The large-cap Russell 1,000 was up 4.35% on the day, but notably, the average stock in the index was up much less than that at just +3.25%.  The reason for the big performance divergence is because the largest ten stocks in the index were up an average of 5.29% on the day.  A cap-weighted index that’s as top-heavy as it is now benefits greatly when its largest members outperform, and that’s what happened today.  The two trillion-dollar companies in the index — Apple (AAPL) and Microsoft (MSFT) — were up 9.31% and 6.65%, respectively.

Normally on big bounce-back days, the stocks that got hit the hardest during the selloff bounce back the most.  That didn’t happen today.  Below we’ve broken the Russell 1,000 into deciles (10 groups of 100 stocks each) based on share price performance during the massive selloff we saw from the market’s peak on 2/19 through last Friday (2/28).  The stocks that fell the most during the selloff (decile 10) actually bounced the least today, rising just 1.92% on average.

Below is a table showing the thirty best-performing stocks in the Russell 1,000 today.  For each stock, we also show how it performed during the 2/19-2/28 selloff as well as its current market cap.  Four stocks in the Russell 1,000 were up 10%+ today.  Vaccine-maker Moderna (MRNA) was up the most with a gain of 15.23%, adding to the 37.05% it gained from 2/19-2/28.  Sage Therapeutics (SAGE) was up the second most at +13.53%, followed by Tesla (TSLA) at +11.32%.  Tesla buyers were back out in full force after suffering through a 27% decline from 2/19-2/28.  Finally, medical waste disposal company Stericycle (SRCL) was up the fourth most with a gain of 10.74% today.

Costco (COST) and Apple (AAPL) were the 5th and 6th best performers in the Russell 1,000 today with gains of 9.96% and 9.31%, respectively.  Other notables on the list of biggest winners today include S&P Global (SPGI), Gilead (GILD), Scotts Miracle-Gro (SMG), Moody’s (MCO), Clorox (CLX), Twitter (TWTR), and Church & Dwight (CHD).  From Health Care to Consumer Staples to Tech, a large number of sectors were represented.  However, one sector with no names on the list of best performers today was Energy.  What else is new?  See our most actionable market analysis with a Bespoke Premium membership.  Click here to start a two-week free trial now.

Below is a look at the historical earnings beat rate (vs. consensus analyst estimates) for US companies reporting quarterly numbers on a rolling 3-month basis.  These charts are updated on a regular basis at our popular Earnings Explorer tool.  The first chart shows the bottom-line EPS beat rate, while the second chart shows the top-line revenue beat rate.  Prior to the last week or so, beat rates had been on the upswing, but they’ve taken a slight dip since the market peaked on February 19th.

The reading that has really taken a hit since the COVID-19 virus began to spread is forward guidance.  The chart below shows our Guidance Spread tracker from our Earnings Explorer tool, which looks at the difference between the number of companies raising guidance and lowering guidance on a rolling three-month basis.  As shown, our guidance spread has fallen dramatically over just the last three weeks, which coincides with the rapid outbreak of the coronavirus both inside and outside of China.  At this point, our guidance spread has taken out lows seen in November 2019, but it’s not nearly as negative as it was in the early part of 2019.

Along with the big drop in our guidance spread tracker, share price reactions to earnings reports have also taken a big hit.  The chart below shows the median one-day share price change that stocks have experienced on their earnings reaction days on a rolling three-month basis.  Over the last three months, the median share price change for stocks on their earnings reaction days has been -0.56%.  That’s the most negative reading seen in the last twelve months, and it’s a complete reversal of the trend of positive share-price reactions we were seeing as recently as January.  Stocks have gone from reacting very positively to their earnings reports to reacting very negatively to their earnings reports in just a few weeks.  You can see these charts over a longer time frame at our Earnings Explorer page, which is available to Bespoke Institutional members.  Start a two-week free trial to Bespoke Institutional to access our Earnings Explorer, the rest of our interactive investor tool-kit, and our actionable investment research.

Similar to the final Markit readings for the month of February released this morning, the headline February ISM Manufacturing number has yet to show any major negative impact as a result of the coronavirus outbreak.  The headline index was expected to fall to 50.5 from 50.9, but the actual decline was larger down to 50.1.  Despite the weaker than expected reading, the ISM Manufacturing index remains at expansionary levels, and it is also a stronger reading than most months since the second half of 2019.

While the headline number may not flash any huge negative impacts from the coronavirus, the commentary section of February’s report makes frequent mention with respondents stating that the virus is “wreaking havoc” as it poses “a major supply chain risk.”  Likely due to the timing of the surveys predating the other major outbreaks around the globe, the comments mainly make note of the effects of the virus on operations in China.  In other words, seeing as this data is lagged a bit, the full effects of more recent outbreaks outside of Asia (namely China) are not likely to be fully reflected in the February report.

Breadth across the individual categories of the report was on the weaker side with only three improving from January and only two improving versus one year ago. These moves have brought the indices for New Orders, Prices Paid, and Imports all into contraction territory from expansionary readings in the prior month. Again, the headline index did not experience any major shifts as might have been expected as a result of Covid-19, but under the hood, some components are beginning to show a more prominent negative impact.

The worst of those declines were for Imports which fell from 51.3 in January to 42.6. As shown below, that is the weakest reading since the Financial Crisis (May 2009) when it dropped down to 38.5.  The 8.7 point decline was also the largest month over month decline on record in the data going back to 1989.  This drop is perhaps the most obvious result of Covid-19 disruptions. Shutdowns from the virus in addition to the New Years Holiday in China would have resulted in weaker trade activity.  Export orders are echoing this as they declined 2.1 points although that drop was not nearly as large as that of imports.

Supplier deliveries (readings above 50 indicate longer delivery times and under 50 indicate faster deliveries) are giving further evidence to negative impacts from the Coronavirus.  The index surged to 57.3 in February from 52.9 in January. That is the highest reading since November 2018 and was the largest one month increase since June of 2018. In other words, suppliers are struggling to deliver due to supply chain disruptions.

As suppliers struggle to deliver, backlogs have begun to grow with the index ticking up to 50.3. That is the first expansionary reading since April of last year. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

Please click the image below to view our March 2020 market calendar.  This calendar includes the S&P 500’s average percentage change and average intraday chart pattern for each trading day during the upcoming month.  It also includes market holidays and options expiration dates plus the dates of key economic indicator releases.  Start a two-week free trial to one of Bespoke’s three research levels.