Stocks exit 2020 with strong gains and are riding a tailwind, but already in the dawn of the new year, the market could face its first big challenge.
The final outcome of the 2020 election plays out Tuesday, when voters in Georgia will pick their senators and decide which party controls the U.S. Senate.
With President-elect Joe Biden heading to the White House and a Democratic-controlled House of Representatives, Wall Street has been comfortable with the view that Biden and the Democrats could not succeed with tax hikes and more progressive policy changes while Republicans hold the Senate.
The runoff election for the two Senate seats Tuesday is widely expected to result in one or both of the incumbent Republican senators retaining their seats. But Democrats are close in the polls and should they win, each party would have 50 seats with Vice President-elect Kamala Harris the tie breaker.
“Georgia is the most important thing to the Biden presidency for the next two years,” said Ed Mills, Washington policy analyst at Raymond James. “It’s going to determine what is the legislative agenda and who can get confirmed by the United States Senate.”
Sen. David Perdue is being challenged by Democrat Jon Ossoff, while GOP Sen. Kelly Loeffler is running against Democrat Raphael Warnock. None of the candidates had more than 50% of the vote in the Nov. 3 election, so Georgia law requires a runoff election between the two leading candidates for each seat.
“It’s a binary event,” said Mills, adding it’s of growing interest to markets. “The general sense for the market is that Republicans are well positioned to maintain their majority in the Senate. But I think the 2020 election as well as the 2016 election and to some extent, the 2018 election has humbled us … The Senate outcomes, in particular, seem to be less predictable than almost any other elections.”
Mills said the results may take several days to determine, adding to the uncertainty the event could hold for markets. According to an RBC investor survey, 88% expect Republicans to maintain control, and most say that is a positive for the stock market.
“The market tends to shoot first and ask questions later. There will certainly be a reaction if Democrats win both those seats,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. Strategists say there could be a relief rally if Republican incumbents see a clear victory.
“That totally dominates [trading] because it’s about do we have status quo or do we have Democrats controlling all parts of Washington and what that means for spending and taxes,” Boockvar said. “I think you could see the worries about taxes overwhelming any thoughts on the benefits of more spending” by Democrats.
By the numbers
A year of extreme volatility ended with a big win for stocks, as the pandemic steered the course for markets. The S&P 500 was up 16.3% for the year, ending at 3,756. That gain comes after a 34% decline early in the year, followed by a powerful more-than 65% rebound. Technology was the big winner for the year, and the Nasdaq was up 43.6% at 12,888.
Besides the runoff vote, the market will be watching a stream of data in the coming week, including the important December jobs report Friday. That could show fewer than 100,000 jobs were added as the spreading virus impacted hiring and layoffs. There were 245,000 jobs created in November.
There is also ISM manufacturing data Tuesday, and a number of Fed speakers, including Vice Chairman Richard Clarida on Friday.
The virus itself could also be a factor for stocks.
Conventional wisdom for the coming year has been that vaccines will be widely distributed, and by the second half things will start to get back to normal and the economy will pick up. But the initial distribution has been slow, and far short of the 20 million targeted for December by President Donald Trump’s task force.
In that recent RBC survey, three quarters of investors were optimistic about vaccine distribution with 80% expecting a majority to be vaccinated by the end of 2021. “We suspect that the positive outlook for the stock market and the economy would deteriorate if expectations for a smooth vaccine rollout are not met,” RBC strategists wrote.
They also noted that nearly 60% of the investors surveyed believe high stock market valuations are problematic.
“This suggests to us that any threat to the economic and earnings recovery story could spark profit-taking. On this point, it is worth noting that the vaccine was the No. 1 issue keeping investors up at night, closely followed by monetary policy and excessive optimism on the recovery,” the strategists noted.
Chris Rupkey, chief financial economist at MUFG Union Bank, said investors will also be watching the formal acceptance of the Electoral College vote Wednesday. Strategists expect the vote count to confirm Biden’s presidency.
However, Missouri Sen. Josh Hawley says he will challenge the certification, and several House Republicans have already vowed to contest the election at that time. If one House member and a senator jointly object to a state’s slate of electors, the two houses of Congress must separately debate and vote on the objection.
Strategists see little chance of any impact on the election outcome, but there could be fireworks. Trump has been claiming since the election that there was fraud but multiple courts failed to find any truth to the claims.
Rupkey said investors are not taking into account enough potential for political risk from the deep animosity between the two political parties.
“I think the additional stimulus and hopes for additional stimulus, and infrastructure spending in 2021, I don’t know that that is such a slam dunk, because of the issue of political instability,” he said.
Why A Year-End Rally Bodes Well For 2021
Welcome to the last day of 2020! It has been a devastating year in so many ways, yet for investors it has been quite rewarding. Much of the gains in 2020 have taken place the final two months, with the S&P 500 Index up more than 14% in November and December so far, the best end to a year since WWII.
A big end of year rally could have bulls smiling in 2021. “Turns out a 10% or more gain the final two months of the year has equaled a higher S&P 500 the following year every single time since World War II,” explained LPL Financial Chief Market Strategist Ryan Detrick. “In fact, January was also higher every single time as well, so maybe this strong rally to end the year is a clue for higher prices into next year.”
As shown in the LPL Chart of the Day, the S&P 500 gained an average of more than 18% the year following a 10% or more surge during the final two months of the year. Meanwhile, January was up 5 for 5 as well, rising an impressive 3% on average.
(CLICK HERE FOR THE CHART!)
Here’s what the average year looks like after the prior year gains 10% or more the final two months compared to a typical year. Once again, strong returns are the playbook historically.
(CLICK HERE FOR THE CHART!)
We wish everyone a happy and safe New Years Eve and we’ll see you in 2021!
Fifty to Zero in 283 Days
In a year with some pretty crazy charts, the one below is right up there with some of the best. After all the markets have been through this year, bot the S&P 500 and Long-Term Treasuries have seen nearly identical returns on a total return basis. That's right, with just a few hours left in the trading year, the S&P 500's total return in 2020 has been a gain of 17.6%, while Long Term US Treasuries, as measured by the B of A Merrill Lynch Long-Term Treasury Index has rallied 17.3%. What makes this nearly identical performance all the more incredible is that on March 23rd, the performance gap between the two was more than 50 percentage points.
(CLICK HERE FOR THE CHART!)
The fact that stocks and bonds have essentially seen identical returns this year isn't typical. The chart below shows the annual performance spread between the S&P 500 and long-term US Treasuries going back to 1978. During that time, the S&P 500 has historically outperformed long-term US Treasuries by an average of 3.9 percentage points per year, but the average gap in performance between the two has been over 15 percentage points. In the 43 years since 1978, there have only been seven other years where the performance spread between the two asset classes was less than five percentage points and just two years (1985 and 1992) where the performance spread was less than a percentage point.
(CLICK HERE FOR THE CHART!)
Back-to-Back Big Years for Technology
With just two trading days (including today) left in 2020, the S&P 500 Technology sector is on pace for its second year in a row of rallying more than 40%. Going back to 1990, the only time the Technology sector experienced back-to-back returns of more than 40% was in 1998 and 1999. Back then, not only was the Technology sector up 40%+ in back-to-back years, but it was also up over 75% in both of those years. If you think markets are pretty crazy these days, they still have nothing on the last two years of the 1990s!
In terms of cumulative returns, the Technology sector is up 210% since the last trading day of 2018, whereas in 1999 it was up 317% in a two-year span. What's also interesting to note about the last 31 years of returns for the Technology sector is how it has only experienced five down years, while the S&P 500 has been down in ten different years during that span. Furthermore, since 2009 there has only been one down year and the decline was a paltry 1.6%. Not a bad 12-year run!
(CLICK HERE FOR THE CHART!)
Given that the sector has more than doubled in the last two years, there have been some big individual winners. Topping the list with a gain of just under 400% is Advanced Micro Devices (AMD). On the last day of 2018, AMD traded hands for under $20 per share. Today's it's over $90. AMD has a lead of more than 100 percentage points over the next closest stock - NVIDIA (NVDA) - which is up 288%. Interestingly, there aren't a lot of major outliers to the upside compared to the sector's 210% gain, but that's because Apple (AAPL), the sector's largest stock, has paced the sector's gains by rallying more than 240%.
On the downside, just four stocks in the Technology sector have declined in the last two years. The worst of these has been DXC Technology (DXC) which has lost more than half of its value, while Juniper (JNPR) and HP Enterprise (HPE) are down between 10% and 20%. Lastly, FLIR Systems (FLIR) has declined less than 2%, so depending on how it acts in the next two days, it could move into positive territory just as Intel (INTC) did yesterday after Third Point bailed it out and moved the stock barely into positive territory for the last two years.
(CLICK HERE FOR THE CHART!)
Growth Dragging on Small Caps
In the past couple of weeks, we have frequently been keeping tabs on small-cap equities which have been particularly strong performers of late resulting in very overbought readings as well as extended valuations. More specifically, taking a look at growth-oriented small-caps, with only a couple days left in the year small-cap growth stocks—proxied by the Russell 2000 Growth ETF (IWO)—are on pace to have outperformed large-cap equivalents in 2020. On December 10th, IWO surpassed the S&P 500 Growth ETF (IVW) in terms of YTD performance, and even after pulling back in the past week, IWO is still in the lead.
(CLICK HERE FOR THE CHART!)
As a result of recent moves, there has been a sharp reversal on a relative basis between the two ETFs in the past week. In the chart below, we show the ratio of the Russell 2000 Growth ETF (IWO) versus the S&P 500 Growth ETF (IVW). This ratio took off beginning in the early fall meaning small-cap growth drastically outperformed large-cap growth. But the former's weakness in the past several days has put a halt to that move.
(CLICK HERE FOR THE CHART!)
As to just how sharp of a reversal this was, in the five days through yesterday's close, the decline in the ratio of IWO to IVW was the largest since June. Before that, April and March saw declines that were even larger. Not only was this one of the biggest drops in the relative performance of small-cap growth to large-cap growth in the past few months, but that also stands in the bottom 0.5% of all readings going back to 2000 when the ETF first began trading. Outside of this past spring, the only other periods that have also experienced this type of underperformance of small-cap growth relative to large-cap growth was at various points in 2011, 2008, and a handful of times in the early 2000s.
(CLICK HERE FOR THE CHART!)
Small-cap underperformance has not necessarily been broad though. For value stocks, small caps (IWN) have generally outperformed large caps (IVE) for the entirety of the new bull market. While there was a bit of a turn lower in recent days, it has been nowhere close to as dramatic of a move as growth stocks.
(CLICK HERE FOR THE CHART!)
In the charts below, we show average performance over the past week of Russell 2000 stocks broken into deciles based on their price to sales and price to book ratios. As shown, the most aggressively valued deciles have averaged the worst performance in the past week. Stocks with low P/S and P/B ratios have not been immune from the weakness, but they have held up significantly better.
(CLICK HERE FOR THE CHART!)
- $MU
- $BBBY
- $SMPL
- $WBA
- $STZ
- $RPM
- $MSM
- $CAG
- $UNF
- $HELE
- $ANGO
- $SGH
- $AYI
- $REVG
- $LW
- $WDFC
- $LNN
- $LNDC
- $SAR
- $RGP
- $GBX
- $ACCD
- $DCT
- $FC
- $NTIC
- $SCHN
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Micron Technology, Inc. $75.18
Micron Technology, Inc. (MU) is confirmed to report earnings at approximately 4:00 PM ET on Thursday, January 7, 2021. The consensus earnings estimate is $0.71 per share on revenue of $5.73 billion and the Earnings Whisper ® number is $0.78 per share. Investor sentiment going into the company's earnings release has 72% expecting an earnings beat The company's guidance was for earnings of $0.40 to $0.54 per share. Consensus estimates are for year-over-year earnings growth of 69.05% with revenue increasing by 11.39%. Short interest has decreased by 20.0% since the company's last earnings release while the stock has drifted higher by 53.6% from its open following the earnings release to be 46.1% above its 200 day moving average of $51.46. Overall earnings estimates have been revised higher since the company's last earnings release. On Wednesday, December 30, 2020 there was some notable buying of 14,441 contracts of the $72.50 call expiring on Friday, April 16, 2021. Option traders are pricing in a 7.5% move on earnings and the stock has averaged a 7.5% move in recent quarters.
(CLICK HERE FOR THE CHART!)
Bed Bath & Beyond, Inc. $17.76
Bed Bath & Beyond, Inc. (BBBY) is confirmed to report earnings at approximately 7:00 AM ET on Thursday, January 7, 2021. The consensus earnings estimate is $0.21 per share on revenue of $2.77 billion and the Earnings Whisper ® number is $0.31 per share. Investor sentiment going into the company's earnings release has 61% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 155.26% with revenue increasing by 0.39%. Short interest has increased by 0.3% since the company's last earnings release while the stock has drifted lower by 3.0% from its open following the earnings release to be 40.2% above its 200 day moving average of $12.66. Overall earnings estimates have been revised higher since the company's last earnings release. On Tuesday, December 22, 2020 there was some notable buying of 6,626 contracts of the $19.00 put expiring on Friday, January 15, 2021. Option traders are pricing in a 17.0% move on earnings and the stock has averaged a 15.4% move in recent quarters.
(CLICK HERE FOR THE CHART!)
Simply Good Foods Company $31.36
Simply Good Foods Company (SMPL) is confirmed to report earnings at approximately 7:00 AM ET on Wednesday, January 6, 2021. The consensus earnings estimate is $0.20 per share on revenue of $208.89 million and the Earnings Whisper ® number is $0.23 per share. Investor sentiment going into the company's earnings release has 59% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 9.09% with revenue increasing by 37.29%. Short interest has increased by 5.9% since the company's last earnings release while the stock has drifted higher by 52.9% from its open following the earnings release to be 47.2% above its 200 day moving average of $21.31. Overall earnings estimates have been revised lower since the company's last earnings release. On Wednesday, December 23, 2020 there was some notable buying of 508 contracts of the $30.00 call expiring on Friday, January 15, 2021. Option traders are pricing in a 17.5% move on earnings and the stock has averaged a 5.3% move in recent quarters.
(CLICK HERE FOR THE CHART!)
Walgreens Boots Alliance Inc $39.88
Walgreens Boots Alliance Inc (WBA) is confirmed to report earnings at approximately 7:00 AM ET on Thursday, January 7, 2021. The consensus earnings estimate is $1.02 per share on revenue of $34.89 billion and the Earnings Whisper ® number is $1.11 per share. Investor sentiment going into the company's earnings release has 55% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 25.55% with revenue increasing by 1.60%. Short interest has decreased by 15.2% since the company's last earnings release while the stock has drifted higher by 9.7% from its open following the earnings release to be 1.0% below its 200 day moving average of $40.29. Overall earnings estimates have been revised lower since the company's last earnings release. On Thursday, December 31, 2020 there was some notable buying of 14,690 contracts of the $40.00 call expiring on Friday, February 19, 2021. Option traders are pricing in a 6.3% move on earnings and the stock has averaged a 4.9% move in recent quarters.
(CLICK HERE FOR THE CHART!)
Constellation Brands, Inc. $219.05
Constellation Brands, Inc. (STZ) is confirmed to report earnings at approximately 7:30 AM ET on Thursday, January 7, 2021. The consensus earnings estimate is $2.39 per share on revenue of $2.22 billion and the Earnings Whisper ® number is $2.45 per share. Investor sentiment going into the company's earnings release has 54% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 11.68% with revenue increasing by 1.76%. Short interest has decreased by 37.7% since the company's last earnings release while the stock has drifted higher by 14.7% from its open following the earnings release to be 22.6% above its 200 day moving average of $178.74. Overall earnings estimates have been revised higher since the company's last earnings release. On Thursday, December 24, 2020 there was some notable buying of 2,291 contracts of the $212.50 call expiring on Friday, January 8, 2021. Option traders are pricing in a 5.6% move on earnings and the stock has averaged a 4.0% move in recent quarters.
(CLICK HERE FOR THE CHART!)
RPM International Inc. $90.78
RPM International Inc. (RPM) is confirmed to report earnings at approximately 6:45 AM ET on Wednesday, January 6, 2021. The consensus earnings estimate is $1.00 per share on revenue of $1.46 billion and the Earnings Whisper ® number is $1.10 per share. Investor sentiment going into the company's earnings release has 40% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 31.58% with revenue increasing by 4.19%. Short interest has decreased by 23.0% since the company's last earnings release while the stock has drifted higher by 4.5% from its open following the earnings release to be 15.8% above its 200 day moving average of $78.42. Overall earnings estimates have been revised higher since the company's last earnings release. Option traders are pricing in a 4.3% move on earnings and the stock has averaged a 2.5% move in recent quarters.
(CLICK HERE FOR THE CHART!)
MSC Industrial Direct Co. Inc. $84.39
MSC Industrial Direct Co. Inc. (MSM) is confirmed to report earnings at approximately 6:30 AM ET on Wednesday, January 6, 2021. The consensus earnings estimate is $1.07 per share on revenue of $774.61 million and the Earnings Whisper ® number is $1.15 per share. Investor sentiment going into the company's earnings release has 25% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 11.57% with revenue decreasing by 5.95%. Short interest has decreased by 21.2% since the company's last earnings release while the stock has drifted higher by 27.3% from its open following the earnings release to be 22.5% above its 200 day moving average of $68.91. Overall earnings estimates have been revised higher since the company's last earnings release. Option traders are pricing in a 5.0% move on earnings and the stock has averaged a 3.4% move in recent quarters.
(CLICK HERE FOR THE CHART!)
Conagra Brands, Inc. $36.26
Conagra Brands, Inc. (CAG) is confirmed to report earnings at approximately 7:30 AM ET on Thursday, January 7, 2021. The consensus earnings estimate is $0.73 per share on revenue of $2.99 billion and the Earnings Whisper ® number is $0.77 per share. Investor sentiment going into the company's earnings release has 53% expecting an earnings beat The company's guidance was for earnings of $0.70 to $0.74 per share. Consensus estimates are for year-over-year earnings growth of 15.87% with revenue increasing by 6.00%. Short interest has increased by 17.1% since the company's last earnings release while the stock has drifted higher by 0.3% from its open following the earnings release to be 3.7% above its 200 day moving average of $34.96. Overall earnings estimates have been revised lower since the company's last earnings release. On Monday, December 21, 2020 there was some notable buying of 4,915 contracts of the $38.00 call expiring on Friday, January 15, 2021. Option traders are pricing in a 6.3% move on earnings and the stock has averaged a 6.7% move in recent quarters.
(CLICK HERE FOR THE CHART!)
UniFirst Corporation $211.69
UniFirst Corporation (UNF) is confirmed to report earnings at approximately 8:00 AM ET on Wednesday, January 6, 2021. The consensus earnings estimate is $1.68 per share on revenue of $440.79 million and the Earnings Whisper ® number is $1.79 per share. Investor sentiment going into the company's earnings release has 18% expecting an earnings beat The company's guidance was for earnings of $1.55 to $1.70 per share on revenue of $433.00 million to $443.00 million. Consensus estimates are for earnings to decline year-over-year by 33.33% with revenue decreasing by 5.29%. Short interest has decreased by 62.4% since the company's last earnings release while the stock has drifted higher by 10.4% from its open following the earnings release. Overall earnings estimates have been revised lower since the company's last earnings release.
(CLICK HERE FOR THE CHART!)
Helen of Troy Ltd. $222.19
Helen of Troy Ltd. (HELE) is confirmed to report earnings at approximately 6:45 AM ET on Thursday, January 7, 2021. The consensus earnings estimate is $3.10 per share on revenue of $560.13 million and the Earnings Whisper ® number is $3.25 per share. Investor sentiment going into the company's earnings release has 55% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 5.08% with revenue increasing by 17.99%. Short interest has increased by 53.4% since the company's last earnings release while the stock has drifted higher by 10.9% from its open following the earnings release to be 19.2% above its 200 day moving average of $186.47. Overall earnings estimates have been revised higher since the company's last earnings release. Option traders are pricing in a 7.0% move on earnings and the stock has averaged a 6.1% move in recent quarters.
(CLICK HERE FOR THE CHART!)
Stocks exit 2020 with strong gains and are riding a tailwind, but already in the dawn of the new year, the market could face its first big challenge.
The final outcome of the 2020 election plays out Tuesday, when voters in Georgia will pick their senators and decide which party controls the U.S. Senate.
With President-elect Joe Biden heading to the White House and a Democratic-controlled House of Representatives, Wall Street has been comfortable with the view that Biden and the Democrats could not succeed with tax hikes and more progressive policy changes while Republicans hold the Senate.
The runoff election for the two Senate seats Tuesday is widely expected to result in one or both of the incumbent Republican senators retaining their seats. But Democrats are close in the polls and should they win, each party would have 50 seats with Vice President-elect Kamala Harris the tie breaker.
“Georgia is the most important thing to the Biden presidency for the next two years,” said Ed Mills, Washington policy analyst at Raymond James. “It’s going to determine what is the legislative agenda and who can get confirmed by the United States Senate.”
Sen. David Perdue is being challenged by Democrat Jon Ossoff, while GOP Sen. Kelly Loeffler is running against Democrat Raphael Warnock. None of the candidates had more than 50% of the vote in the Nov. 3 election, so Georgia law requires a runoff election between the two leading candidates for each seat.
“It’s a binary event,” said Mills, adding it’s of growing interest to markets. “The general sense for the market is that Republicans are well positioned to maintain their majority in the Senate. But I think the 2020 election as well as the 2016 election and to some extent, the 2018 election has humbled us … The Senate outcomes, in particular, seem to be less predictable than almost any other elections.”
Mills said the results may take several days to determine, adding to the uncertainty the event could hold for markets. According to an RBC investor survey, 88% expect Republicans to maintain control, and most say that is a positive for the stock market.
“The market tends to shoot first and ask questions later. There will certainly be a reaction if Democrats win both those seats,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. Strategists say there could be a relief rally if Republican incumbents see a clear victory.
“That totally dominates [trading] because it’s about do we have status quo or do we have Democrats controlling all parts of Washington and what that means for spending and taxes,” Boockvar said. “I think you could see the worries about taxes overwhelming any thoughts on the benefits of more spending” by Democrats.
By the numbers
A year of extreme volatility ended with a big win for stocks, as the pandemic steered the course for markets. The S&P 500 was up 16.3% for the year, ending at 3,756. That gain comes after a 34% decline early in the year, followed by a powerful more-than 65% rebound. Technology was the big winner for the year, and the Nasdaq was up 43.6% at 12,888.
Besides the runoff vote, the market will be watching a stream of data in the coming week, including the important December jobs report Friday. That could show fewer than 100,000 jobs were added as the spreading virus impacted hiring and layoffs. There were 245,000 jobs created in November.
There is also ISM manufacturing data Tuesday, and a number of Fed speakers, including Vice Chairman Richard Clarida on Friday.
The virus itself could also be a factor for stocks.
Conventional wisdom for the coming year has been that vaccines will be widely distributed, and by the second half things will start to get back to normal and the economy will pick up. But the initial distribution has been slow, and far short of the 20 million targeted for December by President Donald Trump’s task force.
In that recent RBC survey, three quarters of investors were optimistic about vaccine distribution with 80% expecting a majority to be vaccinated by the end of 2021. “We suspect that the positive outlook for the stock market and the economy would deteriorate if expectations for a smooth vaccine rollout are not met,” RBC strategists wrote.
They also noted that nearly 60% of the investors surveyed believe high stock market valuations are problematic.
“This suggests to us that any threat to the economic and earnings recovery story could spark profit-taking. On this point, it is worth noting that the vaccine was the No. 1 issue keeping investors up at night, closely followed by monetary policy and excessive optimism on the recovery,” the strategists noted.
Chris Rupkey, chief financial economist at MUFG Union Bank, said investors will also be watching the formal acceptance of the Electoral College vote Wednesday. Strategists expect the vote count to confirm Biden’s presidency.
However, Missouri Sen. Josh Hawley says he will challenge the certification, and several House Republicans have already vowed to contest the election at that time. If one House member and a senator jointly object to a state’s slate of electors, the two houses of Congress must separately debate and vote on the objection.
Strategists see little chance of any impact on the election outcome, but there could be fireworks. Trump has been claiming since the election that there was fraud but multiple courts failed to find any truth to the claims.
Rupkey said investors are not taking into account enough potential for political risk from the deep animosity between the two political parties.
“I think the additional stimulus and hopes for additional stimulus, and infrastructure spending in 2021, I don’t know that that is such a slam dunk, because of the issue of political instability,” he said.
Why A Year-End Rally Bodes Well For 2021
Welcome to the last day of 2020! It has been a devastating year in so many ways, yet for investors it has been quite rewarding. Much of the gains in 2020 have taken place the final two months, with the S&P 500 Index up more than 14% in November and December so far, the best end to a year since WWII.
A big end of year rally could have bulls smiling in 2021. “Turns out a 10% or more gain the final two months of the year has equaled a higher S&P 500 the following year every single time since World War II,” explained LPL Financial Chief Market Strategist Ryan Detrick. “In fact, January was also higher every single time as well, so maybe this strong rally to end the year is a clue for higher prices into next year.”
As shown in the LPL Chart of the Day, the S&P 500 gained an average of more than 18% the year following a 10% or more surge during the final two months of the year. Meanwhile, January was up 5 for 5 as well, rising an impressive 3% on average.
(CLICK HERE FOR THE CHART!)
Here’s what the average year looks like after the prior year gains 10% or more the final two months compared to a typical year. Once again, strong returns are the playbook historically.
(CLICK HERE FOR THE CHART!)
We wish everyone a happy and safe New Years Eve and we’ll see you in 2021!
Fifty to Zero in 283 Days
In a year with some pretty crazy charts, the one below is right up there with some of the best. After all the markets have been through this year, bot the S&P 500 and Long-Term Treasuries have seen nearly identical returns on a total return basis. That's right, with just a few hours left in the trading year, the S&P 500's total return in 2020 has been a gain of 17.6%, while Long Term US Treasuries, as measured by the B of A Merrill Lynch Long-Term Treasury Index has rallied 17.3%. What makes this nearly identical performance all the more incredible is that on March 23rd, the performance gap between the two was more than 50 percentage points.
(CLICK HERE FOR THE CHART!)
The fact that stocks and bonds have essentially seen identical returns this year isn't typical. The chart below shows the annual performance spread between the S&P 500 and long-term US Treasuries going back to 1978. During that time, the S&P 500 has historically outperformed long-term US Treasuries by an average of 3.9 percentage points per year, but the average gap in performance between the two has been over 15 percentage points. In the 43 years since 1978, there have only been seven other years where the performance spread between the two asset classes was less than five percentage points and just two years (1985 and 1992) where the performance spread was less than a percentage point.
(CLICK HERE FOR THE CHART!)
Back-to-Back Big Years for Technology
With just two trading days (including today) left in 2020, the S&P 500 Technology sector is on pace for its second year in a row of rallying more than 40%. Going back to 1990, the only time the Technology sector experienced back-to-back returns of more than 40% was in 1998 and 1999. Back then, not only was the Technology sector up 40%+ in back-to-back years, but it was also up over 75% in both of those years. If you think markets are pretty crazy these days, they still have nothing on the last two years of the 1990s!
In terms of cumulative returns, the Technology sector is up 210% since the last trading day of 2018, whereas in 1999 it was up 317% in a two-year span. What's also interesting to note about the last 31 years of returns for the Technology sector is how it has only experienced five down years, while the S&P 500 has been down in ten different years during that span. Furthermore, since 2009 there has only been one down year and the decline was a paltry 1.6%. Not a bad 12-year run!
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Given that the sector has more than doubled in the last two years, there have been some big individual winners. Topping the list with a gain of just under 400% is Advanced Micro Devices (AMD). On the last day of 2018, AMD traded hands for under $20 per share. Today's it's over $90. AMD has a lead of more than 100 percentage points over the next closest stock - NVIDIA (NVDA) - which is up 288%. Interestingly, there aren't a lot of major outliers to the upside compared to the sector's 210% gain, but that's because Apple (AAPL), the sector's largest stock, has paced the sector's gains by rallying more than 240%.
On the downside, just four stocks in the Technology sector have declined in the last two years. The worst of these has been DXC Technology (DXC) which has lost more than half of its value, while Juniper (JNPR) and HP Enterprise (HPE) are down between 10% and 20%. Lastly, FLIR Systems (FLIR) has declined less than 2%, so depending on how it acts in the next two days, it could move into positive territory just as Intel (INTC) did yesterday after Third Point bailed it out and moved the stock barely into positive territory for the last two years.
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Growth Dragging on Small Caps
In the past couple of weeks, we have frequently been keeping tabs on small-cap equities which have been particularly strong performers of late resulting in very overbought readings as well as extended valuations. More specifically, taking a look at growth-oriented small-caps, with only a couple days left in the year small-cap growth stocks—proxied by the Russell 2000 Growth ETF (IWO)—are on pace to have outperformed large-cap equivalents in 2020. On December 10th, IWO surpassed the S&P 500 Growth ETF (IVW) in terms of YTD performance, and even after pulling back in the past week, IWO is still in the lead.
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As a result of recent moves, there has been a sharp reversal on a relative basis between the two ETFs in the past week. In the chart below, we show the ratio of the Russell 2000 Growth ETF (IWO) versus the S&P 500 Growth ETF (IVW). This ratio took off beginning in the early fall meaning small-cap growth drastically outperformed large-cap growth. But the former's weakness in the past several days has put a halt to that move.
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As to just how sharp of a reversal this was, in the five days through yesterday's close, the decline in the ratio of IWO to IVW was the largest since June. Before that, April and March saw declines that were even larger. Not only was this one of the biggest drops in the relative performance of small-cap growth to large-cap growth in the past few months, but that also stands in the bottom 0.5% of all readings going back to 2000 when the ETF first began trading. Outside of this past spring, the only other periods that have also experienced this type of underperformance of small-cap growth relative to large-cap growth was at various points in 2011, 2008, and a handful of times in the early 2000s.
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Small-cap underperformance has not necessarily been broad though. For value stocks, small caps (IWN) have generally outperformed large caps (IVE) for the entirety of the new bull market. While there was a bit of a turn lower in recent days, it has been nowhere close to as dramatic of a move as growth stocks.
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In the charts below, we show average performance over the past week of Russell 2000 stocks broken into deciles based on their price to sales and price to book ratios. As shown, the most aggressively valued deciles have averaged the worst performance in the past week. Stocks with low P/S and P/B ratios have not been immune from the weakness, but they have held up significantly better.
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- $MU
- $BBBY
- $SMPL
- $WBA
- $STZ
- $RPM
- $MSM
- $CAG
- $UNF
- $HELE
- $ANGO
- $SGH
- $AYI
- $REVG
- $LW
- $WDFC
- $LNN
- $LNDC
- $SAR
- $RGP
- $GBX
- $ACCD
- $DCT
- $FC
- $NTIC
- $SCHN
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Micron Technology, Inc. $75.18
Micron Technology, Inc. (MU) is confirmed to report earnings at approximately 4:00 PM ET on Thursday, January 7, 2021. The consensus earnings estimate is $0.71 per share on revenue of $5.73 billion and the Earnings Whisper ® number is $0.78 per share. Investor sentiment going into the company's earnings release has 72% expecting an earnings beat The company's guidance was for earnings of $0.40 to $0.54 per share. Consensus estimates are for year-over-year earnings growth of 69.05% with revenue increasing by 11.39%. Short interest has decreased by 20.0% since the company's last earnings release while the stock has drifted higher by 53.6% from its open following the earnings release to be 46.1% above its 200 day moving average of $51.46. Overall earnings estimates have been revised higher since the company's last earnings release. On Wednesday, December 30, 2020 there was some notable buying of 14,441 contracts of the $72.50 call expiring on Friday, April 16, 2021. Option traders are pricing in a 7.5% move on earnings and the stock has averaged a 7.5% move in recent quarters.
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Bed Bath & Beyond, Inc. $17.76
Bed Bath & Beyond, Inc. (BBBY) is confirmed to report earnings at approximately 7:00 AM ET on Thursday, January 7, 2021. The consensus earnings estimate is $0.21 per share on revenue of $2.77 billion and the Earnings Whisper ® number is $0.31 per share. Investor sentiment going into the company's earnings release has 61% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 155.26% with revenue increasing by 0.39%. Short interest has increased by 0.3% since the company's last earnings release while the stock has drifted lower by 3.0% from its open following the earnings release to be 40.2% above its 200 day moving average of $12.66. Overall earnings estimates have been revised higher since the company's last earnings release. On Tuesday, December 22, 2020 there was some notable buying of 6,626 contracts of the $19.00 put expiring on Friday, January 15, 2021. Option traders are pricing in a 17.0% move on earnings and the stock has averaged a 15.4% move in recent quarters.
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Simply Good Foods Company $31.36
Simply Good Foods Company (SMPL) is confirmed to report earnings at approximately 7:00 AM ET on Wednesday, January 6, 2021. The consensus earnings estimate is $0.20 per share on revenue of $208.89 million and the Earnings Whisper ® number is $0.23 per share. Investor sentiment going into the company's earnings release has 59% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 9.09% with revenue increasing by 37.29%. Short interest has increased by 5.9% since the company's last earnings release while the stock has drifted higher by 52.9% from its open following the earnings release to be 47.2% above its 200 day moving average of $21.31. Overall earnings estimates have been revised lower since the company's last earnings release. On Wednesday, December 23, 2020 there was some notable buying of 508 contracts of the $30.00 call expiring on Friday, January 15, 2021. Option traders are pricing in a 17.5% move on earnings and the stock has averaged a 5.3% move in recent quarters.
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Walgreens Boots Alliance Inc $39.88
Walgreens Boots Alliance Inc (WBA) is confirmed to report earnings at approximately 7:00 AM ET on Thursday, January 7, 2021. The consensus earnings estimate is $1.02 per share on revenue of $34.89 billion and the Earnings Whisper ® number is $1.11 per share. Investor sentiment going into the company's earnings release has 55% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 25.55% with revenue increasing by 1.60%. Short interest has decreased by 15.2% since the company's last earnings release while the stock has drifted higher by 9.7% from its open following the earnings release to be 1.0% below its 200 day moving average of $40.29. Overall earnings estimates have been revised lower since the company's last earnings release. On Thursday, December 31, 2020 there was some notable buying of 14,690 contracts of the $40.00 call expiring on Friday, February 19, 2021. Option traders are pricing in a 6.3% move on earnings and the stock has averaged a 4.9% move in recent quarters.
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Constellation Brands, Inc. $219.05
Constellation Brands, Inc. (STZ) is confirmed to report earnings at approximately 7:30 AM ET on Thursday, January 7, 2021. The consensus earnings estimate is $2.39 per share on revenue of $2.22 billion and the Earnings Whisper ® number is $2.45 per share. Investor sentiment going into the company's earnings release has 54% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 11.68% with revenue increasing by 1.76%. Short interest has decreased by 37.7% since the company's last earnings release while the stock has drifted higher by 14.7% from its open following the earnings release to be 22.6% above its 200 day moving average of $178.74. Overall earnings estimates have been revised higher since the company's last earnings release. On Thursday, December 24, 2020 there was some notable buying of 2,291 contracts of the $212.50 call expiring on Friday, January 8, 2021. Option traders are pricing in a 5.6% move on earnings and the stock has averaged a 4.0% move in recent quarters.
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RPM International Inc. $90.78
RPM International Inc. (RPM) is confirmed to report earnings at approximately 6:45 AM ET on Wednesday, January 6, 2021. The consensus earnings estimate is $1.00 per share on revenue of $1.46 billion and the Earnings Whisper ® number is $1.10 per share. Investor sentiment going into the company's earnings release has 40% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 31.58% with revenue increasing by 4.19%. Short interest has decreased by 23.0% since the company's last earnings release while the stock has drifted higher by 4.5% from its open following the earnings release to be 15.8% above its 200 day moving average of $78.42. Overall earnings estimates have been revised higher since the company's last earnings release. Option traders are pricing in a 4.3% move on earnings and the stock has averaged a 2.5% move in recent quarters.
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MSC Industrial Direct Co. Inc. $84.39
MSC Industrial Direct Co. Inc. (MSM) is confirmed to report earnings at approximately 6:30 AM ET on Wednesday, January 6, 2021. The consensus earnings estimate is $1.07 per share on revenue of $774.61 million and the Earnings Whisper ® number is $1.15 per share. Investor sentiment going into the company's earnings release has 25% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 11.57% with revenue decreasing by 5.95%. Short interest has decreased by 21.2% since the company's last earnings release while the stock has drifted higher by 27.3% from its open following the earnings release to be 22.5% above its 200 day moving average of $68.91. Overall earnings estimates have been revised higher since the company's last earnings release. Option traders are pricing in a 5.0% move on earnings and the stock has averaged a 3.4% move in recent quarters.
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Conagra Brands, Inc. $36.26
Conagra Brands, Inc. (CAG) is confirmed to report earnings at approximately 7:30 AM ET on Thursday, January 7, 2021. The consensus earnings estimate is $0.73 per share on revenue of $2.99 billion and the Earnings Whisper ® number is $0.77 per share. Investor sentiment going into the company's earnings release has 53% expecting an earnings beat The company's guidance was for earnings of $0.70 to $0.74 per share. Consensus estimates are for year-over-year earnings growth of 15.87% with revenue increasing by 6.00%. Short interest has increased by 17.1% since the company's last earnings release while the stock has drifted higher by 0.3% from its open following the earnings release to be 3.7% above its 200 day moving average of $34.96. Overall earnings estimates have been revised lower since the company's last earnings release. On Monday, December 21, 2020 there was some notable buying of 4,915 contracts of the $38.00 call expiring on Friday, January 15, 2021. Option traders are pricing in a 6.3% move on earnings and the stock has averaged a 6.7% move in recent quarters.
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UniFirst Corporation $211.69
UniFirst Corporation (UNF) is confirmed to report earnings at approximately 8:00 AM ET on Wednesday, January 6, 2021. The consensus earnings estimate is $1.68 per share on revenue of $440.79 million and the Earnings Whisper ® number is $1.79 per share. Investor sentiment going into the company's earnings release has 18% expecting an earnings beat The company's guidance was for earnings of $1.55 to $1.70 per share on revenue of $433.00 million to $443.00 million. Consensus estimates are for earnings to decline year-over-year by 33.33% with revenue decreasing by 5.29%. Short interest has decreased by 62.4% since the company's last earnings release while the stock has drifted higher by 10.4% from its open following the earnings release. Overall earnings estimates have been revised lower since the company's last earnings release.
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Helen of Troy Ltd. $222.19
Helen of Troy Ltd. (HELE) is confirmed to report earnings at approximately 6:45 AM ET on Thursday, January 7, 2021. The consensus earnings estimate is $3.10 per share on revenue of $560.13 million and the Earnings Whisper ® number is $3.25 per share. Investor sentiment going into the company's earnings release has 55% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 5.08% with revenue increasing by 17.99%. Short interest has increased by 53.4% since the company's last earnings release while the stock has drifted higher by 10.9% from its open following the earnings release to be 19.2% above its 200 day moving average of $186.47. Overall earnings estimates have been revised higher since the company's last earnings release. Option traders are pricing in a 7.0% move on earnings and the stock has averaged a 6.1% move in recent quarters.
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New Characters:
Tier 1 passive: dodge rate increases by +30%
Tier 2 passive: Increase guaranteed dodge rate by 25%, Increase skill damage by 25%, bonus damage by 30%
Tier 1 passive: super armor, all defenses +25%
Tier 2 passive: Ignore Target's dodge rate by 40%, Increase skill damage by 30%, bonus damage by 20%
New Potential Realized Characters:
- Red Guardian
Black Widow - Marvel's Black Widow Uniform Options/Bonus
Uniform Bonus: Chain hit 25%, Enhance effects of Graceful Dancer, Tactical Advantage
Taskmaster - Marvel's Black Widow Uniform Options/Bonus
Uniform Bonus: Increases damage dealt to both super villains and super heroes by 40% (Applies to all allies)
Red Guardian - Marvel's Black Widow Options/Bonus
Uniform Bonus: Decrease damage received by 25%
Uniform changes from villain to hero.
Yelena - Marvel's Black Widow Uniform Options/Bonus
Uniform Passive: 20% physical attack, Ignore dodge 15%
Uniform changes from villain to hero.
Other Changes
Bonus rewards in Co-op, World Boss, Danger Room, +10 epic quest biometrics, free timeline refill entries, autoplay+ in shadowland.
Dimension Mission reward upgrades: gold, custom geacard/ISO chests (exact details of these unclear)
Daily MGF's increase up the leagues: minor league - 5 daily, bronze - 6 daily...
Can go up to LVL 15 before it was LVL 10. The Amount of Gold increases from Level 10 to 15.
Agent Level 100 - 1.8M Gold daily.
Agent Level 110+ - 2.0M Gold daily.
60 contribution points required per Dimension Mission rewards now, up from 30 currently.
60 clears now required to collect all rewards from dimension missions. Twice as much energy/boost points/clear tickets consumed for 15k DM points.
Fixed stats: Skill Cooldown & dodge.
Not a Premium Card.
5 year anniversary gift.
Bonus collection: +1% dodge
300k : extreme iso booster
600k : card chest 4-6 star
1M : 10 lvl. 1 uni XP chips
1.5M : custom gear chest 5-6 star
3M : 10 lvl. 2 uni XP chips
5M : 500k gold
ABX refresh cost : 30k gold
Recently used characters highlighted at the top of selection screen.
The stock market enters a four-day week that is the lull before earnings season, but it’s the headlines on developments around the spread of the coronavirus that may result in the most volatility.
Strategists say investors are now most focused on how the virus is progressing, what medical developments might help, and how long it could take to end the shutdown of most of the U.S.
“I think it’s a wait and see with a drift to the downside. I think if you look back to that three-, four-day rally we had in March, capping off the end of the month, I think a lot of that was reaction to the Fed, a lot of it was reaction to the stimulus out of Washington,” said Lori Calvasina, chief U.S. equities strategist at RBC. “There were good vibes coming off of that, but that was yesterday’s news. I think the Fed has done a good job. They have peoples’ confidence...One thing we now need is a decline in the number of virus cases in the U.S.”
Oil could be a factor in the week ahead as OPEC and Russia hold an emergency meeting Monday to discuss production cuts. Oil rallied 12% in the past week with West Texas Intermediate futures at $28.34 per barrel, its best week ever. President Donald Trump sparked the rally when he said he spoke to Saudi Arabia and Russia and they wanted a deal to cut production.
In the past week, stocks were lower for the third week in four, as the market absorbed the latest shocking reports of layoffs, and investors worried about the duration of the virus related shutdowns. The S&P 500 closed down 2% for the week, at 2,488.
Jobs picture
On Sunday, Trump extended the guidelines on social distancing to April 30, as the number of cases grew.
Thursday’s report of 6.6 million new unemployment claims for the week ended March 28 brought the two week total of workers filing claims to 10 million. The biggest data report in the week ahead could again be that jobless claims number on Thursday.
“We look for 7 million new claims to be reported for the week ended April 4, though obviously the range of uncertainty around this forecast is wide, and a substantial decline is also possible,” noted J.P. Morgan economist Jesse Edgerton.
Consumer sentiment is reported Thursday, and consumer price index inflation is reported Friday, when the stock market is closed for the Good Friday holiday.
“I’m not a big believer that investors gain a lot of information from single points of data and even less right now,” said Mike Swell, co-head of global portfolio management at Goldman Sachs Asset Management. “We need the world to open back up. We need the global economies to open back up to have any sense of the lasting impact of this on jobs. The concerns in corporate boardrooms is how conservative they’re going to be when it comes to cap ex and hiring.”
The Fed releases minutes of its last meeting Wednesday.
“The schedule doesn’t matter anymore. What matters now is how the pandemic is playing out, the extent of the downturn of the economy, and then how capital markets are functioning,” Swell said. “All of those things together are going to drive what the Fed’s going to do, and they’ll act when they need to take action.”
The Fed has flooded the markets with liquidity and is ballooning its balance sheet with Treasury and mortgage purchases. Swell said the Fed’s programs are helping the markets they’ve taken aim at including corporate debt, mortgages and commercial paper.
Earnings ahead
First quarter earnings season is scheduled to start in the week after next, and there could be more companies withdrawing guidance between now and then.
“We’re all facing the realization [the virus shutdown] that it’s going to take longer, it’s going to go deeper and that alone is taking the wind out of the sales,” said Calvasina. “Then the companies are going to report , and they’re not going to tell us anything...companies are just withdrawing guidance. It’s not even like there’s a new lower bar. Are we going to come out of this with a bar or are we going to come out of this with no direction?”
According to Refinitiv, earnings are expected to decline about 5.5% for the first quarter, which saw the biggest impact from the virus in the final weeks of March.
Calvasina said she expects the market to retest the lows of March 23, in part because it does not seem investors have gotten negative enough. She said they do not appear to be factoring in the latest gloomy projections from economists of a more than 30% decline in second quarter GDP. She said the market could still have a ways to go before bottoming, and notes the financial crisis drop was 49%. A drop of that magnitude would take the S&P to 1,727.
Her own survey of clients shows that many investors still have a bullish view on the market with a six to 12-month horizon. “We’re seeing investors taking a constructive view. They like what the Fed has done.There seems to be a view about the economy that the damage is really going to be concentrated in the second quarter, and it’s going to be contained in terms of depth and contained in terms of duration,” she said.
Following last week’s more than 10% gain, the S&P 500 Index is tracking toward another weekly loss, its fifth of the last seven. This has many investors wondering if a retest of the lows may be in the cards for US equities. As we explored in our How Markets Bottom post, two of the bear markets we believe show the most similarities to our current one did retest or undercut the lows after the worst of the selling.
“Whether or not we get a retest is an open question,” said LPL Financial Senior Market Strategist Ryan Detrick. “But we believe we’ve seen the worst of the selling, and we will be watching to confirm that fewer individual stocks are making new lows on a further pullback in the indexes.”
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As the LPL Chart of the Day shows, although the S&P 500 made its low on March 23, more stocks actually bottomed a week earlier on March 16, when more than two-thirds of the individual stocks in the index hit a one-year low. Regardless of the direction of the S&P 500 over the coming days, we want to see this trend of fewer stocks making new lows continue.
Factor #1 in our Road to Recovery Playbook is finding confidence in the peak of COVID-19 cases in the United States. At LPL Research we are monitoring this factor daily, and we wanted to provide an update into what we are seeing. As shown in the LPL Chart of the Day, while the number of new cases in the United States has continued to climb, the number of new cases seen outside of the US has begun to drop in recent days. In fact, Italy, the worst-hit country in terms of total deaths from the virus, reported on Tuesday that new cases hit a two-week low.
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This data is important because thus far the number of COVID-19 cases has conformed to Farr’s Law of Epidemics, exhibiting a somewhat predictable bell curve normal-like distribution. Formulated in the 1800s by British epidemiologist Dr. William Farr, these laws predict that epidemics normally follow a pattern of sharp increase, a peak, and then a decline back to a baseline.
The distributions of both new COVID-19 cases and related fatalities in China and South Korea have exhibited this behavior and appear to have ridden out the initial outbreak cycle. The City of Wuhan, China, which was the initial epicenter for the virus, reported on March 19 that it had zero new cases—showing us that the curve can be flattened and there is light at the end of this dark tunnel.
“The market’s bounce last week may have been in anticipation of some of these more positive data points regarding the virus,” said LPL Financial Senior Market Strategist Ryan Detrick. “While US cases continue to climb, the more countries that reach their peak, the more clarity we gain into what that timing may look like for the United States. Investors have historically been rewarded for investing during these crisis events, and we believe the time for suitable investors to consider adding some risk to their portfolios may be approaching.”
April marks the end of the “Best Six Months” for DJIA and the S&P 500. The window for the seasonal MACD sell signal opens on April 1st. The unprecedented speed of the current market selloff and current bear market would appear to have made this year’s signal insignificant. This could be the case, but it is far too early to say if the worst of the bear market is over. Double-digit DJIA losses during the “Best Six Months” have only occurred three times (ending in April in 1970, 1974 and 2009) since 1950. In 1970 & 2009 the “Worst Six Months” were positive while in 1974 DJIA slide another 20.5%.
April 1999 was the first month to gain 1000 DJIA points. However, from 2000 to 2005, “Tax” month was hit, declining in four of six years. Since 2006, April has been up fourteen years in a row with an average gain of 2.3% to reclaim its position as the best DJIA month since 1950. April is second best for S&P and fourth best for NASDAQ (since 1971).
The first half of April used to outperform the second half, but since 1994 that has no longer been the case. The effect of April 15 Tax Deadline appears to be diminished with numerous bullish days present on either side of the day. Traders and investors are clearly focused on first quarter earnings and guidance during April. This year, guidance will likely be the greatest focus, as first and second quarter earnings are likely to be disappointing as a result of the coronavirus pandemic.
Historically bullish election-year influences (the second-best year of the four-year presidential election cycle) have the exact opposite effect on April. Average gains since 1952 are approximately half of the average gain of all years since 1950 for DJIA and S&P 500. Largely due to a 15.6% loss in 2000, NASDAQ’s typical strength in all Aprils since 1971 is transformed into an average loss in election years.
This data is important because thus far the number of COVID-19 cases has conformed to Farr’s Law of Epidemics, exhibiting a somewhat predictable bell curve normal-like distribution. Formulated in the 1800s by British epidemiologist Dr. William Farr, these laws predict that epidemics normally follow a pattern of sharp increase, a peak, and then a decline back to a baseline.
The distributions of both new COVID-19 cases and related fatalities in China and South Korea have exhibited this behavior and appear to have ridden out the initial outbreak cycle. The City of Wuhan, China, which was the initial epicenter for the virus, reported on March 19 that it had zero new cases—showing us that the curve can be flattened and there is light at the end of this dark tunnel.
“The market’s bounce last week may have been in anticipation of some of these more positive data points regarding the virus,” said LPL Financial Senior Market Strategist Ryan Detrick. “While US cases continue to climb, the more countries that reach their peak, the more clarity we gain into what that timing may look like for the United States. Investors have historically been rewarded for investing during these crisis events, and we believe the time for suitable investors to consider adding some risk to their portfolios may be approaching.”
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The depth of this waterfall decline may be too deep for the market to rebound quickly. This bear market also put this year’s Best Six Months (November-April) at risk of being negative. The record of down Best Six Months is not encouraging and it reminds us of a salient quote from the Almanac from an old market sage, “If the market does not rally, as it should during bullish seasonal periods, it is a sign that other forces are stronger and that when the seasonal period ends those forces will really have their say.”— Edson Gould (Stock market analyst, Findings & Forecasts, 1902-1987)
The table below of Down Best Six Month for DJIA since 1950 also suggests caution and patience is in order. Subsequent Worst Six Months (May-October) have averaged losses with only two decent years 1982 and 2009. The market bottom in August 1982 marked the end of the 1966-1982 secular bear market and came of the early 1980s double dip recession. Following the first back-to-back down Best Six Months since 1973-1974, the market hit a secular bear market low in March 2009. Market action in the rest of these years was rather grim.
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Over the past year, the Technology sector has been the most notable sector in terms of outperformance relative to the S&P 500. As shown in the charts from our Sector Snapshot below, the relative strength chart for Technology has been in a steady uptrend for the past twelve months without much interruption even while the decade long bull market was coming to an end. In fact, last week it was the first sector to exit oversold territory after every sector was oversold for 13 days. The other sectors have not been as lucky. During the recent sell off, the relative performance of most sectors, especially cyclicals like Energy, Financials, and Industrials, fell sharply (indicating even worse declines than the S&P 500). Consumer Staples and Health Care, on the other hand, have seen much stronger performance than the rest of the market.
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Tuesday's Consumer Confidence report managed to exceed expectations, but as we noted at the time, the survey for the March reports cuts off on the 18th, so as economic conditions turned south, sentiment levels also likely declined. One area of the report where sentiment already has seen a notable decline is in consumer sentiment towards stock prices. As shown in the top chart below, the percentage of consumers expecting stock prices to decline nearly doubled from 21.7% up to 39.2% while the percentage of consumers looking for higher prices dropped from 43.1% down to 32.3%. In the case of negative sentiment, the percentage of bearish consumers hasn't been this high since late 2012.
Given the major shift in sentiment, the spread between bullish and bearish consumers has seen a major reversal falling from firmly positive (21.4) to firmly negative (-6.9). By this measure, the spread between bullish and bearish investors hasn't been this negative since February 2016.
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Very few assets have been winners recently, especially in the commodities space. As shown in the table below, no major energy or metal commodities (front-month futures) rose in March and gold was the only one to rise in the first quarter. The degree of those declines varied greatly. While gasoline and WTI futures (crude oil) were more than cut in half, gold and iron ore fell less than one percent in March. Considering iron ore's cyclical nature, that small decline is somewhat surprising but as for Q1, iron ore's performance was much weaker with a decline of over 10.5%. Granted, that is still a far better performance than copper which was down by more than twice that. Given the size of these declines, every one of the commodities highlighted below sits well off of its 52-week high. Gasoline and crude oil are the worst of these at 74.14% and 69.63%, respectively. As for where they finished the quarter relative to their 52-week lows, things are mixed. Gasoline, gold, and silver are off those lows by double-digit percentages while the rest are less than 10% away.
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As with many charts across assets, the technical picture of these commodities looks ugly. Almost every one has broken below significant support levels and safe-haven gold is the only one currently in anything other than a downtrend. Although it finished the month just off of the lows, crude oil fell all the way to its lowest levels since 2002 after crashing through support in February. The same can be said for gasoline. Natural gas remains a pain trade with the downtrend of the past several months still firmly in place.
Given its safe-haven status, gold has again been an outperformer approaching some of its highest levels of the past decade during the risk asset rout of the past couple of months. But it has recently been a more volatile trade. The yellow metal has yet to break above resistance around 1,700/oz and has even fallen to support around the 50-DMA. Despite also having the precious metal status, silver has been a serial underperformer to gold. Silver never shared gold's rally over the past couple of months as it fell to its lowest levels since 2009.
As for industrial metals, copper has been hovering around its lowest levels since the final quarter of 2016 after falling through the past year's support around $2.50. On the bright side, the technicals of iron ore have been slightly more constructive as it has still held up at support around $75.
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- $SMPL
- $CONN
- $GBX
- $LEVI
- $ANGO
- $RPM
- $SGH
- $LNN
- $MSM
- $SJR
- $WDFC
- $NTIC
- $EXFO
- $CAAP
- $SLP
- $TLGT
Monday 4.6.20 Before Market Open:
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Monday 4.6.20 After Market Close:
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NONE.
Tuesday 4.7.20 Before Market Open:
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Tuesday 4.7.20 After Market Close:
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Wednesday 4.8.20 Before Market Open:
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Wednesday 4.8.20 After Market Close:
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Thursday 4.9.20 Before Market Open:
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Thursday 4.9.20 After Market Close:
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NONE.
Friday 4.10.20 Before Market Open:
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NONE.
Friday 4.10.20 After Market Close:
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NONE.
Simply Good Foods Company (SMPL) is confirmed to report earnings at approximately 7:00 AM ET on Monday, April 6, 2020. The consensus earnings estimate is $0.18 per share on revenue of $219.69 million and the Earnings Whisper ® number is $0.20 per share. Investor sentiment going into the company's earnings release has 53% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 20.00% with revenue increasing by 77.46%. Short interest has increased by 43.4% since the company's last earnings release while the stock has drifted lower by 30.4% from its open following the earnings release to be 26.0% below its 200 day moving average of $25.37. Overall earnings estimates have been revised higher since the company's last earnings release. On Wednesday, March 25, 2020 there was some notable buying of 3,763 contracts of the $20.00 call expiring on Friday, April 17, 2020. Option traders are pricing in a 17.7% move on earnings and the stock has averaged a 4.3% move in recent quarters.
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Conn's, Inc. (CONN) is confirmed to report earnings at approximately 6:00 AM ET on Thursday, April 9, 2020. The consensus earnings estimate is $0.35 per share on revenue of $412.61 million and the Earnings Whisper ® number is $0.33 per share. Investor sentiment going into the company's earnings release has 65% expecting an earnings beat The company's guidance was for revenue of $394.00 million to $411.00 million. Consensus estimates are for earnings to decline year-over-year by 63.54% with revenue decreasing by 4.71%. Short interest has increased by 23.6% since the company's last earnings release while the stock has drifted lower by 77.8% from its open following the earnings release to be 80.3% below its 200 day moving average of $16.86. Overall earnings estimates have been revised lower since the company's last earnings release. Option traders are pricing in a 25.5% move on earnings and the stock has averaged a 16.7% move in recent quarters.
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Levi Strauss & Co. (LEVI) is confirmed to report earnings at approximately 4:15 PM ET on Tuesday, April 7, 2020. The consensus earnings estimate is $0.35 per share on revenue of $1.47 billion and the Earnings Whisper ® number is $0.37 per share. Investor sentiment going into the company's earnings release has 6% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 7.89% with revenue increasing by 2.48%. Short interest has increased by 37.2% since the company's last earnings release while the stock has drifted lower by 51.6% from its open following the earnings release to be 47.1% below its 200 day moving average of $17.97. Overall earnings estimates have been revised lower since the company's last earnings release. The stock has averaged a 6.0% move on earnings in recent quarters.
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Greenbrier Companies Inc. (GBX) is confirmed to report earnings at approximately 6:00 AM ET on Tuesday, April 7, 2020. The consensus earnings estimate is $0.29 per share on revenue of $800.03 million and the Earnings Whisper ® number is $0.25 per share. Investor sentiment going into the company's earnings release has 35% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 31.82% with revenue increasing by 21.46%. Short interest has increased by 93.0% since the company's last earnings release while the stock has drifted lower by 57.6% from its open following the earnings release to be 50.9% below its 200 day moving average of $26.74. Overall earnings estimates have been revised higher since the company's last earnings release. On Thursday, April 2, 2020 there was some notable buying of 544 contracts of the $10.00 put expiring on Friday, June 19, 2020. Option traders are pricing in a 21.9% move on earnings and the stock has averaged a 6.2% move in recent quarters.
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AngioDynamics (ANGO) is confirmed to report earnings at approximately 7:00 AM ET on Tuesday, April 7, 2020. The consensus estimate is for a loss of $0.03 per share on revenue of $68.43 million and the Earnings Whisper ® number is ($0.04) per share. Investor sentiment going into the company's earnings release has 30% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 115.79% with revenue decreasing by 20.74%. Short interest has decreased by 9.7% since the company's last earnings release while the stock has drifted lower by 43.7% from its open following the earnings release to be 39.5% below its 200 day moving average of $15.93. Overall earnings estimates have been revised lower since the company's last earnings release. On Tuesday, March 24, 2020 there was some notable buying of 1,450 contracts of the $12.50 call expiring on Friday, April 17, 2020. Option traders are pricing in a 18.4% move on earnings and the stock has averaged a 8.2% move in recent quarters.
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RPM International Inc. (RPM) is confirmed to report earnings at approximately 6:45 AM ET on Wednesday, April 8, 2020. The consensus earnings estimate is $0.20 per share on revenue of $1.18 billion and the Earnings Whisper ® number is $0.18 per share. Investor sentiment going into the company's earnings release has 36% expecting an earnings beat The company's guidance was for earnings of $0.17 to $0.23 per share. Consensus estimates are for year-over-year earnings growth of 42.86% with revenue increasing by 3.45%. Short interest has decreased by 16.9% since the company's last earnings release while the stock has drifted lower by 25.1% from its open following the earnings release to be 17.1% below its 200 day moving average of $68.67. Overall earnings estimates have been revised lower since the company's last earnings release. Option traders are pricing in a 11.9% move on earnings and the stock has averaged a 3.1% move in recent quarters.
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SMART Global Holdings, Inc. (SGH) is confirmed to report earnings at approximately 4:05 PM ET on Tuesday, April 7, 2020. The consensus earnings estimate is $0.50 per share on revenue of $268.40 million and the Earnings Whisper ® number is $0.47 per share. Investor sentiment going into the company's earnings release has 57% expecting an earnings beat The company's guidance was for earnings of $0.45 to $0.55 per share on revenue of $265.00 million to $275.00 million. Consensus estimates are for earnings to decline year-over-year by 34.21% with revenue decreasing by 11.73%. Short interest has increased by 22.1% since the company's last earnings release while the stock has drifted lower by 41.2% from its open following the earnings release to be 30.3% below its 200 day moving average of $29.64. Overall earnings estimates have been revised lower since the company's last earnings release. Option traders are pricing in a 16.6% move on earnings and the stock has averaged a 14.3% move in recent quarters.
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Lindsay Manufacturing Co. (LNN) is confirmed to report earnings at approximately 6:45 AM ET on Tuesday, April 7, 2020. The consensus earnings estimate is $0.49 per share on revenue of $113.67 million and the Earnings Whisper ® number is $0.40 per share. Investor sentiment going into the company's earnings release has 40% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 2,350.00% with revenue increasing by 4.11%. Short interest has decreased by 29.6% since the company's last earnings release while the stock has drifted lower by 13.4% from its open following the earnings release. Overall earnings estimates have been revised lower since the company's last earnings release.
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MSC Industrial Direct Co. Inc. (MSM) is confirmed to report earnings at approximately 6:30 AM ET on Wednesday, April 8, 2020. The consensus earnings estimate is $0.98 per share on revenue of $789.46 million and the Earnings Whisper ® number is $1.00 per share. Investor sentiment going into the company's earnings release is for earnings to come in-line with estimates The company's guidance was for earnings of $0.97 to $1.03 per share on revenue of $781.00 million to $798.00 million. Consensus estimates are for earnings to decline year-over-year by 20.97% with revenue decreasing by 4.08%. Short interest has decreased by 56.0% since the company's last earnings release while the stock has drifted lower by 30.1% from its open following the earnings release to be 22.7% below its 200 day moving average of $70.32. Overall earnings estimates have been revised lower since the company's last earnings release. Option traders are pricing in a 9.3% move on earnings and the stock has averaged a 2.6% move in recent quarters.
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Shaw Communications Inc. (SJR) is confirmed to report earnings at approximately 9:00 PM ET on Thursday, April 9, 2020. The consensus earnings estimate is $0.25 per share on revenue of $1.05 billion and the Earnings Whisper ® number is $0.20 per share. Investor sentiment going into the company's earnings release has 53% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 8.70% with revenue increasing by 6.24%. The stock has drifted lower by 22.7% from its open following the earnings release to be 19.3% below its 200 day moving average of $19.36. Overall earnings estimates have been revised lower since the company's last earnings release. Option traders are pricing in a 13.8% move on earnings and the stock has averaged a 1.8% move in recent quarters.
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The stock market enters a four-day week that is the lull before earnings season, but it’s the headlines on developments around the spread of the coronavirus that may result in the most volatility.
Strategists say investors are now most focused on how the virus is progressing, what medical developments might help, and how long it could take to end the shutdown of most of the U.S.
“I think it’s a wait and see with a drift to the downside. I think if you look back to that three-, four-day rally we had in March, capping off the end of the month, I think a lot of that was reaction to the Fed, a lot of it was reaction to the stimulus out of Washington,” said Lori Calvasina, chief U.S. equities strategist at RBC. “There were good vibes coming off of that, but that was yesterday’s news. I think the Fed has done a good job. They have peoples’ confidence...One thing we now need is a decline in the number of virus cases in the U.S.”
Oil could be a factor in the week ahead as OPEC and Russia hold an emergency meeting Monday to discuss production cuts. Oil rallied 12% in the past week with West Texas Intermediate futures at $28.34 per barrel, its best week ever. President Donald Trump sparked the rally when he said he spoke to Saudi Arabia and Russia and they wanted a deal to cut production.
In the past week, stocks were lower for the third week in four, as the market absorbed the latest shocking reports of layoffs, and investors worried about the duration of the virus related shutdowns. The S&P 500 closed down 2% for the week, at 2,488.
Jobs picture
On Sunday, Trump extended the guidelines on social distancing to April 30, as the number of cases grew.
Thursday’s report of 6.6 million new unemployment claims for the week ended March 28 brought the two week total of workers filing claims to 10 million. The biggest data report in the week ahead could again be that jobless claims number on Thursday.
“We look for 7 million new claims to be reported for the week ended April 4, though obviously the range of uncertainty around this forecast is wide, and a substantial decline is also possible,” noted J.P. Morgan economist Jesse Edgerton.
Consumer sentiment is reported Thursday, and consumer price index inflation is reported Friday, when the stock market is closed for the Good Friday holiday.
“I’m not a big believer that investors gain a lot of information from single points of data and even less right now,” said Mike Swell, co-head of global portfolio management at Goldman Sachs Asset Management. “We need the world to open back up. We need the global economies to open back up to have any sense of the lasting impact of this on jobs. The concerns in corporate boardrooms is how conservative they’re going to be when it comes to cap ex and hiring.”
The Fed releases minutes of its last meeting Wednesday.
“The schedule doesn’t matter anymore. What matters now is how the pandemic is playing out, the extent of the downturn of the economy, and then how capital markets are functioning,” Swell said. “All of those things together are going to drive what the Fed’s going to do, and they’ll act when they need to take action.”
The Fed has flooded the markets with liquidity and is ballooning its balance sheet with Treasury and mortgage purchases. Swell said the Fed’s programs are helping the markets they’ve taken aim at including corporate debt, mortgages and commercial paper.
Earnings ahead
First quarter earnings season is scheduled to start in the week after next, and there could be more companies withdrawing guidance between now and then.
“We’re all facing the realization [the virus shutdown] that it’s going to take longer, it’s going to go deeper and that alone is taking the wind out of the sales,” said Calvasina. “Then the companies are going to report , and they’re not going to tell us anything...companies are just withdrawing guidance. It’s not even like there’s a new lower bar. Are we going to come out of this with a bar or are we going to come out of this with no direction?”
According to Refinitiv, earnings are expected to decline about 5.5% for the first quarter, which saw the biggest impact from the virus in the final weeks of March.
Calvasina said she expects the market to retest the lows of March 23, in part because it does not seem investors have gotten negative enough. She said they do not appear to be factoring in the latest gloomy projections from economists of a more than 30% decline in second quarter GDP. She said the market could still have a ways to go before bottoming, and notes the financial crisis drop was 49%. A drop of that magnitude would take the S&P to 1,727.
Her own survey of clients shows that many investors still have a bullish view on the market with a six to 12-month horizon. “We’re seeing investors taking a constructive view. They like what the Fed has done.There seems to be a view about the economy that the damage is really going to be concentrated in the second quarter, and it’s going to be contained in terms of depth and contained in terms of duration,” she said.
Following last week’s more than 10% gain, the S&P 500 Index is tracking toward another weekly loss, its fifth of the last seven. This has many investors wondering if a retest of the lows may be in the cards for US equities. As we explored in our How Markets Bottom post, two of the bear markets we believe show the most similarities to our current one did retest or undercut the lows after the worst of the selling.
“Whether or not we get a retest is an open question,” said LPL Financial Senior Market Strategist Ryan Detrick. “But we believe we’ve seen the worst of the selling, and we will be watching to confirm that fewer individual stocks are making new lows on a further pullback in the indexes.”
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As the LPL Chart of the Day shows, although the S&P 500 made its low on March 23, more stocks actually bottomed a week earlier on March 16, when more than two-thirds of the individual stocks in the index hit a one-year low. Regardless of the direction of the S&P 500 over the coming days, we want to see this trend of fewer stocks making new lows continue.
Factor #1 in our Road to Recovery Playbook is finding confidence in the peak of COVID-19 cases in the United States. At LPL Research we are monitoring this factor daily, and we wanted to provide an update into what we are seeing. As shown in the LPL Chart of the Day, while the number of new cases in the United States has continued to climb, the number of new cases seen outside of the US has begun to drop in recent days. In fact, Italy, the worst-hit country in terms of total deaths from the virus, reported on Tuesday that new cases hit a two-week low.
(CLICK HERE FOR THE CHART!)
This data is important because thus far the number of COVID-19 cases has conformed to Farr’s Law of Epidemics, exhibiting a somewhat predictable bell curve normal-like distribution. Formulated in the 1800s by British epidemiologist Dr. William Farr, these laws predict that epidemics normally follow a pattern of sharp increase, a peak, and then a decline back to a baseline.
The distributions of both new COVID-19 cases and related fatalities in China and South Korea have exhibited this behavior and appear to have ridden out the initial outbreak cycle. The City of Wuhan, China, which was the initial epicenter for the virus, reported on March 19 that it had zero new cases—showing us that the curve can be flattened and there is light at the end of this dark tunnel.
“The market’s bounce last week may have been in anticipation of some of these more positive data points regarding the virus,” said LPL Financial Senior Market Strategist Ryan Detrick. “While US cases continue to climb, the more countries that reach their peak, the more clarity we gain into what that timing may look like for the United States. Investors have historically been rewarded for investing during these crisis events, and we believe the time for suitable investors to consider adding some risk to their portfolios may be approaching.”
April marks the end of the “Best Six Months” for DJIA and the S&P 500. The window for the seasonal MACD sell signal opens on April 1st. The unprecedented speed of the current market selloff and current bear market would appear to have made this year’s signal insignificant. This could be the case, but it is far too early to say if the worst of the bear market is over. Double-digit DJIA losses during the “Best Six Months” have only occurred three times (ending in April in 1970, 1974 and 2009) since 1950. In 1970 & 2009 the “Worst Six Months” were positive while in 1974 DJIA slide another 20.5%.
April 1999 was the first month to gain 1000 DJIA points. However, from 2000 to 2005, “Tax” month was hit, declining in four of six years. Since 2006, April has been up fourteen years in a row with an average gain of 2.3% to reclaim its position as the best DJIA month since 1950. April is second best for S&P and fourth best for NASDAQ (since 1971).
The first half of April used to outperform the second half, but since 1994 that has no longer been the case. The effect of April 15 Tax Deadline appears to be diminished with numerous bullish days present on either side of the day. Traders and investors are clearly focused on first quarter earnings and guidance during April. This year, guidance will likely be the greatest focus, as first and second quarter earnings are likely to be disappointing as a result of the coronavirus pandemic.
Historically bullish election-year influences (the second-best year of the four-year presidential election cycle) have the exact opposite effect on April. Average gains since 1952 are approximately half of the average gain of all years since 1950 for DJIA and S&P 500. Largely due to a 15.6% loss in 2000, NASDAQ’s typical strength in all Aprils since 1971 is transformed into an average loss in election years.
This data is important because thus far the number of COVID-19 cases has conformed to Farr’s Law of Epidemics, exhibiting a somewhat predictable bell curve normal-like distribution. Formulated in the 1800s by British epidemiologist Dr. William Farr, these laws predict that epidemics normally follow a pattern of sharp increase, a peak, and then a decline back to a baseline.
The distributions of both new COVID-19 cases and related fatalities in China and South Korea have exhibited this behavior and appear to have ridden out the initial outbreak cycle. The City of Wuhan, China, which was the initial epicenter for the virus, reported on March 19 that it had zero new cases—showing us that the curve can be flattened and there is light at the end of this dark tunnel.
“The market’s bounce last week may have been in anticipation of some of these more positive data points regarding the virus,” said LPL Financial Senior Market Strategist Ryan Detrick. “While US cases continue to climb, the more countries that reach their peak, the more clarity we gain into what that timing may look like for the United States. Investors have historically been rewarded for investing during these crisis events, and we believe the time for suitable investors to consider adding some risk to their portfolios may be approaching.”
(CLICK HERE FOR THE CHART!)
The depth of this waterfall decline may be too deep for the market to rebound quickly. This bear market also put this year’s Best Six Months (November-April) at risk of being negative. The record of down Best Six Months is not encouraging and it reminds us of a salient quote from the Almanac from an old market sage, “If the market does not rally, as it should during bullish seasonal periods, it is a sign that other forces are stronger and that when the seasonal period ends those forces will really have their say.”— Edson Gould (Stock market analyst, Findings & Forecasts, 1902-1987)
The table below of Down Best Six Month for DJIA since 1950 also suggests caution and patience is in order. Subsequent Worst Six Months (May-October) have averaged losses with only two decent years 1982 and 2009. The market bottom in August 1982 marked the end of the 1966-1982 secular bear market and came of the early 1980s double dip recession. Following the first back-to-back down Best Six Months since 1973-1974, the market hit a secular bear market low in March 2009. Market action in the rest of these years was rather grim.
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Over the past year, the Technology sector has been the most notable sector in terms of outperformance relative to the S&P 500. As shown in the charts from our Sector Snapshot below, the relative strength chart for Technology has been in a steady uptrend for the past twelve months without much interruption even while the decade long bull market was coming to an end. In fact, last week it was the first sector to exit oversold territory after every sector was oversold for 13 days. The other sectors have not been as lucky. During the recent sell off, the relative performance of most sectors, especially cyclicals like Energy, Financials, and Industrials, fell sharply (indicating even worse declines than the S&P 500). Consumer Staples and Health Care, on the other hand, have seen much stronger performance than the rest of the market.
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Tuesday's Consumer Confidence report managed to exceed expectations, but as we noted at the time, the survey for the March reports cuts off on the 18th, so as economic conditions turned south, sentiment levels also likely declined. One area of the report where sentiment already has seen a notable decline is in consumer sentiment towards stock prices. As shown in the top chart below, the percentage of consumers expecting stock prices to decline nearly doubled from 21.7% up to 39.2% while the percentage of consumers looking for higher prices dropped from 43.1% down to 32.3%. In the case of negative sentiment, the percentage of bearish consumers hasn't been this high since late 2012.
Given the major shift in sentiment, the spread between bullish and bearish consumers has seen a major reversal falling from firmly positive (21.4) to firmly negative (-6.9). By this measure, the spread between bullish and bearish investors hasn't been this negative since February 2016.
(CLICK HERE FOR THE CHART!)
Very few assets have been winners recently, especially in the commodities space. As shown in the table below, no major energy or metal commodities (front-month futures) rose in March and gold was the only one to rise in the first quarter. The degree of those declines varied greatly. While gasoline and WTI futures (crude oil) were more than cut in half, gold and iron ore fell less than one percent in March. Considering iron ore's cyclical nature, that small decline is somewhat surprising but as for Q1, iron ore's performance was much weaker with a decline of over 10.5%. Granted, that is still a far better performance than copper which was down by more than twice that. Given the size of these declines, every one of the commodities highlighted below sits well off of its 52-week high. Gasoline and crude oil are the worst of these at 74.14% and 69.63%, respectively. As for where they finished the quarter relative to their 52-week lows, things are mixed. Gasoline, gold, and silver are off those lows by double-digit percentages while the rest are less than 10% away.
(CLICK HERE FOR THE CHART!)
As with many charts across assets, the technical picture of these commodities looks ugly. Almost every one has broken below significant support levels and safe-haven gold is the only one currently in anything other than a downtrend. Although it finished the month just off of the lows, crude oil fell all the way to its lowest levels since 2002 after crashing through support in February. The same can be said for gasoline. Natural gas remains a pain trade with the downtrend of the past several months still firmly in place.
Given its safe-haven status, gold has again been an outperformer approaching some of its highest levels of the past decade during the risk asset rout of the past couple of months. But it has recently been a more volatile trade. The yellow metal has yet to break above resistance around 1,700/oz and has even fallen to support around the 50-DMA. Despite also having the precious metal status, silver has been a serial underperformer to gold. Silver never shared gold's rally over the past couple of months as it fell to its lowest levels since 2009.
As for industrial metals, copper has been hovering around its lowest levels since the final quarter of 2016 after falling through the past year's support around $2.50. On the bright side, the technicals of iron ore have been slightly more constructive as it has still held up at support around $75.
(CLICK HERE FOR THE CHART!)
- $SMPL
- $CONN
- $GBX
- $LEVI
- $ANGO
- $RPM
- $SGH
- $LNN
- $MSM
- $SJR
- $WDFC
- $NTIC
- $EXFO
- $CAAP
- $SLP
- $TLGT
Monday 4.6.20 Before Market Open:
(CLICK HERE FOR MONDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)
Monday 4.6.20 After Market Close:
([CLICK HERE FOR MONDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!]())
NONE.
Tuesday 4.7.20 Before Market Open:
(CLICK HERE FOR TUESDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)
Tuesday 4.7.20 After Market Close:
(CLICK HERE FOR TUESDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)
Wednesday 4.8.20 Before Market Open:
(CLICK HERE FOR WEDNESDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)
Wednesday 4.8.20 After Market Close:
(CLICK HERE FOR WEDNESDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)
Thursday 4.9.20 Before Market Open:
(CLICK HERE FOR THURSDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)
Thursday 4.9.20 After Market Close:
([CLICK HERE FOR THURSDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!]())
NONE.
Friday 4.10.20 Before Market Open:
([CLICK HERE FOR FRIDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!]())
NONE.
Friday 4.10.20 After Market Close:
([CLICK HERE FOR FRIDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!]())
NONE.
Simply Good Foods Company (SMPL) is confirmed to report earnings at approximately 7:00 AM ET on Monday, April 6, 2020. The consensus earnings estimate is $0.18 per share on revenue of $219.69 million and the Earnings Whisper ® number is $0.20 per share. Investor sentiment going into the company's earnings release has 53% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 20.00% with revenue increasing by 77.46%. Short interest has increased by 43.4% since the company's last earnings release while the stock has drifted lower by 30.4% from its open following the earnings release to be 26.0% below its 200 day moving average of $25.37. Overall earnings estimates have been revised higher since the company's last earnings release. On Wednesday, March 25, 2020 there was some notable buying of 3,763 contracts of the $20.00 call expiring on Friday, April 17, 2020. Option traders are pricing in a 17.7% move on earnings and the stock has averaged a 4.3% move in recent quarters.
(CLICK HERE FOR THE CHART!)
Conn's, Inc. (CONN) is confirmed to report earnings at approximately 6:00 AM ET on Thursday, April 9, 2020. The consensus earnings estimate is $0.35 per share on revenue of $412.61 million and the Earnings Whisper ® number is $0.33 per share. Investor sentiment going into the company's earnings release has 65% expecting an earnings beat The company's guidance was for revenue of $394.00 million to $411.00 million. Consensus estimates are for earnings to decline year-over-year by 63.54% with revenue decreasing by 4.71%. Short interest has increased by 23.6% since the company's last earnings release while the stock has drifted lower by 77.8% from its open following the earnings release to be 80.3% below its 200 day moving average of $16.86. Overall earnings estimates have been revised lower since the company's last earnings release. Option traders are pricing in a 25.5% move on earnings and the stock has averaged a 16.7% move in recent quarters.
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Levi Strauss & Co. (LEVI) is confirmed to report earnings at approximately 4:15 PM ET on Tuesday, April 7, 2020. The consensus earnings estimate is $0.35 per share on revenue of $1.47 billion and the Earnings Whisper ® number is $0.37 per share. Investor sentiment going into the company's earnings release has 6% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 7.89% with revenue increasing by 2.48%. Short interest has increased by 37.2% since the company's last earnings release while the stock has drifted lower by 51.6% from its open following the earnings release to be 47.1% below its 200 day moving average of $17.97. Overall earnings estimates have been revised lower since the company's last earnings release. The stock has averaged a 6.0% move on earnings in recent quarters.
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Greenbrier Companies Inc. (GBX) is confirmed to report earnings at approximately 6:00 AM ET on Tuesday, April 7, 2020. The consensus earnings estimate is $0.29 per share on revenue of $800.03 million and the Earnings Whisper ® number is $0.25 per share. Investor sentiment going into the company's earnings release has 35% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 31.82% with revenue increasing by 21.46%. Short interest has increased by 93.0% since the company's last earnings release while the stock has drifted lower by 57.6% from its open following the earnings release to be 50.9% below its 200 day moving average of $26.74. Overall earnings estimates have been revised higher since the company's last earnings release. On Thursday, April 2, 2020 there was some notable buying of 544 contracts of the $10.00 put expiring on Friday, June 19, 2020. Option traders are pricing in a 21.9% move on earnings and the stock has averaged a 6.2% move in recent quarters.
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AngioDynamics (ANGO) is confirmed to report earnings at approximately 7:00 AM ET on Tuesday, April 7, 2020. The consensus estimate is for a loss of $0.03 per share on revenue of $68.43 million and the Earnings Whisper ® number is ($0.04) per share. Investor sentiment going into the company's earnings release has 30% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 115.79% with revenue decreasing by 20.74%. Short interest has decreased by 9.7% since the company's last earnings release while the stock has drifted lower by 43.7% from its open following the earnings release to be 39.5% below its 200 day moving average of $15.93. Overall earnings estimates have been revised lower since the company's last earnings release. On Tuesday, March 24, 2020 there was some notable buying of 1,450 contracts of the $12.50 call expiring on Friday, April 17, 2020. Option traders are pricing in a 18.4% move on earnings and the stock has averaged a 8.2% move in recent quarters.
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RPM International Inc. (RPM) is confirmed to report earnings at approximately 6:45 AM ET on Wednesday, April 8, 2020. The consensus earnings estimate is $0.20 per share on revenue of $1.18 billion and the Earnings Whisper ® number is $0.18 per share. Investor sentiment going into the company's earnings release has 36% expecting an earnings beat The company's guidance was for earnings of $0.17 to $0.23 per share. Consensus estimates are for year-over-year earnings growth of 42.86% with revenue increasing by 3.45%. Short interest has decreased by 16.9% since the company's last earnings release while the stock has drifted lower by 25.1% from its open following the earnings release to be 17.1% below its 200 day moving average of $68.67. Overall earnings estimates have been revised lower since the company's last earnings release. Option traders are pricing in a 11.9% move on earnings and the stock has averaged a 3.1% move in recent quarters.
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SMART Global Holdings, Inc. (SGH) is confirmed to report earnings at approximately 4:05 PM ET on Tuesday, April 7, 2020. The consensus earnings estimate is $0.50 per share on revenue of $268.40 million and the Earnings Whisper ® number is $0.47 per share. Investor sentiment going into the company's earnings release has 57% expecting an earnings beat The company's guidance was for earnings of $0.45 to $0.55 per share on revenue of $265.00 million to $275.00 million. Consensus estimates are for earnings to decline year-over-year by 34.21% with revenue decreasing by 11.73%. Short interest has increased by 22.1% since the company's last earnings release while the stock has drifted lower by 41.2% from its open following the earnings release to be 30.3% below its 200 day moving average of $29.64. Overall earnings estimates have been revised lower since the company's last earnings release. Option traders are pricing in a 16.6% move on earnings and the stock has averaged a 14.3% move in recent quarters.
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Lindsay Manufacturing Co. (LNN) is confirmed to report earnings at approximately 6:45 AM ET on Tuesday, April 7, 2020. The consensus earnings estimate is $0.49 per share on revenue of $113.67 million and the Earnings Whisper ® number is $0.40 per share. Investor sentiment going into the company's earnings release has 40% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 2,350.00% with revenue increasing by 4.11%. Short interest has decreased by 29.6% since the company's last earnings release while the stock has drifted lower by 13.4% from its open following the earnings release. Overall earnings estimates have been revised lower since the company's last earnings release.
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MSC Industrial Direct Co. Inc. (MSM) is confirmed to report earnings at approximately 6:30 AM ET on Wednesday, April 8, 2020. The consensus earnings estimate is $0.98 per share on revenue of $789.46 million and the Earnings Whisper ® number is $1.00 per share. Investor sentiment going into the company's earnings release is for earnings to come in-line with estimates The company's guidance was for earnings of $0.97 to $1.03 per share on revenue of $781.00 million to $798.00 million. Consensus estimates are for earnings to decline year-over-year by 20.97% with revenue decreasing by 4.08%. Short interest has decreased by 56.0% since the company's last earnings release while the stock has drifted lower by 30.1% from its open following the earnings release to be 22.7% below its 200 day moving average of $70.32. Overall earnings estimates have been revised lower since the company's last earnings release. Option traders are pricing in a 9.3% move on earnings and the stock has averaged a 2.6% move in recent quarters.
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Shaw Communications Inc. (SJR) is confirmed to report earnings at approximately 9:00 PM ET on Thursday, April 9, 2020. The consensus earnings estimate is $0.25 per share on revenue of $1.05 billion and the Earnings Whisper ® number is $0.20 per share. Investor sentiment going into the company's earnings release has 53% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 8.70% with revenue increasing by 6.24%. The stock has drifted lower by 22.7% from its open following the earnings release to be 19.3% below its 200 day moving average of $19.36. Overall earnings estimates have been revised lower since the company's last earnings release. Option traders are pricing in a 13.8% move on earnings and the stock has averaged a 1.8% move in recent quarters.
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GBX-100 Replacement Band (Strap) *availability We think it is very important (before buying a new watch) to know if there will be some choice as for replacement bands for GBX-100 (in future or even now). So we made a research and you shouldn’t worry about your future as the bands are available for buying. Casio’s G-Shock G-Lide GBX100 collection is incredibly feature-rich yet the price is not much more than the most basic G-Shock. The new GBX100 timepieces retail for $160 and come in three variations currently: black (GBX100-1), black and white (GBX100-7), and teal/aquamarine (GBX100-2). The simplicity of the physical design makes for a lightweight and comfortable timepiece. Further, the L'Euro est divisé en 100 cents. Le taux de change pour l'Euro a été pour la dernière fois mis à jour le 8 février 2021 par le Fonds Monétaire International. Le taux de change pour Pence sterling a été pour la dernière fois mis à jour le 8 février 2021 par le Fonds Monétaire International. La conversion EUR comporte 6 chiffres significatifs. La conversion GBX comporte 6 chiffres The G-LIDE GBX-100 features a digital display and forged stainless steel bezel. Memory-in-pixel (MIP) LCD offers high-resolution display of tide graphs and moon data, while smartphone connectivity provides multifunction capability with ease of use. Equipped with the strength and functionality surfing demands. GBX100-2. $160.00. BUY NOW . WHERE TO BUY LEARN MORE. GBX100-7. $160.00. BUY GBX-100-1. Previous Next. GBX-100-1. Close. LED:White; The colors may differ slightly from the original. Product Overview GBX-100-1. Find a store Resin Band. Resin Band 200-meter water resistance. The "BAR" value indicates the number of atmospheres to which water resistance is ensured. 20 BAR means water resistance to 20 atmospheres. Watches marked "200m" have the same water resistance as 20 In Japan, the GBX-100-1JF, G-LIDE GBX-100-2JF, and G-LIDE GBX-100-7JF is scheduled for a May 2020 release, with a list price of 24,200 JPY each (tax included). (Update: The release date has been delayed.) GBX : 100 GBP = GBX : 150 GBP = GBX : 200 GBP = GBX : 250 GBP = GBX : 500 GBP = GBX : 1000 GBP = GBX : 5000 GBP = GBX : 10000 GBP = GBX : Start earning now in giant market. Trading is mostly about making Right Forecast. Practice your trading. Try Free Demo. Forex 5.1$ trillion daily GBX Exchange Rate Today. 1 GBX ---AUD . 1 GBX ---CAD . 1 GBX ---CHF . 1 GBX ---CNH . 1 GBX ---CZK . 1 GBX ---DKK GBX-100-1ER. G-LIDE GBX-100-1ER. £149.00. Notify me . Out of stock *This item is excluded from promotional offer codes. Introducing the latest addition to the G-LIDE lineup of G-SHOCK sports watches, which are a favorite choice among the world's top surfers. This new model comes with the ability to display information required by surfers (high tide and low tide times and levels), and to use a Livre sterling est divisé en 100 pence. Le taux de change pour Livre sterling a été pour la dernière fois mis à jour le 8 février 2021 par le Fonds Monétaire International. Le taux de change pour Pence sterling a été pour la dernière fois mis à jour le 8 février 2021 par le Fonds Monétaire International. La conversion GBP comporte 6 chiffres significatifs. La conversion GBX Meanwhile, the GBX-100’s killer MIP display makes it a worthwhile watch. I don’t think I’ll ever buy another traditional negative LCD watch. Model: G-Shock GBX-100-1 Price: $160. SPECIFICATIONS: Case: Resin Strap: Resin Dimensions: 50.9 x 46.0 x 14.7 mm / 66 g Movement: Module #3482 Battery life: 2 years with CR2032
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