index can’t seem to muster a run longer than 3 months.  After a promising first half run, the Index fell 1.6 points to 95.0, ending another false start for the Index’s “road to recovery”.

As we do each month with the NFIB report, the table to the right summarizes what percentage of small businesses cited various issues as their single most important problem.  Topping the list of problems again this month is taxes at 22%, although this is a decline from last month's reading of 25%.  Picking up the slack from Taxes, Poor Sales, Quality of Labor, and Other each saw a 1% increase in the percentage of respondents citing them as the most important problem.  With this week's decline in the percentage of respondents citing Taxes, the combined Washington problems of Taxes and Government Requirements/Red Tape are now cited by 42% of respondents as the most important problem.

The chart below compares the historical relationship between the number of respondents citing "Washington" problems with those citing poor sales.  While we saw a slight uptick in those citing poor sales and a decline in the Washington problems, the gap between the two is still exceptionally large.  While it's a good thing to see that poor sales are not a big worry of businesses, the fact that things like Taxes and Red Tape are taking its place is not really a sign of a healthy business environment.

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Monday
Jul072014

The 50 Most Volatile Stocks on Earnings

Earnings season begins tomorrow, and as we do prior to every reporting period, below is an updated list of the most volatile stocks on earnings.  We use our Interactive Earnings Report Database to generate this list, which finds the stocks that have historically experienced the biggest one-day moves on their earnings report days.  For stocks that report in the morning, we look at that day's change.  For stocks that report after the close, we look at the next day's change.  To be included in the list, a stock must have at least 6 earnings reports in our database.  

The 50 stocks listed below all have average moves of more than +/-11.90% on the day of their quarterly earnings reports.  Millennial Media (MM) is the most volatile stock on earnings with an average one-day change of +/-18.73% on its report days.  Groupon (GRPN) ranks a close second at +/-18.05%, followed by ServiceSource (SREV) at +/-17.30%, BroadSoft (BSFT) at +/-16.77% and Pacific Ethanol (PEIX) at +/-16.36%.  Other stocks in the top ten include Silicon Graphics (SGI), Ubiquiti Networks (UBNT), Inteliquent (IQNT), Fuel Systems Solutions (FSYS) and Blucora (BCOR).  

Four of the 50 most volatile stocks on the list are in the S&P 500 or Nasdaq 100 -- Netflix (NFLX) with an average one-day change of +/-14.24% on earnings, Green Mountain (GMCR) at +/-13.44%, First Solar (FSLR) at +/-13.01% and Priceline Group (PCLN) at +/-12.33%.  Note that as a $1,243 stock, Priceline's average one-day change on earnings is $150!  For Netflix at $472, its average one-day move on earnings is $56.

Other notables on the list include stocks like Yelp (YELP), Zynga (ZNGA), Travelzoo (TZOO), Trulia (TRLA), Pandora (P), iRobot (IRBT) and SolarCity (SCTY).  If you're looking for action this earnings season, these 50 stocks are the place to be.  Remember, though, that they can go down 10+ plus on earnings just as easily as they can go up!

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Monday
Jul072014

Big Tick Higher in Bullish Sentiment

The better-than-expected employment report heading into the July 4th holiday weekend looks to have impacted investor sentiment pretty significantly.  In our Bespoke Market Poll that runs every weekend, bullish sentiment jumped 16 points week-over-week from 48% up to 64%.  Bullish sentiment rarely gets above 60% in our poll, so it's a noteworthy number heading into the trading week.  Since we have been running our weekly poll going back to the start of 2012, bullish sentiment has been above 60% just 7 times. 

Start your day with our Morning Lineup, and end it with The Closer -- some of the most insightful and actionable market analysis on the Street.  Sign up for a 5-day free trial to Bespoke Premium today!

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