EB Daily Market Report - Friday, April 30, 2021
Special Note - Earnings Reaction Spreadsheet
The earnings reaction spreadsheet has been finalized and is now included on our website. It's included on the Webinars page for "Stocks". You can go directly to that page using this LINK.
I did a fairly brief recording and discussed this spreadsheet, illustrating the way I sorted and analyzed the data. This recording will be on our website later today. Be sure to check that out later.
Executive Market Summary
- Futures were weak overnight and our major indices have been in negative territory throughout the day
- The 10-year treasury yield ($TNX) is relatively flat, while the dollar (UUP, +0.78%) is having one of its most bullish days of the past couple months
- A strong dollar normally translates into weakness in commodities; gold (GLD) is down 0.37%, while crude oil ($WTIC) has fallen 2.20%
- Energy (XLE, -2.27%) is leading downside action in sectors
- Defensive sectors are performing well on a relative basis, led by real estate (XLRE, +0.42%)
- Small caps ($SML) and mid caps ($MID) are weaker, likely due to the weakness in energy shares
- Twitter (TWTR, -13.96%) is the worst performing stock on the S&P 500
Market Outlook
Yesterday, I wrote about the market potentially struggling given overbought conditions and rising volatility ($VIX). When that happens, we typically see defensive groups lead on a relative basis. Well, with today's selling, check out the sector leaderboard:
Of the top 5 sectors today, 4 of them are defensive. Only consumer discretionary is performing well among the more aggressive sectors.
Sector/Industry Focus
Two industries in the consumer discretionary area have been basing for awhile now. I'm awaiting breakouts in both, which I believe will occur sooner rather than later:
$DJUSTT:
Travel & tourism has been consolidating for the past several weeks. It was a relative strength leader until it began to pause and consolidate. I suspect that when it breaks out, its relative strength will return.
$DJUSLG:
Hotels look similar to travel & tourism. They were leaders during their last uptrend, but have lagged during their consolidation. Look for renewed relative strength on a breakout.
ChartLists/Strategies
Here are a few of our Raised Guidance ChartList stocks that are at or near key support:
LRN:
LRN now has its PPO back at centerline support and price has returned to a prior price support level.
FLGT:
FLGT raised its guidance back in March and reports its earnings next week. Is it ready to pop? We'll soon find out, though this one is quite volatile and shouldn't be considered unless you're a very aggressive trader.
Earnings Reports
Here are the key earnings reports for the next two days, featuring stocks with market caps of more than $10 billion. I also include a few select companies with market caps below $10 billion. Finally, any portfolio stocks that will be reporting results are highlighted in BOLD. If you decide to hold a stock into earnings, please understand the significant short-term risk that you are taking. Please be sure to check for earnings dates for any companies you own or are considering owning.
Friday, April 30:
XOM, CVX, ABBV, AZN, CHTR, ITW, CL, AON, BCS, JCI, LHX, LYB, PSX, WY, CLX, GWW, QSR, IMO, WPC, NWL, CBOE, BSAC, PSXP, HUN, LAZ, CRI, GT, FNMA, B, PBI, SLCA
Monday, May 3:
EL, EPD, ITUB, SU, NTR, WEC, WMB, AWK, O, ZI, ON, AGR, XPO, FANG, SEDG, MOS, CHGG, CNA, JKHY, QGEN, SCI, VNO, LEG, BLDP, AMG, CAR, CR, KMT, FN, IRBT, SANM, REGI, MWA, RMBS, RIG, IAG, TRVG, EVER
Economic Report
March personal income: +21.1% (actual) vs. +20.3% (estimate)
March personal spending: +4.2% (actual) vs. +4.0% (estimate)
April Chicago PMI: 72.1 (actual) vs. 64.0 (estimate)
April consumer sentiment: 88.3 (actual) vs. 87.1 (estimate)
Happy trading!
Tom