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

Monday
Jun302008

Wait, I Take That Back

While analysts have been lowering their expectations for the Financial Sector all year, during the month of May the degree of their negativity softened considerably.  In the chart below, we show the performance of the Financial sector (blue line) and the trends in analyst EPS revisions (red line).  While the outlook for the sector improved considerably in May, analysts quickly turned negative again in June.  It almost seems as though analysts, just like the analysts at Moody's, found a bad calculation in their spreadsheets.

Financials_eps_revisions

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Sunday
Jun292008

It's All About Oil

If any one tries to tell you differently, all you need to do is show them the chart below.  As last week's trading illustrates, every time oil went up, stocks went down, and every time oil pulled back, the market gained steam.

Weekly_chart_oil_vs_stocks

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Friday
Jun272008

Bespoke's Prediction Poll and Last Week's Winner

The winner of last week's Bespoke Prediction Poll guessed that the Dow would close the week at 11,350 -- just 0.03% percent from today's actual close of 11,346.51.  Congratulations on the prediction and winning one free month of the Bespoke Premium service!  Please enter your prediction for where the Dow Jones Industrial Average will close next Thursday (Friday is July 4th).  The index is currently trading at 11,346.51.  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 Thursday, July 3rd?
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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 a previous 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), July 4th Trading (market performance in the week preceding and following July 4th), Big Down Days (market performance following down days similar to Thursday), International Revenues and the Weak Dollar (how have stocks with strong international revenues been holding up?), July Market Seasonality (typical market and stock performance in July), Housing Futures (which direction is real estate heading?), Fed Funds Days (how should the market perform following this week's rate decision?), Decile Analysis (which stock characteristics are moving stocks higher and lower?), Top Stock Technicals (our chart analysis of the top rated stocks), End of Quarter Window Dressing (which stocks should benefit the most and the least from this definite trend?).

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
Jun272008

Worst June Since 1930

Man, this is getting ugly.  If the month were to end today, the Dow would be down 10.30% this June.  That would mark the worst June for the Dow since 1930, and the worst month for the index since September 2002 (-12.37%).  Unfortunately, the month still has one more day next Monday.

Downjunes

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Friday
Jun272008

Writedowns and Capital Raised for Financial Firms

From data compiled by Bloomberg, financial firms have now written down $399 billion, with much more expected in the coming weeks.  On the flip side, they have raised a total of $322 billion in new capital. 

Below we highlight the writedowns and capital raised of major financial firms around the world.  Citigroup (C) tops the writedown list at $42.9 billion, followed by UBS ($38.2) and Merrill Lynch ($37.1).  Goldman Sachs and Wells Fargo are at the bottom of the list with $3.8 billion and $3.0 billion written down respectively. 

In the table we also include the current market cap for each firm as well as the ratio of writedowns to market cap.  ETrade (ETFC) tops this list with a ratio just over two (writing down $3.3 billion with a current market cap of $1.6 billion).  Washington Mutual and Merrill Lynch are the only other firms that have written down more than their company is currently worth.  JP Morgan, Goldman and Wells Fargo have the best writedown/market cap ratios.

Writedown

Writedownchart

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Friday
Jun272008

Business Week Doubles Down On Housing's Fall

At the end of January, Business Week's Peter Coy wrote a cover story titled, "Meltdown: For Housing, The Worst Is Yet To Come."  Many investors look at magazine covers as contrarian indicators, but Mr. Coy was spot on with the article since things have indeed gotten worse.

Bweekhousingfeb

We just got this week's Business Week in the mail, and once again Mr. Coy (along with Mara Der Hovanesian) has written an article on the struggling housing market.  This week's title -- The Home Price Abyss: Why The Threat Of A Free Fall Is Growing." 

Business Week could have left real estate alone since they have already been right on their February call, but they're effectively doubling down on their bet that real estate will continue to fall.

Check out the articles.  They're both good reads.

"Meltdown: For Housing, The Worst Is Yet To Come"

The Home Price Abyss: Why The Threat Of A Free Fall Is Growing"

Bweekhousing 

Friday
Jun272008

The Bursting of the Non-Bubble?

This morning's WSJ has a cover story comparing the declines in financial shares to the declines of tech stocks during the Internet bubble.  We find that comparison hard to make at this point. 

Since its peak last year, the S&P 500 Financial sector is down 45%.  While that's a large decline, it's nothing compared to the 77% decline that the Nasdaq saw from its high in 2000 to its low in 2002.  For the Financials to be 77% below their record highs, the sector would have to fall another 60% from current levels! 

And the rally in Tech stocks completely drawfs the rally that Financials had.  In the first chart below, we highlight the percent change in the Nasdaq and the S&P 500 Financial sector since 1990.  As shown, the bubble and its subsequent burst in the Nasdaq stands out like a soar thumb.  In the bottom chart, we highlight the percent change in the Nasdaq from its low made in June 1994 to its low made in October 2002.  We also include the Financial sector from its low made in October 2002 to its low made yesterday.  While it's been a tough ride for Financials recently, the Tech bubble was more than double the fun and then double the pain.

Nasdaqfinancials

Nasvsfinl

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Friday
Jun272008

Mass Transit Traffic Spikes?

Here in the New York region of the US, the Metro-North train line is almost a staple of life.  While not everyone commutes on it every day, almost everyone has taken the train at some point in their lives. 

While it's not at all surprising, it has been interesting to see ridership increase day by day as the price of oil has risen in 2008.  Just last year, finding a seat on a train from Harrison, NY to New York City in the evening was easy.  When we got on the train last week to head to a dinner meeting, not a seat was to be found.  And riders continued to pile in as more stops were made along the way. 

With more and more commuters either taking public transit or carpooling, we have also noticed that auto traffic along the I-95 corridor (at least from Westchester County into Connecticut) has been down recently.  Leaving the office earlier than 7 PM has meant nothing but gridlock in the past, but recent trips home earlier than that have been brake free (although Thursdays and Fridays are still horrible). 

Along with our own anecdotal evidence, some recent articles on the matter caught our attention.  In the NY Times this past weekend, it was noted that Amtrak traffic had its biggest monthly traffic figure ever in May, which is usually not a heavy travel month.  The Greenwich Time recently had an article about Metro-North traffic, and just today we found this article that more and more people are running out of gas on the roads.

Got a traffic story to share with us?  Let us know in the comments section below.

Friday
Jun272008

Market Breadth Back to Lows

Below we highlight the percentage of stocks above their 50-day moving averages for the S&P 500 and its ten sectors.  Currently, just 17% of stocks in the S&P 500 are above their 50-days, which is just about as low as breadth has been during the prior lows seen back in August, January and March.  Eleven percent of Industrials and Materials stocks, 8% of Consumer Discretionary stocks, and just 3% of Financial stocks are above their 50-days.  Those looking to sell, sell, sell this market may want to wait for these oversold levels to at least move back to neutral territory.

Spx50day

Finlindu50day

Techenrs50day

Condcons50day

Hlthmatr50day 

Utiltels50day

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Thursday
Jun262008

Shorts Piling On

Since the short-term top in the S&P 1500 on May 19th, the average stock in the index is down 8.4%.  We broke the index into deciles (150 stocks in each decile) based on each stock's short interest as a percentage of float (at the market top) to see if the bears have been licking their chops.  Below we highlight the average performance of stocks in each decile from 5/19 to today.  As shown, the decile of stocks that are the most heavily shorted is down an average of 14.47% since 5/19, while the least heavily shorted decile is down an average of 6.43%.  Clearly, the shorts have been piling on and winning as the market struggles.

Shortintperf

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Thursday
Jun262008

International Declines

While markets have been bad here, they've been even worse in many other areas of the world.  Below we highlight the year to date performance of major equity indices in Japan, Germany, France, Canada, China, the UK, and the US.  As shown, Canada and Japan are outperforming the US, but the rest are down quite a bit more.  While the S&P 500 is down 12.6% this year, the UK is down 14.5%, Germany is down 20%, France is down 21%, and China is down 45%.  All you had to do was short China and buy the US and you'd be making a killing this year.  If it were only that easy.

Intlmarkets

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