Friday
Feb272015

S&P 500 Higher or Lower from Here?

The S&P 500 ended the trading week in the red, but markets are still right near new highs.  So which way will stocks head from here?  Please take part in our weekly Bespoke Market Poll below by letting us know whether you think the S&P 500 will be higher or lower one month from now.  We'll report back with the results on Monday before the open.  Thanks for participating and have a great weekend!

Want to know what Bespoke's research team thinks about this market?  Sign up for a 5-day free trial to any of our subscription services and check out our just-published Bespoke Report newsletter.  Not only will you get in-depth analysis on the current state of the market, but you'll also get to view our Model Stock Portfolio and Model Dividend Portfolio if you're looking for new investment ideas.  Head on over to our Subscribe page and sign up now.  Enter "bespokereport" in the coupon code section to receive a 10% discount on your new membership.

Free polls from Pollhost.com
Will the S&P 500 be higher or lower than its current level one month from now?
Higher   Lower     

Wednesday
Feb252015

Energy Inventories Rise More Than Expected

Crude oil inventories for the latest week were higher than expected again, making it seven straight weeks of higher than expected stockpiles.  The last time we saw a similar string of higher than expected inventory reports was nearly a decade ago back in August of 2005.While traders were expecting inventories to increase by 4 million barrels, the actual build was more than twicce that at 8.4 million barrels.

The chart below compares current levels of crude oil inventories to historical average levels over the last ten years and since 1983.  Below that we also show the spread betwen current crude oil inventories and the historical average dating back to 1983.  As has become the norm lately, we once again had to adjust the y-axes higher as inventories build at a record pace.  Following last week's build, crude inventories are currently more than 108 million barrels (32%) above average.

So where does the recent seven week build in crude oil inventories stand relative to the history.  As shown in the chart below, crude oil inventories have risen by a record 51.7 million barrels over the last seven weeks.  Prior to the current build up in inventories, the prior record seven-week increase was 34.6 million barrels, or a third less than the current period.

Tuesday
Feb242015

Here's a List of the Most Heavily Shorted Stocks in the Russell 1,000

Our bi-weekly Short Interest Report is one of the many products included in our paid content membership packages.  Take a look at the report if you're interested in movements in short interest and how it impacts stock performance.  

Below is a basic list of the most heavily shorted stocks (short interest as a percentage of equity float) in the Russell 1,000 (large cap stocks).  Each stock on this list has at least 20% of its floated shares sold short.  For each stock, we also include its year-to-date performance.  The average year-to-date change of the stocks on this list is currently +0.75%.  Compared to the average YTD change of roughly 3.5% for all stocks in the Russell 1,000, the most heavily shorted stocks are underperforming this year.  

Pilgrim's Pride (PPC) is the most heavily shorted stock in the Russell 1,000 with 58.31% of its float sold short!  One other stock -- Cliff's Natural Resources (CLF) -- has more than 50% of its float sold short.  GoPro (GPRO) is a name in the top five that market followers certainly know after its IPO last year.  As shown, 42.59% of GPRO shares are short right now.  With a decline of 30.45% YTD, the GPRO shorts are certainly winning right now, but such high short interest leaves open the possibility of huge short squeezes any time positive news comes out.

Other notable names on the list include Sears (SHLD), 3D Systems (DDD), SolarCity (SCTY), Zillow (Z), Tesla (TSLA), Stratasys (SSYS) and Intercept (ICPT).   

Monday
Feb232015

Health Care/Biotech Names Still Dominating

The average stock in the Russell 3,000 (which makes up roughly 98% of US-listed stocks) is now up 1.68% in 2015.  Below we have calculated the average year-to-date performance of stocks by sector.  As shown, Health Care stocks are up by far the most with an average YTD gain of 8.06%.  Technology stocks are up the second most at just +2.29%, followed by Telecom at +2.14%.  Health Care, Technology and Telecom are the only three sectors outperforming the average stock in the Russell 3,000 as a whole this year.  The average stock in the other seven sectors is underperforming.  Leading the way on the downside is Utilities, with the average stock down 1.38%.  The average Financial stock is down 0.63%, while the average Energy stock is down 0.39%.

In the chart below, Health Care is the one true standout on the upside.  In 2014, it was Health Care and Utilities leading the way higher, but so far this year, Health Care stocks have continued higher, while Utilities stocks have faltered.

Below is a list of the 30 best performing stocks in the Russell 3,00 year-to-date.  As you can see, the bulk of the stocks on the list are from the Health Care sector.  In fact, the top 6 names and 20 of the top 30 are in Health Care stocks, with most in the wildly-hot Biotech group.  Egalet (EGLT) and Foundation Medicine (FMI) are the two names up more than 100%.

While it's nice to see a bunch of Health Care stocks with big returns this year, some investors want to see stocks in other sectors that are doing well.  In this regards, below is a list of the 30 best performing non-Health Care sector stocks in the Russell 3,000 year-to-date.  The two names on the list that are the most widely followed are probably Netflix (NFLX) and Twitter (TWTR).  NFLX is up 38% in 2015 while TWTR is up 35%.

Monday
Feb232015

Apple (AAPL) Now Twice as Big as the 2nd Largest Company in the World!

Apple (AAPL) has been straight up since the start of the year, gaining $22 (or 19%) to push it above the $130 level.  Below is Apple's trading range chart, with the red area representing between one and two standard deviations above the stock's 50-day moving average.  As shown, AAPL is currently trading well into extreme overbought territory at more than two standard deviations above its 50-day.  It's currently at the very top of its uptrend channel, so we would expect some sort of "cool-off" period to begin soon.

Apple's (AAPL) ever-expanding market cap continues to make headlines.  This morning we tweeted out that Apple's market cap is now larger than the combined market caps of every single stock in the S&P 600 Small Cap index!

Apple is also now more than twice as large as the second largest company (Exxon Mobil) in the world.  Below is a comparison of the market caps for Apple and Exxon going back to 2000.  Just 15 years ago, Apple was struggling as a public company -- in December 2000 its market cap had dipped to just $4.65 billion.  15 years later, and Apple now has a market cap of $770 billion!

Below is a list of the 40 largest stocks in the S&P 500.  For each stock, we highlight its "Apple Multiplier", or the amount that each company would have to multiply by to reach the size of Apple.  As shown, Apple is currently 2.04x as big as Exxon Mobil -- the second largest company in the S&P.  Apple is more than 3x the size of companies like General Electric (GE), Procter & Gamble (PG), Facebook (FB) and JP Morgan (JPM).  Pretty staggering numbers.

Also of note is how close Google (GOOGL), Berkshire (BRK/B) and Microsoft (MSFT) are getting to over-taking Exxon (XOM) in the #2 spot.  All three are within roughly $16 billion in market cap of XOM.  

Apple's (AAPL) ever-expanding market cap continues to make headlines.  This morning we tweeted out that Apple's market cap is now larger than the combined market caps of every single stock in the S&P 600 Small Cap index!

Monday
Feb232015

Bullish Sentiment Declines; Still Above 60%

After hitting the top end of its historical range a week ago, bullish sentiment in our weekly Bespoke Market Poll declined to 61% this week.  This marks three consecutive weeks above the 50% mark for bullish sentiment after a one-week dip below 50% to start the month.

Monday
Feb232015

Bespoke's Paul Hickey Squawk Box Appearance

This morning Bespoke's Paul Hickey appeared on CNBC's Squawk Box, discussing market trends and volatility in US equities alongside Charles Kantor of Neuberger Berman.

Friday
Feb202015

Recent Asset Class Performance Using Key ETFs

As we head into the new trading week, below is a look at the recent performance of various asset classes using US-traded ETFs.  As shown, the Nasdaq 100 (QQQ) is leading the way higher here in the US with a year-to-date gain of 5%.  Growth is outperforming value by a good margin as well.  

In terms of sectors, Financials and Utilities are the only two that are down on the year, while Materials, Health Care, Telecom and Consumer Discretionary are up the most.

Outside of the US, Brazil and Canada are both solidly in the red in 2015.  India, Italy, Russia, France and Germany have been the top performers.  Commodities suffered a serious setback last week after trying to bounce off of lows.  Oil (USO) pulled back 5%, leaving it up 4.66% on the month still, but down 8.4% on the year.  Gold and silver are both down 6%+ on the month, but they're still holding onto small year-to-date gains.

Finally, Treasury ETFs have pulled back across the board in February, with the 20+ Year Treasury (TLT) down 8.5%!  At the end of January, TLT was up 10% on the year already, but after giving up nearly all of those gains, it's now up just 0.49% year-to-date.

Friday
Feb202015

Looking for New Stock Ideas? Check Out the Bespoke 50

Our Bespoke 50 list of top growth stocks in the Russell 3,000 has doubled the performance of the S&P 500 since inception in 2012.  If you're looking for new growth stock ideas, be sure to sign up for a 5-day free Bespoke Premium trial today and check out this week's Bespoke 50.  You can learn more about the methodology of our Bespoke 50 list at this link.  Sign up today and see Bespoke's 50 favorite growth stocks!

Friday
Feb202015

S&P 500 Higher or Lower from Here?

The S&P 500 closed out the week surging to new all-time highs.  But which way will the market go from here?  Please take part in our weekly Bespoke Market Poll below by letting us know whether you think the S&P 500 will be higher or lower one month from now.  Thanks for participating and have a great weekend!

Free polls from Pollhost.com
Will the S&P 500 be higher or lower than its current level one month from now?
Higher   Lower     

Friday
Feb202015

Earnings Season a Success

The ultimate determinate of whether earnings season was a success or not is whether stocks went up or down in reaction to their reports.  In that regards, this earnings season was a success since the average stock that reported gained 0.55% on its earnings reaction day. (For companies that report in the AM, we use that day's change.  For companies that report after the close, we use the next day's change.)  

As shown below, we've now seen positive reactions to earnings reports for two seasons in a row after seeing negative reactions in the two seasons prior.  

Below is a breakdown of the average one-day change in reaction to earnings based on whether the stock beat or missed estimates.  As shown, the average stock that beat consensus analyst earnings estimates gained 1.99% on its earnings reaction day, while the average stock that missed earnings estimates declined 2.19%.  The reason the average decline for misses is greater than the average gain for beats is because a much higher percentage of companies beat estimates this season than missed.  

Revenues mattered less to price reaction than earnings did this season.  As shown, stocks that beat revenue estimates saw an average one-day gain of 1.48% on their earnings reaction days, while stocks that missed revenue estimates declined an average of just 0.72%.  

Guidance mattered the most -- as it always does.  If a company raises or lowers guidance, the stock usually reacts violently to the upside or downside.  This season, the average company that raised its forward guidance gained 4.57% on its earnings reaction day, while the average company that lowered its guidance declined 2.71%.  

Today we'll be publishing a detailed summary of the just-completed earnings season.  To view the report and get on our actionable research platform, sign up for a 5-day free Bespoke Premium trial today.

Friday
Feb202015

The Comeback Quarter

Earnings season came to an end yesterday with Wal-Mart's (WMT) report.  It was a very successful reporting period, with the S&P 500 rallying 3.5% throughout the season and the average stock that reported gaining 0.55% on its report date. 

We think this season can be characterized as the "comeback quarter", because many of this season's biggest earnings success stories were stocks that did horribly on earnings last season.

Below is a list we created of "comeback" stocks -- stocks that fell at least 5% on their earnings report days last season and gained at least 10% on their earnings report days this season.  Some of the more notable names that are widely traded include TripAdvisor (TRIP), Netflix (NFLX), Twitter (TWTR), Amazon (AMZN) and Biogen (BIIB).  Netflix (NFLX) and Amazon (AMZN) are probably the two biggest turnaround stories.  Both were close to being left for dead heading into this season.  Netflix fell 19.37% on its October earnings report and came into this season dangerously close to a sub-$300 share price.  Amazon had already broken below $300 heading into this season after falling at least 8% on each of its prior four earnings reports.

As shown below, Netflix and Amazon both posted huge upside gains following their reports this season -- pushing them up towards all-time highs once again.  All it took was one quarter to get investors back on board with both of these growth stock stories.

Today we'll be publishing a detailed summary of the just-completed earnings season.  To view the report and get on our actionable research platform, sign up for a 5-day free Bespoke Premium trial today.

Thursday
Feb192015

Top Earnings Season Triple Plays

The fourth quarter earnings season unofficially came to an end today now that Wal-Mart (WMT) has reported its quarterly numbers.  This earnings season, more than 1,700 companies reported their quarterly numbers, and our job here is to identify the reports that look the best. 

One way that we narrow our list down is to look for earnings “triple plays.”  Long-term Bespoke subscribers know how much we like triple plays (we have a weekly report specifically highlighting them), but for those that haven’t heard of the term, we came up with it back in the mid-2000s for companies that beat their earnings estimates, beat their revenue estimates and also raise guidance.  We consider triple play stocks to be the cream of the crop of earnings season, and we are constantly finding new long-term buy opportunities from this basket of names each quarter.

As we’ve highlighted over the last few weeks, this earnings season saw an outsized number of companies lowering guidance and a minimal number of companies raising guidance.  We only saw 44 earnings triple plays this season, which is a very low number.  To put this season’s triple play reading into perspective, last season we saw 136 triple plays—which is more than 3x this season’s number.

To further filter the list of 44 triple-play stocks, we analyzed the chart patterns for each of them to identify the ones that currently look the best from a momentum/technical perspective.  Of the 44 triple plays, we found 10 stocks that look the most intriguing to us at their current price levels.  A lot of the triple plays this season have gone parabolic recently, so these are names that we wouldn’t recommend buying until they pull back some.  The names we have identified are generally trending nicely higher, but they aren’t at the extreme overbought levels that other triple plays on the list are at.  If you are looking to gain exposure to certain areas of the market and need some individual stock ideas, we recommend taking a good look at the 10 triple-play names we found.

To continue to our Top Earnings Season Triple Plays report, sign up for a 5-day free Bespoke Premium trial today!

Thursday
Feb192015

Philly Fed Manufacturing Report Drops For Third Straight Month

After a weaker than expected manufacturing report for the New York area earlier this week, this morning's release of the Philly Fed Manufacturing report also came in modestly weaker than expected.  While economists were expecting the headline reading to rise to 9.0 from last month's level of 6.3, the actual reading came in 5.2.  This represents the third straight monthly decline after the index hit a 20-year high in November.

The table to the right breaks down this month's report by each of its individual components.  Interestingly, as the headline index declined, seven of the nine components actually saw month/month increases this month.  The only two components that declined were Prices Paid and New Orders.  Components that saw the biggest gains on the month include Inventories, Unfilled Orders, and Shipments.  In the case of Inventories, the only other month where the component registered a higher reading was in August 1981!

Thursday
Feb192015

What Else is New? Crude Inventories Rise More Than Expected

You would think that after underestimating inventory levels practically every week, traders would adjust their expectations accordingly.  That still isn't the case this week, though, as crude oil inventories rose more than expected yet again.  While traders were expecting crude oil stockpiles to rise by 3 million barrels this week, actual inventories rose by more than two and a half times that at 7.716 million barrels. The chart below compares the current level of crude oil inventories to the historical average levels since 1983 and over the last ten years.  Beneath that we also show the gap between each weekly level this year and the historical average.

Two things stand out in these charts.  First, as crude oil inventories continue to build, once again this week we have had to adjust our y-axis higher.  As a result, the second thing that stands out on the chart is how high current levels are to their historical average.  As of the latest report, inventories are currently 100 million barrels (30%) above their historical long term average and have never been higher than they are now.