B.I.G. Tips – Retail Sales Rebound
This content is for members onlyB.I.G. Tips – Year Like 2019: November Edition
After breaking out to new highs last week, the equity market has followed through on its rally to start this week. As of late morning Monday, the S&P 500 was up just under 23% YTD putting it on pace for the best year since 2013 and the 12th best year in the index’s history dating back to 1928. As we highlighted in last weekend’s Bespoke Report, the latest leg higher in equities has come as sentiment among both professional and individual investors remains negative to, at best, neutral.
So how might the stock market trade for the remainder of 2019 based on the pattern we’ve seen so far this year? As we regularly do throughout the year, we ran the correlation of the closing prices of the S&P 500 so far in 2019 to the closing prices for every other year through 11/4. In our newest BIG Tips report, we have highlighted the ten years where the correlation coefficient with 2019 was the highest. For each year, we also show the S&P 500’s YTD gain through 11/4 and then how the index performed for the remainder of the year, including the maximum gain and loss from the 11/4 close through year-end. Read the report to find out if these 10 prior years that look most similar to 2019 saw further gains or a downside reversal from now through year end.
For anyone with more than a passing interest in the market’s seasonal patterns, this report is a must-read. To see it, sign up for a monthly Bespoke Premium membership now!
B.I.G. Tips – October and YTD 2019 Decile Analysis
This content is for members onlyOctober Employment Report Preview
While rate hikes anytime soon aren’t likely, at yesterday’s post-decision press conference, Fed Chair Powell pretty much ruled out more rate cuts any time soon either. That guidance hasn’t been unwarranted either as recession fears have started to ebb in recent weeks. Thursday’s much weaker than expected Chicago PMI report, however, serves as a reminder that the clouds haven’t quite cleared yet. This will put added significance on tomorrow’s October employment report. While expectations are already low due to the impact of the GM strike, any downside surprise is unlikely to be greeted well by the market.
Heading into Friday’s Non-Farm Payrolls report, economists are expecting an increase in payrolls of just 85K, which would be a big decline from September’s slightly weaker than expected growth of 136K. In the private sector, economists are expecting an increase of 80K from September’s reading of 114K. Job growth in the Manufacturing sector is expected to decline 55K. For the Manufacturing sector, we haven’t seen that large a decline in payrolls since the middle of 2009, but keep in mind that the impact of the now-ended GM strike is expected to pressure job growth. Because of the strike, the unemployment rate is expected to rise to 3.6% from September’s ridiculously low reading of 3.5%, and average weekly hours are expected to remain unchanged at 34.4.
Ahead of the report, we just published our eleven-page preview of the October jobs report. This report contains a ton of analysis related to how the equity market has historically reacted to the monthly jobs report, as well as how secondary employment-related indicators we track looked in October. We also include a breakdown of how the initial reading for October typically comes in relative to expectations and how that ranks versus other months.
For anyone with more than a passing interest in how equities are impacted by economic data, this October employment report preview is a must-read. To see the report, sign up for a monthly Bespoke Premium membership now!