Winners and Losers After 1,000 Reports

This morning's batch of earnings reports put us over the 1,000-report mark for the current earnings season.  So far this season, the average stock that has reported has gained 0.02% on the day of its report, so let's call it a wash for now.  (For companies that report in the morning, we're looking at that day's change.  For companies that report after the close, we're looking at the next day's change.)

Now that we're 1,000 reports into earnings season, below is an updated look at the biggest winners and losers so far.  As shown, there have been six stocks that have gained more than 20% on their report days.  ZELTIQ Aesthetics tops the list with a one-day gain of 28.6%, followed by Rubicon (RUBI) at 27.3% and Amedisys (AMED) at 25.5%.  Inphi (IPHI), Datalink (DTLK) and NeoGenomics (NEO) are the three other companies that gained more than 20% on earnings.  Other popular companies on the list of earnings season winners include Twitter (TWTR), US Steel (X), Intuitive Surgical (ISRG) and Under Armour (UA).  

Brightcove (BCOV) has been the biggest loser thus far with a one-day decline of 37.88% on its report day.  Silicon Limited (SILC) ranks second with a decline of 23.55%, followed by Unisys (UIS) and Alliance Fiber Optic (AFOP).  All four of the aforementioned names fell more than 20% on their report days.  Some of the other notable losers on earnings this season include WellCare Group (WCG), Xilinx (XLNX), Oshkosh Truck (OSK), SanDisk (SNDK) and Buffalo Wild Wings (BWLD).

For those that wish to focus solely on largecap names, below are lists of the biggest winners and losers on earnings in just the S&P 500.  


Industrials Sector Falling Apart

The S&P 500 remains comfortably within its long-term uptrend and above its 50-day moving average.  The same can't be said for the Industrials sector, which has taken a big hit this week.

As shown below, just 39.1% of stocks in the Industrials sector are currently above their 50-day moving averages, and the sector has fallen into extreme oversold territory after trading above its 50-day just a week ago.

(Note that the Consumer Staples sector has been falling apart as well, but it's not as concerning since it's a defensive sector.)

Check out the difference in chart patterns between Industrials and Technology below.  Tech remains in bull mode, while Industrials has really broken down this week.  

Today's better-than-expected GDP report should help stabilize the Industrials sector.  If it doesn't, what kind of warning sign is this sell-off sending investors? 


The Bespoke Morning Lineup: 7/30/14 Commentary

The below commentary excerpt is an example of what Bespoke Premium subscribers receive every morning in The Morning Lineup in addition to three pages of key headlines, charts, trends, and technical indicators.  We will be posting a sample of our commentary here each morning for the next several weeks.  If you're interested in receiving this report and our many others via email, try a 5 day free trial to Bespoke Premium today!

Futures are very quiet this morning, moving up overnight slowly but steadily. Markets in the US are currently expected to open ~20 bps higher than yesterday’s close. In overnight markets, Chinese equities took a break from their explosive move with a slightly worse than flat performance among A shares; equities traded in Hong Kong moved higher once again with a 37 bps gain in the Hang Seng. India (+33 bps) and Japan (+18 bps) were both up, as was Korea where stocks piled on 1%. Most markets had a solid morning followed by modest sideways afternoon price action ahead of the large swath of US economic data today.

In Europe, a beat in Q2’s initial GDP estimate from Spain was released this morning, although the growth was modest: 1.2% YoY versus expectations for 1.1%. Spain is the best performer in Europe on the back of that move with the IBEX 35 up 51 bps as of this writing. The other Iberian nation is going the opposite direction though: Portugal is down over 1%. The only other market trading with any volatility is Norway where stocks are down 61 bps. Core markets are flat in terms of both international and national indices.

Looking ahead to the afternoon, the FOMC decision is out at 2:00 PM and we expect no significant change from prior communications: taper to continue by $10 billion to $25 billion/month, and no new language regarding rate hikes or the timeline for a hike following the removal of accommodation. While some observers are calling for dissent on the decision from hawks, we would be surprised by this outcome. Inflation has ticked up recently but the most recent CPI print was a pause from that trend, indicating that there is little need to be concerned over inflationary pressures at this point. PCE, the Fed’s preferred gauge of inflation, is trending upwards, but it is still far below target. We therefore expect a stay-the-course Fed and no significant changes in outlook for this meeting. We would also note that there is also no press conference at this meeting.

Earnings this morning have been broadly positive and relatively quiet, although Garmin (GRMN, +0.10% yesterday, +7.49% pre-market) reported a massive quarter, beating EPS estimates by over 33%, delivering large revenue growth (11.7% year-over-year) and raising full year revenue and EPS estimates.

Subscribers, please click the thumbnail below to access the full Morning Lineup. 


The Closer Commentary 7/29/14 - Little Blue Boom

The below is an excerpt from tonight's edition of The Closer, sent to Bespoke Premium and Institutional clients each night along with graphs, analysis, and timing models for both single name equities and the market as a whole.

In earnings tonight, the biggest headlines came from the explosion upward in Twitter (TWTR, +1.74% today, +33.32% after hours), which reported a massive beat on every conceivable metric, including user growth (+24% year over year), revenue (+124% year over year), net income, and engagement.  Shares are up over 33% after-hours, and have been climbing steadily since the report.  As of today 33.9 million shares of TWTR were sold short (7.6% of the equity float), and those shorts will be in pain tomorrow as the weaker hands are forced to buy back shares at the market.  For the time being, the Little Blue Bird is really flying, much to shorts’ chagrin.

Elsewhere in earnings, U.S. Steel moves to the upside (X, -0.63% today, +9.29% after hours) this evening after reporting an unexpected profit and higher than expected revenue.  Amgen (AMGN, +0.54% today, +4.01% after hours) also beat profit estimates by 30 cents per share on almost $300 million higher revenue than expected; the company also raised full year EPS and revenue estimates.  American Express (AMX, -0.50% today, 0.10% after hours) delivered a profit beat on in-line revenue.  Insurer AFLAC (AFL, -0.80% today, -1.81% after hours) disappointed the market with a lowered EPS estimate for Q3, despite a strong Q2 report that beat on EPS and revenues.

Get some sleep tonight!  Tomorrow has a GDP release, FOMC decision, and earnings for 237 companies including Allstate (ALL, -1.54%), MetLife (MET, -1.31% ), and Humana (HUM, -2.60%).  Energy names are also reporting including Suncor (SU, -0.91%), Tesoro (TSO, +1.52%), and Cenovus (CVE, +0.37%).  In consumer space, Kraft (KRFT, -0.76%) reports; Sprint (S, +4.71%) will report as well.  As for GDP, a full preview will be out tomorrow morning with The Morning Lineup.  We will also preview ADP and the FOMC.

To continue reading, subscribers can click here.  Non-subscribers can gain access by signing up for a five day free trial.


Biggest Exporters to Russia

European leaders are in the process of instituting beefed up sanctions against Russia.  Although these sanctions will most likely only be targeted to certain sectors like defense and banking, investors have increasingly been focusing on what countries are the most exposed to Russia in terms of total exports to that country.  While we are (hopefully) far from the point where the international community feels the need to sever all trade ties with Russia, any ratcheting up of sanctions will have a proportionate impact on countries which export the most to Russia.

Earlier today, we tweeted a chart showing Russian imports broken out by the country of origin.  In that chart, China and Germany each accounted for more than 14% of all Russian imports.  While those numbers look large, they only tell you that Russia relies a lot on those two countries.  It doesn't necessarily mean that those countries rely a lot on Russia.  

Flipping that perspective around, the chart below shows large countries (top 25 in terms of GDP) where Russia accounts for more than 1% of all total exports.  Looking at it from this perspective, for both Poland and Turkey, Russia accounts for more than 4% of total exports.  Next on the list is Germany, where Russia accounts for 3.5% of total exports.  Broadly speking then, in terms of G8 countires Germany has the most to lose from any additional ratcheting up of sanctions against Russia.  For the US, on the other hand, Russia only accounts for just over 1% of total exports.  It is no surprise then, that the US has been among the most vocal calling for sanctions, while Europe is taking a more gradual approach.


Consumer Confidence Surges

When it comes to confidence measures during the current economic expansion, it doesn't get much better than today's Consumer Confidence report from the Conference Board.  While economists were expecting July's reading to come in at a level of 85.4, the actual reading was 5.5 points higher at 90.9, up from June's reading of 86.4.  This was the biggest upside surprise since June 2013.  Even more impressive, though, was the fact that we haven't seen a reading above 90.9 since October 2007.

Following last month's report, we noted that the Consumer Confidence Index was coming close to breaking its downtrend that had been in place since the late 1990s leading up to the 2000 recession.  With this month's increase, that downtrend has now been broken.  While the increase in confidence is welcome, we would remind readers that the current level of confidence is still below the historical average reading of 93.4 that we have seen dating back to 1967.  Even with the recovery/expansion in the US economy now entering its sixth year, consumer confidence is still below average.

One of the drags on consumer sentiment during the current recovery has been a weak rebound in confidence among middle class consumers.  Throughout this recovery, it has been said that the wealthy have seen their standard of living improve while the middle class has been left behind.  Looking at confidence based on income supports this view, but it may be showing some signs of change.  

The chart below compares Consumer Confidence of consumers with incomes above $50K (red line) and consumers with incomes between $35K and $50K (blue line).  Since bottoming at similar levels at the depth of the recession, wealthier Americans definitely saw a sharper rebound in confidence while confidence among middle class ($35K-$50K) consumers lagged.  In July, however, confidence among middle class consumers spiked by 11.6 points compared to a 0.5 point increase for wealthier consumers.  This narrowed the gap in confidence among both income groups down from 32.3 points to 21.2 points.  One month does not necessarily make a trend, and we have seen similar one month spikes during this recovery that never materialized into a longer trend, but whenever you see a shift like this, it bears watching for signs of a change in the prevailing trend.


The Bespoke Morning Lineup: 7/29/14 Commentary

The below commentary excerpt is an example of what Bespoke Premium subscribers receive every morning in The Morning Lineup in addition to three pages of key headlines, charts, trends, and technical indicators.  We will be posting a sample of our commentary here each morning for the next several weeks.  If you're interested in receiving this report and our many others via email, try a 5 day free trial to Bespoke Premium today!

Equity index futures have been quiet overnight and after hitting their lows just before 4:00 AM have traded up well into the open for cash equities, helped by positive earnings releases pre-market. Rates are moving off their overnight highs as equity futures rally, but are still lower than yesterday in the long end and slightly higher in the short end…the inexorable flattening continues. The dollar index is largely flat as a weaker pound offsets a stronger euro. In credit markets, US high yield was slightly tighter (lower spread) to Treasuries yesterday, while higher quality investment grade bonds remain in the same range they’ve held since the start of June.

The divergence between the S&P 500 as a whole and the industrial sector that we’ve seen since mid-June has continued and accelerated; over the last four days industrials are now down 1.41% versus the broad index, the worst-performing sector over that period. Utilities, meanwhile, have outperformed, returning to a trend we’ve seen all year long that had moderated since the end of June.

Pre-market earnings have been mixed, but large-cap firms have had solid reports, including a beat on top and bottom line by Aetna (AET, +1.71% yesterday, -2.15% pre-market). While AET is trading down pre-market, the company also raised full-year EPS guidance (still within analyst estimates); shares have traded as high as $89 in thin pre-market activity. Elsewhere in healthcare Pfizer (PFE, -0.30% yesterday, +0.56% pre-market) also beat on EPS and revenues, issuing healthy guidance in-line with analyst estimates of full year EPS and revenues. Meanwhile UPS (-0.88% yesterday, -3.07% pre-market) reported stronger-than-expected revenue but failed to deliver on the bottom line and lowered guidance for full-year EPS. The fall in profit is primarily due to a charge taken to account for some union employee liabilities.

Subscribers, please click the thumbnail below to access the full Morning Lineup. 


The Closer Commentary 7/28/14 - Reverse Off The Start

The below is an excerpt from tonight's edition of The Closer, sent to Bespoke Premium and Institutional clients each night along with graphs, analysis, and timing models for both single name equities and the market as a whole.

As if the rough and disorderly open wasn’t enough, the Pending Home Sales figure released today showed a decline of 1.1% versus expected gains of 0.3%, a really unfortunate print.  Housing, having shown signs of life in May (this particular indicator printed at 6.1%; revisions from this release brought that figure slightly lower to 6.0%), is still clearly challenged.  Our long-term outlook is unchanged, but for 2014 the pain in construction and secondary market turnover appears set to continue.

Equity markets were eventually able to shrug off a rough open and bounce off the 1968 level.  After trying and failing to break through its 200-period moving average (on a 2 minute chart) three times before 1:00 PM, the index finally consolidated into a wedge then broke out to the upside, a move that carried the index to its highs of the day and sustained a close in the green at +3 bps. 

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S&P 1500 Most Heavily Shorted Stocks: Mid July 2014

Short interest figures for the middle of July were released late last week, and below we have provided a list of the 32 stocks in the S&P 1500 that have more than 25% of their float sold short.  As is usually the case, the majority of names listed in the table come from the small cap space.  In fact, just two of the 32 names shown (GameStop- GME and Cablevision- CVC) are in the S&P 500.

For each stock listed below, we have also included its performance so far this month.  Of the 32 names shown, only 12 are up so far in July.  Additionally, of the 20 stocks that are down, seven are lower by more than 10%.  Overall, the average performance of the stocks listed is a decline of 2.75% compared to a gain of 0.40% for the S&P 1500.  Normally in a period when the overall market is up, stocks with the highest level of short interest outperform, so the fact that the most heavily shorted stocks in the market are down by nearly 3% in an up market has to make the shorts just ecstatic.  

The strong underperformance of the most heavily shorted stocks in July continues a trend that has been in place for much of the last several months.  With the exception of the month of June, we have repeatedly seen the most heavily shorted stocks posting returns that are well behind the overall return of the market.  2013 was a year to forget for short-sellers, but so far 2014 has been the year for shorts.


More Bears than Bulls

There were more bears than bulls in our weekly Bespoke Market Poll.  As shown below, 49% of respondents said the S&P 500 would be higher one month from now, while 51% said the index would be lower.  Two weeks ago we saw 64% bulls and just 36% bears, so we've seen quite a shift in recent weeks as July comes to an end.


The Bespoke Morning Lineup: 7/28/14 Commentary

The below commentary excerpt is an example of what Bespoke Premium subscribers receive every morning in The Morning Lineup in addition to three pages of key headlines, charts, trends, and technical indicators.  We will be posting a sample of our commentary here each morning for the next several weeks.  If you're interested in receiving this report and our many others via email, try a 5 day free trial to Bespoke Premium today!

Low volatility in Europe following a good night in Asia has kept US equity index futures relatively subdued. In the immediate aftermath of the open last night there was some selling that took contracts down a few index points. There was also a ramp between the close in Tokyo and Europe’s opening trades, but broadly speaking the pits (or, more accurately, the servers supporting electronic trading) have been quiet thus far. Earnings this morning are a little light relative to the ridiculous release schedule the rest of this week but it’s been a very mixed set of data: A beat on EPS/revenue from Cummins (CMI, -0.43% Friday, -0.13% pre-market) isn’t being swallowed well, and although Tyson Foods (-0.58% Friday, -1.37% today) beat on revenue, an EPS miss and negative guidance is weighing on shares.

Treasuries rallied to close out the week Friday, but the yield on the 10-year finished out the week right where it ended the prior week (2.48%). Yields today are popping higher back towards trend from overbought levels, led by the belly of the curve where fives have jumped 2 bps in yield; while longer dated paper is performing better (+1.54 bps yield in thirties), the front end has been the safest place this morning with twos rising less than half a bp in yield in front of new supply this afternoon. Expect volatility in Treasuries the rest of the week, as seven auctions (including bills) take place.

Subscribers, please click the thumbnail below to access the full Morning Lineup. 


Bespoke Market Intelligence -- The Most Interesting Things We Found This Week

If you're an investment professional, you've got to check out the things we're doing over at our sister site, Bespoke Market Intelligence.  Our survey analysis on industry groups and specific stocks has yielded big findings for our clients.  You can learn more about the survey reports we currently run and have for sale by clicking here.  To inquire about purchasing reports or running your own custom studies, you can reach us at this contact form or by calling 914-630-0512.

Below are the most interesting things we found this week from our work over at Bespoke Market Intelligence:

Deep Dive Quarterly Surveys: (Full-length reports on the below topics are currently available for purchase).

AAPL:  Throughout our survey volumes, 87-90% of existing iPhone owners consistently reply that they will purchase an iPhone when it is time to get a new smartphone.  We asked all iPhone owners which brand they owned before their current iPhone – and 83.5% replied Apple.  This suggests that, for the most part, projected retention rates for the iPhone are holding up.  In going through the same exercise for a number of popular Android brands (Samsung, HTC, LG, Motorola, Nokia), we found that only 67.4% owned one of those brands before owning their current Android phone.

NFLX:  Domestic Netflix subscribers have actually become progressively less price sensitive, and regardless of whether the price is $7.99 or $8.99 per month, subscribers view Netflix as a great value for their money.

Social Media:  With each survey we have run since August of 2013, the percentage of Facebook users who feel that the quality and relevance of ads has improved increased.  Snapchat, Twitter, and Instagram have a much better presence among 13-17 year-olds.  Lastly, visit frequency and time per visit has declined steadily for LinkedIn.

GMCR:  The Keurig received a very high net promoter score among its owners, which is usually an indicator of future organic growth.  Additionally, 45% of single-serve coffee brewer users agree that the ability to brew a full pot of coffee would make them more likely to purchase the Keurig 2.0.

GRPN:  The percentage of Groupon users who purchased at least one item on Groupon during the past three months declined to 43.5%, the lowest tally compared to our previous four survey volumes (a plurality of these users spent between $26-$50 per item).

Recent Traffic Trends of US Consumers

Has used the following website to purchase items online during the past month:

  • eBay: 20.5%
  • Zulily: 1.3%
  • Groupon: 16.8%
  • Amazon: 50.7%

Has shopped at the following stores during the past month:

  • Dillard's: 6.3%
  • Macy's: 24.7%
  • Bloomingdales: 1.8%
  • JC Penney: 20.5%
  • Kohl's: 26.0%
  • Sak's Fifth Ave: 1.4%
  • Nordstrom: 7.4%

Have shopped at the following drug stores during the past month:

  • CVS: 42.6%
  • Walgreens: 43.6%
  • Rite Aid: 18.3%
  • Duane Reede: 2.2%

Have shopped at the following retailers during the past month:

  • Target: 50.1%
  • Walmart: 65.1%
  • Dollar General: 19.1%
  • Family Dollar: 19.1%
  • Dollar Tree: 25.6%

Have visited the following restaurants in the past month:

  • Burger King: 22.4%
  • McDonald's: 49.5%
  • Sonic: 11.9%
  • Taco Bell: 26.9%
  • KFC: 14.6%
  • Jack in the Box: 8.3%
  • Panera: 18.1%
  • Pizza Hut: 13.0%
  • Denny's: 6.7%
  • Popeye's: 8.0%
  • Wendy's: 25.3%
  • Starbucks: 28.1%

Again, to learn more about our survey analysis and how to purchase, you can reach us at this contact form or by calling 914-630-0512.  Keep an eye on Bespoke Market Intelligence in the near term, because we've got a new product release due out in September that you'll definitely want to see.


S&P 500 Higher or Lower from Here?

The S&P 500 finished the week 0.12 points higher than it started, but which way will it head from here?  Please take part in our Bespoke Market Poll below by letting us know whether you think the S&P 500 will be higher or lower one month from now.  We'll report back with the results on Monday before the open.  Thanks for participating, and have a great weekend!  

Be sure to sign up for a 5-day free trial to our Bespoke Premium service to check out our just-published Bespoke Report newsletter.  Investors are going to need all the info they can get to stay on top of the heap of data that will hit the tape next week!  Use "summer" in the coupon code section of our Subscribe page to save 10% on the life of your membership.

Will the S&P 500 be higher or lower than its current level one month from now?
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The Closer Commentary 7/25/14 - End of Week Commentary

The below is an excerpt from tonight's edition of The Closer, sent to Bespoke Premium and Institutional clients each night along with graphs, analysis, and timing models for both single name equities and the market as a whole.

Geopolitics were center stage again this week but unlike last week volatility didn’t materialize.  The Nasdaq gained 0.39%, the S&P 500 was flat and the Dow sold off as earnings season chugged along.  516 companies reported this week, with 63% beating top-line estimates and 64% beating EPS.  205 S&P 500 companies have reported earnings thus far.

In other asset classes, Treasury yields zig-zagged through the week, ending up 1.5 bps lower in the 10 year than last Friday’s close.  The tail of the curve continued to rally, moving lower by 5 bps, almost entirely on Friday.  Credit spreads continued to edge a bit higher, oil rallied modestly, metals sold off, and industrial metals moved higher on stronger-than-expected global PMI data.  The dollar moved higher all week while EUR and GBP sold off; the NZD crashed as its central bank expressed concerns that the currency was too high.  International equity markets were led by Spain (+2.71%) and Hong Kong (+3.26%) led the way in USD terms.  Germany underperformed all week, and ended down 1.47%.

Have a great weekend!  GDP, FOMC, and NFP next week.

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Huge Week Ahead

It's a summer Friday, and most of Wall Street is looking to the beach, the mountains, or pretty much anywhere but their desks.  But when the weekend comes to a close Sunday night, it's going to be a grim return to the markets, because next week is set to be crazy.  In addition to earnings reports from more than 800 companies, there is a massive slew of economic data hitting the tapes.  In a quirk of the calendar, we get GDP, an FOMC decision and NFP...all in 48 hours between Wednesday and Friday.  Topping that off is an abundance of other indicators covering services, manufacturing, housing and the consumer.  Oh and if the volatile earnings and econ data wasn't enough for you, there are Treasury auctions galore: 3 month bills, 6 month bills and 2 year notes on Monday, 4 week bills and 5 year notes Tuesday, and finally 2 year floating rate notes and 7 year notes Wednesday.  In other words, get some R&R this weekend because next week will be anything but a snoozer.

If you're interested in earnings season plays, head over to Bespoke Premium to check out products like our Earnings Calendar, Interactive Earnings Database, and Earnings Triple Plays.  Sign up for a five day free trial now to receive The Bespoke Report tonight for free!

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