Please click the image below to view our April 2020 market calendar.  This calendar includes the S&P 500’s average percentage change and average intraday chart pattern for each trading day during the upcoming month.  It also includes market holidays and options expiration dates plus the dates of key economic indicator releases.  Start a two-week free trial to one of Bespoke’s three research levels.

Since 1983, intraday performance on quarter end has had a dramatic set of swings: from a boring morning to a dramatic afternoon rally and brutal selloff into the close. In the chart below, we show the average and median performance of the S&P 500 (as a percentage change versus the prior day’s close) for all quarter ends since 1983. The market tends towards little change in the morning before running all the way to session highs at 3:00 PM across the course of the afternoon. That tends to preclude an unwind into the close, though, with stocks dropping all the way to flat to down just before the close. The key takeaway for today? Don’t get lulled into complacency by a boring morning or solid start to the afternoon. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

Conditions headed in to the last day of trading tend to be very important as well. Since 1983, months with stocks down on a month-to-date basis heading in to the final day have seen steady rallies and a close at the highs. The opposite is true for periods when stocks have been up month-to-date on the last trading day. In both cases, quarter-end rebalancing is likely playing a large role. On the other hand, shorter-term rallies like the move seen this week have less of an impact, generally.

As we have been highlighting in our Sector Snapshot over the past few weeks, finding a stock that is overbought in the current environment has been like searching for a needle in a haystack. There were a few days earlier this month that not a single stock in the S&P 500 was overbought, and even today after a sizable rally in the past week just 1.2% of stocks in the index – 6 stocks-  are overbought. In the snapshot from our Trend Analyzer below we show these stocks. While there are some new arrivals to the overbought club, Gilead Sciences (GILD) and Regeneron (REGN), two companies seeking a medical solution to the COVID-19 virus, have been the few names teetering in and out of overbought territory for the past month now. While those two have been overbought on an off and on basis, they are not the most overbought. Citrix Systems (CTXS) holds that title after finishing the day yesterday nearly 3 standard deviations above its 50-DMA. No other stock is nearly as overbought with Digital Realty Trust (DLR) the next most overbought at 2 standard deviations above its 50-DMA.  For DLR, along with peer Equinix (EQIX) and Energy stocks Cabot Oil and Gas (COG) the picture today is very different than one week ago when each one was oversold.

Below, we show the chart of these same six stocks.  Like the broader market, each one has been very volatile recently but over the past year have generally remained in uptrends with the exception of COG which, like the rest of the sector, has been in a prolonged downtrend. Start a two-week free trial to Bespoke Institutional to access our Trend Analyzer, Chart Scanner, and more.

Given the route of equities across sectors over the past month and a half as well as the subsequent rally in the past week, most charts out there look very messy.  Most have fallen off of a cliff, breaking any notable support levels in the process but others have held up relatively well during the COVID-19 collapse or have at least finally found support like Seagate Tech (STX).

The nature of the businesses of names like Clorox (CLX), Campbell Soup (CPB), Hormel Foods (HRL), and Kroger (KR) never led them to see the same type of massive declines of many other cyclical stocks.  Instead they continued to roughly trade within their uptrends and even surge to fresh highs in the beginning of March.  After the rotation into the more beaten down names in the past week, these stocks are no longer as extended as they were but they now sit closer to the bottom of their uptrends.  For example, earlier this month CPB broke out of the range it had been in for most of 2019 before it sold off back below that range.  The past few days’ rally has brought it back into this range. The same can be said for other names like Microsoft (MSFT), Netflix (NFLX), or NVIDIA (NVDA).  These stocks had broken their uptrends but the moves had not been sustained to the downside as the past week’s rally has kept those uptrends somewhat in tact.  Start a two-week free trial to Bespoke Institutional to access our custom portfolios, Chart Scanner, Trend Analyzer, and much much more.

Since COVID-19 activity shut-downs started to roll across the country back in early March, a number of industries have taken massive hits. Restaurants and travel have been especially hard-hit, but the scale of declines is so large it can be hard to grasp in the abstract. Below we show how activity indicators for key sectors of the economy are down 60% or more on a YoY basis, a shock that’s completely unprecedented in a modern services economy. Granted, these declines are in large part by design, and some of them can bounce back significantly. On the other, these drops indicate revenue not available to meet costs that include payroll, rent, and interest. A 93% decline in travel volumes, 100% decline in seated restaurant meals, 55% decline in overall restaurant revenue, and 67% decline in a subset of small business hours worked are all statistics that capture just how badly broad swathes of economic activity are being hit.  Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

Looking at the S&P 500’s industry groups, every one is now up over the last week since last Monday’s low.  The only standout is the Food & Staples Retailing group which is only up 1.3%.  But as we frequently highlighted last week, that is a result of it being the group that also held up the best during the time between the 2/19 peak through last Monday’s low.  In fact, that industry is currently the one that is closest to its 52 week high at 11%.  The Consumer Durables and Apparel group, on the other hand, has performed the best over the past week rising nearly 30%.  That comes as it was one of the most beaten down sectors, nearly being cut in half during the initial COVID crash. Even with the recent rally, that still leaves it another 31.65% below its 52-week high.

The size of the declines over the past month and a half have erased a lot of the past few years of progress.  There are currently only five industry groups higher than they were one year ago.  Only half are up over the past two and three years.  Fortunately, over a longer time horizon—the past five years—the majority of industries are still higher with some industries like Software and Services, Semiconductors, and Retailing still up around 100% or more. Autos and Energy, however, are both down more than 50% over the last five years.  Start a two-week free trial to Bespoke Premium to see our list of “Stocks for the COVID Economy.”