Bespoke’s Sector Snapshot — 5/4/17
We’ve just released our weekly Sector Snapshot report (see a sample here) for Bespoke Premium and Bespoke Institutional members. Please log-in here to view the report if you’re already a member. If you’re not yet a subscriber and would like to see the report, please start a 14-day trial to Bespoke Premium now.
Below is one of the many charts included in this week’s Sector Snapshot, which highlights our trading range screen for the S&P 500 and ten sectors. The black vertical “N” line represents each sector’s 50-day moving average, and as shown, four of ten sectors are below their 50-days while six are above. Both the Energy and Telecom sectors have moved into deep oversold territory. Are they due for a bounce?
To see our full Sector Snapshot with additional commentary plus six pages of charts that include analysis of valuations, breadth, technicals, and relative strength, start a 14-day free trial to our Bespoke Premium package now. Here’s a breakdown of the products you’ll receive.
Chart of the Day: 6 Days & Counting Without A 20 bps Move, What’s Next?
ETF Trends: International – 5/4/17
Commodities continue to get hit hard with oil, metals, and silver leading the space lower. Media and REITs are also areas of weakness. On the best performers list, European equities continue to show good returns with the DAX at a new all-time high, up almost 5% since the close prior to France’s first round elections.
Bespoke provides Bespoke Premium and Bespoke Institutional members with a daily ETF Trends report that highlights proprietary trend and timing scores for more than 200 widely followed ETFs across all asset classes. If you’re an ETF investor, this daily report is perfect. Sign up below to access today’s ETF Trends report.
See Bespoke’s full daily ETF Trends report by starting a no-obligation free trial to our premium research. Click here to sign up with just your name and email address.
the Bespoke 50 — 5/4/17
Every Thursday, Bespoke publishes its “Bespoke 50” list of top growth stocks in the Russell 3,000. Our “Bespoke 50” portfolio is made up of the 50 stocks that fit a proprietary growth screen that we created a number of years ago. Since inception in early 2012, the “Bespoke 50” has beaten the S&P 500 by 35 percentage points. Through today, the “Bespoke 50” is up 109.2% since inception versus the S&P 500’s gain of 73.2%. Always remember, though, that past performance is no guarantee of future returns.
To view our “Bespoke 50” list of top growth stocks, sign up for Bespoke Premium ($99/month) at this checkout page and get your first month free. This is a great deal!
B.I.G. Tips – April Employment Preview
Heading into Friday’s Non Farm Payrolls (NFP) report for April, economists are expecting an increase in payrolls of 190K, which would be a 92K gain from last month’s much weaker than expected reading of 98K. In the private sector, economists are also expecting an increase of 190K, which would be an even larger increase compared to the headline reading. The unemployment rate is forecasted to tick up to 4.6%. Growth in average hourly earnings is expected to accelerate to 0.3%, while average weekly hours worked is also forecast to rise to 34.4.
After last month’s disappointing report, the April report is important as it will shed some light on whether March was an anomaly or the beginning of a new trend. With such high stakes surrounding the report, the market will likely have a big reaction to the upside or downside based on how the number comes in relative to expectations. To that end, we just published our eleven-page monthly preview for the April 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 September. We also include a breakdown of how the initial reading for September typically comes in relative to expectations and how that ranks versus other months.
One topic we cover in each month’s report is the S&P 500 stocks that do best and worst from the open to close on the day of the employment report based on whether or not the report comes in stronger or weaker than expected. In other words, which stocks should you buy, and which should you avoid? The table below highlights the best-performing stocks in the S&P 500 from the open to close on days when the Non-Farm Payrolls report has been better than expected over the last two years. Of the 25 top performing stocks, eight sectors are represented, as Consumer Discretionary and Technology both lead with six each. Technology, though, is clearly the leader with the four top performing stocks, including Qorvo (QRVO) which has seen an average open-close gain of 2.66% and positive returns every time. Other consistent winners have been AVGO, SWKS, ADSK, URBN, KMX, and ALB.
For anyone with more than a passing interest in how equities are impacted by economic data, this report is a must read. To see the report, sign up for a monthly Bespoke Premium membership now!
Old Faithful: Jobless Claims
Time and time again throughout the economic recovery there’s been a pattern that whenever it seems as though economic data is showing cracks, jobless claims come in and bail us out. It happened again this week when Jobless Claims dropped by 19K back down to 238K and below the consensus forecast of 248K. This now makes it 113 straight weeks that claims have been below 300K, and as shown in the chart below, the downtrend that has been in place for several months has once again halted an upward move in claims.
Despite the decline in claims, the four-week moving average actually increased slightly this week, rising from 242.25K up to 243K. That’s still less than 4K off the multi-decade low of 239.75K that we saw ten weeks ago back in February, but it’s going to be a tough slog getting back below that level. However, with claims being as reliable as they have been over the years, we wouldn’t bet against it.
On a non-seasonally adjusted basis, jobless claims fell almost 40K down to 211.3K. For the current week of the year, this is the lowest reading since 1973 and more than 115K below the average of 326.5K for the current week dating back to 2000.
The Closer — Oil Inventories No Catalyst, Alternative Views Of Chinese Credit — 5/3/17
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Looking for deeper insight on global markets and economics? In tonight’s Closer sent to Bespoke Institutional clients, we review weekly EIA petroleum market data updated today and take an alternative approach to measuring Chinese credit growth.
The Closer is one of our most popular reports, and you can sign up for a free trial below to see it!
The Closer is one of our most popular reports, and you can see it and everything else Bespoke publishes by starting a no-obligation 14-day free trial to our research!
Best Performing Stocks on Earnings This Season
More than 1,300 companies have reported earnings so far this reporting period, and the average stock has gained 0.06% on its earnings reaction day (the first trading day following its earnings release). Below is a list of the stocks that have posted the biggest share price gains on their earnings reaction days this season. As shown, LSB Industries (LXU) ranks first with a one-day gain of 30.75%. And that was on an EPS miss! Chegg (CHGG) ranks second with a gain of 28.71% followed by Select Comfort (SCSS) at +28.26%. Bridgepoint Education (BPI) and EXACT Sciences (EXAS) round out the top five — each with gains of more than 26%.
Other notables on the list of big winners this season include GNC, GrubHub (GRUB), iRobot (IRBT), First Solar (FSLR), FireEye (FEYE), and Weight Watchers (WTW). You’ll notice that only one S&P 500 company made the list of biggest winners — BCR — and that was the result of an acquisition offer that accompanied the earnings report.
Below is a list of the best performing large cap (S&P 500) names on earnings this reporting period. Behind BCR, Coach (COH) ranks second with a one-day gain of 11.38% following its report on May 2nd. Edwards Lifesciences (EW) is the only other S&P 500 company that has gained more than 10% on its earnings reaction day this season.
Under Armour (UAA) — a name that prior to its earnings report this season had been significantly beaten down — ranks fourth with a gain of 9.94%, while Wyndham Worldwide (WYN) rounds out the top five with a gain of 9.02%. Other notables on the list of S&P 500 earnings winners include Caterpillar (CAT), Intuitive Surgical (ISRG), Cummins (CMI), American Express (AXP), Wynn Resorts (WYNN), and McDonald’s (MCD).
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Chart of the Day: Pool Corp (POOL)
Top Earnings Season Triple Plays — 5/3/17
Here at Bespoke, our job is to identify winners and losers, and one of the ways we try to find earnings-season winners is through our list of “triple plays.”
Long-term Bespoke subscribers know how much we like triple plays, but for those that haven’t heard of the term, we came up with it back in the mid-2000s for companies that beat analyst earnings estimates, beat analyst revenue estimates and also raise guidance. Investopedia.com is one of the best online resources for financial markets education, and they’ve actually given us credit for coining the “triple play” term on their website. We consider triple play stocks to be the cream of the crop of earnings season, and we are constantly finding new long-term buy opportunities from this basket of names each quarter.
There have been a total of 62 “triple plays” so far this season out of roughly 1,300 earnings reports. Throughout earnings season, Bespoke sends Premium and Institutional members its “Earnings Triple Plays Report.” The report keeps a running tally of recent triple plays, and it also provides a list of “Top Triple Plays.” We’ve just published our first Earnings Triple Plays Report for this earnings season, featuring a list of the 62 stocks that have registered triple plays this earnings season plus the 14 that we’ve identified as having the most attractive chart patterns. Learn how to see the stocks below!
See our Top Earnings Season Triple Plays by signing up for a monthly Bespoke Premium membership now. Click this link for a 14-day free trial.