Stock Market Today: February 22nd - 26th, 2021

Welcome StonkForums to the trading week of February 22nd!

This past week saw the following moves in the S&P:


Major Indices End of Week:



Major Futures Markets on Friday:


Economic Calendar for the Week Ahead:


What to Watch in the Week Ahead:

• Monday

Earnings: Dish Network, Royal Caribbean, Marathon Oil, Ingersoll-Rand, Occidental Petroleum, Transocean, Zoominfo, ONEOK, HSBC

10:00 a.m. Leading economic indicators

• Tuesday

Earnings: Home Depot, Macy’s, Intuit, Thomson Reuters, Square, Toll Brothers, Jazz Pharmaceuticals, McAfee, Medtronic, Pioneer Natural Resources, Bank of Montreal

9:00 a.m. FHFA home prices

9:00 a.m. S&P/Case-Shiller home prices

10:00 a.m. Fed Chairman Jerome Powell semi-annual economic testimony Senate Banking Committee

• Wednesday

Earnings: Lowe’s, NVIDIA, Viacom, Public Storage, Booking Holdings, TJX, Brookdale, Royal Bank of Canada, Apache, Petrobras, Pure Storage, L Brands, Casper Sleep

7:00 a.m. Mortgage applications

10:00 a.m. New home sales

10:00 a.m. Fed Chairman Powell semi-annual economic testimony at House Financial Services Committee

• Thursday

Earnings: Salesforce.com, Norwegian Cruise Lines, Etsy, Best Buy, HP, Shake Shack, Beyond Meat, Anheuser-Busch Inbev, Dell Technologies, Virgin Galactic, American Tower, Cleveland Cliffs, Airbnb, Carvana, Door Dash

8:30 a.m. Atlanta Fed President Raphael Bostic

8:30 a.m. Jobless claims

8:30 a.m. Durable goods

8:30 a.m. Q4 GDP second reading

10:00 a.m. Pending home sales

10:00 a.m. Advanced economic indicators

10:00 a.m. St. Louis Fed President James Bullard

3:00 p.m. New York Fed President John Williams

• Friday

Earnings: Fluor, Cinemark, Draft Kings, Foot Locker, AMC Networks

8:30 a.m. Personal income and spending

8:30 a.m. Advanced trade

9:45 a.m. Chicago PMI

10:00 a.m. Consumer sentiment

• Saturday

Earnings: Berkshire Hathaway

 

Bitcoin Breaks Records As Rates Surge & Reddit Stocks Slump, Santelli Rant Remembered
Today is the anniversary of the pre-COVID peak in US equities (2/19/20).

Things have gone just a little bit turbo since then...



Source: Bloomberg



Source: Bloomberg

The Bad - Bonds were battered this week, with the long-end up over 14bps (drastically steepening)...



Source: Bloomberg

And The Ugly - Gold Bullion saw its worst week since Thanksgiving, clubbed like a baby seal to 8-month lows as real yields exploded higher (and spot prices triggered a death cross)...



Source: Bloomberg

After a hopeful return from the long weekend, US stocks were generally lower on the week. Small Caps ripped back higher today, rescuing themselves from being the laggards on the week as Big Tech tumbled but the Dow clung to gains...



That's 4 down-days in a row for the S&P 500

Did Small Caps hit their limit relative to big caps once again?



Source: Bloomberg

It was an ugly week for the original Reddit short-squeeze stocks as the "Game Stopped" hearing faded away...



Source: Bloomberg

BUMBL has stumbled...



TSLA lost $800...



VIX was higher on the week, with a mysterious bid hitting every time it dropped below 20...



Perhaps interesting for those calling for the bond 'rout' to get 'rout'-ier - 10Y and 30Y yields have ripped up to the spike low yields from 2016...



Source: Bloomberg

Real yields soared this week - with 30Y real yields surging by their most since March 2020...



Source: Bloomberg

...back above 0 for the first time since June...



Source: Bloomberg

And 10Y real yields started to fly higher...



Source: Bloomberg

Which is weighing big time on gold...



Source: Bloomberg

The dollar round-tripped on the week to end only marginally higher



Source: Bloomberg

Most major cryptos were higher on the week but Ripple lagged...



Source: Bloomberg

We already noted Bitcoin, but Ethereum also broke to new record highs, testing up towards $2000 for the first time...



Source: Bloomberg

Amid all the carnage in Texas Nat Gas prices roundtripped on the week...



Oil ended the week unchanged after topping $62 (WTI) at its highs...



Gasoline prices ended higher on the week (the 13th weekly rise in the last 16 weeks)...



Silver significantly outperformed gold on the week...



Source: Bloomberg

Finally, Bitcoin's big surge this week has pushed its market cap above $1 trillion... beating TSLA to that mark!



Source: @BiancoResearch

making it the 8th biggest 'asset' in the world...



Source: 8marketcap

"Rat-poison-squared" indeed!

 

Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2021-



S&P sectors for the past week-

 

Value Outperforming Growth But Only for Large Caps
Fri, Feb 19, 2021

While the S&P 500 traded lower today, value stocks had a strong finish to the week. Starting with a look at dividend stocks, the iShares Select Dividend ETF (DVY) rose 1.35% today for its best day since January 6th when DVY rose nearly 4%. As shown below, DVY has recently been on a tear.



Along with the dividend ETF (DVY), the iShares S&P 500 Value ETF (IVE) rose 0.31%, reaching a new 52-week high intraday. That compares to the growth counterpart, the iShares S&P 500 Growth ETF (IVW), which saw a bearish engulfing on its 0.65% decline. Today was the widest outperformance for value (IVE) over growth (IVW) since mid-January. As shown below, while both are still trending nicely higher long-term, the value ETF is at new highs while growth is closer to its 50-day moving average.



Value's outperformance today only applied to large caps, though. While small caps have fallen over the past several sessions, the Russell 2000 Growth ETF (IWO) and Russell 2000 Value ETF (IWN) both rebounded nicely today with identical gains of 2.08%. In the case of small-cap growth (IWO), the recent declines have been more severe meaning today's strong performance still leaves it further below its highs than small-cap value (IWN).



Industrial Metals Shining Bright
Fri, Feb 19, 2021

While precious metals like gold have been facing their fair share of selling recently alongside rates, elsewhere in the metals markets, industrial metals have been surging. Year to date, industrial metals—as proxied by the Bloomberg Industrial Metals total return index—are up 11.43% while their precious metals counterpart is down by over 4%. With a fairly flat January, most of those gains have come from this month alone. As shown below, so far this month the Bloomberg Industrial Metals index has risen 11.41% for its strongest performance through the first 14 trading days of a month since September of 2012. Going back to the start of the index in early 1991, the only other months with stronger performance were March of 2008 (11.42) and April of 2006 (14.94).



Again, whereas industrial metals are flying, precious metals have been trending lower since the summer. In the chart below, we show the relative strength of the Bloomberg Industrial Metals index versus the precious metal counterpart index over the past five years. Times that the line is rising indicates outperformance of industrial metals and vice versa. Precious metals had been outperforming since mid-2018, but the relative strength line bottomed out back in August of last year. From then through the late fall, industrial metals outperformed, and after some consolidation from November through the end of January, industrials are once again outperforming in a big way.



Delving deeper, tin, copper, and nickel have been leading in those gains. As shown in the charts below, both year to date and over the past year, these three metals have risen the most with tin in the number one spot in both respects.





One Year Later: 3 Lessons Learned Since the Market Peak
Friday, February 19, 2021

Today marks one year since the market began to price in the effects that COVID-19 would have on the world. The old market adage “stairs up, elevator down” certainly rang true over the coming weeks, as the S&P 500 recorded the fastest bear market (closing 20% below a previous all-time high) in history, accomplishing that feat in a mere 16 days.

The stock market is a peculiar mechanism however, and despite the turmoil the world has experienced since the outbreak of the pandemic, the S&P 500 marched forward to set new all-time highs less than 6 months later on August 18 and hasn’t looked back. So after such a wild year since the market peaked on this day in 2020, what have we learned?

1. Markets are forward looking. While it’s difficult to pin down a date when we can expect our lives to completely return to normal, the stock market is already pricing in the normalization of daily life, even if that remains uncertain. Economic conditions around the world have been improving relative to how they were at the beginning of the pandemic. While pockets of weakness remain, the market is more concerned with where the economic conditions will be, not where they are currently.

2. Sector performance is dynamic. Investing in “stay at home” themed growth and technology stocks whose earnings were viewed to be relatively well insulated by the effects of the pandemic and subsequent lockdowns provided both downside protection during the March volatility as well as outperformance after the market bottomed. However, as shown in the LPL Chart of the Day, conventional early-cycle leadership from financials and energy stocks has emerged over the past three months:



3. Remember your timeline. Everyone would love to be able to pull their money at the exact top, avoid all major market corrections and reinvest at the bottom, but unfortunately, there is no holy grail timing mechanism and market volatility is the cost of admission for stock investing. “It’s our jobs as investors to focus on our long-term goals,” noted LPL Financial Chief Market Strategist Ryan Detrick. “Drawdowns and bear markets are part of the path to get there, and limiting the latest shiny object from affecting our decisions is key to any investment strategy.” If an investor pulled their money from the market during last year’s volatility, there have been a plethora of reasons to be hesitant to reinvest it, and the subsequent bounce from the lows happened in a flash, meaning they may have bought back in at a higher price than they originally sold.

Thankfully, bear markets and extreme volatility like we experienced last year are rare, but they provide a unique learning opportunity for investors. No one truly knows what the future holds for the stock market, so making sure we learn from the past is crucial for long-term success as investors. For more on our market and economic views, check out our most recent Global Portfolio Strategy publication.

Stimulus Matters: Retail Sales Rebound Big in January
Thursday, February 18, 2021

The US economy had a tumultuous year in 2020, to say the least, and after rebounding strongly in the third quarter, the holiday surge in COVID-19 cases increased the risk that the economy may stumble heading into the new year. The sharp increase in new COVID-19 cases led to additional curbs on activity to contain the virus, triggering a rise in weekly jobless claims, and many feared we might have a double-dip recession.

Sensing a need to act, Congress passed a fifth relief bill at the end of December, including additional direct payments to households. The lame-duck injection of fiscal stimulus to the US economy was just what it needed. Following a weak retail sales number in December—ordinarily one of the strongest months for retail sales—consumer spending rebounded firmly in January, rising 5.3% month over month according to the US Census Bureau—the most in seven months—and greater than all of the estimates in the Bloomberg economist survey.

Looking under the hood makes the headline number even more remarkable. As shown in the LPL Chart of the Day, the largest month over month increases came in categories associated with discretionary spending, including a 23.5% surge in spending at department stores:



“Fiscal stimulus was just what the doctor ordered for the US consumer in January,” added LPL Financial Chief Market Strategist Ryan Detrick. “The boom in spending on discretionary categories could become a trend if a wave of pent-up demand gets unleashed on the economy in 2021.”

Clearly, direct payments to households had a major effect on January’s retail sales, so does this mean that February sales will disappoint? Not exactly. Direct payments to households totaled roughly $166 billion, but the increase in January sales was only $29 billion and the savings rate remains high. Of course, not all of that money was spent on retail items, but there may be some gas left in the tank for February retail sales, particularly by individuals who didn’t receive their payments until later in the month or who will be receiving a credit on their federal tax returns.

Earlier this month, we raised our gross domestic product (GDP) forecast for the US from 4–4.5% to 5–5.5%. Yesterday’s retail sales number puts us on a solid path toward achieving that target—and may even raise the prospects of exceeding it. The first quarter of 2021 is expected to be the weakest of the year, so the January surge in retail sales removes much of the risk of the US economy stumbling out of the gates as we begin 2021.

However, a strong start to the year may embolden the call for a smaller price tag for President Biden’s fiscal stimulus proposal. Despite this, we ultimately believe a stimulus package north of $1 trillion is likely, which should prime the US economy for continued growth in 2021 as the battle against COVID-19 improves.

Tech Leading in New Highs
Wed, Feb 17, 2021

The S&P 500 has been reversing from its record highs over the past couple of sessions, but on an individual stock basis there are still a large number of names that have reached new 52-week highs. As shown in the charts from our Daily Sector Snapshot below, through yesterday's close, a net percentage of just over 15% of the S&P 500 reached new 52-week highs. That is the strongest reading in new highs since January 12th. Outside of several days at the start of 2021, the only other days of the pandemic era with as high if not higher readings were September 2nd, October 9th, and November 9th. Most of the sectors are also seeing their number of new highs rise to strong levels. In addition to the S&P 500, yesterday's reading for Communication Services, Financials, Materials, and Tech all were in the top decile of all days since at least 1990. In the case of Materials, while new highs have been trending higher and yesterday's reading was historically strong, it was still well off the record highs from earlier this year.



On the other hand, perhaps the most impressive sector in terms of net new highs has been Technology. Yesterday, 35.53% of the sector's stocks reached a new 52-week high. Not only is that the highest reading with respect to the other sectors, but that high reading also stands in the top 0.5% of all days for the sector since at least 1990. In other words, there have only been 38 other days since 1990 that the Tech sector saw as strong of a reading in net new highs as yesterday. The most recent of those was November 9th when 43.84% of the sector touched a new 52-week high. Overall, in the context of more broadly positive breadth with strong readings in new highs for other sectors, Tech's large number of new highs is an added plus for the broader market given the massive 28.08% weight of the sector.



Small Cap Growth Taking the Lead
Tue, Feb 16, 2021

One of the topics we covered in last Friday's Bespoke Report was the outperformance of small caps over the past year. Even on a much shorter time horizon, that outperformance has been evident. As shown in the snapshot of our Trend Analyzer below, in the five days ending last Friday and on a year to date basis, both Small Cap Growth (IJR) and Small Cap Value (IJS) have been two of the top-performing ETFs in our US Styles screen while large-cap counterparts have also been higher but with more modest gains. With a particular focus on growth stocks, while the S&P SmallCap 600 Growth (IJT) ETF was up the most of these ETFs last week with a 3.96% gain, the S&P 500 Growth ETF (IVW) was the second-worst performer after 'only' rising 1.05%. That continued a trend that has been in place YTD with the performance spread between the two ETFs topping ten percentage points.



We are coming up on the one-year anniversary of the last highs on February 19th, 2020 just before the COVID crash. For most of the past year since then, large-cap growth (IVW) had actually been outperforming small-cap growth (IJT), but since the new year began, small-cap growth has jumped ahead. Now, the S&P Small Cap Growth ETF (IJT) is up 35.31% since the 2/19/20 high compared to a 28.16% gain for the S&P 500 Growth ETF (IVW). As shown in the second chart below, IJT had been catching up on IVW for some time now though. The relative strength line of IJT versus IVW had been in a downtrend for most of the past five years meaning large-cap growth had been generally outperforming the small-cap counterpart. Since the lows last March, the line trended sideways meaning neither one saw significant outperformance, but come the fall, the line has taken off in favor of small caps. With more outperformance in the past week and a half, that line has turned sharply higher once again reaching the highest level since December of 2019 last week.



Is A/D Line Signally Late-February Weakness?

Back on January 21 in our February Almanac post our Market Probability Chart highlighted the pattern of late-February seasonal weakness. A disappointing jobless claims number today appears to be the straw the sent the market lower. In this chart of the NASDAQ 100 Index (NDX) I have overlaid the NASDAQ Composite Advance/Decline Line. The NASDAQ A/D Line peaked and flattened out about six trading days ago and is now heading lower.

This coincides with the seasonal pattern of late-February weakness. However, we expect recent support to hold above 13,000. Should that level be breached major support exists around the old September doji high of 12,240. Considering how far the market has come in the face of some formidable economic and pandemic obstacles and how frothy sentiment had become, a little consolidation and pullback is to be expected.

We may see some further weakness into month-end and into March, but with vaccine rollout gaining some traction, more stimulus likely and a supportive Fed we do not expect any major selloff at this juncture.

 

Here are the current major indices pullback/correction levels from ATHs as of week ending 2.19.21-


Here is also the pullback/correction levels from current prices-


Here are the current major indices rally levels from correction low as of week ending 2.19.21-

 

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Here are the upcoming IPO's for this week-

 

Stock Market Analysis Video for February 19th, 2021
Video from AlphaTrends


ShadowTrader Video Weekly 2.21.21
Video from ShadowTrader

 

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Here are the most anticipated Earnings Releases for this upcoming trading week ahead.

***Check mark next to the stock symbols denotes confirmed earnings release date & time***

Monday 2.22.21 Before Market Open:

Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES!

Monday 2.22.21 After Market Close:

Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES!

Tuesday 2.23.21 Before Market Open:

Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES!

Tuesday 2.23.21 After Market Close:

Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES!

Wednesday 2.24.21 Before Market Open:

Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES!

Wednesday 2.24.21 After Market Close:

Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES!

Thursday 2.25.21 Before Market Open:

Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES!

Thursday 2.25.21 After Market Close:

Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES!

Friday 2.26.21 Before Market Open:

Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES!

Friday 2.26.21 After Market Close:

Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES!

 

And finally here is the most anticipated earnings calendar for this upcoming trading week ahead-
($NVDA $SQ $MRNA $PLUG $CRM $DKNG $HD $DPZ $OSTK $JMIA $RKT $CLF $ETSY $OXY $TDOC $M $BIGC $RCL $BBY $BYND $LOW $MGI $W $MRO $MGNI $SPCE $VALE $CRON $FLR $LI $NLS $PANW $CROX $NKLA $UPWK $MDT $DSX $DISH $FSLR $DDD $HZNP $OKE $IVR)


If you guys want to view the full earnings post please see this thread here-

• Most Anticipated Earnings Releases for the week beginning February 22nd, 2021 <-- click there to view!

 

Good Monday morning StonkForumers!

Here is this morning's pre-market news thread for those of you wanting to get a quick read before today's open-
<-- click there to read!

Hope everyone has a great trading day ahead on this first trading day of the new week.

 

Morning Lineup - 2/22/21 - 52-Week Highs...In Treasury Yields
Mon, Feb 22, 2021

It's looking like it's going to be one of those Mondays this morning. Treasuries are trading higher this morning while equities are looking to open moderately lower. Bitcoin, meanwhile, is down over 8% after Elon Musk said over the weekend that prices 'seem high'. That's enough these days.

In economic news, the only two datapoints on the calendar this morning are Leading Indicators at 10 AM and Dallas Fed at 10:30 AM. Earnings season is unofficially over, but there's still a number of key reports to contend with after the close and over the next few days. Make sure to track them all in our Earnings Calendar.

As the pre-pandemic days start to fall further in the past, one-year charts of various financial assets are starting to look a lot more different. Take the yield on the 10-year US Treasury. Along with the fact that yields are rising, the higher levels of rates from before the pandemic are falling out of the one-year window. Through that combination of events, today's yield of 1.3721% would mark a 52-week high on a closing basis. It's been a while since we've been able to say that! As if the chart doesn't look interesting enough now, wait until late March when the down leg falls completely out of the picture.

 

Good Tuesday morning StonkForumers!

Here is this morning's pre-market news thread for those of you wanting to get a quick read before today's open-
<-- click there to read!

Hope everyone has a great trading day ahead today.

 

Morning Lineup - 2/23/21 - More Pain in Tech
Tue, Feb 23, 2021

What goes up must come down. After a rough day for tech and bitcoin yesterday, we're seeing more of the same again today, as Nasdaq futures are down over 1% and bitcoin, while well off its lows, is still down 10%. There's not a lot of economic news on the calendar today, but we will get updates on Consumer Confidence and economic activity in the Richmond Fed district at 10 AM. Also at 10, Fed Chair Powell will give his semi-annual monetary report.

Days like yesterday don't happen very often. Even as the DJIA was up marginally, the Nasdaq finished down more than 2%. The charts below show both indices going back to the start of 1986. Before yesterday, there was only one other day since 2001 that saw a similar setup and that was last July. In the period from early 1999 through May 2001, there were 33 occurrences, and then before that, the only two other occurrences were right after the 1987 crash. Let's just say that prior divergences like yesterday didn't exactly occur during periods of low volatility.

While days like yesterday are rare, the way futures are positioned right now, we could see the same thing happen again today. While Nasdaq futures aren't down quite 2% yet, they're still down over 1.5%. Needless to say, back-to-back days where the DJIA was up and the Nasdaq was down 2% are extremely uncommon. The only four other times it has occurred since 1986 were in 2000 (4/10-4/11, 9/5-9/6, 10/2-10/3, and 12/12-12/13).