Stock Market Today: February 8th - 12th, 2021

Welcome StonkForums to the trading week of February 8th!

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: Hasbro, KKR, Loews Corp., Softbank, Dun and Bradstreet, Take Two Interactive, Nuance, Leggett and Platt, Simon Property Group

12:00 p.m. Cleveland Fed President Loretta Mester

• Tuesday

Earnings: Cisco, Twitter, Lyft, Dupont, Mattel, Honda, Nissan, Centene, Hanesbrands, Canopy Growth, Martin Marietta Materials, Masco, Sealed Air, S&P Global, Hains Celestial , Fox Corp, Akamai, Owens-Illinois

6:00 a.m. NFIB small business survey

10:00 a.m. JOLTS

12:00 p.m. St. Louis Fed President James Bullard

• Wednesday

Earnings: Coca-Cola, General Motors, Uber, Zillow, Under Armour, Cerner, Zynga, iRobot, MGM Resorts, Spirit Airlines, Lumen Technologies, Molina Healthcare, O’Reilly Automotive, Wyndham Hotels

8:30 a.m. CPI

10:00 a.m. Wholesale trade

2:00 p.m. Fed Chairman Jerome Powell webinar at the Economic Club of New York

2:00 p.m. Federal budget

• Thursday

Earnings: PepsiCo, Walt Disney, Kraft Heinz, Expedia, AstraZeneca, Generac, Virtu Financial, Yeti, Kellogg, AllianceBernstein, Borg Warner, Duke Energy, Molson Coors, Tyson Foods, ArcelorMittal

8:30 a.m. Initial jobless claims

• Friday

Earnings: Moody’s, Newell Brands, ING Groep

10:00 a.m. Consumer sentiment

10:00 a.m. New York Fed President John Williams

 

Stocks Surge Most Since June Despite Redditor-Rout, Crypto Spikes To New Highs
The WSB Big-Shorts Raid has roundtripped (crashing 42% this week)...



Source: Bloomberg



...US equity markets exploded higher (Small Caps up almost 8% for their best week since June!)...amid a dismally-disappointing jobs print! Makes sense, right, bad news is good news for MOAR free money!!!



Which may not come as a total surprise when you realize that last week saw the largest alpha drawdown (hedge fund edge) since 2009...and somebody needed to do something... think of the children!!





Source: Bloomberg

The most-crowded stocks in N. America have performed well since Wednesday as the top 50 crowded longs are up ~6.7% while the crowded shorts are down ~7.9%. Much of this came on Thursday, with the +8.0% spread between the top 50 crowded longs and shorts being the largest spread we’ve seen since we began tracking the data in 2010.



Source: Bloomberg

Most Shorted Biotechs ripped higher this week, the biggest two-week gain since May...



Source: Bloomberg

GME gained 17% today but lost 80% on the week...



VIX collapsed back to a 20 handle this week - its lowest in 2 months..



Treasury yields surged this week with the long-end dramatically underperforming amid a heavy calendar of corporate issuance and more stimmy talks...



Source: Bloomberg

10Y Yields spiked up to the early January highs and reversed... for now...



Source: Bloomberg

The 2Y Yield closed at a record low today...



Source: Bloomberg

The yield curve continued to steepen dramatically with 2s10s at its highest since April 2017...



Source: Bloomberg

The dollar ended the week marginally higher after today's dismal jobs data sparked hope for more stimmys and triggered a tumble in the world's reserve currency...



Source: Bloomberg

And we note that US equities have notably decoupled from the USD in the last few weeks...



Source: Bloomberg

It was a huge week for crypto led by Ethereum's rip to new record highs...



Source: Bloomberg

Ethereum soared this week, topping $1760 at its highs...



Source: Bloomberg

Bitcoin surged back above $38,000...



Source: Bloomberg

Which left Bitcoin at its weakest relative to Ethereum since August 2018...



Source: Bloomberg

Gold futures bounced back above $1800 today after an ugly week...



Silver ended the week unchanged after a massive roundtrip on the Reddit-Raiders ramp...



The reversal in silver happened right as its ratio to gold hit a critical support level from 2014...



Source: Bloomberg

Oil prices surged this week (by the most since October) with WTI topping $57 - its highest since January 2020...



Finally, did the US equity market get ahead of itself again relative to the constant flow of liquidity gushing into the world?



Source: Bloomberg

Because remember, the market is NOT the economy...



Source: Bloomberg

 

Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2020-



S&P sectors for the past week-

 

Super Bowl LV: Time to Break the Tie - Go Bucs!
Fri, Feb 5, 2021

This year's Super Bowl will be a first for many different reasons. It will be the first-ever game played in the home stadium of one of the teams playing. It will be the first-ever game with a 43 year old starting QB. The age difference between the starting QBs will be the widest ever (18+ years). The game will not be played to a full stadium (atendance capped at 25K). We could go on. Another interesting aspect of this year's game is that it will break the tie between the AFC and NFC for number of championships won (27). The last time the two conferences had an equal number of Super Bowl titles was back in 1990 after Super Bowl XXIV when each conference had 12. The New York Giants broke that tie in 1991 when Scott Norwood went 'wide ride' to give the NFC its 7th straight and 13th total Super Bowl victory. From there, the NFC continued its domination of the AFC (and the Bills) winning the next six championship games, including three against the Bills.



We've all heard of the Super Bowl market indicator which says that a win for the NFC bodes well for the equity market while an AFC victory is a bearish signal. For years, there actually was a wide gap in performance for the market following wins by either conference in the past, but in recent years the disparity has narrowed. In the 27 years where the AFC has won the Super Bowl, the S&P 500 averaged a rest of year gain of 6.9% with positive returns 70% of the time. When the NFC wins, though, the S&P 500's average rest of year performance has been a gain of 10.5% with positive returns more than 77% of the time.



When it comes to individual teams, 13 have won the Super Bowl more than once. The two teams with the most victories are the Steelers and Patriots each of which has won the game six times. The Dallas Cowboys otfen refer to themselves as 'America's Team' but Pittsburgh is the "Stock Market's Team". In the six years where the Steelers won the Super Bowl, the S&P 500 experienced positive returns for the remainder of the year every time for an average gain of 18.8%! Market returns for the Patriots following their six victories has been a much more muted 4.6%, including a decline more than 21% from the end of the team's first victory in 2002. The 49ers and the Broncos have 'only' won five and three Super Bowls, respectively, but following their victories, the S&P 500 has been up for the remainder of the year every time for an average gain of more then 20%!

So, what about this year's teams? The Chiefs have won the Super Bowl twice in their history, and the S&P 500 has averaged a rest of year gain of 8.1% following their victories. While the S&P 500 was down for the remainder of the year after they won in 1970, the decline was less than 1%. The one year the Chiefs made it to the championship but lost, the S&P 500 was up over 14% for the remainder of the year.

For the NFC, Tampa Bay's one and only appearance in the Super Bowl was in 2003 (XXXVII). They won that game, and the S&P 500's rest of year gain was over 29%. Additionally, while they're on a new team now, in the three Patriots vicotries where Tom Brady and Rob Gronkowski were both on the team, the S&P 500 was higher for the remainder of the year all three times for an average gain of 12.7%. Go Bucs!



Should Investors Root For Tom Brady Or Patrick Mahomes?

The Super Bowl Indicator suggests stocks rise for the full year when the Super Bowl winner has come from the original National Football League (now the NFC), but when an original American Football League (now the AFC) team has won, stocks fall. We would be the first to admit that this indicator has no connection to the stock market, but “data don’t lie”: The S&P 500 Index has performed better, and posted positive gains with greater frequency, over the past 54 Super Bowl games when NFC teams have won. Of course, it doesn’t always work, as stocks did quite well the past two years even though AFC teams won.

It was originally discovered in 1978 by Leonard Kopett, a sportswriter for the New York Times. Up until that point, the indicator had never been wrong.

A simpler way to look at the Super Bowl Indicator is to look at the average gain for the S&P 500 when the NFC has won versus the AFC—and ignore the history of the franchises. As shown in the LPL Chart of the Day, this similar set of criteria has produced an average price return of 10.2% when an NFC team has won, compared with a return of 7.1% with an AFC winner. An NFC winner has produced a positive year 79% of the time, while the S&P 500 has been up only 65% of the time when the winner came from the AFC.



Here’s the catch. Stocks have actually done just fine lately when the AFC has won. In fact, the S&P 500 Index gained 10 of the past 11 years after an AFC Super Bowl champ.



“There have been 54 Super Bowl winners, yet only 20 teams account for those wins,” said LPL Financial Chief Market Strategist Ryan Detrick. “And wouldn’t you know it, the best stock market performance happens after the Bucs win the big game? But I don’t care, I’m still not rooting for Tom Brady.”

Here’s a breakdown of the 20 Super Bowl winners and how the S&P 500 has done following their victories. For some reason, the author’s favorite team, The Cincinnati Bengals, isn’t on this list. We double checked the data, but they still aren’t on there.



Lastly, this is Tom Brady’s record 10th Super Bowl. It turns out; stocks don’t do well when he is in the game, up only 0.5% for the year. Meanwhile, should he lose (again, what the author is hoping for here), stocks actually do quite poorly, down 10.4% on average.



Over a Quarter Eying a Correction
Thu, Feb 4, 2021

In spite of the continued craziness in the headlines over the past week, sentiment has seen little in the way of change. AAII's weekly sentiment survey saw bullish sentiment fall just 0.3 percentage points to 37.4%. That is a third consecutive decline and leaves bullish sentiment at the lowest level since the end of October.



Bearish sentiment was also lower this week dropping to 35.6% compared to last week's reading of 38.3% which was the highest level since early October. That leaves bearish sentiment right in the middle of the range of the past year, still several percentage points below last year's elevated levels and the more recent historically low readings.



The bigger decline in bearish sentiment relative to the move in bullish sentiment resulted in the bull-bear spread to move back into positive territory after briefly dipping to -0.6 last week; the first negative reading since mid-October.



Neutral sentiment picked up the losses rising to 27.1% from 24% last week. That 3.1 percentage point week over week increase only brings neutral sentiment back to similar levels to the end of 2020.



In another sentiment survey from Investor's Intelligence, which surveys newsletter writers rather than individual investors, the readings were similar. Bullish sentiment in this survey also came in at some of the lowest levels since the fall. At 57.8%, it was the first sub-60% reading since mid-November and the lowest reading since November 4th. Bearish sentiment was slightly higher rising to 16.7% from 16.5% though it is still below levels from two weeks ago. While these survey results still lean historically bullish with the bull-bear spread at 41.1—which is in the top decline of readings going back to the 1960s—a higher share of respondents did report that they are looking for a correction. That reading climbed above 25% for the first time since the first week of November. While that is far from a historically high reading (historical average of 25.77%), it did end a streak of consecutive readings below 25% at 12 weeks long.



Across the history of the survey, there have been 42 streaks of readings of "looking for a correction" below 25% that lasted for at least 12 consecutive weeks. In the table below, we show the 14 of these instances that occurred without a prior occurrence in the past year. These streaks coming to an end have typically pointed to some short term weakness with the next month and 3 month periods averaging a decline. For the one month period, returns have only been positive 30.77% of the time. Six months later performance has leaned positive but underperforms the norm. On the bright side, one year after these streaks come to an end performance has much more consistently been positive with slightly above-average returns.



Post-Election Februarys Have Been Even More Troublesome

From yesterday’s post, we knew February has a tepid recent record. In post-election years, February’s historically record has been even worse as historical average losses swell. In order to include as much data as we have available, we are using DJIA data since 1901, S&P 500 since 1930, NASDAQ from 1971 and Russell 1000& 2000 data beginning in 1979. When comparing post-election year February to the recent 21-year February seasonal pattern, the overall shape and trend does not change greatly however, weakness becomes more prevalent as the mid-month surge is less pronounced and second half declines expand.

Breaking down historical performance by year confirms frequent post-election-year February losses, most notably by NASDAQ and DJIA. Generally speaking, when February is positive it is an “ok” month, but when the month has been down, it has frequently been down by sizable amounts. There are seven double-digit losses in the table and not a single double-digit gain.

Typical February Trading: Lackluster Over Last 21 Years

February has historically been a rather bland month. Since 1950, S&P 500 has averaged a measly –0.04%. Over the last 21-year period S&P 500 average performance has declined to a loss of 0.6% in February. February’s first trading day has historically been good, like yesterday, and trading days eight, nine, ten and eleven have offered repeatable long opportunities over the last 21 years. Outside of these five days, the balance of February has been somewhat disappointing for bulls.

As Goes January, So Goes The Year

Stocks got off to a nice start in 2021, until the late January selloff, as everyone got GameStop fever. Should bulls worry about what a down January might mean for the rest of 2021?

There’s an old adage on Wall Street that suggests, “As goes January, so goes the year.” This was first discussed in 1972 by Yale Hirsh of the Stock Trader’s Almanac, and it has an impressive track record. Simply put, when the first month of the year was green, it bodes well for the rest of the year (and vice versa). Given stocks closed red in January, how worried should investors be?

As shown below in the LPL Chart of the Day, the numbers confirm that when the S&P 500 has been green in January, the index has been up 11.9% on average over the rest of the year (final 11 months) and higher 86% of the time. However, when that first month was red, stocks rose only 1.7% on average over the final 11 months and were higher barely 60% of the time.



“A weak January could foretell of rough times ahead in 2021,” explained LPL Financial Chief Market Strategist Ryan Detrick. “The good news is lately the trend has been broken, as stocks have done quite well after a weak January.” In fact, 8 of the past 9 times January saw stocks lower the final 11 months finished higher.



Have We Seen the Top in Negative Yielding Debt?

Negative yielding debt has been one of the most extraordinary and peculiar consequences of global monetary policy initiatives, turning the basic premise of fixed income investing upside down. Instead of one party lending another party money, and the lender receiving interest in return for the risk incurred, since 2018 the levels of outstanding debt in which the lender pays the borrower for the privilege of loaning the borrower money has skyrocketed. This has left both lenders and fixed income investors in the unfortunate situation of attempting to “lose less” rather than “earn slightly more” than the value of the loan extended.

The total value of negative yielding debt around the globe set a new record in the final month of 2020, eclipsing more than $18 trillion as governments around the world issued debt to combat the COVID-19 pandemic. The majority of these bonds are issued by governments in the developed world such as Japan and Europe, while US Treasuries remain one of the few sovereign bonds in the developed world that held positive yields throughout the pandemic. Though the Federal Reserve has committed to keeping short-term rates near zero for the foreseeable future, it should come as a relief to investors that thus far, Fed Chair Jerome Powell has dismissed the idea of negative short-term rates in the U.S.

However, negative yielding debt does affect U.S. investors. Even after accounting for the costs of hedging out currency risks, Japanese investors can obtain 70 bps more in yield by investing in the U.S. 10-year Treasury note compared to a 10-year Japanese government bond, while German investors can earn 0.37% after hedging costs, compared with the -0.45% current yield of the German 10-year bund, which is the highest level in nearly five months. These factors increase demand for U.S. debt, which has helped to depress Treasuries yields and dampen the outlook for fixed income investors.

What does the future of negative yielding debt look like? As shown in the LPL Chart of the Day, the good news is that this amount of negative yielding debt has declined substantially in the past two months and fallen back below the previous record high set in 2019. We believe this amount should continue to fall in 2021 as global economies recover and safe-haven yields rise, contributing to the 10-year Treasury yield moving toward our year-end 2021 forecast of 1.25–1.75%.

 

Here are the current major indices pullback/correction levels from ATHs as of week ending 2.5.21-


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 2.5.21-

 

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Here are the upcoming IPO's for this week-

 

Stock Market Analysis Video for February 5th, 2021
Video from AlphaTrends


ShadowTrader Video Weekly 2.7.21
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 2.8.21 Before Market Open:

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

Monday 2.8.21 After Market Close:

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

Tuesday 2.9.21 Before Market Open:

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

Tuesday 2.9.21 After Market Close:

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

Wednesday 2.10.21 Before Market Open:

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

Wednesday 2.10.21 After Market Close:

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

Thursday 2.11.21 Before Market Open:

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

Thursday 2.11.21 After Market Close:

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

Friday 2.12.21 Before Market Open:

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

Friday 2.12.21 After Market Close:

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

NONE.

 

And finally here is the most anticipated earnings calendar for this upcoming trading week ahead-
($CGC $GM $CRSR $HAS $TWTR $KO $DIS $COTY $GPN $CSCO $ACB $CNC $CHGG $PEP $ENPH $ZNGA $UBER $CRNT $ENR $TTWO $NET $AMG $AZN $CRNC $TEVA $SPG $KHC $SAIA $SQNS $UAA $DDOG $GFN $IRBT $WCC $TSN $NRZ $LH $PERI $CNA $YETI $AYX $K $MAT)


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

• Most Anticipated Earnings Releases for the week beginning February 8th, 2021 <-- click there to view!

 

StonkForumers! Come join us on our stock market competitions for this upcoming trading week ahead!-

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• Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (2/8-2/12) <-- click there to cast your weekly market direction vote and stock picks for this week!

• Daily SPX Sentiment Poll for Monday (2/8) <-- click there to cast your daily market direction vote for Monday!

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It would be pretty sweet to see some of you join us and participate on these!

I hope you all have a fantastic weekend ahead!

 

Just thought this was worth a quick mention in here. But, think this may be a first for me here. My most anticipated earnings thread over on WSB happens to be the sub's 3rd top voted thread there right now as of this very moment!

 

Hah, this was just something I had stumbled across the other day, but got waaaay too occupied with IRL stuff. But, it's funny how the whole GME thing actually turned out to be some kind of a black swan event for the market to pull back a bit. At first I thought this was all just a bunch of nonsense, but then later on someone put together this quick stat of the overall U.S. market (gauged by the SPX) vs. GME over the past week, and here's what it showed.

Over the past week (or at least when this whole GME fiasco started), when GME has been up a lot, it was like the reverse of the SPX. Negatively correlated if you will.

Sample size is small here obviously, but just something I found to be kind of amusing at least lol.

 

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 - 2/8/21- How Much Bitcoin is on the Balance Sheet?
Mon, Feb 8, 2021

Equity markets are picking up this week right where they left off last week, and the major averages are all indicated to open the week higher. The big news of the morning has been Tesla's (TSLA) announcement that it has purchased $1.5 billion in bitcoin with its cash on the balance sheet. TSLA is hardly considered a tradtional company, but when one of the largest companies in the world starts to hold bitcoin on its balance sheet as a substitute for cash, the market takes notice. Not surprisingly, bitcoin is trading up ~15% in the wake of TSLA's announcement.

Weeks like the last one don't come around all the time. With a 4%+ gain for the S&P 500, every one of the index's major sectors finished in positive territory for the week. Leading the way higher, Energy surged over 8%, while Communication Services, Financials, and Consumer Discretionary all tacked on more than 6%. Following the rally, though, most sectors are overbought, including Communication Services and Real Estate which are both at 'Extreme Overbought' levels (more than two standard deviations above their 50-day moving average). Given the strength, we were a bit surprised to see that three sector ETFs still have timing scores that rank as 'good' in our Trend Analyzer.

 

Hmm, interesting bit of stat I just ran across on my Twitter feed just now.

So, apparently last week the SPX was up for every single day (a perfect 5 for 5 green). And evidently that was only the 20th time since 1990 that it has done that. Turns out when that occurrence has happened, the market (historically speaking) say 6 months out seemed about average, but 12 months later the SPX was seen higher 89% of the time and up +15% on average. Not too shabby.

Chart courtesy of the folks over at LPL Research:

 

More good news for the bulls here?

So the SPX gained +4.3% last week.

Apparently, the past 6 times it had gained 4% or more in a single week, the market was seen higher 8 weeks later every single time in each of those 6 occurrences. Up +9.1% on average.

 

One more in here for now...sorry for the stat bombs in here today

Think I may have posted this a few times in last week's thread?

But, now that the Super Bowl is officially in the books, and the NFC team (Buccaneers) won it, that could suggested even more good news for the bullish case this year lol.



Seems a bit too much good news here though eh?

 

Wrote this up on the Discord chat, will share in here too:
_______________________________________________________

Hmm, so once again more new ATHs across the board for the majors today...

I'm not really sure what can/will actually derail this market at this point, absent something completely/entirely out of left field, like some cataclysmic black swan event. Which, I don't think COVID or COVID+ (aka, whatever the heck other variants are out there...) will get the needle moving much on that anymore. So, outside maybe a JFK type event, or some ginormous asteroid hitting earth. Sure seems to me like its all systems go eh? I mean, when you've got the feds basically signaling that the "invisible hand" is here to stay to keep markets propped up forever it seems lol. What can possibly go wrong? I still think though that maybe we are in the middle to maybe even early late stages of this massive market bull run that really started off the post-Lehman lows back in '09 (excluding the COVID-induced bear market that only lasted, what, a few months? lmao.). We're not quite there yet if you will, but eventually the bears time will come. Nothing lasts forever. Even FED-induced rallies like the one we've been in here for over a decade now. However, for now anyway, we're in the same song and dance as we've been in for years and years. In other words BTFD now and always. Rinse and repeat.