Hey what’s happening r/stocks! Good morning and happy Saturday to all of you on this subreddit. I hope everyone made out pretty nicely in the market last week, and are ready for the new trading week ahead! 🙂

Here is everything you need to know to get you ready for the trading week beginning March 18th, 2019.


The Fed’s meeting is the big deal for markets in the coming week, and it is widely expected to send a message that investors in both bonds and stocks could find bullish.


But analysts in both markets say the Fed’s message has been well telegraphed, and market response could be tepid or even a “sell the news” reaction.


The key for both markets will be what the economic data shows, after a series of weak reports. Thursday’s regional Philadelphia Fed survey and PMI data Friday on manufacturing and the services sectors will be important. Existing home sales are also released Thursday.


“The first quarter has not exactly been a hallelujah quarter, and the Fed has to acknowledge that,” said Diane Swonk, chief economist at Grant Thornton.


The Fed is expected to hold interest rates steady, but it is also expected to issue a new forecast with fewer rate hikes and a slower economy. The Fed also is likely to announce the end of its operation to unwind its balance sheet, but economists are divided on which month this year it will actually end the program.


Stocks surged in the past week with the best performance since November for the S&P 500, which ended up 2.9 percent. At the same time Treasury yields, which move opposite price, continued to fall. The bench mark 10-year Treasury slipped below 2.60 percent Friday, its lowest yield since June 4, and the 2-year was at 2.43 percent.


The fact that both markets are rising at the same time is somewhat unusual, and at some point the trend could break in favor of one market versus the other.


An easier Federal Reserve, meaning one less inclined to drive up rates, is viewed as a positive for stocks because higher interest rates can slow the economy and send borrowing costs higher for companies and investors. Bond yields also head lower when the Fed is not likely to raise interest rates.


“This could be an interesting week,” said Art Hogan, chief market strategist at National Securities. He said it should be positive for stocks if the Fed reduces its forecast for rate hikes and delivers on expectations.


“This is the meeting where we get more clarity on the balance sheet reduction. Both those things would be an affirmation of where things are right now. It’s also technical…where we close [on the S&P] puts us on a precipice of breaking out,” said Hogan.


The S&P 500 closed at 2,822, near the key 2,825 level which is the upper end of a big band of resistance. “The only down week of the year was the week before this, and the trend has been higher,” he said.


But Paul Christopher, Wells Fargo Investment Institute chief international investment strategist, said the stock market could actually have little reaction to the Fed because Fed officials have been very dovish in public comments.


“It could be neutral or perhaps even negative. What more can they say? You might see some people selling the fact,” he said. Christopher said he sees the market as stretched, and it could sell off. But then, there could be a buying opportunity.


“We think stocks have to start to feel better about the economy first,” he said, adding a trade deal with China could be a positive.


The Fed’s actions could also already be priced into the bond market, according to George Goncalves, head of fixed income strategy at Nomura. He said what really matters is what risk markets, or stocks, do in response.


“There’s scope for risk to do better and the Fed’s not hiking. You can see it rally into the summer and the economy will look better and if that happens that will be a buying opportunity for rates,” he said.


Economists see the Fed reducing its forecast for two rate hikes to one or even none for this year. They also expect it to say it will end its program to reduce the balance sheet, but they don’t agree on whether that happens in June, September or closer to the end of the year.


The Fed is currently reducing its balance sheet by allowing securities to roll down as they mature, instead of replacing all of them as it previously did. It now theoretically could allow $60 billion a month to roll off, but Fed officials could change that program and begin to repurchase securities to replace them.


The markets are also waiting to hear if the Fed will focus solely on Treasury securities, and at what part of the curve – or duration. In the past it had purchased mortgages but is expected to discontinue that.


“We think they’re back to buying Treasurys by Oct. 1. Somethings got to give. At some point, its either that [bond market] people are too pessimistic and the economy is going to do well because the Fed is behind the curve, or we have another kind of correction on our hands in the next six to nine months,” he said. “We just have to pass through time There’s a powerful faith-based system around easy money can fix all things.”


Swonk said she expects the Fed to continue to forecast one rate hike for this year. The Fed interest rate forecasts appear as anonymous dots from individual Fed officials on a chart, known as the “dot plot.”


Even so, she doesn’t expect the Fed will actually raise rates but it will continue to give itself flexibility. Economic data has been mixed with some very poor reports, like December’s retail sales, which fell 1.6 percent, and February’s jobs report, which showed job growth of just 20,000 jobs, 160,000 below forecast.


“I think they have to walk a fine line between acknowledging the weakness we’ve seen and then also show that we’re still going to see growth this year,” she said.


(CLICK HERE FOR THE FULL S&P TREE MAP FOR THE PAST WEEK!)
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Saint Patrick’s Day is the only cultural event that perennially lands in March. Over the years gains the day before Saint Patrick’s Day have proved to be slightly better than the day itself and the day after. Perhaps it’s the anticipation of the patron saint’s holiday that boosts the market and the distraction from the parade down Fifth Avenue that causes equity markets to languish. Perhaps it’s the all the green folks don that stirs up thoughts of money and market gains. More likely, it’s the fact that Saint Pat’s typically falls in historically bullish Triple-Witching Week.

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Whatever the case, since 1950, the S&P 500 posts an average gain of 0.19% on Saint Patrick’s Day (or the next trading day when it falls on a weekend), a gain of 0.13% the day after and the day before averages a 0.24% advance. S&P 500 median values are 0.17% on the day before, 0.20% on Saint Patrick’s Day and 0.07% on the day after.

In the nine years when St. Patrick’s Day falls on a Sunday like this year, since 1950, Friday advanced an average 0.15% and the following Monday suffered an average loss of -0.08%. However, over the last 25 years market performance on Saint Patrick’s Day and the day after has improved, up 72% of the time on the Holiday with an average gain of 0.57%.


Below is an updated look at our ETF Asset Class Performance Matrix, which shows the total returns of key ETFs across assets classes on both a YTD, MTD basis as well as over the last week. How strong were global equity markets this week? Well of all the equity-related ETFs in the matrix, not a single one finished the week in the red. Even Industrials (XLI), which were dragged down by Boeing (BA), managed to eke out a gain of 0.2%. Among US indices, the Nasdaq 100 blew away the field rallying over 4%, but every other US index ETF was up over 1.4%. International markets were even stronger with India (PIN), Brazil (EWZ), and China (ASHR) all rallying more than 4%. Rounding out the four names from BRIC, Russia (RSX) even rallied 3.5%. In terms of YTD leaders, China and Crude oil are neck and neck for the top spot with gains of 25%+.

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Earlier this week we provided a full update on analyst sentiment across sectors and individual stocks in our Closer report. Below are a few charts and tables that we’ve pulled from the big report in case you’re interested.

As shown below, there are 22 analyst ratings per stock in the S&P 500 on average. But Energy and Communication Services have more than 29 ratings per stock! It’s hard to find an edge with nearly 30 analysts covering a name.

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Notably, the Energy sector also has the highest percentage of analyst Buy ratings, which is surprising given that Energy has been the weakest sector of the market since the S&P peaked last September. It looks like analysts think the sell-off for Energy has caused valuations to become more attractive.

(CLICK HERE FOR THE CHART!)

Below is a table listing the S&P 500 stocks with the highest percentage of Buy ratings right now. There are 3 stocks in the index that have 100% Buy ratings — Marathon Petroleum (MPC), ABIOMED (ABMD), and Keysight Tech (KEYS). Both MPC and ABMD are basically flat this year, but KEYS is up 39% YTD. Even after the gains, though, analysts still love KEYS.

Other notables on the list of most loved stocks include mega-caps like Amazon.com (AMZN) with 93.9% Buy ratings, Alphabet (GOOGL) with 93.2% Buy ratings, and Microsoft (MSFT) with 91.9% Buy ratings. Diamondback Energy (FANG) is the most loved Energy sector stock, while AMETEK (AME) is the most loved Industrials stock.

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The S&P 500’s trailing 12-month P/E ratio got down into the low 15s at the bottom in late December, but we’ve seen huge P/E expansion as the market has rallied back. As of this afternoon, the S&P’s trailing 12-month P/E sits at 18.61. Even still, that’s well below readings in the 20s that were seen for a number of weeks in 2018.

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Below we show one-year P/E ratio charts for major S&P 500 sectors. Since the December lows, we’ve seen P/E expansion in every sector, but the one that stands out the most is Utilities.

We went into detail on extended valuations for the Utilities sector in yesterday’s Chart of the Day for members, but you can see the spike up to 19.80 in the one-year chart for Utilities below. At 19.80, only Technology, Health Care, and Consumer Discretionary have higher trailing 12-month P/E ratios than Utilities right now.

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As of today’s close, this pre-election year March is below average when compared to it historical performance. Strong market performance in pre-presidential-election year frequently translates into above average performance for individual months. March is a month that typically enjoys a nice boost, but so far it has not occurred. Prior to the gains of today and yesterday, this March was well off its average levels. This March and past pre-election year average performance has been plotted in the chart above and the gap in performance is readily visible.

Strong gains in January and February had major indexes right at key resistance levels at the start of the month and when they failed to break out profit taking ensued. Slowing global growth, naming in China and the EU along with ongoing trade concerns and last Friday’s tepid jobs report have all weighed on stocks. Heavy selling of DJIA’s largest component, Boeing (BA) has kept that index in check this week. Despite sign of slowing growth, the US economy is still on relatively firm ground when compared to other regions. Further market gains are likely, but progress is probably going to be choppy.

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The S&P 500 Index corrected nearly 20% from the September peak until December 24 before staging a furious rally of 19%. What could happen next? A well-deserved pullback would be perfectly normal, and in fact, is probably needed before another surge higher can occur. Now the $64,000 question: Would a pullback be a retest of the December lows, a 10% correction, or something more modest?

As we discussed in our recent Weekly Market Commentary: Modest Pullback Or Something Bigger? we think a pullback in the range of 3–5% is the most likely scenario. “We continue to see solid fundamentals, valuations that are quite reasonable, the strong possibility of a U.S.-China trade deal over the coming months, and healthy market technicals,” explained Senior Market Strategist Ryan Detrick. In fact, six technical indicators we mentioned in the recent commentary suggest a pullback could offer buying opportunities for suitable investors:

  • The S&P 500 is above its upward sloping 50-day moving average (MA), suggesting an improving trend, and at support in the form of its 200-day moving average.

  • March has been the second strongest month for the stock market over the past 20 years.

  • Stocks tend to go up in the final 10 months of a year (25 out of the last 27 years) after experiencing gains during January and February.

  • Market breadth is favorable, with a high proportion of stocks participating in this year’s advance.

  • Investor flows have been negative in 2019—evidence of caution, not euphoria

  • Investor sentiment surveys suggest bulls are not in overabundance.

Last, as our LPL Chart of the Day shows, it’s important to remember that the S&P 500 has been higher a year after every midterm election since World War II—that’s 18 out of the past 18 midterms—with an average return of 14.2%. President Trump views the stock market as part of his re-election path, suggesting this pattern could hold once again. With the S&P 500 up only 1.3% since the midterm election last November, there indeed could still be room for stocks to run in 2019.

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Here are the most notable companies (tickers) reporting earnings in this upcoming trading week ahead-


  • $TLRY

  • $MU

  • $OSTK

  • $NVAX

  • $LL

  • $FDX

  • $NKE

  • $HQY

  • $PLX

  • $DSW

  • $UNIT

  • $ZUO

  • $GIS

  • $ACRS

  • $STNE

  • $JKS

  • $TIF

  • $DRI

  • $NVGS

  • $CSIQ

  • $HDS

  • $CAG

  • $TME

  • $SYNH

  • $MIK

  • $TACO

  • $SMAR

  • $AMRS

  • $TLGT

  • $WSM

  • $LEJU

  • $BITA

  • $CMC

  • $MTBC

  • $GEN

  • $CELP

  • $GPX

  • $YIN

  • $WKHS

  • $HZN

  • $GES

  • $WPM

(CLICK HERE FOR NEXT WEEK’S MOST NOTABLE EARNINGS RELEASES!)
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Below are some of the notable companies coming out with earnings releases this upcoming trading week ahead which includes the date/time of release & consensus estimates courtesy of Earnings Whispers:


(CLICK HERE FOR MONDAY’S PRE-MARKET EARNINGS TIME & ESTIMATES!)
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(CLICK HERE FOR WEDNESDAY’S PRE-MARKET EARNINGS TIME & ESTIMATES!)
(CLICK HERE FOR WEDNESDAY’S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

(CLICK HERE FOR THURSDAY’S PRE-MARKET EARNINGS TIME & ESTIMATES!)
(CLICK HERE FOR THURSDAY’S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

(CLICK HERE FOR FRIDAY’S PRE-MARKET EARNINGS TIME & ESTIMATES!)

(CLICK HERE FOR FRIDAY’S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

NONE.


Tilray, Inc. (TLRY) is confirmed to report earnings at approximately 4:05 PM ET on Monday, March 18, 2019. The consensus estimate is for a loss of $0.15 per share on revenue of $17.69 million and the Earnings Whisper ® number is ($0.12) per share. Investor sentiment going into the company’s earnings release has 54% expecting an earnings beat. The stock has drifted lower by 31.3% from its open following the earnings release. Overall earnings estimates have been revised lower since the company’s last earnings release. On Thursday, March 7, 2019 there was some notable buying of 5,062 contracts of the $70.00 call expiring on Thursday, April 18, 2019. Option traders are pricing in a 11.3% move on earnings and the stock has averaged a 14.5% move in recent quarters.


Micron Technology, Inc. (MU) is confirmed to report earnings at approximately 4:00 PM ET on Wednesday, March 20, 2019. The consensus earnings estimate is $1.67 per share on revenue of $5.97 billion and the Earnings Whisper ® number is $1.62 per share. Investor sentiment going into the company’s earnings release has 45% expecting an earnings beat The company’s guidance was for earnings of $1.65 to $1.85 per share. Consensus estimates are for earnings to decline year-over-year by 40.36% with revenue decreasing by 18.79%. Short interest has increased by 5.4% since the company’s last earnings release while the stock has drifted higher by 24.9% from its open following the earnings release to be 10.7% below its 200 day moving average of $44.27. Overall earnings estimates have been revised lower since the company’s last earnings release. On Tuesday, March 12, 2019 there was some notable buying of 10,156 contracts of the $35.00 put expiring on Friday, March 22, 2019. Option traders are pricing in a 8.0% move on earnings and the stock has averaged a 5.4% move in recent quarters.


Overstock.com, Inc. (OSTK) is confirmed to report earnings at approximately 9:00 AM ET on Monday, March 18, 2019. The consensus estimate is for a loss of $0.67 per share on revenue of $483.67 million. Investor sentiment going into the company’s earnings release has 57% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 75.28% with revenue increasing by 6.00%. Short interest has increased by 67.4% since the company’s last earnings release while the stock has drifted higher by 4.3% from its open following the earnings release to be 19.1% below its 200 day moving average of $25.26. Overall earnings estimates have been revised lower since the company’s last earnings release. On Thursday, March 7, 2019 there was some notable buying of 3,691 contracts of the $25.00 call expiring on Thursday, April 18, 2019. Option traders are pricing in a 19.9% move on earnings and the stock has averaged a 13.2% move in recent quarters.


Novavax, Inc. (NVAX) is confirmed to report earnings at approximately 7:30 AM ET on Monday, March 18, 2019. The consensus estimate is for a loss of $0.12 per share on revenue of $7.87 million and the Earnings Whisper ® number is ($0.13) per share. Investor sentiment going into the company’s earnings release has 47% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 25.00% with revenue decreasing by 24.41%. Short interest has increased by 26.7% since the company’s last earnings release while the stock has drifted lower by 73.7% from its open following the earnings release to be 74.1% below its 200 day moving average of $1.97. Overall earnings estimates have been revised higher since the company’s last earnings release. On Thursday, January 31, 2019 there was some notable buying of 36,277 contracts of the $2.00 put expiring on Thursday, April 18, 2019. The stock has averaged a 7.6% move on earnings in recent quarters.


Lumber Liquidators, Inc. (LL) is confirmed to report earnings at approximately 6:00 AM ET on Monday, March 18, 2019. The consensus earnings estimate is $0.16 per share on revenue of $273.15 million and the Earnings Whisper ® number is $0.11 per share. Investor sentiment going into the company’s earnings release has 54% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 60.00% with revenue increasing by 5.11%. Short interest has decreased by 7.8% since the company’s last earnings release while the stock has drifted lower by 5.7% from its open following the earnings release to be 35.6% below its 200 day moving average of $15.80. Overall earnings estimates have been revised lower since the company’s last earnings release. On Friday, March 15, 2019 there was some notable buying of 772 contracts of the $9.00 put expiring on Friday, March 22, 2019. Option traders are pricing in a 20.9% move on earnings and the stock has averaged a 13.1% move in recent quarters.


FedEx Corp. (FDX) is confirmed to report earnings at approximately 4:00 PM ET on Tuesday, March 19, 2019. The consensus earnings estimate is $3.10 per share on revenue of $17.68 billion and the Earnings Whisper ® number is $3.13 per share. Investor sentiment going into the company’s earnings release has 62% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 18.42% with revenue increasing by 6.98%. Short interest has decreased by 3.7% since the company’s last earnings release while the stock has drifted higher by 5.2% from its open following the earnings release to be 17.5% below its 200 day moving average of $215.77. Overall earnings estimates have been revised lower since the company’s last earnings release. On Thursday, March 7, 2019 there was some notable buying of 4,884 contracts of the $220.00 call expiring on Friday, July 19, 2019. Option traders are pricing in a 6.3% move on earnings and the stock has averaged a 4.5% move in recent quarters.


Nike Inc (NKE) is confirmed to report earnings at approximately 4:15 PM ET on Thursday, March 21, 2019. The consensus earnings estimate is $0.62 per share on revenue of $9.50 billion and the Earnings Whisper ® number is $0.68 per share. Investor sentiment going into the company’s earnings release has 74% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 8.82% with revenue increasing by 5.74%. Short interest has decreased by 25.0% since the company’s last earnings release while the stock has drifted higher by 18.4% from its open following the earnings release to be 11.4% above its 200 day moving average of $77.92. Overall earnings estimates have been revised lower since the company’s last earnings release. On Monday, March 4, 2019 there was some notable buying of 3,343 contracts of the $72.50 put expiring on Friday, June 21, 2019. Option traders are pricing in a 5.3% move on earnings and the stock has averaged a 4.0% move in recent quarters.


HealthEquity, Inc. (HQY) is confirmed to report earnings at approximately 4:00 PM ET on Monday, March 18, 2019. The consensus earnings estimate is $0.21 per share on revenue of $74.50 million and the Earnings Whisper ® number is $0.21 per share. Investor sentiment going into the company’s earnings release has 61% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 250.00% with revenue increasing by 23.27%. Short interest has increased by 45.6% since the company’s last earnings release while the stock has drifted higher by 7.0% from its open following the earnings release to be 4.2% above its 200 day moving average of $78.87. Overall earnings estimates have been revised lower since the company’s last earnings release. Option traders are pricing in a 7.8% move on earnings and the stock has averaged a 7.1% move in recent quarters.


Protalix BioTherapeutics Inc (PLX) is confirmed to report earnings at approximately 7:00 AM ET on Monday, March 18, 2019. The consensus estimate is for a loss of $0.03 per share on revenue of $10.45 million. Investor sentiment going into the company’s earnings release has 50% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 70.00% with revenue increasing by 323.25%. Short interest has decreased by 15.5% since the company’s last earnings release while the stock has drifted higher by 2.3% from its open following the earnings release to be 46.3% below its 200 day moving average of $0.91. Overall earnings estimates have been revised higher since the company’s last earnings release. The stock has averaged a 2.4% move on earnings in recent quarters.


DSW Inc. (DSW) is confirmed to report earnings at approximately 7:00 AM ET on Tuesday, March 19, 2019. The consensus earnings estimate is $0.03 per share on revenue of $848.96 million and the Earnings Whisper ® number is $0.05 per share. Investor sentiment going into the company’s earnings release has 67% expecting an earnings beat The company’s guidance was for results to range from a loss of $0.09 per share to earnings of $0.06 per share. Consensus estimates are for earnings to decline year-over-year by 92.11% with revenue increasing by 17.92%. Short interest has decreased by 30.2% since the company’s last earnings release while the stock has drifted lower by 5.1% from its open following the earnings release to be 7.2% below its 200 day moving average of $27.36. Overall earnings estimates have been revised higher since the company’s last earnings release. Option traders are pricing in a 13.3% move on earnings and the stock has averaged a 12.6% move in recent quarters.


What are you all watching for in this upcoming trading week ahead?


Have a fantastic weekend and a great trading week ahead to everyone here on r/stocks! 🙂