The S&P 500 has given up early gains and is now trading modestly lower in what has become an all too familiar pattern ever since the coronavirus entered the world stage in January.  In fact, of the now seven Fridays so far in 2020, the S&P 500 has traded lower on the day six times.  The one exception was the Friday heading into MLK weekend back on 1/17.  Ever since then there’s been a genuine skittishness on the part of investors to add equity exposure into a 65+ hour window where markets are closed and who knows what type of headlines regarding the coronavirus will come out.

The chart below shows the S&P 500’s daily percent change in 2020 by weekday with each day of the week color-coded.  It’s an admittedly small sample size, but Fridays are the only day so far this year where the S&P 500 has been down both on a median basis and more than half of the time.  While Fridays have been poor for stocks, Mondays have been the best day of the week with a median gain of 0.70% and gains 80% of the time.  It’s not often that people actually look forward to Mondays!  Wednesdays and Thursdays haven’t been as strong for equities, but they have been even more consistent to the upside. The only down Wednesday so far in 2020 was 1/29 (-0.09%), while this past Thursday was the only down Thursday for the S&P 500 since Thanksgiving.  Collectively, Tuesdays have been pretty uneventful with a median gain of just 0.01% and positive returns half of the time.  On a more bullish note, though, two of the year’s three best days were Tuesdays. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

When it comes to monthly retail sales, one trend we have highlighted repeatedly over the years is the shift in American shopping habits from bricks and mortar to online establishments.  Ten years ago, General Merchandise retailers accounted for 14.4% of total retail sales.  At the same time, online sales which had already risen sharply over the years accounted for only 7.9% of total sales.  Fast-forwarding to the present, online retail has continued to surge at the expense of General Merchandise retailers (among others) and now ‘clicks’ account for a larger share of total sales than ‘bricks’.

Another less discussed trend in American shopping habits is the shift from eating at home to eating out.  While there was a time not so long ago when going out for dinner was considered a treat, for a lot of Americans today, home-cooked meals are out of the norm.  The chart below shows the historical share of total sales that both Food and Beverage Stores and Bars and Restaurants have accounted for since 2000.  Twenty years ago, sales at Food and Beverage stores accounted for 13.3% of total sales while Bars and Restaurants accounted for just 9.2%.  As Americans increasingly eat out, though, sales at Bars and Restaurants have risen to 12.56% while sales at Food and Beverage Stores have been drifting lower to the current level of 12.44%.  While both groups have been moving back and forth in recent months regarding which one has the lead in total share, in January, Bars and Restaurants overtook Food and Beverage Stores by the widest margin on record (0.12 percentage points).  In most modern houses, the idea of a formal dining room has become obsolete, and who knows, the way things are going now, in fifty years the idea of a kitchen may sound just as quaint.  Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

Bespoke co-founder Paul Hickey appeared on CNBC’s Squawk Box this morning to discuss the current market and the roads to 30K for the Dow and 10K for the Nasdaq.  To view the segment, please click on the image below. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

In an earlier post, we detailed the improvements in AAII’s weekly sentiment survey. Another sentiment survey from Investors Intelligence also saw a substantial improvement in investors reporting as optimistic this week. The percentage of bullish newsletter writers in the Investors Intelligence survey rose 5.3 percentage points this week to 52.9%. That only brings it back to similar levels to last month, but it was also the largest week over week increase in bullish sentiment since a 5.4 percentage point increase in June of last year. A more notable move in this week’s survey was that of respondents looking for a correction.  While there have been far higher readings over the past few years, similar to bullish sentiment, last week’s reading of just over 33% was the highest share of respondents expecting a correction since October. But as investors reassessed the negative implications of the coronavirus, this has come crashing down falling 5.4 percentage points week-over-week.

As shown below, while that 5.4 percentage point decline was far from the largest such decline in the history of the data going back to the late 1990’s (a 13.2 percentage point decline in June of 2012 holds that title), there have only been 29 other times that this reading on sentiment had fallen more than 5 percentage points in a single week. The most recent occurrence was in June of last year.

The performance of the S&P 500 following similar declines in ‘correction’ sentiment in the past has been mixed.  While the S&P 500 has outperformed versus all other periods one week and 3 months later, one month, six months, and one year later have seen returns more inline or worse than other periods on a median and average basis.  In other words, when fewer newsletter writers are looking for a correction or market pullback, better than average returns become slightly less likely.  Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.