the Bespoke 50 — 2/22/18

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 63.3 percentage points.  Through today, the “Bespoke 50” is up 159.9% since inception versus the S&P 500’s gain of 96.6%.  Always remember, though, that past performance is no guarantee of future returns.

To view our “Bespoke 50” list of top growth stocks, click the button below and start a trial to either Bespoke Premium or Bespoke Institutional.

Investor Sentiment Little Changed

In a week that was shortened by a holiday, not to mention one where a lot of people are on vacation, it should come as no surprise that individual investor sentiment was little changed.  Add to that the fact that the market was just down modestly since the prior week’s survey results, and you have all the ingredients for a relatively boring report.  According to the weekly survey from AAII, bullish sentiment on the part of individual investors dropped from 48.52% down to 44.65%, which is right in line with levels we have seen in recent weeks.

Similarly, bearish sentiment saw little in the way of change this week, rising from 21.4% up to 22.8%.  Like we said, it was a pretty boring week of survey results, but after all the volatility from late January and early February, boring is good!

Jobless Claims Settle into a New Range

Several years ago now, when jobless claims first dropped below 300K, that was a level that was considered impressive and most likely temporary.  That’s because throughout the history of the series, whenever claims traded below that level, they didn’t stay there for long.  With claims coming in below 300K consistently for three years now, the new ‘temporary’ level became 250K.  Over the last five months, though, jobless claims have pretty consistently come in below that level now as well, and they are now settling in at what appears to be an even lower new level.  In this week’s report, weekly claims dropped to a level of 222K, marking the third straight week where claims have come in below 230K.  The last time that happened?  1973!  There’s only so much lower claims can go right?

While the four-week moving average didn’t make a new low for the expansion this week, it came pretty darn close.  At 226K, the four-week average is just 1K above the multi-decade low of 225K from early February, and if claims come in anywhere near this week’s level next week, we should see a new low.

On a non-seasonally adjusted basis, jobless claims also remain strong.  At this week’s level of 213.3K, the NSA reading is 125K below the average for the current week of the year dating back to 2000, and in the history of the time series (going back to the late 1960s), there has never been a lower print for the current week of the year.  No matter how you slice it, jobless claims continue to be one of the most impressive economic indicators tracking the US economy.

The Closer — Minutes Review — 2/21/18

Log-in here if you’re a member with access to the Closer.

Looking for deeper insight on markets?  In tonight’s Closer sent to Bespoke Institutional clients, we review the Fed minutes. We also update existing home sales data and recap Markit Flash PMIs from around the world released over the last 24 hours.

See today’s post-market Closer and everything else Bespoke publishes by starting a 14-day free trial to Bespoke Institutional today!

Fixed Income Weekly – 2/21/18

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 review the extreme pricing levels the investment grade corporate bond market has reached.

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!

Click here and start a 14-day free trial to Bespoke Institutional to see our newest Fixed Income Weekly now!

Bespoke’s Global Macro Dashboard — 2/21/18

Bespoke’s Global Macro Dashboard is a high-level summary of 22 major economies from around the world.  For each country, we provide charts of local equity market prices, relative performance versus global equities, price to earnings ratios, dividend yields, economic growth, unemployment, retail sales and industrial production growth, inflation, money supply, spot FX performance versus the dollar, policy rate, and ten year local government bond yield interest rates.  The report is intended as a tool for both reference and idea generation.  It’s clients’ first stop for basic background info on how a given economy is performing, and what issues are driving the narrative for that economy.  The dashboard helps you get up to speed on and keep track of the basics for the most important economies around the world, informing starting points for further research and risk management.  It’s published weekly every Wednesday at the Bespoke Institutional membership level.

You can access our Global Macro Dashboard by starting a 14-day free trial to Bespoke Institutional now!

The Closer — FX Charts — 2/20/18

Log-in here if you’re a member with access to the Closer.

Looking for deeper insight on markets?  In tonight’s Closer sent to Bespoke Institutional clients, we review some technical setups for the dollar versus major currencies.

See today’s post-market Closer and everything else Bespoke publishes by starting a 14-day free trial to Bespoke Institutional today!

The Best and Worst Performing Stocks on Earnings This Season

Through Friday, exactly 1,400 companies had reported their Q4 2017 EPS numbers this earnings season.  The average one-day price change in reaction to these earnings reports has been a gain of 0.32%.

Bespoke keeps close tabs on all earnings-related news for companies that are publicly traded on US exchanges.  We have a full searchable database of all earnings reports going back to 2001 that’s available to subscribers.  You can access it here if you’re interested.

Below is a list of the 40 stocks that have reacted the most positively to their earnings reports so far this season (since 1/8).  Fossil (FOSL) ranks first with an unbelievable one-day move of +87.72%.  With a one-day gain of 47.58% in response to its 2/6 earnings report, Snap (SNAP) ranks second, followed by QuinStreet (QNST), Liquidity Services (LQDT), and Virtu Financial (VIRT).

The only two S&P 500 stocks in the top 40 are GWW and UAA.

Below is a list of the 40 stocks that have had the worst one-day price reaction to earnings this season.  M/A-COM (MTSI) ranks worst with a one-day decline of 36.73%, followed by iRobot (IRBT) with a drop of 32.08%.  RFP, ACET, and NGVC round out the worst five.  Expedia (EXPE) has been the worst performing S&P 500 stock with a one-day drop of 15.47% on 2/9.  Other notables on the list of losers include Canada Goose (GOOS), YRCW, Arista Networks (ANET), and Acuity Brands (AYI).

Below we narrow the list down to just S&P 500 stocks.  These are the 30 S&P 500 stocks that have had the best one-day price reactions to earnings this season.  Notables include eBay (EBAY), Intel (INTC), Netflix (NFLX), Wynn Resorts (WYNN), Viacom (VIAB), and NVIDIA (NVDA).

Below are the 30 biggest losers on earnings this season in the S&P 500.  United Continental (UAL), Texas Instruments (TXN), PayPal (PYPL), UPS, and Hershey (HSY) are a few notables.  Ironically, eBay was one of the top performers on earnings this season, while its darling spin-off PayPal was one of the worst.

Want to find the biggest winners and losers during earnings season at any time?  You can find them using our Earnings Screener.  Below is an example of how you would search for a list of the biggest winners since a certain date.  Try running the screen yourself to see how it works!

Stock Seasonality: 2/20/18

While we don’t ever suggest that investors should base their trading solely on the calendar, there is evidence that the market and many stocks do indeed follow seasonal patterns.  This makes our S&P 500 Stock Seasonality report a useful addition to every investor’s toolbox. Using the last ten years worth of price data, our Stock Seasonality report looks at the average returns for the S&P 500, its eleven sectors, and its 500 individual stocks.  In the report, we highlight the five stocks in each sector that have historically been the best and worst performers over the next two weeks.  For each stock, we also include information such as average returns, the percent of time each stock or sector is positive/outperforms the S&P 500, and its historical performance over the next two weeks for each of the last ten years.  The Stock Seasonality report is published on a weekly basis on Mondays, and it is available to all Bespoke Premium and Bespoke Institutional subscribers.

This week’s stock that we have chosen to highlight is salesforce.com (CRM).  CRM typically reports Q4 earnings late in the month of February, and this year is scheduled to report after the close on 2/28.  Historically speaking, investors have liked what they have seen in the report.  As shown in our Earnings Screener, the stock has gapped up following its Q4 report in eight of the last ten years, and in many cases by double-digit percentages.  Overall, in the two-week period from the close on 2/20 through the close on 3/6, CRM has seen a median gain of 6.9% with gains in all but one year.  That one year where the stock declined was in 2011, but it wasn’t the earnings that dinged the stock back then, because on its earnings reaction day, CRM rallied close to 5%.

For active traders, our Stock Seasonality report is an excellent tool to help keep track of the best and worst times of year for the overall market, sectors, and individual stocks.  To see the report, sign up for a monthly Bespoke Premium membership now!

Bespoke Brunch Reads: 2/18/18

Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.

Economic Musings

Why Debt is both Interesting and Important by Toby Nangle (Principles And Interest)

Musing on the macroeconomics of household debt; what it is, what it isn’t, why it’s important, and why it’s sometimes talked about in the wrong way. [Link]

Data Analysis Ahead of Theory by Sri Thiruvadanthai (Yeah, But….Thoughts on Economics)

A list of stylized facts about macroeconomics designed to inform the current conversation around reforming the discipline. [Link]

Crypto

A surge of sites and apps are exhausting your CPU to mine cryptocurrency by Dan Goodin (ArsTechnica)

Using JavaScript plugins, a number of websites have begun harvesting the computing power of visitors’ processors to mine cryptocurrency, often without notifying users of that activity. [Link]

Brooklyn Bitcoin Mine Causes Static for T-Mobile Users by Todd Shields (Bloomberg)

A custom mining rig in a New York City borough was using so much power and creating so much background radio frequency that it interfered with cell phone frequencies, causing FCC intervention. [Link; auto-playing video]

Coinbase is erratically overcharging some users and emptying their bank accounts by Adrianne Jeffries (The Verge)

In a technical error, Coinbase began emptying bank accounts of some customers to the pointof incurring overdraft fees. [Link]

Next-Generation Crypto-Ledgers Take the Block Out of Blockchain by Olga Kharif (Bloomberg)

An overview of efforts to deploy blockchain technology beyond bitcoin, including payments aggregation and cheaper, faster alternatives to the bitcoin network. [Link; auto-playing video]

History

What Really Happened on Easter Island? by Catrine Jarman (Sapiens)

One of the most popular cautionary tales about the impact of human beings on the environment bay have been a radical misinterpretation of the history of Easter Island. [Link]

Big History by Blair Reeves (Blair Reeves)

An argument that context is both badly missing and deeply necessary for understanding history properly, especially at very large timescales. [Link]

Strange News

This Short Seller Pressed ‘Tweet.’ Then the FBI Showed Up by Greg Farrell and Anders Melin (Bloomberg)

Former Bespokecast guest and notable short seller Marc Cohodes made some ill-advised tweets that somehow ended up garnering him a visit from the FBI. [Link]

N.Y. landlord obliterated dozens of graffiti murals. Now he owes the artists $6.75 million. by Samantha Schmidt (WaPo)

Legally painted graffiti on the walls of dilapidated warehouses were covered with white paint in preparation for sales to developers. The result is a landmark judgement in favor of artists whose work was destroyed by the owner of the property. [Link; soft paywall]

Fed Findings

Here’s How New Fed Chief Powell Is Changing Things Up by Christopher Condon (Bloomberg)

In an effort to flatten the hierarchical institutional design of the FOMC, Chair Powell is working to get in closer contact with staff economists and researchers. [Link; auto-playing video]

Finance Miscellanea

Churches Are Still Filing Bankruptcy by Pamela Foohey (Credit Slips)

While consumer bankruptcies are starting to even out, churches are still in relatively dire financial straits as evidenced by the still-high bankruptcy filings they make. [Link]

The Big Risk in China Isn’t Stocks by Nisha Gopalan (Bloomberg)

With lots of eyes on the size of Chinese credit markets, bank lending, and equity markets, the real risks in the country may be more specific to the real estate market. [Link]

A culprit for financial site glitches: you and your apps by Ross Kerber (Yahoo!/Reuters)

During the height of the equity market pullback last week, retail investors flooded brokerage website to the point they crashed, a possible sign of what made the difference in lower prices: investor behavior. [Link]

Politics

Poll: GOP gains on generic ballot, Trump approval ticks upward by Steven Shepard (Politico)

After falling behind Democrats by a historic margin, Republicans have come storming back in the wake of tax reform passage. [Link]

Language

Hockey language divergence between North Korea and South Korea by Victor Mair (Language Log)

In order to play together in the PeoyongChang Olympics, North and South Korean hockey players needed remedial language classes. [Link]

Moore’s Law

Science and research policy at the end of Moore’s law by Hassan N. Khan, David A. Hounshell and Erica R. H. Fuchs (Nature)

The authors argue that while Moore’s Law is likely to break down as the industry fractures into distinct research paths, progress is likely to continue along discrete paths; possible solutions include public funding of more general research and leadership from outside private industry. [Link]

Tech Problems

Too Much Power to the People? A Food Safety Site Tests the Limits by Kevin Roose (NYT)

The internet has unleashed consumers’ voices, but there are drawbacks: false reports, anonymous submissions, and fearmongering are all significant issues. [Link; soft paywall]

America’s Real Digital Divide by Naomi Schaefer Riley (NYT)

Excessive time in front of screens has widely reported drawbacks, and it turns out that children from lower income families are even more exposed to the perils of a digital babysitter. [Link; soft paywall]

Hollywood

The ‘Black Panther’ Movie Deal That Didn’t Get Made by Ben Fritz (WSJ)

Sony’s misguided purchase of rights to Spiderman but intentional pass on the rest of the Marvel universe looks like one of the worst decisions in the history of the movies. [Link; paywall]

The Forecaddie: Nothing quite like Mark Wahlberg’s approach to golf (Golf Week)

Marky-Mark’s entourage for a round: a personal chef with eight daily meals in coolers, a playing partner (CAA agent Rob light), and three caddies. One caddy handles clubs and raking, one shot selection, and a third is there simply to run sprints with Wahlberg between shots. [Link]

Hoops

Sources: College hoops corruption case poised to take down Hall of Fame coaches, top programs, lottery picks by Pete Thamel (Yahoo!)

Five months ago a federal probe led to 10 arrests of college basketball coaches and other hangers-on. Sources report that the next round (featuring 4000 calls wire tapped as well as thousands of documents and bank records) could splash across 50 programs. [Link; auto-playing video]

St. John’s Is On The Most Unlikely Hot Streak In College Basketball History by Neil Paine (538)

Starting 10-2, losing 11 straight, and then wins over number 4 Duke, number 1 Villanova, and a solid Marquette squad, has meant the biggest turnaround in college basketball history. [Link]

Brews

US craft beer slowdown sends hops market from boom to bust by Emiko Terazono (FT)

After hoppy craft beers saw a surge in popularity, hops prices exploded and production surged, but tastes have since started to shift again, leading to a bust. [Link; paywall]

Harassment

Why I don’t use my real photo when messaging with customers on my website by Julia Enthoven (Kapwing)

A woman using her picture or the picture of another woman saw a dramatic difference in harassment and rude or profane comments from users seeking tech support on her company’s website. Using a male picture or that of the firm’s logo, the harassment stopped. [Link]

Read Bespoke’s most actionable market research by starting a two-week free trial today!  Get started here.

Have a great Sunday!

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