There are few groups that have gotten hit harder from the 2019-nCov virus than the major cruise lines like Carnival (CCL), Royal Caribbean Cruises (RCL), and Norwegian Cruise Line (NCLH).  Each of these stocks put in place a recent high on January 17th but have fallen dramatically since then. In the immediate days following that date, the first US cases were confirmed, and the first travel restrictions and other precautionary measures like airport screenings began to be put in place.  Since then, each of these three stocks has fallen by double-digit percentages with the biggest loser being CCL which at yesterday’s close was down 19.5% since 1/17 alone.

The reason for CCL’s outsized declines compared to its peers is in part due to the fact that it has already confirmed cases of the virus aboard one of its ships which may not come as that big of a surprise considering CCL has the largest fleet of these three companies; as such, it would naturally have a higher probability of being exposed to the virus.

Despite a reprieve today with the stock up over 3%, the recent declines for CCL come in the context of a much longer downtrend that has been in place since early 2018. Over the course of the past two years, the 200-day moving average has acted as stiff resistance for the stock with the only significant break above that level being a fake-out in September 2018. More recently, though, there has been another after a solid response to earnings in December sent CCL surging. CCL held above these levels, successfully retesting the 200-day and putting in a higher high over the next few weeks with the 50-DMA even catching up and crossing above the 200-DMA. That is until coronavirus fears sank the stock back below both moving averages creating an overall mixed technical picture. Now at very oversold levels, CCL has the potential to sail back up to last month’s highs if the worst of the coronavirus fears is behind us and the negative headlines subside. On the downside, any break below last year’s low just above $40 would negate any of the technical positives that CCL has achieved over the last several weeks.

Adding to the reasons CCL could see a rebound is its attractive valuation.  CCL is the largest cruise liner stock by market cap ($25.8 billion) and fleet size (over 100 ships). Despite its size, compared to RCL and NCLH it has the lowest price-to-earnings, price-to-book, price-to-sales, and EV/EBITDA.  As shown in the charts below, the P/E and P/S ratios are now around their lowest level of the past decade.  Although it is not quite at the same extreme, the P/B ratio is similarly at the low end of the past decade’s range.  Finally, CCL is also a very high yielder with a dividend yield of 4.8%.  That is not only larger than those of the other cruise lines but is also the seventh-highest yield of the S&P 500’s Consumer Discretionary stocks. Carnival has consistently paid this dividend over the past ten years and appears capable of continuing to do so going forward given the payout ratio is remains healthy at just 46%.  Start a two-week free trial to Bespoke Institutional to access the full range of research and interactive tools.

The December Job Openings and Labor Turnover Survey (JOLTS) from the BLS showed a sharp drop in the number of available jobs in the US economy.  While economists were expecting total job openings of 6.925 million, the actual level of available jobs was just 6.423 million.  That’s an enormous miss!  Since economist forecasts for this report are available (~2012), the latest report was the biggest shortfall relative to expectations in the history of the survey.  Not only that but December’s miss followed November’s report which was also much weaker than expected (6.80 mln vs 7.25 mln forecast), ranking as the third worst report relative to expectations in the history of the survey.

With back to back weak reports, the JOLTS has now seen its largest two-month decline on record (since 2001), and it’s not even close.  Behind the current two-month decline of over 900K available jobs, the next largest was in September 2015 when the two-month decline was 697K.  While there was no recession in 2015, there was major weakness in the Energy sector.  Furthermore, the only three other times the JOLTS fell more than 500K in a two-month span all occurred during recessions.  The most notable aspect of the weakness in the JOLTS report over the last two months, though, is how disconnected it is from just about every other employment-related report we have seen recently.

While there’s been a collapse in the number of available jobs in the US economy, we would note that there are still more available jobs than there are people looking for them.  The chart below compares the monthly number of job openings to the number of US Americans who are unemployed and looking for work.  Prior to 2018, there was never a time in the history of the JOLTS report when there were more job openings than there were unemployed Americans.  That changed in January 2018 and has been the same ever since.  While the spread has narrowed substantially from more than 1.5 million two months ago, there’s still a historic amount of tightness in the labor market even if the number of job openings has suddenly started to shrink.  Start a two-week free trial to Bespoke Institutional for full access to our highly sought market analysis and interactive investment tools.

Last Friday we wrote an article outlining and explaining the many investor tools that Bespoke clients have access to.  Today we want to highlight another feature available to members — our Custom Portfolios.  The Custom Portfolios feature lets you monitor the specific stocks and ETFs you’re most interested in.  You can build as many portfolios as you’d like, whether it’s based on your own portfolio, your watch list, or other strategies that you’d like to monitor closely or simply keep an eye on.  Below is a snapshot of multiple custom portfolios that we’ve set up as displayed on the website when we’re logged in as a member.  The custom portfolio we’re highlighting below is made up of the 30 largest stocks in the S&P 500.

It’s super easy to create a new custom portfolio and just as easy to add or edit tickers within each portfolio.  Our Trend Analyzer tool lets you see how stocks or ETFs in your custom portfolios are trading relative to their historical trading range.  This lets you know which areas of your portfolio are currently overbought or oversold and which currently have attractive (or unattractive) trend and timing scores.  Simply checking this page each morning ahead of the open or after the close allows you quickly find anything that stands out or needs attention.

If you click the “Chart Scanner” tab for your custom portfolio, it immediately brings up price charts for each individual ticker.  This lets you quickly scan all of the stocks and ETFs you care about most to identify anything that’s trading at key support or resistance or breaking out or breaking down.  This is the quickest and easiest way we’ve found to monitor price charts for a large number of tickers.

Finally, the Earnings Explorer tab at our Custom Portfolios page keeps you updated on upcoming earnings reports for stocks you own or are following.  With this feature, you’ll always know when a stock has an earnings release and also how that stock typically reacts to earnings reports.  You’ll never be blindsided by an unexpected earnings report again.

One of the most helpful features of our Custom Portfolios tool is the daily email you can receive with notifications regarding your stocks or ETFs.  Next to the name of each portfolio, there’s an “eye” icon that you can click to turn on the daily email notification.  Each weekday, you’ll receive an email at 7 PM ET that includes any important information about the tickers in your portfolio.  Below we show you where the “eye” icon is so that you can turn it on for your own custom portfolios if you’d like.

In the daily email, we let you know about any upcoming earnings reports in the next week, any big price trend changes that occur, any stocks or ETFs that made a new 52-week high or low that day, or any stocks or ETFs that experienced a price change of more than 5% (up or down) that day.  Below is a snapshot of a recent email we received for our own custom portfolios.

We can’t recommend the use of our Custom Portfolios tool enough given how much we use it ourselves!  If you’d like to try it out for yourself, you can start a two-week free trial to either Bespoke Premium or Bespoke Institutional now!  CLICK HERE to start your free trial now!

While a number of investor sentiment surveys ask investors for their views on the market, one less widely followed index from TD Ameritrade seeks to gauge sentiment by what investors are actually doing.  According to TD Ameritrade, the Investor Movement Index (IMX):

The Investor Movement Index, or the IMX, is a proprietary, behavior-based index created by TD Ameritrade designed to indicate the sentiment of individual investors’ portfolios. It measures what investors are actually doing, and how they are actually positioned in the markets.  The IMX does this by using data including holdings/positions, trading activity, and other data from a sample of our 11 million funded client accounts.

The latest update to the IMX index for January was released earlier and showed that investor sentiment improved as investors increased equity market exposure for the fourth straight month, which is tied for the longest streak of monthly improvement since early 2014.  The improved readings in the IMX index over the last four months have also taken the level of the index to its highest since October 2018.

In looking at longer-term trends for the IMX index, it’s interesting to note that while sentiment has really ticked higher in the last four months, it is still nowhere near levels it was at in late 2017/early 2018 just before equities peaked and saw an 18-month consolidation period.  This reinforces a broader trend we have seen in other sentiment readings recently.  Namely, investor sentiment has clearly improved, but investors still have one eye warily looking over their shoulders.  Start a two-week free trial to Bespoke Institutional for full access to our highly sought market analysis and interactive investment tools.

As seen in the snapshot from our Seasonality Tool below, the current week of the year (February 10th through February 17th) has been one of the strongest of the past decade. The 1.85% median gain ranks in the 99th percentile of all seven-day periods throughout the calendar year.

This year, that time frame (2/10 through 2/17) will bring us right into the President’s Day holiday next Monday (2/17). Since the Federal Holiday’s Act of 1971 set the holiday as the third Monday of February, the S&P 500 has experienced a median gain of 1.45% in the week leading up to President’s Day.  Prior to 1971, President’s Day was observed on George Washington’s birthday on February 22nd. Taking a look at each individual day the week before President’s Day, Wednesday has experienced the strongest and most consistent positive performance. Tuesday is similarly strong with a median gain of 0.28% and a higher close 61.2% of the time. The second half of the week though is weaker with median declines on Thursday and Friday and a higher close less than half of the time.

As for the week of President’s Day itself, the shortened week sees more mixed performance for the S&P 500 with a median gain of 0.17% from the Friday before to the first Friday after.  Of that week, Wednesday and Thursday have typically been the weakest days with median declines of 10 and 11 bps, respectively. Neither day has experienced a gain more than half of the time.  Friday is by far the strongest day with a median gain of 0.15%.  Start a two-week free trial to Bespoke Institutional to access our Seasonality Tool and other interactive tools.