After falling in back to back weeks, seasonally adjusted initial jobless claims rose to 898K this week which was weaker than the forecasted decline to 825K and last week’s level of 845K last week.  Now just below 900K, claims are at their highest level since the week of August 21st (before the change in seasonal adjustment methodology meaning comparisons are not exactly like for like) which was also the last time claims were above one million.  Additionally, the 53K week over week increase was the largest increase since the week of August 14th when claims rose by 133K.

Non-adjusted claims have been a bit more choppy over the past few weeks, but this week marks the first back-to-back increases since the first half of September. Non-seasonally adjusted initial jobless claims rose to 885.9K this week from 809.2K last week.  Similar to the adjusted number, that is the highest level since mid-August while the WoW increase was the largest since a 117.7K climb in the week of July 10th.

While non-seasonally adjusted claims have deteriorated for two weeks in a row with particularly weaker results in the most recent print, we would note that seasonality could be a factor.  In the charts below we show the level of claims for each given week of the year versus the historical average. As shown, the rise in NSA initial jobless claims is consistent with the seasonal rise that typically occurs from the fall through the end of the year.

As for continuing claims (NSA), the most recent week (40th week of the year) marked the first reading below 10 million since March. While that is certainly a positive and a sizeable improvement—the first weekly decline greater than 1 million since the first week of August—going forward seasonality will be a headwind.  As shown in the second chart below, the 40th week of the year has typically marked the seasonal low for the year as claims tend to rise through the year-end.

Reporting of claims from the most populous state, California, is still paused and with the addition of seasonal headwinds, it is a bit tough to decipher whether the uptick in claims is a material worsening in the data as COVID cases have been on the rise or more simply seasonality. Pandemic Unemployment Assistance (PUA) claims would seem to more give more credit towards the latter.  For initial claims, PUA claims fell to 372.9K this week, down for a fifth straight week. Behind the first week that PUA claims were reported (April 17th), that is the lowest count of initial PUA claims.  For total claims (regular and PUA combined), this week’s reading of 1.26 million marked a new pandemic low.

Similarly, continuing claims are also reaching some of the lowest levels since early in the pandemic.  Continuing PUA claims which are lagged another additional week have also continued to fall. The most recent reading for the last week of September came in at 11.172 million. That is the lowest amount since the first week of August.

While new lows in continuing claims are being reached, we would also note that it does not mean all those people are necessarily returning to work.  The Extended Benefits program continues relief for workers who have exhausted regular benefits during periods of high unemployment such as the current scenario. The basic program’s extension is up to 13 additional weeks.  These claims have been on the rise since July with a new high of 354.7K this week. While the decline in regular claims still outpaces these extensions, it is yet another point that, with some nuance, claims have generally improved but are still a mixed bag. Click here to view Bespoke’s premium membership options for our best research available.

Below is a look at the year-to-date reading for the high-frequency Morning Consult daily consumer sentiment indicator.  While still well off highs seen prior to the COVID Crash in late February and early March, sentiment has generally been ticking higher off the lows.  You’ll notice in the chart below, however, that while the “Future Expectations” reading is still bouncing back nicely, the “Current Conditions” reading has been going more sideways over the last couple of months.

We can also look closer into state level readings from the daily Morning Consult sentiment numbers.  In the heat map below, we show the changes in the levels of consumer sentiment for each state since mid-February.  As shown, the lower 48 have seen much larger improvements than Alaska or Hawaii with the largest improvements coming in the Northeast and parts of the Midwest.  On the other hand, in addition to Hawaii and Alaska, some of the key swing states like Maine, New Hampshire, and Nevada have improved the least.  Of all 50 states, Vermont’s current reading on sentiment is the closest to its February levels, but even Vermont is still down 17.9 points.  Click here to view Bespoke’s premium membership options for our best research available.

Yesterday we highlighted the year-to-date performance of the major S&P 500 sector ETFs using a snapshot from our Trend Analyzer tool.  Below we take a look at the year-to-date performance of the 30 stocks in the Dow Jones Industrial Average.

Apple (AAPL) currently ranks #1 with a year-to-date gain of 66.2%.  At the moment, AAPL is 3.85% above its 50-day moving average but not in overbought territory.  It’s in a long-term uptrend channel as well.

Ranking second is the newly-added Dow stock salesforce.com (CRM), which is up 61% year-to-date and 9.5% above its 50-day moving average.

There are four more Dow stocks that are up more than 20% in 2020 — Microsoft (MSFT), Home Depot (HD), Nike (NKE), and Wal Mart (WMT).  All four of these stocks are trading in long-term uptrends, but they’re currently trading in overbought territory, which means they’re at least one standard deviation above their 50-day moving averages.

Another four stocks are up more than 10% YTD — Procter & Gamble (PG), McDonald’s (MCD), Caterpillar (CAT), and UnitedHealth (UNH).  Then you have Visa (V), Johnson & Johnson (JNJ), and Amgen (AMGN) up on the year but only marginally.

While the S&P 500 is up nearly 8% on the year, the Dow 30 at the index level is actually slightly in the red on the year.  Of the 30 members, 13 are up YTD and 17 are down.

The biggest losers in the Dow so far this year have been JP Morgan (JPM), Chevron (CVX), Walgreens (WBA), and Boeing (BA).  Each of these stocks is down 25% or more, with BA down the most at nearly 50%.  Other notable losers that are down 10%+ include Disney (DIS), Cisco (CSCO), American Express (AXP), and Travelers (TRV).  Start a two-week free trial to Bespoke Institutional to access Bespoke’s interactive research dashboard and investor tools.

Chinese equities (on a USD adjusted basis) have been pressing to new multi-year highs recently.  As shown in the first chart below, the CSI 300 has reached its highest level in over five years this week.  And in terms of market cap, the Chinese stock market is at its highest level ever according to Bloomberg data.

China’s $10+ trillion stock market cap makes it the second-largest global stock market behind the US.  As a percentage of total world market cap, Chinese equities now account for 10.86% compared to 41.85% for the US.  China is the only country other than the US that can boast a double-digit share of the world market cap.  Both countries have gained over two percentage points of market share year to date and China has gained 2.12% since the S&P 500’s pre-pandemic high back in February.  Since the bear market low in the US in March, the US has regained the most share of any country, but there are other notable gainers like Germany, Canada, India, South Korea, Australia, and Sweden.

While China and the US have gained the most share of world stock market cap this year, the biggest losers have been Japan, the UK, France, Russia, and Brazil.  Brazil’s share of world market cap has fallen sharply in 2020 from 1.26% down to 0.75%.  The UK has lost a full percentage point of world market cap since the start of the year, falling from 4.01% down to 3%.

While Chinese market cap has surpassed its 2015 highs, as a percentage of total global market cap, it still needs to rise another 2.89 percentage points before it is at a new high.  As shown below, the 10.86% share of market cap for Chinese equities today is even off the high of 11.37% from July.  Meanwhile, the US continues to make up a bigger and bigger slice of the pie and is basically in its most dominant position of the last 10+ years.  Start a two-week free trial to Bespoke Institutional to access Bespoke’s interactive research dashboard and investor tools.

Seven of the eight big “mega-cap” Tech or Tech-related companies are set to report Q3 earnings before the end of October.  Our Custom Portfolios tool available to Bespoke Premium and Bespoke Institutional members allows investors to easily monitor the upcoming earnings report dates for the stocks they care about most.  Below is a snapshot of the upcoming earnings report dates for stocks in a “Big Tech” custom portfolio that we’ve built.  (If you’re already a subscriber, you can import this portfolio into your Custom Portfolios by clicking here.)

Netflix (NFLX) is set to be the first of the mega-caps to report next Tuesday (10/20) after the close.  As shown in our earnings calendar, analysts are looking for NFLX to earn $2.14/share this quarter with sales of $6.405 billion.  In Netflix’s history as a public company, it has reported quarterly earnings 73 times and exceeded EPS estimates 84% of the time.  NFLX has beaten sales estimates 62% of the time and raised forward guidance 25% of the time.  In terms of NFLX’s share-price reaction to earnings, the stock has historically averaged a one-day gain of 0.35% on its earnings reaction day (the first full trading day following its earnings release).  NFLX is the most volatile of the mega-cap stocks on the list when it comes to earnings with an average absolute one-day change of 12.29% on earnings reaction days.

Tesla (TSLA) reports next Wednesday (10/21) after the close and expects to earn $0.60/share on $8.3 billion in revenues.  TSLA has one of the lowest EPS beat rates of the group, but it has averaged a one-day gain of 1.86% on its prior 40 quarterly earnings reaction days.

Next up after Tesla is Amazon (AMZN), which reports next Thursday (10/22) after the close.  Amazon is expected to report quarterly sales of $91.6 billion, which would be $23 billion more than the $68 billion in sales it did in Q3 2019.  While Q4 is normally AMZN’s best quarter due to the holiday shopping period, if AMZN meets Q3 sales expectations, it would be $5.5 billion more in sales than the company did last Q4.

The following week we’ll get reports from Microsoft (MSFT) on Tuesday (10/27) after the close and then Apple (AAPL), Facebook (FB), and Alphabet (GOOG) on Thursday (10/29) after the close.  Of these names, Facebook (FB) has historically beaten EPS and sales estimates at the highest rate (91%), and it’s also the stock that has historically reacted the most positively on its earnings reaction days.  To build your own custom earnings calendar of the stocks you care about most, start a two-week free trial to Bespoke Premium today.

Along with getting a helpful earnings calendar for stocks in the Custom Portfolios that you can build, you can also see your stocks run through our Trend Analyzer and Chart Scanner tools.  Our Trend Analyzer tool lets you quickly and easily see where stocks or ETFs in your portfolio are trading relative to their historical trading ranges.  As shown below, the eight mega-cap stocks in our “Big Tech” portfolio have all moved back above their 50-day moving averages as of this morning and half of them (AMZN, MSFT, NFLX, NVDA) are trading in overbought territory.  Of the overbought names, Netflix (NFLX) is the most extended into “extreme” territory.  You can learn more about our Trend Analyzer and how to get the best use out of it when you start a two-week free trial to Bespoke Premium.

Finally, our Chart Scanner tool lets you quickly browse through the chart patterns of all the stocks in your Custom Portfolios so you can stay on top of technicals.  By checking up on the charts each day, you’ll be able to more easily spot technical breakouts or breakdowns for stocks in your portfolio and potentially act on them if needed.  Below is a snapshot of the price charts for the eight “Big Tech” stocks as it would be viewed by members on our website.  To build or import your own Custom Portfolio today, start a two-week free trial to Bespoke Premium.  It’s worth a try!

The most popular S&P 500 ETF — SPY — is currently up 10% year-to-date.  Below is a snapshot from our Trend Analyzer tool (available to Bespoke Premium subscribers) that shows S&P 500 sector ETFs and their year-to-date performance (among other stats).  As shown, eight of the eleven major sector ETFs are in the green for the year, with Technology (XLK) leading the way at +35.2%.  That’s a pretty incredible move in a pandemic year, and it shows just how powerful the Tech sector is regardless of how well the “physical” economy is doing.  The Consumer Discretionary sector (XLY) ranks second with a year-to-date gain of 25.06%, but that gain is mostly buoyed by Amazon.com (AMZN), which is easily the largest stock in the cap-weighted sector.  The only other sector that’s up more than 10% on the year is Communication Services (XLC) at +16.4%.

Materials (XLB), Health Care (XLV), Consumer Staples (XLP), Utilities (XLU) and Industrials (XLI) are the remaining sectors in the green in 2020 with gains between 0 and 10%.  On the downside, Real Estate (XLRE) is only marginally in the red with a YTD decline of 3.57%, and then you get to the two big losers on the year — Energy (XLE) and Financials (XLF).  The Financial sector (XLF) is down 17% so far this year while Energy (XLE) is down 46.6%.  The gap of more than 80 percentage points between the year’s best and worst performing sectors is something that rarely happens, but then again, 2020 has been a year like no other!  Try our Trend Analyzer tool with a two-week free trial to Bespoke Premium.