Even though equities are rallying considerably this week, sentiment has been little changed.  That’s likely a function of the timing of this week’s survey and the massive volatility.  32.9% of respondents in AAII’s weekly sentiment survey reported as bullish this week.  That’s little changed from 34.4% last week. Meanwhile, the percentage of equity newsletter writers reporting as bullish in the Investors Intelligence survey has continued to fall with just over 30% reporting as bulls this week. That is the lowest level since the first week of 2019. Prior to that, there have only been 29 other weeks since 1997 with lower readings.

The results are similar for bearish sentiment. AAII’s survey saw bearish sentiment rise slightly from 51.1% last week to 52.07% this week. Bearish sentiment has now been above 50% for three consecutive weeks.  That is the first time this has happened since March of 2009.  Back then readings above 50% persisted for four weeks straight. Outside of that 2009 occurrence, the only other times that bearish sentiment remained above 50% for three weeks or more was in January, March, and July of 2008 and the late summer and fall of 1990.  As for the Investors Intelligence survey, 41.7% are reporting as bearish which is the highest level since October of 2011.  This week’s reading is in the 96th percentile of all readings in the history of the survey.

Neutral sentiment picked up about half of a percentage point this week to 15.03%.  With the majority of investors reporting as bearish, this very low reading is in just the second percentile of all readings in the history of the survey. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

No one was expecting a strong number for jobless claims this week as forecasts were predicting claims to come in at a record high. The median forecast was calling for claims to total 1.7 million compared to 282K last week which had been the highest reading since September of 2017.  Instead, they practically doubled those forecasts coming in at a record 3.283 million. Fortunately, that was less than some of the most aggressive estimates like Citigroup which forecasted claims to be 4 million.  This week’s data is an unprecedented albeit anticipated jump in jobless claims. To put the size of the number into perspective, that is roughly 1% of not  the US working population, but the entire US population!  In the history of the data going back to 1967, there has never been a higher number in the level of claims (first chart below) or week-over-week change (second chart below). The previous high for jobless claims was 695K from October of 1982, almost one-fifth of this week’s print.  As for the week to week changes, the over 3 million increase in claims blew the size of the previous largest movements out of the water.

The four week moving average typically helps to smooth out the week to week fluctuations of the high-frequency data, but considering the size of the move, the utility of the moving average is fleeting this week. The moving average has also reached a record high and experienced the largest one week increase on record.

While it may not be much consolation given how horrific this week’s numbers are, one silver lining is in the non-seasonally adjusted number. Before seasonal adjustment, jobless claims were slightly less staggering at 2.898 million. In other words, seasonal factoring does make the number of claims look higher than the actual amount reported. But that is still the largest weekly increase and highest number on record regardless of any seasonal patterns that may be affecting the number. Given more workers are continuing to stay home than return to work these numbers are likely to keep rising over the coming weeks. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

Turnaround Tuesday has carried into hump day with the Dow up well over 5% again today as of this writing.  As we mentioned in an earlier post, that means the Dow is on track for its first back-to-back up days for the first time since early February.  Remarkably, even with only two consecutive up days, the index is closing in on exiting a bear market. For that to happen, the Dow would need to close above the 22,310.32 level which is 20% off of the bear market closing low (Monday’s close at 18,591.93). At today’s high, the Dow was less than 300 points or 1.32% from that level.

As for the individual stocks contributing to the rally, Boeing (BA) deserves a lot of thanks.  The stock has been hit very hard during the sell-off. Whereas the stock has traded in the mid-$300 for much of the past two years and up to mid-February, as of late last week BA had fallen below $100.  That massive drop in price means that day to day movements in the stock would have a lesser impact on the level of the price-weighted Dow. In spite of this, BA has contributed over 400 points to the Dow’s rally in the past two days alone!  That is much more than any other stock in the index with the next biggest contributor being UnitedHealth (UNH) who’s 335.44 point contribution comes as its share price is currently around $100 more than BA.  BA’s contribution is also almost 200 points more than those of McDonald’s (MCD), Visa (V), and Apple (AAPL). Of all 30 Dow stocks, there is only one that is down over the past couple of days, subtracting from the index’s rally: Walmart (WMT). Given WMT has held up fairly well recently, its performance is yet another example of investors’ focus on the more beaten down names that we have noted earlier today and in last night’s Closer. Start a two-week free trial to Bespoke Institutional to access Closer and full range of research and interactive tools.

The way things have been moving on a minute to minute basis, nothing is guaranteed in this market, but the way things stand now, the Dow is on pace to break its streak of days without back to back daily gains at 32 trading days.  That’s right, not since February 6th have we seen the Dow finish the day in positive territory for more than a day at a time.  Looking back throughout history, there have only been a handful of other periods where the DJIA went this long or longer without two up days in a row.  The last occurrence was all the way back in 1984, and before that, you have to go back to 1969.  Other than those two streaks, there were also two other periods in 1931 where the DJIA went more than 30 trading days without back to back gains.  While the current streak ranks as tied for the fourth-longest on record, if the DJIA isn’t able to hold onto its intraday gains today, the current streak will extend out to a minimum of at least two trading days and that would move the current streak into second place overall.  Start a two-week free trial to Bespoke Institutional to access our Custom Portfolios, interactive tools, and full library of research.

Yesterday, the S&P 500 had one of its best days on record and the best day since 2008 as the index soared nearly 10%.  As we noted in last night’s Closer, for stocks that have been hit the hardest during the past month’s equity rout, yesterday’s buying spree was a very welcome sign.  Yesterday saw a massive “dash for trash” as the current bear market’s worst performers were the best performers in yesterday’s session. The average stock in the bottom 10% of performers over the course of the current bear market dating to February 19th was up an astonishing 18.1%. All five of the bottom deciles in the distribution of returns since the bear market began were up at least double-digit percentage points. On the other end of the spectrum, while the best performing stocks were still positive on the day, their rallies were much more muted as the average stock in the best-performing decile only rose 3.38%.  Start a two-week free trial to Bespoke Institutional to access nightly Closer and full range of other research and interactive tools