Wednesday
Jul022008

Bespoke's Sector Snapshot

Below we highlight our trading range charts of the S&P 500 and its ten sectors.  Moves into or below the green shading represents an oversold reading (red=overbought). 

The S&P 500 is walking on thin ice right now, barely holding support levels made from the March lows.  If it breaks support, the index will resume the long-term downtrend that has been in place since 2007.  Unfortunately, Financials, Industrials, Consumer Discretionary, Consumer Staples and Health Care haven't been able to hold their March lows.  It's going to take a lot of work on the upside to get these sectors out of their downtrends.  While Technology, Materials and Telecom haven't broken their March lows, they are in extreme oversold territory.  Utilities and Energy are the only sectors holding onto uptrends.

Sectorte

Finlindu

Inftenrs

Condcons

Hlthmatr

Utiltels   

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Wednesday
Jul022008

Global Financial Performance

As of yesterday, just 11.6% of the stocks in the Bloomberg World Financial index were up in 2008.  At least some are up!  Below we highlight the best and worst performing stocks in the index year to date.  As shown, a Chilean financial firm is up the most at 225%, followed by Climate Exchange in Britain at 92%.  There are multiple financial firms in the Middle East on the list of winners as well.  Surprisingly, the US does have some representation on the positive list.  Oritani Financial out of New Jersey and Dime Community Bank of New York are both up about 30% on the year, while Capitol Federal (out of Kansas) is up 23.8%.

Worldfinancialsup

There's much more pain on the downside than there is joy on the upside for Financials.  While just 11% of global financials are up on the year, 16.6% are down more than 50% on the year.  Below we highlight the ones down the most.  As shown, the US has a lot more representation on this list than the one above.

Worldfinancialsdown 

Wednesday
Jul022008

Groundhog Day in Japan

Last month, we highlighted the streak of 25 straight down days in Vietnam's benchmark stock index (it is now running an eight day streak of positive returns).  Currently, Japan is working on its own streak of days with negative returns.  Over the last ten trading days, the Nikkei 225 has finished the session down every single time for a total loss of 8.1%.  Since 1970, this is the index's third streak of ten negative days.  In each of the prior two periods, the Nikkei managed to have an up day both times, and it was also positive over the next week.

Nikkei_10_day_losing_streaks_2

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Tuesday
Jul012008

Lampert's Bet on CIT Group and Housing

Yesterday's Wall Street Journal had an article highlighting that Eddie Lampert has recently placed bets on a housing recovery.  Some of the housing-related names that Mr. Lampert's hedge fund (ESL Investments) held at the end of the first quarter included CIT Group, PHH Corp, Centex and KB Home.  While these are housing-related names, none of them made up more than 1% of the portfolio at the end of the first quarter (this doesn't include HD because he's held that one for awhile).  As shown below, SHLD makes up 58% of the fund, followed by Autozone (22%) and Autonation (AN).  While it is indeed a bet on housing, it's not yet a very big one.

Eslinvestments613_2

   

Tuesday
Jul012008

Average Stock Distance From 52-Week Highs

Average_distance_0701While investors wait for the S&P 500 to hit the official 20% threshold for a bear market, once it does, it will only be telling us what the average stock has been telling us for some time.  As shown to the right, the average stock in the S&P 500 is currently down over 25% from its 52-week high, while the average stock in the S&P 1500 is down closer to 30%.

On a sector by sector basis, Consumer Discretionary stocks are the furthest from their 52-week highs with an average decline of 36.3% (the half off sale is looking like it's right around the corner), followed by Telecom Services and Financials.  Don't be misled by the fact that Financials are only the third worst though.  Since this was the first sector to feel the credit crunch, many of these names started their descent over a year ago, so their 52-week highs are lower than their highs from 2007.  As far as sectors that are holding up the best, Energy stocks unsurprisingly top the list with an average decline of only 15.9%, followed by the 16.7% decline in the Utilities sector.

Average_distance_0701_sector

Tuesday
Jul012008

Bespoke's Paul Hickey on CNBC's Street Signs Today

Street_signs_4Bespoke's Paul Hickey will appear on CNBC's Street Signs at 2:15 PM ET today to discuss the performance of international and domestic equity markets..

Tuesday
Jul012008

Second Half Bespoke Reader Expectations

After the worst first half for the Dow since 1970, there are lots of questions up in the air as to how things will play out in the last six months of 2008.  We want to know what Bespoke readers think will happen.  Please answer the questions below regarding the markets, oil, real estate and the election so we can get a sense of how investors are positioned for the second half.  We'll report back with the results in the coming days.  Thanks for participating!


Will the S&P 500 be higher or lower than it is now at the end of the year?
Higher
Lower
  
Free polls from Pollhost.com


Will the price of oil be higher or lower than it is now at the end of the year?
Higher
Lower
  
Free polls from Pollhost.com


Will Obama or McCain become the next US President?
Obama
McCain
  
Free polls from Pollhost.com


Will median home prices in the US be lower or higher than they are now at the end of the year?
Higher
Lower
  
Free polls from Pollhost.com

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Tuesday
Jul012008

Mid-Year Strategist Report

Below we highlight the current year-end S&P 500 price targets from major strategists polled by Bloomberg.  As shown, the average price target is 1,517, which is 18.5% above the index's close yesterday.  UBS and Deutsche Bank have the highest price targets at 1,650 (which would be a 29% gain over the next 6 months), followed by Lehman at 1,630 and Wachovia at 1,590.  Credit Suisse has the lowest price target at 1,350, but that is still 70 points above where the index closed yesterday. 

At the start of the year, strategists were looking for a gain of 11% in 2008.  Strategists have lowered that estimate by 7% in the first six months, but meeting the current price target is going to be tough to say the least.  It's also noteworthy that two firms stopped giving forecasts, one went under (BSC), and the other changed strategists (GS) in the first half of 2008. 

Strategists1

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Tuesday
Jul012008

First Half Sector and Stock Performance

Below we highlight sector performance for the first half of 2008.  As shown, Energy and Materials were the two sectors in the S&P 500 that were up in the first half, while the other eight were down.  Financials suffered the most with a decline of 30.9%, and they were followed by Telecom, Industrials, Consumer Discretionary, Health Care and Technology.

Sectorperf701

Below are the 25 stocks in the Russell 3,000 (currently >$5) that were up the most in the first half.  James River Coal (JRCC) is up the most so far this year at 424%, followed by HUSA (267%), PCX (267%), GDP (266%), and FINL (259%).  There are a total of 35 stocks in the index that were up more than 100% in the first half. 

Rayytd

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Monday
Jun302008

That Was Ugly

12ndhalves_2Today's close put the finishing touches on the worst first half to a year for the Dow since the index was down 14.60% from January through June of 1970.  The 14.44% decline for the Dow makes it the tenth worst first half since 1900.  At right we highlight the second half performance of the Dow based on a number of first-half scenarios. 

As shown, poor starts to the year are typically met with underperformance for the remainder of the year, although significant declines of 10% or more have seen an average gain in the second half that is slightly better than the average for all second halves.  When the Dow has been down in the first half, it has averaged a gain of just 0.29% for the second half, with gains 57.5% of the time.  Declines of 5% or more have actually averaged a loss of 1.29% for the rest of the year, while declines of 10% or more have averaged 4.36% in the second half. 

The market really outperforms in the second half when it is up in the first half.  The bigger the gains in the first half, the bigger the likelihood of gains in the second half.  Unfortunately, we don't have those gains to help us this year.

12ndhalves1_2

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Monday
Jun302008

Lehman (LEH) the Teenager

After another dismal day, Lehman Brothers (LEH) closed below $20 per share for the first time since May 2000.  As shown below, its descent over the last year or so has not been pretty.  From its high of $85.80 in February of last year, the stock is now down 76.9%.

Leh

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Monday
Jun302008

Mid-Year Price Changes of Major Commodities

Now that the year is halfway over, below we highlight the year to date percent change of ten major commodities.  As everyone knows, commodities have had quite a run so far in 2008.  While oil has been the major focus, natural gas and corn have risen more than crude.  Natural gas is up 78.8% so far this year, while corn is up nearly 60%.  Oil is up 46% after starting the year at $96/barrel.  Trailing oil is platinum, copper, silver, wheat, coffee and gold.  Oranges are the only commodity of the ten listed that are down on the year (-17.58%).  If the US consumer is going to survive the second half of the year, these commodities are going to have to stop going up...and fast.

Ytdcommodi

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Monday
Jun302008

S&P 500 Stocks Furthest Above and Below 50-Day Moving Averages

Below we highlight stocks in the S&P 500 that are currently trading the furthest above and below their 50-day moving averages.  As shown, Massey Energy (MEE) is the furthest above its 50-day in the index at 39.47%.  MEE is also the best performing stock in the S&P 500 year to date (164%).  MEE is trailed by JBL, BTU, NBR and CNX.  Non-Energy related names on the list include BUD, NEM, KG, VAR, EDS, BIG and AMGN.  And surprisingly, Spring (S) has made its way onto the list of winners.  While it's still down more than 28% year to date, it is currently 9.67% above its 50-day moving average.

Furthestabove

It's not surprising that 11 out of the 12 stocks on the oversold list are in the Financial sector.  MBI and MTG are both more than 50% below their 50-days, and Washington Mutual (which is now trading at $5!) is 44.67% below.  General Motors (GM) is the one non-Financial stock mixed in with the top 12 losers.  Other non-Financial related names on the list include AN, SNDK, F, CVH and MU.

Furthestbelow 

Monday
Jun302008

Investors Losing All Their Blue Chips

So called blue-chip stocks have struggled mightily over the last year.  The total loss in market cap from their 52-week highs for stocks in the S&P 100 (largest 100 S&P stocks by market cap) is now $2.5 trillion.  Below we highlight stocks in the index that are the furthest from their 52-week highs, as well as the loss in market cap from their 52-week highs.  As shown, GM is 75% from its 52-week high, Lehman is 72.4%, and Wachovia is 71.7%. 

Looking at market cap, GM has lost $18 billion (it is now worth a little more than $6 billion), which ranks it 42nd in terms of losses.  General Electric has lost the most in market cap at -$168 billion.  Citigroup (C) isn't far behind GE at -$167 billion.  BAC, AIG and MSFT round out the top 5 in terms of market cap losses. 

Investors that have purchased blue-chip stocks expecting them to hold up well during the downturn are looking at their statements and only seeing red chips.

Worstlosses

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Monday
Jun302008

Prediction Poll Results for The Shortened Work Week

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Predictionpoll630