Thursday
Jul172014

Philly Fed Strongest Since March 2011

Today's report on manufacturing activity in the Philadelphia region came in better than expected (23.9 vs 16.0), hitting its highest level since March 2011.  This report confirmed the strength in manufacturing that we saw in the Empire Manufacturing report earlier this week.

The table to the right breaks down the monthly changes in the Philadelphia Fed headline report and each of its components.  As shown, seven of the nine subcomponents increased this month, led higher by Shipments and New Orders.  On the downside, the only two components that saw a decline were Unfilled Orders (9.1) and Prices Paid (-0.3), which should provide a small sense of relief to investors concerned about inflation.  With regards to employment, while they didn't see the largest increases, both the Number of Employees and Average Workweek saw increases this month.  This was in contrast to the Empire Manufacturing report which actually showed a decline in the Number of Employees while the Average Workweek increased.

Finally, as mentioned above New Orders and Shipments both saw the largest m/m increases in July's report.  Following those increases, both sub-indices are now at their highest levels in 10 years!

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Thursday
Jul172014

Investor Sentiment Drops

Following a "sell-off" of less than 1% last week, and some weakness within small cap stocks this week, bulls are once again heading for the hills.  In the latest weekly survey of investor sentiment from the American Association of Individual Investors (AAII), bullish sentiment plunged from 37.64% down to 32.36%.  This was the sixth largest weekly decline so far this year and brings bullish sentiment down to its lowest level since late May.  In other words, the S&P 500 closed less than four points (0.19%) from an all-time high yesterday and less than one-third of individual investors are bullish.

Thursday
Jul172014

Jobless Claims Lower Than Expected

The trend in jobless claims continues to be lower.  While economists were expecting an already low level of 310K first time claims in today's report, the actual level was 8K lower at 302K.  This was the third lowest weekly reading since the recession ended in 2009 and was the lowest reading since early May.  While other areas of the economy have shown uneven improvement, the trend in employment recently has shown steady improvement.

With this week's lower than expected reading in weekly claims, the four-week moving average dropped to 309K, and represents a new post-recession low.  The prior low of 310.5K was in late May.

On a non-seasonally adjusted basis (NSA), jobless claims rose by 47.1K to 369.6K.  While the increase looks large, it is common for claims to increase at this time of year.  In fact, for the current week of the year NSA claims were lower than any other week since at least 2000 and well below the average of 471.1K.

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Thursday
Jul172014

The Bespoke Morning Lineup: 7/17/14 Commentary

The below commentary 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 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!

We saw another trend-less night in Asia-Pacific trading last night as Japan popped on the open but then sold off throughout the day to finish slightly lower on the day. China retreated some 50 bps, India advanced 21 bps, and other markets were a total grab bag: Australia a hair higher, New Zealand a hair lower, Indonesia and Taiwan down 80 bps, smaller markets up 7 - 49 bps across southeast Asia. As we remarked yesterday, most markets in the region appear to be trading on local factors (earnings, economic data, geopolitical events, positioning) rather than global flows.

Europe, on the other hand, is once again trading in lockstep and a rough start to the day has gotten worse as we write this with the EuroStoxx 50, DAX, and CAC 40 all hitting a serious downdraft simultaneously this morning. Peripheral equities are caught in the same pattern of selling and are sympathetically heading south almost tick-for-tick in line with the core indices. There’s been no economic news, no headline tape-bombs, and nothing in terms of earnings that we can see to drive the sudden risk capitulation. As of this righting our run of European stocks has the EuroStoxx 50 off 1.26%, the France off more than 1%, Germany down 75 bps, England off almost as much, Italy down 1.25%, and Spain slightly more. The volatility in European equities has been huge the last few days relative to recent history; while some of the rapid swings last week were driven by headlines, today’s moves seem to be without those scare-catalysts, but still moving in lock step. The market is also trying to sort out the implications of much harsher sanctions against Russia, and the possible implications of an angrier bear to the east.

As we’ve observed the last few days, Europe and the spoos are literally right on top of one another, but today there doesn’t seem to be any lead from Europe like there was the last few days. Regardless, the flow in the US has a distinctly transatlantic flavor yet again today, despite earnings and domestically focused US economic data today. Futures are currently pointing to an open almost ten points lower than last night's close, or 48 bps down. Dow futures are holding in better (calling a 31 bps lower open in the blue chips), while the Nazz is set to open 55 bps below yesterday’s levels.

In earnings today, Morgan Stanley (MS) continued the trend of expectation beating with an EPS print 5 cents higher than expected, revenue came in 5% above analyst estimates, and the stock is up over 1% pre-market. Elsewhere, Phillip Morris International (PM, +0.94% pre-market) also beat on top and bottom line, UnitedHealth (UNH, +0.88% pre-market) crushed EPS estimates ($1.42 versus $1.25 expected) and raised revenue and EPS guidance for the year. There was also bad news from Mattel (MAT, -8.28% pre-market) where earnings widely missed (3 cents EPS versus 18 cents expected, revenue over 10% below street estimates). Broadly speaking large-caps have been more positive than small firms this morning, but Novartis (NVS, -1.25% pre-market) had soft revenue numbers that missed expectations, while EPS was exactly in-line at $1.34/share.

Elsewhere in single-name equity news this morning, Microsoft (MSFT, +1.18% pre-market) announced today that it would be laying off 18,000 workers as part of its restructuring, 14% of its headcount and the largest in the firms’ history. The story of relatively new CEO Satya Nadella’s efforts to turn around MSFT is well known, but this is his most bold action yet.

Housing starts missed this morning (893K seasonally adjusted annual rate versus 1,026K expected and downward revisions to the prior figure), but jobless claims ticked down again to 302K versus 310K expected, another good sign for the labor market. Philly Fed is up at 10:00 AM (16.9 expected versus 17.8 prior), and we get James Bullard (St. Louis Fed President) speaking at 1:35 PM.

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Wednesday
Jul162014

The Closer Commentary 7/16/14 - Midweek Merger Madness And More

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.

Stocks today trading well after European equities spiked huge this morning.  Europe ended up a sea of green after a broad risk rally sent indices from Spain to Finland up 1% or more.  Italy had a banner day with equities in the FTSE MIB index jumping over 3%.  Other peripheral indices turned in impressive gains including a 2.73% rally in Portugal and 1.84% rise in the IBEX 35 index of Spanish stocks.  Equity futures in the US responded appropriately and after staying flat until the open of European bourses, spiked upwards.  Respectable earnings this morning including a top– and bottom-line beat from Bank of America (BAC) had the market in a good mood at the open, with equities printing their first trades up 49 bps in the S&P 500, 37 bps in the Dow Jones Industrial Average and 67 bps in the Nasdaq Composite.  The Russell 2000 index of small cap stocks, while opening on par with its larger peers, began selling off heavily right out of the gates, hitting lows on the day late in the 11:00 AM hour.  The Russell badly underperformed large caps all day, and ended up 20 bps lower on the day.  Another loser on the day was the IBB (Nasdaq Biotech ETF), which collapsed almost 1.5%.

IBB has served as a solid leading indicator for small caps this year (see chart at right), tending to roll over and turn around earlier and harder than the Russell 2000.  The recent highs in the IBB actually coincided with the Russell, but the previous highs had the IBB as a leading indicator, as did the major turnaround that came in May for both indices. 

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Wednesday
Jul162014

75% of Stocks Remain Above Their 50-Day Moving Averages

As shown below, 75% of the stocks in the S&P 500 are currently trading above their 50-day moving averages.  This indicator has been trending slightly downward for about a month now, but it hasn't fallen below the 75% mark for quite some time.  Generally, whenever this breadth reading gets above the 80% level, the market is due for a breather.

All of the stocks in the Telecom sector are currently trading above their 50-days.  Unfortunately there are only 5 stocks in the sector!  The next two sectors with the highest breadth readings are Financials and Technology at 83.3%.  This is positive for market bulls since these are the two largest sectors of the market.  If Tech and Financials are doing well, chances are the broad market is doing well.  Three other sectors have breadth readings above the overall S&P 500's reading of 75% -- Energy, Health Care and Materials.  The four sectors with below-market breadth readings are Industrials, Utilities, Consumer Discretionary and Consumer Staples.  The two consumer sectors have the lowest percentage of stocks above their 50-days.  Discretionary is at 65.5% and Staples is at 60%.  While readings at 60% or above are strong, we'd like to see consumer sectors outperforming instead of underperforming.

The Closer is a one-stop-shop for a summary of key trends from each trading day.  Each edition is packed with analysis, charts, tables and models to help you understand what happened in the latest market session.  The Closer hits your inbox with the following sections every evening after the close:

  • Featured Analysis.  Bespoke's trading and research team collaborates to bring you two pages of commentary on the day that was, including clear charts on individual equities, sectors & indices, and non-equity asset classes that are impacting the market.
  • The Tale of The Tape.  This intraday chart gives the key relationship we saw in equities on any given day.  The chart will change as the flows between equities, rates, currencies, commodities, and credit change.  Other days cross-asset flows won’t be as important as trends within equities themselves so we’ll occasionally show intraday comparisons versus recent history or between the S&P 500 and other key sectors or indices.
  • Biggest Movers. This simple table shows the top and bottom 1% of the US equity markets from today, with tickers and returns for the 15 stocks that performed best and worst in the S&P 1500.  We’ve also included the stocks that had the biggest volume days relative to their recent historical average trading volume.
  • Major Asset Class PerformanceThe Morning Lineup features a series of key asset class charts, and we think these are just as important to close the day as they are to open it.  Check here for updates on the performance of oil, gold, the USD index, long bond futures, the S&P 500 and the Nasdaq Composite over the last 15 trading sessions.
  • Key ETFs.  This easy to read list keeps you on top of how each market is moving, as we show performance on the day for the 47 ETFs Bespoke keeps a close eye on.  Also included are sparklines to give an at-a-glance view of how each ETF has done over the last six months, including highs and lows over that period.
  • Most Popular Tweets from Bespoke.  In this section, we highlight tweets from the day that created conversation on Twitter.  It can be tough to stay on top of everything going on in social media, so this section will give you a quick summary of the thoughts we shared during the trading day.  Want to keep track of what we’re seeing in real time?  Head on over to http://twitter.com/bespokeinvest any time.
  • Bespoke Market Timing Model.  Our model is a compilation of many widely (and not so widely) followed market indicators that formulates a prediction for the short term direction of the market.  While most investors have one or two indicators they rely on, we recognize that no indicator by itself is correct all of the time.  With this in mind, we set out to create a series of indicators from multiple disciplines in order to see what the 'crowd' of indicators are telling us.  Just as no individual is bigger than the market, we contend that no single indicator is more accurate at forecasting the market than the sum of them all.
  • Bespoke Stock Odds.  The Stock Odds report helps traders quickly identify the leaders and laggards of the market.  The product is unique, however, because it not only shows which stocks have recently had the biggest moves, but also how they typically react following similar moves.  Anyone can produce a list of the day's best and worst performers, but we have gone the extra step to focus on what it means going forward.

The Closer is included with Bespoke Premium and Bespoke Institutional memberships. 

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Wednesday
Jul162014

Updated S&P 500 Sector Weightings

Below is an updated look at sector weightings for the S&P 500.  As shown, Technology is still the largest sector of the S&P at 19.19%.  Financials ranks second with a weighting of 16.07%, so Tech and Financials collectively make up roughly 35% of the US stock market.  

Health Care is the third largest sector of the S&P at 13.19%, and then there are four sectors right around the 10% mark -- Consumer Discretionary (11.86%), Energy (10.74%), Industrials (10.49%) and Consumer Staples (9.49%).  Materials, Utilities and Telecom are at the bottom of the barrel around the 3% mark.

After today's rally in big blue-chip Tech names, the Tech sector's S&P 500 weighting actually reached its highest level since November 2012.  As shown, year-to-date, Tech's weighting has increased 0.60 percentage points.  This is the biggest jump of any sector, just ahead of Energy with a gain of 0.50 percentage points.  

Five sectors have seen their weightings decrease so far in 2014.  Consumer Discretionary has seen the biggest decline in its share of the S&P 500 at 0.69 percentage points.  Industrials has fallen the second most, followed by Consumer Staples, Financials and Materials.  It's notable that both consumer sectors have lost share this year.  

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Wednesday
Jul162014

Homebuilder Confidence Increases More Than Expected

Wasn't housing supposed to be rolling over?  After a winter of weak housing related data and confidence reports, things are starting to turn around.  Since the second half of June, every housing related economic report (Existing, Pending, and New Home Sales) has been better than expected.  Today's homebuilder confidence report for the month of July is just another example.  According to the National Association of Homebuilders (NAHB), homebuilder confidence improved more than expected in July.  While economists were expecting a level of 50 (which is the dividing line between optimism and pessimism), the actual reading came in at 53 compared to last month's level of 49.  That comes on the heels of June's reading which also increased four points and was better than expected.  This increase of eight points is now the largest two month increase since July of 2013.

The table to the right (charts below) breaks down this month's report by each of the index's components and regions.  Relative to last month, every one showed improvement.  The largest increase came in future sales which rose six points from 58 to 64.  On a regional basis, both the West and the Midwest saw increases of six points, while the gains in the Northeast and South were somewhat more contained.  Even after the improvement of the last two months, the headline index and its various components still have a ways to go before taking out their highs from last year, but they aren't exactly rolling over either.


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Tuesday
Jul152014

Retail Sales Weaker Than Expected

The docket of economic data got off to a poor start Tuesday morning, with a weaker than expected retail sales report.  While economists were expecting month/month (m/m) growth of 0.6%, the actual reading came in at just a third of expectations (0.2%).  While the headline number was disappointing, digging a little deeper into the report was somewhat more encouraging.  Ex Autos and Ex Autos and Gas, growth was only 0.1% below the consensus forecast of 0.5%.

Looking at retail sales growth across the different sectors also showed positive breadth.  Of the 13 sectors, only four showed a m/m decline, led lower by Building Materials which declined 1%.  To the positive, General Merchandise grew 1.14%, while non-store retailers (online) saw growth of 0.89%.  Rounding out the top four, Health and Personal Care and Clothing both also saw growth of more than 0.8%.

The table below shows each sector's share of total retail sales and how it has changed over the last year. Autos and Auto parts dealers have the largest share of total retail sales at just under 20% (19.9%).  The two other groups that have seen the biggest increase in their total share of retail sales (green text) are Nonstore retailers (online) and Health and Personal Care.  On the downside, the three groups that have seen the largest decline in their total share of retail sales (red text) over the last year are General Merchandise, Food and Beverage Stores, and Gas Stations. 

In the case of online retail, its share of total sales has been on a steady increase for several years now.  For more than ten years its share of total sales has been on a nearly uninterrupted increase as it continues to steal share from just about every other sector.  At 9.1% of total sales, online retailers' share is at a record high.

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Tuesday
Jul152014

The Closer Commentary 7/15/14 - Meandering Expectations Management

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.

US traders walked in this morning to a rough vista: European equities rolled over from the open, peripheral spreads were blowing out, Treasury markets were in rally mode, and US equity index futures sold off their highs of the overnight session to call a negative open.  But just as analysts began to trickle in, European managers shook off the cobwebs, cracked their knuckles, and started lifting offers.  In the space of less than an hour the FTSE MIB and other peripheral equities catapulted off their lows of the day.  Shortly thereafter, JPM released its second quarter results, as did Johnson and Johnson (JNJ), putting a fierce bid in S&P 500 futures and sending the S&P 500 on a tear into 8:30 AM data releases, which were positive (more on that later).  While equity markets in New York had turned themselves around for the most part by the time Janet Yellen took the stage in Washington for her annual testimony to the US Senate, the message she delivered was much less kind to stocks than it was to bonds.  The S&P 500 finished the day down 19bps, the Nasdaq was off 4 bps, and the Russell 2000 was down 101 bps.  The Dow finished the day higher (0.03%) on the better-than-expected reports from three of its components.  The chart above and to the left shows just how much global news and earnings data contributed to a healthy dose of volatility today;  testimony from the Fed also played a part.  In a nutshell, today was all about adjustment to flows, whether in market momentum in Europe, or in terms of news domestically.

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Tuesday
Jul152014

Looking For Action? S&P 1500 Most Volatile Stocks

For traders with a short-term time horizon who are looking for big moves over a short period, we have updated our list of the S&P 1500 stocks trading above $10 that have the largest intraday high-low ranges (based on the average percent spread between the intraday high and low over the last 50 days).  The stocks are grouped based on whether they have a rising or falling 50-day moving average (DMA).  Stocks highlighted in gray are new to the list this month.

If you thought there was a dearth of volatility last month, when only ten of the stocks listed had an average daily range of 5% or more, this month there are only four!  That's right, the only four stocks in the S&P 1500 that are trading above $10 per share and have average daily range of 5% or more are Sunedison (SUNE), Christopher and Banks (CBK), Penn Virginia (PVA), and GT Advanced Technologies (GTAT).  What this month's list does have, though, is symmetry.  As shown, there are an equal number of stocks listed that have rising and falling 50-day moving averages.  

In terms of pricing, there are no triple digit stocks in this month's list as the highest priced name is Synaptics (SYNA), which is trading in the mid $80 range.  On a sector basis, there is broad representation as nine out of ten sectors are represented.  With 14 stocks on the list, Technology has the greatest representation, followed by Health Care (10), and Consumer Discretionary (9).  The only sector with no stocks on the list is Utilities.

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Tuesday
Jul152014

Country Dividend Yields

The S&P 500 currently trades with an 18.09 trailing 12-month P/E ratio, and its dividend yield is 1.9%.  Compared to other major equity markets around the world, the 1.9% yield on the S&P 500 is low.  Below is a look at the dividend yields for 22 major country stock market indices.  As shown, four countries have yields above 4% -- Spain (IBEX 35), the UK (FTSE 100), Brazil (Bovespa) and Australia (S&P/ASX 200).  Spain's IBEX 35 has the highest yield of the bunch at 4.67%.

The US ranks 18th out of 22 on the list with its 1.9% yield, ahead of only Mexico, Japan, India and South Korea.  Countries like France, China, Russia, Germany and Canada all have yields above 2.7%.

Below is a look at the various country ETFs traded on US exchanges that we track in our daily ETF Trends report that's included as part of the Bespoke Premium membership.  For each country/region ETF, we provide its dividend yield based on its payouts over the last 12 months.  

As shown, the UK (EWU) ETF paid out 6.04% over the last 12 months -- not a bad source of income.  Other high yielding country/region ETFs include the Euro Stoxx 50 (FEU) at 5.11%, the Europe, Asia, Far East Value (EFV) at 4.32%, and New Zealand (ENZL) at 4.09%.

Investors looking for yield in this low-rate environment tend to focus on individual companies that offer attractive dividends.  As shown below, there are plenty of countries that also offer attractive dividend yields, and at the same time they provide international exposure for asset allocation models.  

Our daily ETF Trends report provides both traders and long-term investors alike with a unique tool to quickly identify which areas of the market are attractive and which ones to stay away from. A different set of ETFs is published each day of the week to cover indices, sectors, groups, styles, commodities, currencies, fixed income, and international markets.  Using a proprietary trend and timing score, we code each ETF based on its current trading pattern.   Long-term investors can use this tool to determine when to enter or exit a position, and active traders can use it to identify potential trade setups.   We also provide our proprietary “trading range” screen for each ETF to better analyze overbought/oversold levels.  The report is an easy way to stay on top of the multitude of ETFs offered today.

Our daily ETF Trends report is available to Bespoke Premium and Bespoke Institutional subscribers.  Click here view a sample of the report.

Tuesday
Jul152014

The Bespoke Morning Lineup: 7/15/14 Commentary

The below commentary 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 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!

Fresh concerns over Banco Espirito Santos’ ties with other Portuguese firms and the rest of the European economy put a scare in peripheral equity markets and to core indices alike in early European trading. European markets opened to steep declines and spoos (SPY) hit the slopes at 3:00 AM. Even as we write, though, the market has turned higher, and the futures market is calling a positive open in the US cash equity market after multiple blue chips posted strong earnings.

For all the concern radiating outwards from European markets this morning, Asia Pacific markets felt none of it last night with the Nikkei moving 64 bps higher after a dovish Bank of Japan statement overnight. Governor Kuroda’s BoJ moved to maintain stimulus and made confident assessments of Japanese inflation’s progress upwards as the central bank continues to expand the monetary base by almost $700bn per year. Of note in this quest is the collapse in volumes for Japanese government bonds, where there were no trades in the morning session for a second day in a row. JGBs, like the Nikkei, trade in two separate sessions, with a mid-day break in between. For holders of the debt this lack of liquidity is a grave concern; the BoJs consistent buying means there is little incentive to trade the bonds actively, creating a dearth of liquidity.

Other Asian equity markets had respectable gains overnight including China (+18 bps), Hong Kong (+49 bps), Indonesia (+99 bps) and India (+89 bps). It’s worth noting that the opening bell for equity markets in Europe (3:00 AM EST) didn’t have the same effect on Asian indices as it did on US risk assets, with the Indian equity market putting in some of its strongest results during the day between 3:00 AM EST and the close at 6:00 AM EST. Indonesia also put in a strong close while European markets were opening in the red.

Europe had a rough open, including a decline of over 1.6% in the FTSE MIB (Italy’s primary benchmark). Since about 6:45, though, European equity markets have reversed aggressively, bottoming on the day following as-expected economic data from EU countries, a respectable bill auction in Spain, and a very strong print in UK CPI that has the pound in the stratosphere this morning, up 58 bps from its morning lows around 3:00 AM EST. The flurry of news and activity in Europe has led to a fairly disorderly market in sovereign bonds too; spreads of peripherals had blown out versus the bund but are now in outright rally mode in the course of an hour. The entire episode feels like an effort at headline-selling gone very badly awry, with stronger, more patient hands stepping in with bids and kicking off a short squeeze.

One positive factor affecting the trans-Atlantic equity and sovereign credit markets is the positive earnings news from both JPMorgan (JPM) and Johnson & Johnson (JNJ), which both released healthy beats on the top and bottom line. Combined with solid performances from Wells Fargo (WFC) and Citi (C) over the last two days of reporting, this looks like a very good start to earnings season both in terms of revenues and profits, and the reversal in equity futures this morning owes as much to that result as it does to the bounce back in European risk appetites. In more good news M&A continues apace with a deal being reached for Reynolds American (RAI) to purchase Lorrilard (LO) for $27.4 billion.

Economic data today was confusingly mixed with a big beat in the Empire Manufacturing index (25.6 versus 17.0 expected and 19.28 prior) and a good reading in the Import Price Index month-over-month (0.1% versus 0.4% expected and 0.3% previous). But retail sales disappointed with a 0.2% month over month growth in headline spending versus 0.6% expected. The previous print was revised up from 0.3% to 0.5%, and the control group/ex auto and gas figures were much more encouraging. All told, though, this was a weak report and will hit GDP forecasts, and it stands in strong contrast to the Empire survey.

Fed Chair Yellen is on the tapes speaking to the Senate Banking Committee at 10:00 AM. Business inventories will also be released at that time.

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Monday
Jul142014

The Closer Commentary 7/14/14 - Mellow Monday

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.

Markets got off to a slow, if positive start this week, with indices immediately popping on the open then going precisely nowhere for the rest of the day.  While equities exhibited a slight downward bias intraday relative to the highs put in late in the morning, ranges were constrained and there were few violent moves.  At 4:00 PM, the S&P 500 stood at 1,977.10, up 48 bps.  The Nasdaq finished up 56 bps to 4440.42 and the Dow marked closing levels of 17,055.42, up 66 bps.  The last time the Dow outperformed the Nasdaq and the S&P 500 when all three were up was back on May 21, and led to average gains of 42 bps in the S&P 500 over the following three trading days.

Dominating the news flow this morning was Citi (C) earnings, which came in much stronger than expected after adjusting for the large mortgage settlement charge announced this morning.  Loan loss reserve drawdowns reflected a more optimistic view of economic and credit outlook, while net interest margin grew and revenues beat street expectations.  The financial sector as a whole remains very challenged among a muddled outlook for mortgage lending, historically low interest rates, and oceans of deposits driven by Fed quantitative easing.  Citi does seem to be outperforming of late, though, with two sentiment-beating reports in a row (we discussed the last one in “The Closer - Slow But Smiling” dated 4/14/14).  Having shrugged off poor sector sentiment and a scandal at its Banamex subsidiary last earnings season, C over-delivered once again in terms of earnings.  But the stock is still down 7% this year, a rough performance given the showings by Wells Fargo (WFC, +12.8%) the S&P 500 (+6.92%) or the S&P 500 Financials sector (+4.36%).  In the last quarter, even, the stock is underperforming with a paltry 1.62% gain taking it into positive territory on the strength of today’s report.  Much is also made of the fact that the firm trades at a discount to book-value, the only one of its peers to do so.  From our perspective, based on recent outperformance of Citi’s financial results, the stock looks cheap.  But sometimes you get what you pay for!

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Monday
Jul142014

Key Earnings Reports this Week

With earnings season kicking into full gear this week, below is a look at the 50 largest companies set to report through Friday.  For each company, along with its expected report date and time, we include its historical earnings and revenue beat rate using data from our Interactive Earnings Report Database.  We also include each stock's average one-day change in reaction to its historical quarterly earnings reports.  (For companies that report after the close, we look at the next day's change.  For companies that report before the open, we use that day's change.)

None of the 50 largest companies that report this week are set to release this afternoon, but tomorrow is a big day with Johnson & Johnson (JNJ), JP Morgan (JPM) and Goldman Sachs (GS) in the morning, and Intel (INTC), Yahoo! (YHOO) and CSX after the close.  On Wednesday we'll hear from Bank of America (BAC) in the morning and then eBay (EBAY), Las Vegas Sands (LVS), SanDisk (SNDK) and Yum! Brands (YUM) in the evening.  Thursday will be the biggest day for earnings this week with companies like Morgan Stanley (MS), UnitedHealth (UNH), Baxter (BAX), and Baker Hughes (BHI) set to report before the open, and Google (GOOG), IBM, Schlumberger (SLB) and Capital One (COF) after the close.  General Electric (GE) and Honeywell (HON) will close out the week with reports on Friday morning.

Of the 50 largest companies reporting for the remainder of the week, some of the names that have historically done the best on their report days include CSX, BlackRock (BLK), Morgan Stanley (MS), Blackstone (BX), PPG and Google (GOOG).  Names like Intel (INTC), Bank of America (BAC), Las Vegas Sands (LVS), and Seagate (STX) have historically averaged declines on their earnings report days.

For a closer look into how companies in your portfolio typically trade around earnings, be sure to access our Interactive Earnings Report Database.

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