Earlier today, we published an update to our “Death By Amazon” index of stocks, which tracks the performance of stocks in companies whose sales are the most Amazon-able.  In the update, we mentioned how the “Death By Amazon” index just recently made a four-year low.  On a related note, short interest figures for the end of March were released earlier this week, and looking at the data, Death By Amazon is a trade that hasn’t gone on unnoticed.

The chart below compares the price of the S&P 1500 Retailing Group and the average short interest as a percentage of float (SIPF) for stocks in the group going back to 2007.  For the last several months now, average short interest levels have been rising steadily for the group and currently stand at over 13%, which is the highest reading for the group since December 2008.  Not since the depths of the financial crisis have traders been more negative on the group, although we would note that they were a lot more negative back then compared to now.  One thing to note in this chart is that even though it looks as though the Retailing Group has performed well over the last few years, practically all of the gains in the sector are the result of Amazon.com (AMZN), Home Depot (HD), and Priceline.com (PCLN).  Outside of these three stocks, the vast majority of the group’s members have been trending the other way.

In terms of individual stocks, the table below shows the sixteen stocks in the group that have more than 20% of their float sold short.  Looking at the list, all but three stocks are down so far this year.  Ironically, the stock with the highest short interest, RH (formerly Restoration Hardware), is up sharply YTD.  That’s more of a special situation, though, as RH is coming off hard times from prior years and is still down more than 50% from its highs in late 2015.  Lumber Liquidators (LL) is another example.  Although it is up 37% this year, it’s trading at a fifth of its level from late 2013.  For just about every other stock shown, 2017 has already been a year to forget, especially when you consider the fact that the broader market is up about 5% on the year.

While the outlook for many of the names in the retail space is bleak, there will undoubtedly be some companies that buck the trend and turn things around.  In our earlier update to the Death By Amazon index, we actually highlighted one of the names in the list below as a turnaround candidate.  So if you haven’t already, sign up for a free trial and check out the report!

The average stock in the S&P 1500 (contains large, mid, and small caps) is down 3.35% since the index peaked on March 1st.  We broke the S&P 1500 into deciles (10 groups of 150 stocks each) based on stock performance from election day 2016 (11/8/16) through the March 1st equity market peak to see how the biggest post-election winners and losers have been doing during the current pullback.  As shown, the decile of stocks that did the best during the post-election rally from 11/8/16 through 3/1/17 are down an average of 8.45%.  Clearly investors have been selling the biggest “Trump Trade” winners since the beginning of March.

Below is a list of the worst performing stocks in the S&P 1500 since the March 1st equity market peak.  All of the names listed are down 20%+.  Notables include Frontier Communication (FTR), AK Steel (AKS), Winnebago (WGO), US Steel (X), and First Solar (FSLR).  It’s been just a brutal few weeks for these names.

Remember back a couple of weeks ago when weekly jobless claims “spiked” up above 250K for two weeks?  After those two weeks of elevated readings back in mid-March, jobless claims have dropped back down near their cycle lows.  In this week’s report, claims came in at 234K, which was down 1K from last week’s revised reading and 11K below consensus estimates.  Claims have now been below 300K for 110 straight weeks, and any concerns that the labor force was weakening following those two relatively elevated prints last month should be alleviated as it looks increasingly likely that they were more weather related than anything else.

With this week’s decline, the four-week moving average has now dropped 3K down to 247.25K.  That puts this reading back within 10K of the cycle low of 239.75K that we saw seven weeks ago.

On a non-seasonally adjusted basis, claims were equally as strong.  With a print of 239.9K, NSA claims were more than 130K below their historical average of 372.2K for the current week of the year going back to 2000.  It is also the lowest print for the current week of the year dating back to 1969.