In late April, we highlighted that Ford (F) had retaken Tesla (TSLA) in terms of market capitalization following a massive jump for Ford in response to earnings.  Notwithstanding some weakness today on news of job cuts, in both terms of price and market cap, F has held pretty steady since that gap up. On the other hand, TSLA has continued its fall from grace from the title of largest US auto manufacturer that it earned for the first time back in 2017. Analyst downgrades today were the catalyst of an early 3%+ decline for TSLA, sending the stock to a 52-week low—its lowest level since December of 2016—further diminishing the company’s market cap. TSLA is now similar to its size in early 2017. With a market cap of $4.8 billion less than Ford, it is also the lowest of the auto manufacturers. Meanwhile, with a market cap of roughly $52 billion, General Motors (GM) is now distinctively the largest automaker in the country.  Start a two-week free trial to Bespoke Institutional to access our Chart Scanner, Earnings Explorer, and much more.

More than 2,000 public companies released quarterly earnings during the Q1 reporting period between April 10th and May 16th.  On average, these stocks fell 0.57% on their earnings reaction days, so collectively, investors were net sellers on earnings this past season.  (For a stock that reports before the open, its earnings reaction day is that trading day.  For a stock that reports after the close, its earnings reaction day is the next trading day.)

There were 25 stocks that gained more than 20% on their earnings reaction days this season, and there were 108 that gained more than 10%.  Below is a list of the very best performers.  As shown, Control4 (CTRL) ranks at the top with a one-day gain of 39.6% when it reported on May 9th.  While the company missed revenue estimates, it announced that it was being acquired for $23.91/share — 39.66% above the price it closed at prior to its earnings report.

The same thing happened to the 2nd best performer on earnings this season — Aquantia (AQ).   AQ reported earnings on May 6th, and while it missed both EPS and revenue estimates, it announced that it had been bought by Marvell Technology for $13.25/share.

Behind CTRL and AQ, the next best three stocks on their earnings reaction days this past season were Impinj (PI), Zix Corp (ZIXI), and Enphase Energy (ENPH).  PI and ZIXI both gained nearly 35%, while ENPH gained 29.3%.  Other notables on the list of biggest winners include Sohu.com (SOHU), MercadoLibre (MELI), US Steel (X), and Twitter (TWTR).

While there were 25 stocks that gained more than 20% on their earnings reaction days this season, there were 31 that fell more than 20%.  Additionally, there were 108 stocks that gained more than 10%, but there were 157 that fell more than 10%. In other words, there were more big losers than winners.

At the top of the “biggest losers” list is Stamps.com (STMP), which fell 55.75% on May 9th after its evening report on May 8th.  For STMP, it was its second 50%+ decline on earnings in a row — something that had never happened for any stock in our Earnings Database dating back to 2001!

Behind STMP, we saw Conduent (CNDT) and Puma Biotech (PBYI) both fall more than 38%, while Tenneco (TEN) fell 37.5%.  Other notables on the list of biggest losers this past earnings season include Fluor (FLR), iRobot (IRBT), MarineMax (HZO), Sleep Number (SNBR), and 3D Systems (DDD).  With every company on the list below experiencing a one-day drop of more than 17% recently, this is not a distinguished list that you want to be on if you’re a publicly traded company!  Start a two-week free trial to Bespoke Institutional to access our Earnings Explorer tool and everything else we have to offer.

This May so far has not been the kindest to equities as Friday marked another down week.  With markets facing this selling, investors have been dumping more cyclical sectors for defensives.  As shown in our Trend Analyzer below, Financials (XLF) and Industrials (XLI) saw the worst of last week’s declines as XLF fell the most at 2.18% with XLI not far behind down 1.9%. Technology (XLK) and Consumer Discretionary (XLY) were also notably weak falling over 1%.  As these more cyclical sectors saw sizeable declines, defensives rallied.  The Real Estate sector ETF (XLRE) and the Utilities sector ETF (XLU) rose 1.47% and 1.41%, respectively, as Consumer Staples (XLP) managed to gain 0.77%. This brings all three to firmly overbought levels, whereas XLRE and XLU had actually been neutral only a week ago.  Start a two-week free trial to Bespoke Institutional to access our interactive Trend Analyzer and much more.

Turning to the charts of these sector ETFs, while there may have been declines over the past few weeks, there also has not been any outright collapses.  In fact, most sectors have fallen to, rather than through, logical support levels over the past few weeks.  For example, despite a brief dip below, Materials (XLB) has been trading tightly between March lows and the 200-DMA. Meanwhile, for XLI and XLF, the 200-DMA has acted as support with recent lows bouncing right off of these moving averages.  Similarly, Consumer Discretionary (XLY), Tech (XLK), and Communication Services (XLC) have been hovering around their 50-DMAs in their recent pullback. For XLC and XLY, this recent pullback has also seemed to have found a bottom at the lower end of the sectors’ uptrend channels.  The same cannot be said for XLK which has more distinctively broken through its uptrend.  Defensives, on the other hand, are at the tops of their uptrend channels or are eyeing a new break higher. Continuously weak this year, Health Care (XLV) is still the only sector that has been making consistently lower lows.

With Memorial Day right around the corner, we wanted to look at how the S&P 500 has historically performed leading up to the first unofficial weekend of summer.   While the day to honor the sacrifice of Americans who have died while in service of the US military was historically observed on May 30th, beginning in 1971, Memorial Day was moved to the last Monday of May.  With Memorial Day falling on the 27th of May this year, it’s on the earlier side (earliest it can be is May 25th while the latest is the 31st).  Also, as an added bonus, because of the way the calendar falls this year, there are 15 weeks between Memorial Day and Labor Day versus the traditional 14.  So while it may have been a lousy spring for many areas of the country this year, look on the bright side: at least we’ll get an extra week of summer!

In terms of market returns, the S&P has tended to see modestly positive returns in the week leading up to Memorial Day, averaging a gain of 0.15% (median: 0.23%) with positive returns 62.5% of the time. Relative to all one week periods, those returns are slightly better than average but nothing to a significant degree.  More recently, though, the returns have been a bit better.  In the ten years since the lows of the Financial Crisis, the S&P 500 has seen an average gain of 0.65% (median: 0.39%) during the week leading up to Memorial Day weekend with positive returns in all but two years. Start a two-week free trial to Bespoke Institutional to access our seasonality tools and so much more.

Below is a snapshot from our Trend Analyzer tool of the six major US index ETFs.  As you can see in the “Trading Range” section to the right, all six ETFs are currently trading below their 50-day moving averages as we get set for a lower open to start the new trading week.  (For each ETF, the dot represents where it’s currently trading within its normal range, while the black, vertical line represents each ETF’s 50-day moving average.)

The small-cap Russell 2,000 (IWM) is trading the furthest below its 50-day moving average and has just moved into “oversold” territory, which means it’s more than one standard deviation below its 50-DMA.  The Dow 30 (DIA) is the next closest to oversold territory at -1.19% below its 50-DMA.  The Nasdaq 100 (QQQ), S&P 500 (SPY), and Total Stock Market (VTI) ETFs are all just barely below their 50-DMAs.  Start a two-week free trial to Bespoke Institutional to access our interactive equity market tools and much more.

Below is a snapshot of the six US index ETFs from our Chart Scanner tool so you can see how each one has been trending lately a little more closely.

With the S&P 500 set to open lower by 0.70% to start the new trading week, below is an updated look at recent asset class performance using our key ETF matrx.  For each ETF, we show its performance (total return %) last week, quarter-to-date, and year-to-date.  As shown, SPY is currently up 1.19% in Q2, but it’s still up 14.87% year-to-date.  The Dow 30 (DIA) is underperforming SPY by more than 3 percentage points on a YTD basis, while the Nasdaq 100 (QQQ) is outperforming SPY by 4 percentage points.  Small-caps and mid-caps are in the midst of a rough patch with declines of 2%+ last week.  However, the Russell 2,000 (IWM) is up nearly the same amount as the large-cap S&P 500 (SPY) for the entirety of 2019 so far.

Defensive sectors like Consumer Staples (XLP) and Utilities (XLU) have seen buying lately as investors rotate out of cyclicals a bit.  Quarter-to-date, Communication Services and Financials are up the most with gains of more than 4%, while Health Care (XLV) and Energy (XLE) have been the biggest losers with declines of 3.5%+.  Year-to-date, however, Technology is up the most with a 22% gain, followed by Communication Services (XLC) and Consumer Discretionary (XLY).  Health Care is lagging badly in 2019 with a gain of just over 2%.

Outside of the US, we’ve seen quite a bit of divergence lately.  Quarter-to-date, both Brazil (EWZ) and China (ASHR) are down more than 9%, while Hong Kong (EWH) and India (PIN) are pretty deep in the red as well.  On the flip side, Germany (EWG) is up 4.2%, while Russia (RSX) is up 2.6% and Canada (EWC) is up 1.6%.

Oil (USO) is up the most of any asset class on a year-to-date basis with a gain of 35.4%, but natural gas (UNG), gold (GLD), and silver (SLV) are all in the red on the year.  Fixed income ETFs rallied last week, leaving them all up roughly 3-4% year-to-date.  Start a two-week free trial to Bespoke Institutional to access our interactive equity market tools and much more.