Headed into the final hour of trading, with oil surging over 5.7% on the back of tensions escalating with Iran, energy stocks have been the top performers today.  Capital Goods and the Software and Services industries are also experiencing strong rallies today.  A strong earnings report from Oracle (ORCL) has been the major catalyst for Software and Services.  The only industry groups to have moved lower are Consumer Services, Telecom, and Banks.  Another factor in some stocks’ gains today has also been recent weakness so far this month.

In the chart below, we break up the S&P 500 into deciles (groups of 50) based on month-to-date performance headed into today’s trading.  As shown, the 10th decile made up of the weakest stocks in June through yesterday’s close (the only decile with MTD decliners) has been one of the best-performing groups. The average stock in this decile is up 1.11% today. That is the joint second best performance across these deciles shared with the second-best performers on a MTD basis.  Additionally, the best-performing stocks in June have continued to rally over 1% on average today. But neither the best nor worst MTD stocks are the leading decile, that actually belongs to the fourth decile with an average gain of 1.19%.  Some names in this decile include ULTA (ULTA), Phillips 66 (PSX), and BlackRock (BLK).

The best-performing stock in June has been Under Armor (UAA) with an MTD gain through yesterday’s close of 18.82%.  It is down around 1.17% today.  Whirlpool (WHR), which has seen similar performance MTD, is holding up a tiny bit better, but is still in the red today, down 0.3%. On the other end of MTD performance, GAP (GPS) has gotten crushed in June falling over 12.5%.  The losses have kept coming today as it has fallen just under half of a percent more. But the second-worst performer this month, Noble Energy (NBL), has been lifted by strength in energy and has rallied 6% today; nearly erasing all of its June losses.  Start a two-week free trial to Bespoke Institutional to access our interactive tools and much more.

Back in early May when President Trump put hopes of a trade deal with China on hold, one of the groups hardest hit was semiconductors.  The Philadelphia Semiconductor Index (SOX) declined 19.8% from its intraday high in late April to its low on 5/29 and first traded back below its 50-day moving average (DMA) on 5/13.  From its low, the SOX has erased just about half of its losses from the April high, but three times now, the group has seen a rally stall out right at or below its 50-DMA.  As long as the SOX is able to hold on to its higher low from earlier this week, it’s not much of a problem, but if it goes on to make a new short-term low, it would be a worrisome sign.

With the SOX failing to retake its 50-DMA, we wanted to see which stocks in the group have been holding the group back.  The table below lists each of the components of the SOX and where each one is trading relative to its 50-DMA.  Of the 30 stocks in the index, just 13 are currently above their 50-DMA, while the remaining 17 are still below that level, so it’s not as though just a handful of stocks are holding the SOX back.  Micron (MU), MKS Instruments (MKSI), Cree (CREE), NVIDIA (NVDA), and Qorvo (QRVO) are all more than 5% below their 50-DMAs, while Cypress (CY), Advanced Micro (AMD), and Silicon Motion (SIMO) are the only three stocks more than 5% above their 50-DMAs.  Start a two-week free trial to one of Bespoke’s three membership levels to access our interactive tools and in-depth research.

Earlier this week we published a Chart of the Day suggesting that gold (in the form of the GLD ETF) was looking strong but needed to get above the $130/share level to experience a breakout and potentially leg nicely higher.  We’re seeing that break above $130 today as the yellow metal makes a new 5+ year high.  Below are updated charts showing the move.  You can really see in the longer-term chart (second below) how $130 has acted as stiff resistance over the last few years.  A solid clearing above this level in the coming days opens up a move towards $150 in our view.  Start a two-week free trial to one of Bespoke’s three membership levels to access our interactive tools and in-depth research.

The market may be reaching all-time highs today, but sentiment is hardly reflective of that. The AAII weekly sentiment survey continues to see modest improvements in bullish sentiment as it rose 2.7% this week to 29.51%, returning it to its normal range (less than 1 standard deviation from the historical average). But this improvement has not necessarily been at the same pace as the market’s rally off of recent lows. Bullish sentiment is now around 10 percentage points off of where it stood the last time the S&P 500 was at these levels.

Versus all other times in the history of the survey that the market was at all-time highs, the current reading for bullish sentiment stands in the 8th percentile, so it is very rare to see bullish sentiment this low given the market’s current state.  This means individual investors are likely totally caught off guard by recent gains, and there’s plenty of cash on the sidelines that can still be put to work.

Bearish sentiment saw a similar sized decline to the increase in bullish sentiment.  The percentage of investors reporting as bearish fell from 34.2% to 32.13%, a 2.07% decline. That is also about 10% from a high in bearish sentiment of 42.58% that was reached in the first week of the month.  This brings this outlook more into a normal range as it is only a little less than two percentage points above the historical average.

Neutral sentiment still remains at the upper end of the past few years’ range coming in at 38.36% this week, only a minor decrease (0.6%) from last week. As has been the case for most of the past few months, neutral sentiment has been the predominant sentiment reading among surveyed investors.  Start a two-week free trial to one of Bespoke’s three membership levels to access our interactive tools and in-depth research.

The Department of Labor’s weekly report on initial jobless claims were expected to fall from 220K from 222K last week on a seasonally adjusted basis.  The release surprised with stronger results showing only 216K initial jobless claims.  That is the lowest print since claims came in at 212K on May 23rd.  With this stronger print, a couple of impressive streaks continue.  For starters, claims have remained at or below 300K for a record 224 weeks.  Additionally, this week marks the 89th week at or below 250K.  That ties the previous record of 89 weeks ending January 10th, 1970! Save a massive spike higher, claims will likely beat that record next week.

The less volatile four-week moving average saw a small increase of 1K this week to 218.75K.  As we mentioned last week, the four-week moving average has been very stable in the past month.  Since the May 30th release, the four-week moving average has only moved in a tight 3.5K range with this week’s print actually being at the high end of this range.

As is typical for the current week of the year, claims saw a sizeable downtick this week on a non-seasonally adjusted basis.  The NSA number fell from 220K last week down to 205K.  As is usually the case, that is well below the average for the current week of the year since 2000 of 320K.  As we have mentioned in the past, this year has seen a significant number of weeks with YoY increases in the NSA data unlike what can be observed over the past several years.  After last week saw another YoY increase, this week caught a break, albeit, the YoY decline was only 1K.  So this week’s NSA claims number was just barely the strongest of the current cycle for the current week of the year. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.