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!

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Will the S&P 500 be higher or lower than its current level one month from now?
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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.

Thursday
Feb192015

Fed Minutes Push Out Market Expectations of Fed Hikes

Some dovish comments in the Fed minutes put a bid in Fed Funds futures yesterday, pushing expectations for the first Fed Funds rate hike back a month, from October to November.  In practice, this means an increase in the likelihood of a first hike taking place at the December meeting, and decreased likelihoods of June or September rate hikes.  For now, the expectation has been for a push out from where the market was positioned as of yesterday. 

Thursday
Feb192015

Golden Cross For Bezos And Co.

Amazon (AMZN) has rallied hard off of January 29th earnings, gaining 33% or $95 per share from the January 15th lows.  As a result, both its 50 and 200 day moving averages have moved up, and the 50-DMA moved across the 200-DMA today.  With both rising, this is a so-called "Golden Cross" technical set-up.  As we've mentioned before, golden crosses aren't a sure-fire buy signal by any means. But for AMZN, golden crosses have been a pretty good signal over the last ten years.  The last time we saw this happen with the name, shares rallied 19.45% over the following year.  Below, we show the forward returns for AMZN following previous golden crosses over the last ten years as well as charting previous occurences.  Please note that to make the chart more readable, we are using a log scale.

Thursday
Feb192015

Caterpillar Machinery Orders Lowest Since February 2010

Caterpillar (CAT) released its monthly machinery orders for the month of January and the results weren't especially encouraging.  As shown in the chart below, the three month moving average of year/year monthly sales fell 14%.  While orders haven't especially been strong lately (negative for 26 straight months now), the trend has been lower in recent months.  January marked the third straight month that y/y sales accelerated to the downside, and the current level of negative 14% is the most negative reading in nearly five year (February 2010.

When Caterpillar releases monthly machinery sales, it also breaks out the figures by geographical region.  During the month of January y/y sales fell in every region.  This was the first time that all four regions (Asia, EAME, Latin America, and North America) saw negative sales growth since December 2013. 

Thursday
Feb192015

Jobless Claims Remain Low

Jobless claims dropped by 21K this week, falling to 283K from last week's level of 304K and below consensus forecasts for a level of 290K.  This marks the third week in the last four that weekly jobless claims have been below 300K after three weeks to start the year where claims were above 300K.

With another weekly sub 300K reading, the four-week moving average fell below by a little over 6K to 283.25K.  Although this is still above the post-recession low of 279K back in late October, the four-week moving average has now seen declined for four straight weeks from its recent high of 307K.

On a non-seasonally adjusted basis (NSA), jobless claims fell 45.2K down to 279K.  For the current week of the year, this is the lowest level since at least 2000 and more than 85K below the average of 279K for the current week of the year going back to 2000.

Thursday
Feb192015

Bears Head Back to their Caves

After the recent strength in equities, investors sure are getting confident.  According to the weekly sentiment survey from the American Association of Individual Investors (AAII), bullish sentiment increased for the second straight week rising by 7.02 percentage points to 47.02%.  That makes this week's reading the highest level of bullish sentiment since January 1st (51.74%).

As one might expect given the increase in bullish sentiment, bearish sentiment declined this week, falling from 20.33% down to 17.88%.  What is notable about this decline is that there have only been five other weeks during this entire bull market that bearish sentiment was lower than it is now.  The lowest level of bearish sentiment for the entire bull market was 15.05% back in November 2014.

Wednesday
Feb182015

Rundown of Today's Fed Minutes

If you're looking for a quick yet in-depth rundown of the day's action in financial markets, Bespoke's Closer report is an extremely useful tool.  As a member of either our Bespoke Premium or Bespoke Institutional packages, you'll get the Closer in your inbox after every trading day.  It's great for invidual investors, advisors and institutional investors alike.

The main news impacting markets today was the release of the Fed Minutes at 2 PM ET.  In today's Closer, we provide a rundown of the Fed's comments and what it means for the market going forward.  If you're not yet a Bespoke subscriber, take advantage of this free look at one of our most widely followed products -- The Closer report for 2/18/15.  Click on the thumbnail image below to view today's report.

Want to learn more about Bespoke's product line?  Fill out a Contact Form today and we'll send you information on how you can use Bespoke to become a better, more informed investor.

Wednesday
Feb182015

Nasdaq Internet Group Breaking Downtrend?

After trending downwards for the last year, the Nasdaq Internet Group finally looks to be breaking higher.  You can see the break above the top of the downtrend in the chart below.

Remember when the Internet group was surging higher right inline with the Biotech group in 2013?  That surge seems like an eternity ago after the lackluster performance Internet stocks experienced in 2014.  As shown below, after moving hand-in-hand higher throughout 2013, Biotech left the Internet group in the dust last year.  Through today, the Biotech group is up twice as much as the Internet group since the end of 2012.

With the group's recent break above its downtrend channel, traders are searching for the right Internet stocks to pick up.  Below is a list of the 30 largest Internet names run through our custom trading range screen.  For each stock, the dot represents where it's currently trading while the tail end represents where it was trading one week ago.  The black vertical "N" line represents each stock's 50-day moving average, and moves into the red or green zones are considered overbought or oversold.

As shown, stocks in the Internet group are all over the place, with some in extreme overbought territory and some at extreme oversold levels.  Most of the moves in these names recently have been due to stronger or weaker than expected earnings reports.  Names like TripAdvisor (TRIP), Netflix (NFLX), Amazon (AMZN) and LinkedIn (LNKD) all surged to overbought levels after positive earnings reports this season, while others like Baidu (BIDU) and AOL are oversold due to poor earnings reports.  The most interesting names are the ones that are trending higher (tails to the left of the dot) that have just moved back above their 50-days.  

Contact us to learn how you can run your own portfolio through our custom trading range screen on a regular basis.