Bespoke CNBC Appearance (9/2/14)

Bespoke's Paul Hickey appeared on CNBC's Fast Money on Tuesday (9/2) to discuss seasonal factors on the market.  To view the segment please click on the image below.


ISM Manufacturing Hits a Three Year High

Today's release of the ISM Manufacturing report for August showed a nice pick up for the manufacturing sector in the month of August.  While economists were expecting a level of 57.0, the actual reading came in at 59.0.  This was up from 57.1 in July and was the highest level since March 2011.  For some perspective on August's reading, there have only been 20 months in the last 30 years where the headline reading has been above its current level.

The table below breaks down this month's ISM Manufacturing report by each of its sub-indices.  Here, we saw broad-based strength as seven out of ten components saw month over month increases.  This month's reading of 64.5 for the Production component was the best since May 2010, while the New Orders component rose to 66.7; that was the best reading for that component since April 2004!  On the downside, the only three components that saw m/m declines were Supplier Deliveries, Employment (just a slight decline), and Prices Paid.  Finally, on a y/y basis this month's report also saw broad based strength with eight out of ten components showing accelerating rates of growth.


Bullish Sentiment Down Slightly

Bullish sentiment dipped for the second week in a row this past weekend in our Bespoke Market Poll.  As shown below, bullish sentiment towards the market over the next month came in at 54% this week, down from 59% in the week prior.  The drop in bullish sentiment came in the face of a stock market that closed out the month of August at new all-time highs.


August, QTD, and YTD Asset Class Performance

The month of August is now behind us and September trading begins on Tuesday following Monday's Labor Day holiday.  Below is a look at the performance of various asset classes in August, quarter-to-date and year-to-date using our key ETF matrix.  The left hand side of the matrix features mostly US equity related ETFs, while the right side contains country, commodity and fixed income ETFs.  

As you can see, August was a big month for US stocks, with most areas gaining 3-5%.  It wasn't so great for foreign markets, however, with a lot of red on the board.  Commodities got hit in August as well, leaving them down big for the quarter.  Fixed income put in yet another month of gains.


New Highs Into Labor Day

After a nice Friday rally into the close, the S&P 500 is heading into the long Labor Day weekend at a new all-time high of 2,003.37.  But which way will the market head when the trading desks fill back up in September?  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 Tuesday before the open.  Thanks for participating, and have a great weekend!

If you're looking for some market advice to read through over the holiday weekend, we're currently offering an "end of summer" special on our popular Bespoke Premium service.  Sign up for a 5-day free trial today and check out our just published weekly Bespoke Report newsletter, which is one of the many products included with the service.  

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


Updated S&P/Case-Shiller Housing Numbers

The June S&P/Case-Shiller home price figures were released this week, and below is a look at the city-by-city breakdown.  For each city tracked, we provide its month-over-month and year-over-year change in home prices on a percentage basis.  Keep in mind that these figures are for June, so they're backward looking by two months.

As shown, the New York region finally heated up a bit this summer, posting the biggest month-over-month gain (+1.58%) of the 20 cities tracked.  Chicago saw the second biggest MoM increase at 1.44%, followed by Las Vegas (1.37%) and Detroit (1.36%).  New York has been a big laggard in terms of home price increases since the current economic expansion began, so it will be interesting to see if the most recent figures are just a blip or the start of a new trend.  

San Francisco has seen the biggest jump in home prices during the current expansion, but the city actually saw the smallest month-over-month gain in June at just +0.34%.  So while New York bounced, San Francisco lagged.

Below is a look at how much home prices have increased for each city tracked by S&P/Case-Shiller since the housing bust lows.  As shown, San Francisco remains by far the biggest winner with a gain of 66%.  Detroit and Las Vegas have seen the 2nd and 3rd largest increases in price at 51% and 50%, respectively.  At the bottom of the list is New York (which we mentioned earlier) with a gain of just 11% off of its lows.

While Las Vegas has seen home prices rise 50% off their lows, they're still 42% below the highs they made during the housing bubble of the mid-2000s.  Below is a chart showing how far each city is from its bubble highs in price.  After Las Vegas is Phoenix at 35% below, followed by Miami (-34%), Tampa (-32%) and Detroit (-23%).  The two composite 10-city and 20-city indices are both roughly 17% below their all-time highs.  There are two cities that have already eclipsed their prior bubble highs -- Denver and Dallas.  Three other cities are within 10% of their highs -- Boston, Charlotte and Portland.  San Francisco is just outside of the 10% mark at -11%.  


Emerging Markets, BRICs Breaking Out of Sideways Range

Emerging markets continue to charge higher in 2014 after years of trending downward.  Below are long-term charts of the emerging markets ETF (EEM) and the BRIC ETF (EEB) going back to 2009.  As shown, the last six months (boxed in charts) have been a boon for EM as a whole and the BRIC countries.  And just recently, both the EEB and EEM have broken above the top of their two-year sideways trading ranges.  This range-breakout is a bullish sign for the asset class longer-term.


Bullish Sentiment Above 50%

Bullish sentiment among individual investors ticked up 5.8 percentage points this week to 51.92% according to the American Association of Individual Investors.  Over the last three weeks, AAII bullish sentiment has ticked up more than 20 points from its level of 30.89% on August 7th.  This is the highest bullish sentiment reading we've seen all year, and it's the first time it has been above the 50% mark since 12/26/13.  

As you can see in the chart below, readings above 50% have been relatively rare throughout this bull market.  But what do high readings mean for the market going forward?  Sign up for a 5-day free trial to our Bespoke Premium service to see a just-published report covering this topic.  Right now we're offering an "end of summer" special that gives you 10% off the life of your membership!


Initial Jobless Claims at 298k

Initial jobless claims for the latest week came in at 298,000, which was 2,000 better than the 300,000 estimate, and unchanged week-over-week.

The four-week moving average for claims moved back below the 300,000 mark after a brief one-week stint above this level last week.  At 299,750, we're still above the post-recession low of 293,750 for the four-week moving average that was set at the beginning of August.  

Non-seasonally adjusted (NSA) claims came in at 248,600 this week, which as shown below, is well below the average reading of 311,000 for the current week of the year.  In fact, this week's NSA reading was the lowest level seen for the current week of the year going back to at least 1999.


Preliminary Q2 GDP Surprises To The Upside

Following last month's strong GDP read, there was some concern that the bounce-back from Q1's massive disappointment (-2.1% quarter-over-quarter and annualized after further revisions released last month) was being driven by inventory accumulation.  

Inventories can provide a short-term boost to GDP by increasing output, but if they accumulate faster than demand, they can lead to "pay-backs" where inventories are sold instead of new production.  In a sense, inventory accumulations and disccumulations are just shifts between periods of time.  In Q1, part of the huge decline in GDP was a decline in inventories.  That category contributed to quarter-over-quarter annualized growth by negative 1.16%.  In other words, if inventories had been flat, the annual rate of GDP growth would have been -0.94%, not -2.1%.

In Q2, we saw inventories jump, with a contribution to total growth of 1.66%, roughly mirroring the decline in Q1.  Many commentators were concerned that this meant Q3 growth would be slower than Q2, as inventories would have to be sold off.  Today's report, in addition to confirming some other trends that we liked in the initial Advance reading back on July 30th, suggests that inventories are not going to be an issue moving forward, with Q2 GDP showing a big gap up in final demand (GDP growth less inventory growth) from 2.3% to 2.8%.  Slower inventory accumulation helped, but so did higher-than-expected private fixed investment as businesses begin to deploy capital expenditures.  Below is a table summing up the changes from the July 30 Advance reading to today's Preliminary reading of Q2 GDP.

Bespoke subscribers got a jump on the upward revision to GDP last night in our daily post-close commentary piece, The Closer.   Featuring pages of easy-to-follow commentary, charts, updates, and models, The Closer is your one-stop-shop for analysis of the day that was and the day to come.  From last night's report:

Q2 GDP’s second reading is out at 8:30, with the street looking for a slight downward revision from 4.0% QoQ (seasonally adjusted and annualized) to 3.9%.  Consumption is expected to lead this decline, with a move lower from 2.5% to 2.4%.  Our bias would be slightly to the upside given strong June Factory Orders, solid June Personal Spending (and an upward revision to May), upward revisions for June Retail Sales Ex Autos and Gas, and a big revision upward for Capital Goods Shipments Non-Defense Ex-Aircraft in June.  Weighing on the release will be a downward revision for Retail Sales Control Group in the July Retail Sales release.  Overall, we gauge risk to be to the upside, but don’t expect a large change.  

To view last night's report, please click the thumbnail at right.  To subscribe and receive The Closer on a daily basis, sign up for a 5-day free trial to Bespoke Premium.  Right now we're running our "end of summer" special, which gives you a 10% discount on the life of your membership!


Internet Stock Trading Range Screen

A few days ago we posted an updated look at the Nasdaq Internet group, which tanked in March and April but has found its footing over the last few months.  Below we take a look at the 30 largest components of the Internet group by running them through our trading range screen.  (Give us a call at 914-315-1248 to learn about running your own custom trading range screen.)  For each stock, the dot represents where the stock is currently trading, while the tail end represents where it was trading one week ago.  Moves into the red zone are considered overbought, while moves into the green zone are oversold.  The black vertical "N" line represents each stock's 50-day moving average.

As shown, the majority of Internet stocks are trading above their 50-day moving averages, and 12 are currently in overbought territory.  eBay (EBAY) and Yahoo! (YHOO) are the most overbought of the bunch, and both have moved higher over the last week.  Most stocks in the group have actually moved slightly lower within their trading ranges over the last week, as evidenced by the red shading of the dots.  Two of the 30 stocks on the list are currently in oversold territory, and they're both Chinese Internet names -- Qihoo 360 (QIHU) and SINA Corp. (SINA).

For each stock, we also highlight its year-to-date performance, as well as its performance since the Internet group made its most recent low on May 8th.  For the year, Zillow (Z) and YY Inc. (YY) are up the most with gains of 75%.  Other notable winners in the group include Facebook (FB) with a gain of 36.91%, Ctrip (CTRP) at +30.18%, and Netflix (NFLX) at +28.96%.  The worst performer in the group year-to-date is SINA (SINA) with a decline of 45.59%, but Groupon (GRPN) is right on its tail with a decline of 44.84%.  Other key Internet stocks that are down year-to-date include (AMZN), Yahoo! (YHOO), AOL and HomeAway (AWAY).  These decliners just haven't been able to recover from the steep pullback the group experienced in early Spring.


Bespoke Premium -- Your Pre-Market News Source

While our end of summer special is going on, we thought we'd highlight a few of the key products included with our subscription packages.  One of them is our Bespoke Morning Lineup, delivered to your inbox each morning before the open.  

The Bespoke Morning Lineup is your pre-market source for up-to-date information concerning market events overnight and in the morning.  On a daily basis, we summarize major international market events, stock specific news of note, analyst actions, and economic indicators/events.  In addition, we also outline what major indicators, events, earnings reports, conferences, dividends, splits, and upcoming index changes are due the following day so that you can plan ahead and be ready.

On page two of the Morning Lineup, we provide graphic-rich charts and graphs of market internals, overbought/oversold levels, trading ranges, relative strength and lists of big winners and losers.  On page three, we highlight short and long-term charts of the S&P 500, Nasdaq, gold, oil, the long bond and the US Dollar.

Investors view our Morning Lineup religiously each morning to get prepared for the market’s open.  There’s simply no better way to start the trading day.

The Bespoke Morning Lineup is part of our Bespoke Premium and Bespoke Institutional services.  Click here to view today's report as a free sample.  We also provide commentary in the email that goes out with the Morning Lineup.  Below is today's commentary that was sent out to clients.

Snapshot: Equity index futures are flat this morning (spoos +6 bps, Dow futures +9, Nazz 100 +8 bps).  Asia is coming off a solid session and European equities are mixed with reasonable dispersion but trading at much healthier volume levels than recent sessions.  No European major market is up or down more than 30 bps as of this writing.  Global bonds continue to rally, led by the bund, down 2.6 bps to yield 91.1 bps in the ten year tenor.  Treasury yields are lower by about 2 bps across the curve with slightly better performance from the 7 year point out (curve flattening of 1 bp in fives-thirties).  Credit markets are basically flat.  The dollar is selling off this morning (-15 bps), retreating from 52-week highs put in yesterday, with selling starting as European traders began reaching their desks at about 2:00 AM EST.  The USD is down versus every major cross, performing worst versus the CAD and NZD.  Metals are up this morning (gold +35 bps, silver +42 bps) and energy is flat (Brent +10 bps, WTI +26 bps) except for natural gas (+1.2%).

European equities: Equities are subdued today with the CAC 40, DAX, and Euro Stoxx 50 trading in lock-step, all down about 10 bps on underperformance from Energy, Materials and Consumer Staples where breadth is extremely weak.  Financials are outperforming, but despite their heavy weighting in many EU indices they aren’t enough to drag markets positive.  Italy (+18 bps) and Spain (+29 bps) are outperforming, but not drastically.  We’re seeing a nice pop in Portugal (+90 bps), and Austria (+30 bps) is also outperforming which has been rare this year (trailing both the DAX and the Euro Stoxx 50 by about 6% and 11% respectively).  Russian equities are up 76 bps in USD terms on the Russian Cash Index, helped by seemingly productive talks with Ukraine yesterday and a stable ruble (RUBUSD stable around 36 all week). 

European bonds: The real story in Europe this morning continues to be the German government bond market where yields are now negative for the first three years of its yield curve.  Ten year bunds now yield 91.1 bps, trading at a seemingly inconceivable 146 bps spread to Treasuries.  EUR-denominated government paper is trading well across the board, as spreads to bunds fall even faster than the yields on the less-risky German debt does.  At the ten year point on the curve, bunds are down 2.6 bps in yield this morning, but compare that with yield declines of 3.4 bps in France, 4.6 bps in Italy, 8.5 bps in Spain, 3.6 bps in Portugal, 3.6 bps in the Netherlands and 10.5 bps in Greece.  One catalyst for the price action today is a pair of consumer confidence misses in Germany and Italy.  German GfK Consumer Confidence printing at 8.6 versus expectations of 8.9 and previous reading of 9.0 (revised down to 8.9), while Italian Consumer Confidence missed, 101.9 versus 104.0 expected and 104.6 previous, which was revised down to 104.4.  These misses are just the latest in a seemingly never-ending series of economic data declines and misses for the European area.

Global bonds: The action in Europe is vacuuming other global yields lower as well.  While not down as much as benchmark bunds, we’re also seeing yield declines in UK gilts (yield -3.2 bps), Swiss government bonds (yield -1.8 bps), Australian government bonds (yield -2.4 bps) and New Zealand debt (yield -3.0 bps).  The only major global bond market that is not trading lower in yield this morning for its ten year tenor is Canada, where yields are less than half a bp higher as of this writing.  The tractor beam of EU yields is by far the single largest factor in this pattern, in our view.

Asia: Overnight trading was solid in Asia with the best performance going to New Zealand (+93 bps) and Taiwan (+98 bps).  Volumes were average or higher than recent levels for most markets, China being one exception where shares traded were three-quarters of the average for the last two weeks.  Japanese equities traded up, barely, with the Nikkei 225 eking out a 9 bps gain after reversing off mid-day lows; volume edged higher than extremely depressed two-week averages but remains very light.  China was mixed with A-shares outperforming (Shanghai Composite +11 bps) while Hong Kong and H-shares had the worst day in the region (Hang Seng -62 bps, Hang Seng China Enterprises -45 bps).  India had a solid day (+46 bps), while other regional markets like Singapore (+55 bps), Korea (+33 bps), Philippines (+20 bps) and Indonesia (+36 bps) all put in decent gains.  Asian credit also outperformed versus US and European indices with the iTraxx Japan CDS and iTraxx Asia ex-Japan IG CDS indices both tightening a point.

Econ Data: Light day in data today after yesterday’s wave of releases.  The only release is weekly Mortgage Applications from the Mortgage Banker’s Association, which were out at 7:00 AM, showing mortgage activity moved slightly higher on lower rates week-over-week.  There are two Treasury auctions today, with an 11:00 AM issue of two year floating rate notes (a re-opening of an existing issue) and a 1:00 PM sale of five year notes, a new issue.


Analyst Ratings Cross the 12,000 Mark

As shown below, there are currently 12,052 analyst ratings for S&P 500 stocks, which equates to 24 ratings per stock in the index.  Of those 12,052 analyst ratings, 6,038 (50.1%) are Buy ratings, 747 are Sell ratings, and 5,267 are Hold ratings.  Clearly analysts are a bullish bunch, but the current Buy/Sell/Hold breakdown is pretty much inline with where it always is.

Over at Bespoke Premium, we just published a more in-depth report on analyst coverage for S&P 500 stocks, where we highlight the stocks most loved and hated by analysts and how they compare to our proprietary stock ratings.  To view the report, sign up for a 5-day free trial to Bespoke Premium today.  Be sure to enter "endofsummer" in the coupon code section of our Subscribe page to get 10% off your membership package.

Below is a breakdown of analyst ratings by sector in terms of coverage.  As shown, Technology is the most widely covered sector at 30.1 ratings per stock.  Energy ranks second at 28.3 ratings per stock, followed by Telecom at 26.6 and Consumer Discretionary at 25.2.  Utilities and Materials are the least covered sectors at 18.9 and 19.4 ratings per stock, respectively.

Finally, below we show the percentage of total ratings that are Buys by sector.  As shown, analysts are most bullish on Health Care with 58.3% Buy ratings.  Energy ranks second at 55.7% Buy ratings, followed by Technology at 54.5%, Industrials at 51.9% and Consumer Discretionary at 51.1%.  Analysts are least bullish on Utilities with just 35.3% Buy ratings.  Telecom, Materials, Consumer Staples and Financials all have a smaller percentage of Buy ratings than the S&P 500 as a whole as well.


S&P 500 Breadth

Below is a look at the percentage of stocks in the S&P 500 trading above their 50-day moving averages.  Right now, just two-thirds of the stocks in the index are trading above their 50-days, even though the index just hit a new all-time high.  

Find out our thoughts on this divergence in breadth over at Bespoke Premium.  We've just published a B.I.G. Tips report on this topic.  Sign up for a 5-day free trial using our end of summer special today!


Check-up on Biotech, Internet Groups

Earlier this year in late February and early March, the two groups that did best in 2013 -- Biotech and Internet -- threw hissy fits and went into their own bear markets.  Below is a check-up on their chart patterns now that six months have passed since they last hit all-time highs.

As shown, Biotech has nearly recovered all of its bear market declines, but it's not quite yet to new highs.  At the moment, traders are giving Biotech a bid, but it has key resistance coming up very soon.  With the group already overbought here, it may be take a couple of tests to finally break through.

While Biotech has gained back nearly all of its declines, the Internet group still has a ways to go.  As shown below, the Internet group pulled back 21.3% from late February through early May, and it has bounced 19.6% off its lows at this point.  The group just last week made it above near-term resistance, clearing the way for a run to its year-to-date highs if traders choose to continue taking it higher.

It appeared as if 2014 might be a total bust for Biotech and Internet back in May, but the two groups have really made a nice comeback after bottoming out.  As long as they don't break back below their 50-days in the near term, their directional trends will remain upward sloping.

Page 1 ... 2 3 4 5 6 ... 598 Next 15 Entries »