Bullish Sentiment Approaching 40%

This week’s sentiment survey from AAII showed an increase in bullish sentiment back near 40% and back near the recent high of 41.29% from mid-September.  While 40% is hardly an extreme reading by any stretch of the imagination, this year there have only been four weeks where bullish sentiment actually topped 40%.  With 40% being hard enough, an actual majority is a long way off, and that should keep the current streak of 145 straight weeks below 50% safe for the foreseeable future.

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As you might expect, bearish sentiment declined this week, falling from 32.8% down to 26.9%.  That’s the lowest reading in five weeks and sixth lowest weekly print in bearish sentiment this year.

 

Continuing Claims Lowest Since 1973

December 1973.  That’s the last time continuing jobless claims have been below this week’s print of 1.889 mln.  Think about that for a minute.  The median American age is currently 37.8 years old, so the majority of Americans weren’t even alive the last time claims were this low.  Every week it seems like the weekly jobless claims report can’t top the recent reports of the past, but then we get another reading like this.  Eventually the tide will turn, but for now, it keeps moving in the right direction.

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Jobless Claims back to Pre-Hurricane Levels

Weekly jobless claims came in lower than expected this week falling from 258K down to 243K.  This week’s print was the lowest since 8/25, which was right before the triple whammy of hurricanes Harvey, Irma, and Maria struck the US and its territories.  While the Department of Labor did note that claims from Florida, Puerto Rico, Texas, and the Virgin Islands were impacted, as the chart below illustrates, the impact of this Summer’s hurricanes was not nearly as impactful as Katrina in 2005 and Sandy in 2012 implying a much stronger foundation for US employment.  It has now been 136 straight weeks since weekly claims last topped 300K – a level that used to be considered as good as it gets.  Looking ahead, we’ll have to watch out west to see if the California fires have any impact on claims in California.

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On a four-week moving average basis, claims are also starting to tick lower as this week’s reading fell by 9.5K down to 257.5K.  Again, to think that the US has been swamped with three major hurricanes and the four-week moving average of claims never went more than 35K above the multi-decade low of 235.5K from mid-May is incredible.

On a non-seasonally adjusted basis, weekly claims rose to 228K from 204.7K last week.  For the current week of the year, this was the lowest print since 1973 and nearly 115K below the average of 343K for the current week dating back to 2000.

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Bespoke’s Sector Snapshot — 10/12/17

We’ve just released our weekly Sector Snapshot report (see a sample here) for Bespoke Premium and Bespoke Institutional members.  Please log-in here to view the report if you’re already a member.  If you’re not yet a subscriber and would like to see the report, please start a 30-day trial to Bespoke Premium now.

Below is one of the many charts included in this week’s Sector Snapshot, which is our trading range chart for S&P 500 sectors.  The black vertical “N” line represents each sector’s 50-day moving average, and as shown, 9 of 10 sectors are currently above their 50-days.  Consumer Staples is the only sector below its 50-day, while Technology is now the most overbought sector.

To see our full Sector Snapshot with additional commentary plus six pages of charts that include analysis of valuations, breadth, technicals, and relative strength, start a 30-day free trial to our Bespoke Premium package now.  Here’s a breakdown of the products you’ll receive.

the Bespoke 50 — 10/12/17

Every Thursday, Bespoke publishes its “Bespoke 50” list of top growth stocks in the Russell 3,000.  Our “Bespoke 50” portfolio is made up of the 50 stocks that fit a proprietary growth screen that we created a number of years ago.  Since inception in early 2012, the “Bespoke 50” has beaten the S&P 500 by 62.0 percentage points.  Through today, the “Bespoke 50” is up 146.0% since inception versus the S&P 500’s gain of 84.0%.  Always remember, though, that past performance is no guarantee of future returns.

To view our “Bespoke 50” list of top growth stocks, sign up for Bespoke Premium ($99/month) at this checkout page and get your first month free.  This is a great deal!

The Closer — JOLTed Minutes — 10/11/17

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Looking for deeper insight on global markets and economics?  In tonight’s Closer sent to Bespoke Institutional clients, we recap the Fed minutes and today’s JOLTS report.

Sample

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The Least Exciting Record Ever

With minimal percentage moves on a seemingly daily basis, the DJIA is coming extremely close to having its least volatile year on record.  Below, we show the index’s average daily percentage (positive or negative) move by year going back to 1900.  So far in 2017, the DJIA has seen an average daily move of just 0.306%.  The only other year on record where the average daily move was smaller was in 1964 and at 0.302% it was just barely lower at that.

Keep in mind that there is still another two and a half months left to go in 2017, so this average could certainly rise or fall from here.  In order to make a run for the record books, the DJIA has to average a daily move of +/- 0.29% or less (~65 points) for the remainder of the year.  Considering that the DJIA has averaged a daily move of 61 points since the start of September through now (a time of year where volatility typically peaks), 65 points or less wouldn’t be a stretch.

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Fixed Income Weekly – 10/11/17

Searching for ways to better understand the fixed income space or looking for actionable ideals in this asset class?  Bespoke’s Fixed Income Weekly provides an update on rates and credit every Wednesday.  We start off with a fresh piece of analysis driven by what’s in the headlines or driving the market in a given week.  We then provide charts of how US Treasury futures and rates are trading, before moving on to a summary of recent fixed income ETF performance, short-term interest rates including money market funds, and a trade idea.  We summarize changes and recent developments for a variety of yield curves (UST, bund, Eurodollar, US breakeven inflation and Bespoke’s Global Yield Curve) before finishing with a review of recent UST yield curve changes, spread changes for major credit products and international bonds, and 1 year return profiles for a cross section of the fixed income world.

In this week’s note, we discuss the growth (or lack thereof) in Eurozone government debt over the last few years.

Sample

Our Fixed Income Weekly helps investors stay on top of fixed income markets and gain new perspective on the developments in interest rates.  You can sign up for a Bespoke research trial below to see this week’s report and everything else Bespoke publishes free for the next two weeks!

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The Closer — Puigdemont Pulls Back From Catalonian Cliff — 10/10/17

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Looking for deeper insight on global markets and economics?  In tonight’s Closer sent to Bespoke Institutional clients, we review the speech made today by Catalan President Puigdemont. We also discuss why Canada’s housing “bubble” doesn’t look anything like it.

Sample

The Closer is one of our most popular reports, and you can sign up for a free trial below to see it!

See today’s post-market Closer and everything else Bespoke publishes by starting a no-obligation 14-day free trial to our research platform!

B.I.G. Tips – Analyst Sentiment Heading into Earnings Season

Earnings season kicks off this week as the first of the major companies start to report Q3 numbers.  Most of the big names reporting are all Financials like Blackrock (BLK) on Wednesday morning, Citigroup (C) and JPMorgan (JPM) on Thursday morning, and then Bank of America (BAC), PNC, and Wells Fargo (WFC) on Friday before the open, so we will have to wait a little while longer to get a better read on things in general.

We just published our quarterly look at analyst revisions heading into this earnings season.  In this report, we take the current trends and break down how the equity market has performed during prior periods when analyst revisions were at similar levels.

For anyone with more than a passing interest in how equities are impacted by earnings season, this report is a must read.  To see the report, sign up for a monthly Bespoke Premium membership now!

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