Wednesday
May282008

Energy Speculators at Intrade

The US average national price for regular unleaded gas is currently $3.944.  Intrade has contracts for where the average will be on June 30, 2008, and as shown below, the last trade on the $4/gallon contract was at 70 (effectively putting Intrade's odds at 70%).  While gas could be headed higher, traders over there might be getting a little ahead of themselves.  With the current price still less than the contract price of $4/gallon, the odds should be at or below 50/50.  While there is a big debate over the impact that speculators are having on actual oil prices, they seem to be out and about at Intrade.

Intradegasoline 

Wednesday
May282008

Investors Intelligence Correction Forecasts

In this week's update of the Investors Intelligence sentiment data, the number of newsletter writers forecasting a correction of 10% rose to 29.9%.  This is the highest reading since January when it reached as high as 31.5%.  While Investors Intelligence data is often considered contrarian, recent high readings of advisors looking for a correction have been pretty good calls.  In the S&P 500 chart below, the red dots represent periods when the percentage of respondents looking for a correction was 29% or more.  While the ensuing declines were not always 10%, each occurrence has been followed by at least a minor decline.

Investors_intelligence

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Wednesday
May282008

Analyst Buy and Sell Ratings for Stocks and Sectors

We recently gathered analyst buy and sell ratings for stocks in the Russell 1,000.  Below we highlight the average percentage of buy and sell ratings for stocks in each sector.  Not surprisingly, the Energy sector has the highest percentage of buy ratings, while Consumer Discretionary and Financials have the lowest.  The average Energy stock has 54% buy ratings, while the average Financial stock is well below all other sectors at 33%.  Technology, Materials and Health Care are all behind Energy each with 52% buy ratings.  Overall, the average stock in the Russell 1,000 has 44% buy ratings and just 8% sell ratings.

Buyratings

Sellratings

Below we provide a list of Russell 1,000 stocks with the most buy and sell ratings (with at least 5 analysts covering them).  As shown, nine stocks in the index have 100% buy ratings, with Staples (SPLS) topping the list because it has the most analyst coverage.  The stock is up just 1.13% on the year, so analysts must know something that investors don't.  Any hint of negative news will probably not be good for the stock because at this point analysts can only lower ratings.  Other notables on the list of stocks with the most buy ratings include FWLT, UTX and AAPL. 

On the downside, Western Refining (WNR) and New York Times (NYT) have the highest percentage of sell ratings at 63%.  Sears Holdings (SHLD) is also up there with 57% sell ratings.  Analysts clearly don't have much faith in Eddie Lampert.

For those interested, Intel (INTC) is the stock in the Russell 1,000 with the most sell-side analyst coverage.  A total of 40 analysts currently have recommendations for Intel!

Buystocks_3

Sellstocks

Wednesday
May282008

Yahoo Free Real-Time Quotes

Yhoo_real_time_4While many investors already have access to free-real time quotes, most sources of this information require the user to either have a paid account or at least register for access.  This morning though, Yahoo! Finance announced that they will now once again offer free real-time prices on most US equities.  For more information check out the company's release.

Wednesday
May282008

Materials and Energy Sectors Decline

Energy and Materials were the only two sectors in the S&P 500 that declined yesterday, and each have now been down four days in a row.  As shown in the trading range charts below, the declines have moved the sectors from extreme overbought territory down to the top of their trading ranges.  As of now, the uptrends remain intact, but it has been awhile since these sectors have been oversold, so we could see more of a selloff in the coming days.

Energymaterials_2

Below we list the worst performing Materials and Energy stocks since the two sectors peaked on May 20th.  As shown, KWK is down the most at 11.78%, followed by TRA, GGC, ATI and TIN.  While big names like XOM, CVX, MON, DOW and DD aren't on the list of worst performers, they are all down between 4% and 6% over the last week.   

Energymaterialsstocks

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Tuesday
May272008

Currency, Commodity, and Fixed Income Trading Ranges

Even after crude oil's three dollar plus decline today, it and other energy related commodities remain in short-term overbought territory.  The chart below is published each morning as part of our Daily Morning Lineup, and it shows the current levels of major currencies, fixed income, and commodities versus their typical trading ranges.  For each asset we show the current level (circle) as well as the change over the last week (tail).  When the circle is in the white area, it is considered neutral, while readings in the pink and red areas indicate overbought levels.  Conversely, readings in the green areas indicate oversold levels.

As previously mentioned, energy related commodities are all still in overbought territory even after today's declines.  The dollar is in neutral territory versus the Euro and Yen.  In the major metals, gold and silver are both in neutral territory, while copper is oversold.  Finally, US Treasuries remain weak as both the 2-year and 10-year notes are in oversold territory.

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Trading_ranges_commodities_and_cu_2

Tuesday
May272008

Historical New Home Sales Chart

Newhomesalesgoogle

As shown from the Google News search above, New Home Sales rose 3.3% in April.  Had we gone into a coma in 2003 and just woken up today, we might look at these headlines and think things were pretty good.  But a look at the chart below paints a much better picture of the current state of the housing market.  If you get real close to your computer, you can see the blip of a rise in the historical chart of New Home Sales since 1963.  While New Home Sales did rise 3.3% in April, it was a month over month comparison.   The real story is that sales declined 42% year over year.    

Newhomesales527

Tuesday
May272008

Exxon Mobil (XOM) Down Four Days In A Row

Last Tuesday, we put out a B.I.G. Tips report to Bespoke Premium members highlighting the 7-day winning streak for XOM.  Our historical price analysis showed that the stock has usually seen declines in the week following similar winning streaks in the past.  Since last Tuesday, the stock has now been down four days in a row for a decline of xxx%.  For those interested, when Exxon has been down four days in a row since 1980, the stock has averaged a gain of 0.44%

Click the image below to view last week's B.I.G. Tips report on XOM.  To receive these on a daily basis, subscribe to Bespoke Premium today.

Tuesday
May272008

March S&P/Case-Shiller Figures

Marchcaseshiller_3At right we highlight the month over month and year over year changes in median home prices from the March S&P/Case-Shiller figures.  As shown, Las Vegas is down the most at nearly 26% versus March 2007, followed by Miami, Phoenix, LA, San Diego and San Francisco.  Charlotte is the only city that showed an increase in median home prices from 3/07 to 3/08. 

Things weren't much better on a month over month basis.  Las Vegas and Miami both fell more than 4% from February to March.  Dallas and Charlotte were the only two cities to show month over month gains. 

The Composite 10-city index was down 15.3% from 3/07 to 3/08, and it is now down 17.78% from its peak in June 2006.

Below we provide historical year over year changes (%) in median home prices for the 20 cities that S&P/Case-Shiller tracks along with their two composite indices.

Housing1_2

Housing2

Housing3 

Housing

Tuesday
May272008

Shanghai Can't Break Through 50-Day

Below we provide a price chart of China's Shanghai Composite index, which is currently down nearly 36% year to date.  After staging a rally of more than 20% in late April, the index has once again corrected more than 10%.  As shown in the chart, the index just hasn't been able to break through its 50-day moving average. 

Chinashanghai_2

 

Tuesday
May272008

Stocks and Credit Spreads

Since last year, there has been a steady relationship between stocks and credit markets.  As strains emerged in the corporate bond market, credit spreads rose and the bull market stalled.  When the credit markets all but froze up in March, stocks across the globe swooned and the S&P 500 even briefly hit bear market territory with a 20% decline using intraday prices. 

As the S&P 500 rallied off the March lows, credit spreads maintained their relationship with stocks and began to decline.  Last week, however, that relationship weakened.  While the S&P 500 fell by over 3%, the Merrill Lynch index of high yield credit spreads barely budged.  On the week, spreads rose by only seven basis points from 663 to 670 over treasuries.  Furthermore, all of the rise happened on Friday when spreads rose by 11 basis points from a post Bear Stearns meltdown low of 659 basis points.  While the market still faces multiple headwinds, the continued stability in high yield spreads suggests that credit issues might be heading to the rear view mirror.

High_yield_spreads_thru_0523

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Tuesday
May272008

Volume During Last Week's Declines

Many market participants argued that the recent rally lacked staying power because volume had been so weak.  Last week we had the first real selloff since mid-April, and as shown below, volume was weak and below average during these declines as well.  Those that questioned the rally because of weak volume should also question the staying power of these declines, right?

Spxpricevolume

Friday
May232008

Memorial Day Reading

If you're looking for some additional reading while lounging around this weekend, we put out a number of reports this week for Bespoke Premium members covering recent market activity.  Along with our in-depth sector and ETF analysis, our B.I.G. Tips reports offer unique, objective analysis on indices, stocks, the economy, commodities, housing and everything else related to making people money.  We typically release two to three of these reports a day, and all of them are archived on our site for Premium members to view.  They are usually one or two pages of succinct, easy-to-read charts and commentary that are easily printable.  Below are the titles and thumbnails of the reports we released just this week.

This Week's B.I.G. Tips reports: Should We Believe the Chicago Fed? (does the recession call merit attention), S&P 500 Technicals (where are we headed from here), Bank and Broker Default Risk (comparing default risk with stock prices), Oil Up, Oil Stocks Down (what happens when this divergence occurs), Sector Weights (financials fall, energy rises), Oil vs. Natural Gas (which one should be higher), XOM Winning Streak (7 up days in a row; is it due for a pullback), "What If" Screen of the Week (a new stock screener from Bespoke), Weak Volume In Rallies (does volume matter during rallies), Member Survey Results (what do Premium members think about the markets), Bespoke's Torture Index (our unique index that tracks torture for consumers), Economic Indicator Analysis (our monthly charts and gauge of all economic indicators).

Have a great Memorial Day weekend!

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Friday
May232008

Credit Crisis Indicators

In late March, we highlighted charts of a few credit crisis indicators.  Below we have updated those charts, and by the looks of them, things remain much better than they did a couple of months ago. 

The first chart measures default risk by looking at a credit default swap index of investment grade debt.  While the index has ticked slightly higher this week as equity markets have sold off, the rise has been puny compared to the spikes seen earlier this year.  The second chart looks at the national average of 30-year fixed mortgage rates.  While it would be nice if rates were lower, they have remained stable and are not spiking like they were in January and February when banks demanded huge spreads to take on any risk whatsoever.  The last chart tracks the municipal bond market through the MUB ETF of S&P's National Municipal Bond Index.  Another problem during the credit crisis was the failure of Auction Rate Securities, which tanked muni bonds and sent their yields sharply higher.  As shown by the price chart, muni bonds have come back nicely as investors became attracted to those high yields.

Cdx

30yearfixed 

Mub

Friday
May232008

Existing Home Sales Back to Prior Lows

Last month's uptick in Existing Home Sales (if you want to call it that) didn't last long.  Today's release of the April figures showed that Existing Home Sales came right in line with the all-time lows of 4.89 million seen in January.  Granted, the indicator has only been around since 1999, but the argument that real estate is getting better can't be made yet.

Existinghomesales

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