Monday
Jul282008

International Long Term Interest Rates

The charts below highlight the yields on selected international ten-year treasuries.  Interestingly, in the US and Canada, interest rates are still closer to the low end of the their range over the last two years, while yields in the rest of the world are near their highs of the last two years.

Interestrates072808

Interestrates072808a

Interestrates072808b

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Monday
Jul282008

Q2 Sector EPS Growth

ln our prior post we highlighted the performance of stocks in reaction to earnings reports this season.  Below we highlight the year over year earnings growth numbers seen from sectors this quarter versus Q2 '07.  Currently, the Financial sector is the only one seeing negative growth.  But it's a big negative at -94.8%, which is enough to bring the entire S&P 500 earnings growth down 24.3%.  Energy, Technology and Consumer Discretionary are all seeing 20%+ growth this quarter, while Health Care and Consumer Staples are also seeing double-digit growth.  Ex-Financials, S&P 500 earnings growth is at 12.1%.

Q2growth728

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Monday
Jul282008

Second Quarter Earnings Season Performance

Below we highlight the average one-day change of stocks within each sector on their earnings report days this season.  With earnings season about half over, Industrial stocks are performing the best, averaging a gain of 2.3% in response to earnings.  Industrials are followed by Financials, Health Care and Technology on the upside.  The worst performing stocks on earnings reports this season are Utilities, which have averaged a decline of 3.2%.  Utilities are followed by Energy and Consumer Staples.  These three sectors were expected to hold up the best during an economic downturn, and it seems that investors are a bit underwhelmed by them this earnings season.

2ndquarterepsperf

Sunday
Jul272008

Steve Jobs' Health: "More than a common bug, but not life threatening"

Apple (AAPL) investors finally got somewhat of an answer to their questions regarding Steve Jobs' health this weekend.  In Saturday's NY Times Business section, columnist Joe Nocera wrote of a recent "off-the-record" conversation he had with Jobs.  Mr. Nocera wrote, "While his health problems amounted to a good deal more than “a common bug,” they weren’t life-threatening and he doesn’t have a recurrence of cancer."  The last few paragraphs of the column regarding the author's conversation with Jobs are worth checking out.  Click here to read.

Want more business news?  Find interesting articles on Bespoke's B.I.G. News page.

Sunday
Jul272008

The Garage Sale Indicator

Gigaom.com writer Chris Albrecht recently contacted Craigslist to see if he could quantify his anecdotal evidence that the number of garage sales are up dramatically this summer.  While it makes sense that more people would be trying to raise cash during an economic downturn, it's still interesting to see.  As shown in Gigaom.com's chart below, the number of garage sale listings on Craigslist were up 100% in May 2008 compared to May 2007.  That's a big increase!

Garagesale

Friday
Jul252008

Bespoke Prediction Poll and This Week's B.I.G. Tips Reports

The winner of this week's Bespoke Prediction Poll guessed that the Dow would close the week at 11,375.00 -- just 0.03% percent from today's actual close of 11,370.69.  Congratulations on the winning prediction and receiving one free month of the Bespoke Premium service!  At the bottom of this post, please enter your prediction for where the Dow Jones Industrial Average will close next Friday.  The index is currently trading at 11,370.69.  Predictions must be in by this Sunday at midnight.  The person with the closest answer will receive one free month of the $40/month Bespoke Premium service.  Thanks for participating!

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: Week in Review (our widely followed weekly newsletter on the markets), 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), Earnings Season Update (key earnings season stats and the best and worst reports), Bank and Broker Default Risk (our new custom Credit Default Swap index on the banks and brokers), Monthly Dividend Screen (top yielding dividend stocks going ex over the next few months), The Record Move in Financials: What's Next? (how to play the huge rally in Financials), Big Up and Down Days (where do they occur in bull and bear markets), Biotech Overbought (which stocks look best and worst in this group), Oil Declines and the Market (what to buy and sell during oil bear markets), Oil Breaks Downtrend (is the commodity heading lower?), Apple Earnings (how to play AAPL going into earnings), Decile Analysis of the Rally (what has and hasn't worked over the last week?).









Where will the DJIA close on Friday, August 1st?
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Friday
Jul252008

Second Quarter Earnings Season: Biggest Winners and Losers

Below we highlight the Dow 30 stocks that have reported earnings this season along with the one-day change in response to their reports.  As shown, 13 of the 20 Dow stocks that have reported went up in reaction to earnings, with JPM going up the most at 13.5%.  JPM is followed by Citi, UTX, PFE, T and BAC.  MRK got hit the hardest with a decline of 11%, followed by AXP and MSFT.  Overall, at least there have been more positives than negatives.  Of the 20 Dow stocks, 13 have beaten estimates while just 3 have missed.

Dow30perf

For those interested, below we highlight the best and worst performing stocks on the first trading day following earnings reports.  As shown, airliner UAUA has had the biggest up move on the day of earnings at 68%.  UAUA is followed by LCC (58%), HBAN (40%), MTG (39%) and WFC (33%).  Other notables on the list of earnings winners include AMR, WB, and DAL.  On the list of losers, Overstock (OSTK) and FCSX top the list with declines of 41%.

Upmovesearnings

Downmovesearnings

   

Friday
Jul252008

S&P Breaking News on FNM and FRE

After running through the numbers on their abacus, S&P just announced that they have put FNM and FRE on credit watch "Negative" and may downgrade the credit of these two companies in the future.  Where have these guys been?

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Friday
Jul252008

Energy Sector Declines

The recent downturn in oil has left the S&P 500 Energy sector down 7.5% year to date.  Investors who have built up positions in Energy names throughout oil's runup this year surely have a sour taste in their mouths this month.  Since oil peaked on July 11th, the average S&P 1500 Energy stock is down 9.96%, while the S&P 1500 as a whole is up about 2%.

Energyoil

Below we highlight the 25 worst performing S&P 1500 Energy stocks since the 7/11 intraday peak in oil.  As shown, Cabot Oil&Gas is down 24%, followed by Chesapeake Energy, Quicksilver Resources and St. Mary Land & Exploration all down about 23%.  Overall, 79 of the 85 stocks in the sector are down since 7/11.  If 7/11 turns out to be a longer-term peak in energy prices, it will prove to be the lucky day that superstitious investors were hoping for.

Energy

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Friday
Jul252008

Bespoke's Sector Snapshot

Below we highlight our trading range charts of the S&P 500 and its ten sectors.  The green (red) shading represents between one and two standard deviations below (above) the sector's 50-day moving average.  When prices move into or below the green area, they are considered oversold, and vice versa for the red zone. 

As shown in the first chart below, the S&P 500 barely made it out of oversold territory during its recent rally of 5%.  After yesterday's declines, the index is now in the green zone once again.  And even after the Financial sector recently had its biggest 5-day rally in 20 years, it didn't even make it above its 50-day moving average.  After it failed to move above the 50-day yesterday, the technicals don't look good for Financials. 

Energy, Materials and Utilities -- three market bastions for the first part of this bear market -- are now the most oversold of the ten S&P 500 sectors.  As energy and other commodities have sold off, they have unsurprisingly brought the stocks down with them.  While investors have been waiting on a pullback in oil to get back into stocks, the gains in the major indices might be muted since energy stocks make up such a big slice of the pie now.

Spxte

Finlindu

Inftenrs

Condcons

Hlthmatr

Utiltels

    

Friday
Jul252008

NYSE Short Interest Hits Another Record

Short interest on the NYSE rose 2.7% during the first half of July to 18.61 bln shares and represents another record high going back to 1931.  Over the last year, short interest on the NYSE has risen by 43.7%.  As a percentage of total shares outstanding, 4.7% of all shares on the NYSE are currently sold short.  While some may interpret this data as a sign that SEC Chairman Cox's supposed crackdown on short selling hasn't worked, we would note that the data is as of July 15th (settlement date).  Therefore, given the fact that most equity trades settle three business days after the trade date, in order to be reflected in the most recent report, trades would have had to been executed no later than July 10th.  The month-end report should be interesting.

Nyse_short_interest072408

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Thursday
Jul242008

Oil Price Targets

Back on April 8th, we published the first chart below highlighting the consensus price targets for oil from commodity analysts surveyed by Bloomberg.  Oil was trading at $108 at the time, but price targets were still well below that in the $80-$90 range. 

With the recent spike to $140, analysts have upped their price targets on oil to $125-$128 through the first quarter of 2009.  Over the last couple of months, analysts have turned more bullish on the commodity.  Only time will tell if this bullishness was prescient or too little too late.

Oilforecasts

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Thursday
Jul242008

Trading Places: Energy and Financials

For the last several months, going long Energy and short Financials has been a trade that has just printed money.  However, if you piled into the trade in the last few weeks, you're feeling some pain.  The charts below show the relative strength of the Energy and Financial sectors versus the S&P 500.  While the energy sector appears to have broken its uptrend, the Financial sector still has some work to do on the upside before we can say that it has bottomed.

Relative_strength_energy_and_fina_2

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Thursday
Jul242008

Bespoke's Paul Hickey on Bloomberg TV After the Close Today

Bloomberg_2 Bespoke's Paul Hickey will appear on Bloomberg TV with Matt Miller after the close today to discuss short interest and its impact on the market.

Thursday
Jul242008

Washington Mutual Up and Down

After rallying 118% from the mid-$3s to the mid-$6s last week, Washington Mutual (WM) is back down to the mid-$3s this week.  WaMu's daily changes over the last couple of weeks look more like yearly changes.  At least for one financial firm, the worst doesn't seem to be over.

Wamu

Wmutual

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