Thursday
Jul312008

Financial Sector Has Seven of Ten Best Days During 2008

With the sector down over 25% so far this year, it's hard to believe that the Financial sector has had most of its best one-day performances since 1990 during 2008.  But as shown in the chart below, seven of the ten best days for the sector (red dots) have come during 2008.

Financial_sector_19902008

If this story sounds familiar, it's because we experienced a similar situation eight years ago with the Tech sector.  As shown below, the Technology sector had nine of its ten best one-day gains during the bear market of 2000-2002.  There's a reason they say big days come in bad markets.  When the dust settled in tech stocks, they had lost 82% of their value over a stretch of 132 weeks.  This makes the current decline of 42% over a 75-week period for Financial stocks seem downright tame. Does that mean the Financials have further to fall?  While they may go lower, given the fact that the rally in Financials was more subdued than what we saw in tech stocks, the final declines in the Financial sector are likewise not likely to be as severe. 

Technology_sector_19902008

              Ten_best_day_financial_and_techno_3

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Thursday
Jul312008

Top Stock Scouter Rated Stocks

Back on April 23rd, we highlighted a list of the top rated stocks using MSN's StockScouter ratings.  We noted that we would look at the stocks in a couple months to see how they performed.  After updating the price performance of the stocks in the list, the average stock was down 3.78% versus the S&P 500's performance of -7.44%.  While they weren't up, they did outperform, so it's worth taking a look at the stocks that are currently ranked best according to StockScouter.  There are currently 35 stocks in the S&P 500 with a "10" StockScouter ratings, which is the highest score a stock can get.  Below we highlight these names along with their year to date changes.  As shown, Hasbro (HAS) is the best performing stock this year of the "10s", followed by NSC, QCOM, AMGN, BNI and CPWR.  The worst performing stocks year to date that still have a "10" rating are TXT, ROK, MSFT and MRO.  We'll once again take a look at the performance of these names in a couple months to see how they have done.

Topmsn_2

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Thursday
Jul312008

Obama or McCain?

The Intrade contracts for who will become the next US President have begun to tighten a little bit over the last couple of days (see chart below).  On July 16th, the money was giving McCain a 30% chance of winning the election and Obama a 65% chance.  Currently, the odds are 38.7% for McCain and 59.8% for Obama.  Regardless of who you want to become the next President, which Intrade contract would you rather purchase right now based on the risk and reward for each one?  Let us know by taking part in the poll below.

Mccainobama_2 


Which contract would you rather buy right now?
McCain at 38.7%
Obama at 59.8%
  
Free polls from Pollhost.com

Thursday
Jul312008

GDP Grows at 1.9%: Good or Bad?

Those that don't really follow the financial markets every day might have very different takes on the economy based on where they get their news.  Just look at the varying headlines across a number of news sources on today's Q2 GDP growth numbers:

Gdpnytimes

Gdpwashpost

Gdplatimes

Gdpcnn

Gdpcnbc

Gdpforbes

Gdpwsj

      

Thursday
Jul312008

Most Overbought and Oversold ETFs

Below we highlight the 25 most overbought and oversold US ETFs based on their 50-day moving averages from our list of nearly 800 names.  Currently, the biotech ETF (BBH) is the furthest above its 50-day at nearly 18%, followed by Turkey (TUR), the Ultrashort Oil&Gas ETF (DUG) and XBI.  On the oversold side, natural gas (UNG) is trading the furthest below its 50-day at -24%, followed by more energy related ETFs.

Etfsabove731

Etfsbelow731 

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Thursday
Jul312008

Lousy Economic Readings

This morning's economic reports were pretty much lousy across the board.  In addition to a weaker than expected preliminary read on Q2 GDP (1.9% vs 2.3% expectation), initial jobless claims also showed a troubling rise.  For the week, initial jobless claims rose to 448K.  As shown in the chart below, there have been very few readings in initial jobless claims that were this high or higher where there wasn't an official recession (gray periods).

In addition to the weak economic reports for the current period, this morning's GDP release also showed that Q4 GDP was revised lower from positive 0.6% down to negative 0.2%.  Given the revision from positive to negative territory, the announcement from the NBER that the US is in a recession probably isn't too far off.

Initial_jobless_claims_073108

Wednesday
Jul302008

Two Days of 1.5% Gains

For just the 22nd time in the last ten years, the S&P 500 has rallied more than 1.5% for two days in a row.  Below we highlight the prior times it has occurred along with the change in the index over the next day, week, and month.  As shown, the last time it happened was March 24th, 2007.  In the week following that 2-day rally, the index was down 2% over the next week, but up 2% over the next month.  The median change on the following day has been -0.18%, while it has been -0.57% and -2.10% over the next week and month.  Based on the last ten years worth of data, two strong up days have typically been followed by slightly weaker-than-normal performance.

Rowspxup2days

Wednesday
Jul302008

Most Heavily Shorted ETFs

Short selling has been a major topic on Wall Street lately, with the focus mainly on the short interest of individual stocks.  Below we highlight the US ETFs with the highest short interest as a percentage of shares outstanding as well as the ones with the highest short interest ratios.  The most heavily shorted ETFs have short interest numbers that well exceed their shares outstanding.  The S&P Retail ETF (XRT) has a short interest figure that is more than 6 times its shares outstanding.  This seems a bit out of whack to us.  As shown, the most heavily shorted ETFs come in the sectors and groups that are doing the best and doing the worst in this market.  Financials, Consumer Discretionary and Energy ETFs make up the bulk of the list.  The heavily traded USO (oil) ETF reportedly has 180% of its shares outstanding sold short. 

The most recent short interest figures are from mid-July, which don't yet show the impact of the SEC's new short interest policies.  While the short interest of individual stocks will most likely decrease, it will be interesting to see how the short interest of the ETFs below change.

For those interested in more short interest analysis, subscribe to Bespoke Premium to receive our in-depth short interest reports (example) twice a month.

Etfshorts

Below we highlight the US ETFs with the highest short interest ratios.  This number represents how many days it would take to cover all of the shares shorted based on the ETF's average 30-day volume.  Most of these ETFs have much lower daily volume than the ones in the table above, and this means short squeezes would be much bigger in these names.

Etfshorts730_2

 

Wednesday
Jul302008

Bespoke's Paul Hickey on CNBC Street Signs Today at 2:15 PM ET

Street_signs_4Bespoke's Paul Hickey will appear on CNBC's Street Signs today at 2:15 PM ET to discuss the implications of the recently announced record in US births.

Wednesday
Jul302008

100 1% Days

The credit crisis has been gripping Wall Street for just over a year now, and there has been no shortage of volatility since then.  Below we highlight the number of 1% days (up or down) for the S&P 500 over the last year (252 trading days).  We're currently right at the 100 mark, meaning about 40% of the trading days have been 1% days over the last year.  That's definitely a lot compared to the low volatility experienced from '04 to '07, but it's not extraordinary, as it has happened in every decade since the '70s.  For those interested, the peak since 1940 was 141 over the one-year period from 4/02-4/03. 

1days730

Wednesday
Jul302008

This Day In History

Wired magazine has a daily feature on their website where they look at This Day in Tech.  Each day they highlight a notable event from the past that happened on the same day.  Today's entry comes from 1869 when the world's first oil tanker, The Charles, left the United States bound for Europe with about 7,000 barrels of crude.  How times have changed.  While it was only 7,000 barrels, the US was essentially the world's first exporter of oil.  Today, it's the reverse.  Oil tankers come to US ports full and leave empty.

Tuesday
Jul292008

May Case-Shiller Housing Numbers

Below we highlight a color-scaled look at the May S&P/Case-Shiller housing numbers released today.  For each city we highlight the month-over-month change, the year-over-year change, as well as how long it has been since the current reading was this low.

The West Coast and Miami continue to be problem areas, with month-over-month declines of 1% or more, and year-over-year declines of 20% or more. Las Vegas and Miami are down the most year-over-year at 28%.  While many are happy that 7 areas saw month-over-month gains, it's probably negative that there weren't more, given that the Composite index has seen month-over-month gains from April to May in every year except this year and '07 since '91.

Probably the most disheartening of the data is how much of the gains from '04 to now have been given up.  The Composite 10-City index is now at its lowest levels since June 2004, Vegas hasn't been this low since March 2004, and San Diego hasn't seen these levels since September 2003.  Detroit is the worst, with current prices now back to January 1999 levels.

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Maycaseshiller_2 

Tuesday
Jul292008

Oil vs Natural Gas

While oil and natural gas have both seen sharp drops since early July, the declines in gas have been twice as severe.  Since its high in early July, natural gas has declined by 33%, while oil has declined by a more modest 16.2%.  As a result, the ratio between the prices of oil and natural gas has risen back near its highs of recent years.  Based on their relationship since 1990, the average ratio between the two commodities has been 9.2, which is 33% below current levels.  While the two commodities are not completely fungible, this would imply that either oil still has further to fall or else the sell-off in natural gas has been overdone.

Oil_vs_gas

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Tuesday
Jul292008

Big News

Remember to visit our B.I.G. News page every day to stay up to date with the top business news stories that we're reading.  Click the button below to check it out.

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Tuesday
Jul292008

Changes in Market Cap for Biggest US Companies

Below we highlight some interesting tables on the recent changes in market caps of the largest companies in the US.  In the first chart below, we highlight the 25 biggest companies in the US, along with where they stood at the S&P 500's peak just before the credit crisis began last July 19th. 

Exxon Mobil (XOM) is still the largest company in the US even though it has lost about $93 billion in market cap since last July.  GE, MSFT and WMT rank a distant 2nd, 3rd and 4th, but they are the only other US companies worth more than $200 billion.  In the table, blue shading means the company's size rank hasn't changed, red means it has declined, and green means it has increased.  JNJ, IBM, BRK/A, AAPL and DNA are top 25 companies that saw some of the biggest increases in rank since last year, but the eye-openers are the declines in ranks.  The biggest fall from grace has been Citi, who has lost about $158 billion in market cap (from about $250 to $95 billion) and gone from a #4 rank to #27.  In dollar terms, C, GE, AIG, XOM and BAC have lost the most, while in rank terms, FRE, WM and NCC top the list.  Other noteworthy falls are LEH, who went from the 89th biggest S&P 500 company to #246, and MER, who has now lost more market cap than it is now worth since last July.

Instead of going into more detail, we'll let the tables do the talking:

Marketcap729_2

Increase_2

Decrease_2 

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Decreasemarketcap_2