Monday
Jun232008

Bank Index (BKX): Sound and Fury Signifying Nothing

With its closing price of 60.87, the KBW Bank Index has now erased 100% of the gains it had off of its October 2002 low.  Even worse, the index now sits less than 2 points above its low from October 1998.  Talk about a lost decade

Bkx_index_0608_2

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Monday
Jun232008

Earnings Volatility for the Dow Stocks

Earlier today we posted on the most volatile stocks on earnings reports out of the 2,700 stocks in the Bespoke Interactive Earnings Report Database.  Below we highlight the same information for the 30 stocks that make up the Dow Jones Industrial Average.  The list is sorted by the average one-day absolute percent change on earnings reports.  As shown, Hewlett-Packard (HPQ) is the most volatile Dow stock following its earnings reports.  HPQ has averaged a change of +/-4.83% on the first trading day following the 24 earnings reports we have on file for the stock.  HPQ is followed by INTC, CAT, MSFT and AA.  VZ, CVX, JNJ, BAC and PG are the least volatile stocks on earnings.

We also include the average one-day change (not absolute) on earnings reports for the Dow 30.  This highlights whether the stock tends to trade higher or lower in reaction to earnings.  As shown, the five most volatile stocks typically average declines on earnings, with Intel averaging the biggest declines at -1.54%.  UTX averages the biggest gains on its report days at 1.04%.

Volatileearningsdow_2

The Bespoke Earnings Report Database provides detailed analysis for over 2,700 stocks. We take earnings analysis to the next level by not only highlighting how the actual reports compare to analyst estimates, but also how the stock price reacted to the report. Users of this database can easily find how a stock or basket of stocks typically reacts to earnings in order to prepare themselves for future quarterly releases. Traders can also see how stocks trade after gapping up or down on earnings to develop trade ideas. If IBM opens down $2 on earnings, what does the stock typically do next? This database can answer that question and much more for the majority of US stocks that trade today!

Please call 914-315-1248 or email info@bespokeinvest.com if you would like to learn more about the Bespoke Interactive Earnings Report Database!  The database can be purchased in its entirety or on a stock by stock basis.

You can also learn about the many other products that Bespoke offers at Bespoke Premium. 

Monday
Jun232008

Point of No Return or Perfect Buying Opportunity?

The recent declines in many Financial stocks have put them in unprecedented negative territory.  Below we highlight historical charts of the percentage from 52-week highs for Lehman (LEH), Wachovia (WB), Citigroup (C), Merrill Lynch (MER) and Bank of America (BAC).  At its low point earlier this month, Lehman was 72% below its 52-week high, making it the furthest below it has ever been.  Wachovia is 68% below its highs over the last year, and Citi got down to 66% below back in March.  Merrill Lynch and Bank of America aren't quite at record territory yet, but they're getting close.  Back in 1998, Merrill got down to 65% below its 52-week high, and it is at -60% now.  In 1990, BAC was 66% below its 52-week high, and it's at -50% now. 

The consensus view is that the struggling Financials still have much further to go on the downside before the pain is over.  But if they fall much further, they might have dug a hole they can't get out of.  Taking a longer-term view of one, two, or even five years from now, will these charts have marked a screaming buy, or a clear sign that the companies were "toast?"

Leh52

Wb52

Citi52

Mer52

Bac52

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Monday
Jun232008

Bespoke Premium Free Trial Offer

Thank you for your interest in Bespoke Investment Group!  For your participation in this week's Bespoke Prediction Poll, we are offering you a 5-day free trial to our unrivaled Bespoke Premium research service.

During your 5-day free trial, you'll receive a username and password to login and view current and historical reports at Bespoke Premium.  You'll also receive all new reports by email so you get them in a timely manner.  To learn more about the products included in the Bespoke Premium suite, please click here

To start your free trial, simply call us at 914-315-1248 or click the button below to sign up right online.  If you try out the service and like it, the $40 monthly subscription automatically begins after the 5-day free trial ends.  You can cancel your subscription at any time during the trial with no strings attached.

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Monday
Jun232008

Most Volatile Stocks on Earnings

With second quarter earnings season now just a couple of weeks away, below we highlight the 25 stocks in the Bespoke Interactive Earnings Report Database that have historically been the most volatile on their report days.  We first filtered the database of more than 2,750 stocks to find the ones with at least 10 historical quarterly earnings reports that are trading at more than $10 per share.  We then calculated the average absolute percentage change on the first trading day following all reports for each stock. 

Below we highlight the 25 stocks with the highest average one-day absolute percentage change on report days.  As shown, Multi-Fineline (MFLX) tops the list with an average absolute change of 18.64% on its 14 report days.  It is volatile both on the upside and downside, however, since its average one-day change (not absolute) is just 0.89%.  Intuitive Surgical (ISRG) ranks second at 17.77%, but it typically moves to the upside since its average one-day change (not absolute) is 9.46%.  Other notables on the list of most volatile stocks on earnings include TZOO, PCLN, NTRI, NFLX, SNDK, AMZN and BIDU.  If you're looking to play big moves on earnings in either direction, these names are right up your alley.

Volatileearnings

The Bespoke Earnings Report Database provides detailed analysis for over 2,700 stocks. We take earnings analysis to the next level by not only highlighting how the actual reports compare to analyst estimates, but also how the stock price reacted to the report. Users of this database can easily find how a stock or basket of stocks typically reacts to earnings in order to prepare themselves for future quarterly releases. Traders can also see how stocks trade after gapping up or down on earnings to develop trade ideas. If IBM opens down $2 on earnings, what does the stock typically do next? This database can answer that question and much more for the majority of US stocks that trade today!

Please call 914-315-1248 or email info@bespokeinvest.com if you would like to learn more about the Bespoke Interactive Earnings Report Database!  The database can be purchased in its entirety or on a stock by stock basis.

You can also learn about the many other products that Bespoke offers at Bespoke Premium.

Monday
Jun232008

Bespoke Prediction Poll Results

We started our new weekly Prediction Poll last Friday and received nearly 200 reader responses over the weekend for where the Dow 30 would close this Friday the 27th.  Below we highlight the results from the poll, and as shown, the average of all predictions was 11,818.  The Dow closed at 11,873 on Friday, so that means the crowd is looking for the index to fall 55 points (or -0.46%) this week. 

Thanks to all who participated.  And remember, the person with the guess closest to the Dow's actual close on Friday will receive one free month of the Bespoke Premium research service.

Djiatargets627

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Monday
Jun232008

Oil: What a Difference Six Months Makes

Oil_bubble_barronsThe cover headline of this week's Barron's reads, "Oil Bubble: When It Will Pop and Why."  The article outlines the trends behind oil's run-up, and why these trends could reverse to cause the bubble to pop, bringing prices down to $100 per barrel.  Six months ago, oil was trading in the low $90s, and the big debate was whether or not it would break above $100.  Today, we're talking about a potential bursting of the bubble, bringing prices back down to a 'more reasonable' level of $100.  What a difference six months makes.

Friday
Jun202008

Bespoke's Prediction Poll

This week we're introducing the Bespoke Prediction Poll to gather a consensus view on next week's market action from Think B.I.G. readers.  Please enter your prediction for where the Dow Jones Industrial Average will close next Friday.  The index is currently trading at 11,842.69.  Predictions must be in by Sunday at midnight.  The person with the closest answer will receive one free month of the $40/month Bespoke Premium service.  Thanks for participating!









Where will the DJIA close on Friday, June 27th?
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For non-members of the Bespoke Premium service, we have recently begun issuing our Week in Review newsletter that provides a detailed look at the comings and goings in the financial world over the last week.  You can sign up to receive the Week in Review along with all of our other reports by visiting BespokePremium.com.  Please click the image below to view last week's Week in Review as an example.

Along with our Week in Review newsletter, below we provide the titles of the in-depth B.I.G. Tips reports we released this week.  If any spark your interest, they are all available to our Premium subscribers.  These are anticipatory, ahead-of-the-curve research reports that cover markets, economies, stocks, commodities, housing and anything else related to making people money. 

This week's B.I.G. Tips reports: Earnings Estimate Revisions (stocks with the biggest increases and decreases in analyst estimates), Stock Ratings (a look at the most and least loved stocks from the major financial websites), Coal Stocks Soar (will parabolic rises be met with similar declines?), S&P 500 vs Oil (stocks are much worse than they look), Bull Market in Japan (follow the new trend?), FDX Earnings (how to trade the stock at the open), Fed Funds Forecasts (are Fed Funds futures that accurate?), Four Quarters of Negative Growth (what to expect for the market going forward).

Thanks for taking part in the Bespoke Prediction Poll!  If you'd like to try out our Premium service, please sign up at BespokePremium.com.

Friday
Jun202008

NYSE Stocks With The Highest Short Interest as a % of Float

As we noted yesterday, short interest on the NYSE increased another 7% since the end of May.  Along with a chart of the shoot up in short interest since the S&P 500 hits its peak last year, we also provide a list of the 25 stocks on the NYSE with the highest short interest as a percentage of float.  As shown, FirstFed Financial (FED -- nice ticker) currently has the highest short interest at 80% of float.  The stock is down 71% this year, so the shorts are clearly winning that battle.  There are some stocks on the list where the shorts are losing, however.  PZN and TLB both have more than 50% of their float sold short, but they're up slightly on the year.  Big Lots (BIG) has 45% of its float sold short, but it is up more than 100% in 2008.  If they can't get BIG to go down, it looks like the shorts are going to die trying.

Nyse_short_interest_0615

Nyseshort 

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Friday
Jun202008

S&P 1500 Regional Banks Index Down 33% YTD

Regional Banks are front and center in the markets these days.  For those interested, below we highlight the 63 companies that make up the S&P 1500 Regional Banks index.  For each stock, we include its percentage from its 52-week high, year-to-date percent change and estimated dividend yield.  As shown, the majority of stocks in the index are down significantly on the year, with UCBH Holdings down the most at 82%.  There are some stocks in the group that are up on the year, however.  UMB Financial is a regional bank that is up 43% this year.  Others in the green for 2008 include WIBC, WABC, CBU, FBP, ONB, HBHC, CFR, NARA and BOH.  The estimated dividend yields are quite high since prices have fallen so much and dividends have yet to really get cut.  Take these with a grain of salt.

Banksdown

Banksup 

Friday
Jun202008

Legg Mason Struggles

Even the best are struggling.  As of yesterday's close, Bill Miller's Legg Mason Value Trust was down 22.7% on the year versus the S&P 500's decline of 8.55%.  Mr. Miller's fund performance is doing nothing to help out Legg Mason's stock (LM) either.  As shown, it is down nearly 30% on the year.

Lmvt

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Friday
Jun202008

Volatity Going Nowhere

With the S&P 500 drifting closer and closer to 52-week lows, one would expect to see the VIX volatility index moving higher and higher.  While it has risen over the last few weeks, the VIX is nowhere near the highs reached during the January and March market lows.  The VIX typically pops when investors become fearful of their stock investments.  Big spikes in the VIX tyipcally signal panic selling, and many investors wait for this panic selling to signal a short-term bottom in the markets.  If the current levels of the VIX are any guide, we still have a lot of pain to go through before that bottom is reached.

Vixspx

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Friday
Jun202008

Global Inflation Rates

We think we have it bad here...

Although it's widely believed to be underestimated, the CPI in the US is on the lighter side of inflation compared to the 70 other countries listed below.  As shown, the median CPI for the 71 countries is 5.83% (YoY) compared to the most recent CPI of 4.2% in the US.  The highest inflation rate goes to Venezuela and the Ukraine at 31%, followed by Sri Lanka (26%), Vietnam (25%), Egypt (19.7%) and Pakistan (19.27%).   Although our "official" inflation rate is below the majority of the countries we analyzed, prices here are higher than major countries like France, Germany, the UK, Canada and Japan.

Globalinflation_2 

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Friday
Jun202008

Bank and Broker Default Risk

Below we provide the current default risk of the major banks and brokers around the world as measured by their 5-year credit default swaps (this is the one-year cost to insure the company's bonds over the next five years).  As shown, Lehman's CDS price is currently the highest at 249.2, followed by Merrill at 196 and Wachovia at 189.  Investors are much more worried about US banks and brokers than they are the foreign ones.  RBS, Barclays, Soc Gen, Deutsche Bank, Banco Santandar, BNP Paribas and HSBC are all at the bottom of the list. 

While default risk is still elevated for these firms, it is still much lower than it was in mid-March just before the Bear Stearns bailout.  Lehman's CDS price was all the way up at 450 back then, so it is down 44% at current levels.  While default risk is down across the board, stock prices are down significantly as well for many of these firms.  Lehman is down another 38% since 3/14, Merrill is down 13%, Bank of America is down 21%, and Wachovia is down 33%.  Some stock prices are up, however.  Morgan Stanley and Citi are up slightly, while Goldman is up nearly 20%.

Bankbrokercds

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Friday
Jun202008

Percentage of Stocks Above 50-Day Moving Averages

In the S&P 500, 36% of stocks are currently trading above their 50-day moving averages.  A healthy market typically has more than 50% of stocks above their 50-days, so current levels are definitely weak.  But they can no doubt get weaker.  Back in August 2007 and this January, the percentage dropped to single digits.

On a sector basis, Financials are the weakest at 16%, followed by Consumer Discretionary and Consumer Staples.  Energy has the most positive breadth with 78% of stocks above their 50-day moving averages.  Utilities rank second at 68%, and Technology ranks third down at 49%.

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Finlindu50day

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Condcons50day

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Utiltels50day