Nov 20, 2015
After a brutal week last week, stocks bounced back sharply this week both here in the U.S. and abroad. Last week’s terrorist attacks in Paris occurred just after the market closed on Friday, leaving many traders expecting declines when they got to their desks on Monday morning. But while futures traded lower heading into the trading day on Monday, the declines were short-lived. In fact, the S&P 500 ended up gaining 1.5% on Monday, and another big gain of 1.6% on Wednesday was enough to leave the market up more than 3.3% on the week.
Below is a snapshot of this week’s performance across the asset class spectrum using key ETFs traded on U.S. exchanges. Consumer Discretionary and Technology posted the biggest gains out of the ten sectors here in the U.S., while Brazil (EWZ) and Russia (RSX) gained the most of any country ETFs highlighted at 9%+. The only area of weakness this week was in commodities, where oil, natural gas, gold and silver all traded lower. For the year now, the commodities ETF (DBC) is down 23%.
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Nov 20, 2015
The third quarter earnings season came to an end earlier this week. We’ve got full coverage in this week’s Bespoke Report newsletter due out later today, but below is a chart that sums up the season pretty well. This chart highlights the one-day price reaction that each stock experienced on its earnings reaction day this season. (For stocks that report before the open, we use their price change on that trading day. For stocks that report after the close, we use their price change on the next trading day.) We’ve broken the distribution up by stocks that beat earnings estimates, missed earnings estimates, and reported inline earnings estimates.
As shown, 1,522 stocks beat earnings estimates this season, which equates to a 59.3% beat rate. These stocks that beat estimates averaged a gain of 2.14% on their earnings reaction days this season. A total of 785 stocks missed earnings estimates this season — a 30.6% miss rate — and these stocks averaged a decline of 3.87% on their earnings reaction days. Finally, 260 stocks (10.1% of all reports) reported inline earnings, and these stocks averaged a one-day move of -2.13% on their earnings reaction days. With an average decline of 2.13% for stocks that reported inline earnings, simply meeting expectations was clearly not enough for investors this season.
Nov 20, 2015
In today’s Chart of the Day available to Bespoke subscribers, we take a look at the historical impact of options expiration on the short-term performance of the equity market.
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