Wall Street Week Ahead for the trading week beginning March 15th, 2021 : StockMarketChat

Good Saturday morning to all of you here on r/StockMarketChat. I hope everyone on this sub made out pretty nicely in the market this past week, and is ready for the new trading week ahead.

Here is everything you need to know to get you ready for the trading week beginning March 15th, 2021.

The Fed could be a catalyst for bonds, and that could drive growth stocks in week ahead – (Source)

Bonds could be volatile in the week ahead. If yields go higher, that could make it difficult for big tech and other growth stocks to gain traction.


Rising bond yields have been challenging growth stocks. Names like Apple, Tesla, and Amazon have been lagging as investors move to cyclical groups that do well in an economic recovery. Even so, the S&P 500 and the Dow both closed at record highs Friday, while the Nasdaq Composite was lower.


The Nasdaq, home to big tech, did gain 3% in the past week, but it is down 5.5% over the last month.


The bond market in the coming week will likely take its cues from the Federal Reserve, which meets Tuesday and Wednesday.


The central bank is expected to give a nod to much better growth. Bond pros are also watching to see whether Fed officials will tweak their interest rate outlook, which now does not include any rate hikes through 2023.


Fed ahead

“The markets have way too high expectations around what the Fed is going to do or say,” said Gregory Peters, head of multi-sector and strategy at PGIM Fixed Income. “I think the message is going to be consistent.”


He said Fed Chairman Jerome Powell is likely to sound dovish and is unlikely to give any time frames on when the central bank will change its bond-buying program or other policy.


Bond yields, which move opposite price, have been rising on an improving outlook for the economy.


That trade also showed up in the stock market, with the Dow up 4% for the week to end Friday at a record 32,778. Consumer discretionary stocks, which include retail, were among the best performers, up 5.7%, boosted by optimism that individuals will spend their $1,400 stimulus checks.


Yields were higher Friday after President Joe Biden said all adults would be eligible for a vaccine by May 1. The 10-year Treasury yield touched a high of 1.642% — its highest level in more than a year.


It is the key rate to watch since it affects mortgages and other consumer and business loans.


“The economy is going to be unbelievably strong this year — deficit spending, reopening, vaccines,” said Peters of PGIM.


“It looks like for next year, all the numbers are being revised higher,” he said. “So this thing could have some sustainable growth, so I think there’s going to be pressure on rates moving higher.”


Bond yields rose sharply over the past month. The rapid pace of the move has made stocks jittery as investors adjust to higher rates. The 10-year Treasury yield was at 1.16% on Feb. 12.


Growth vs. cyclicals

Over the last month, energy stocks have risen nearly 20%, financial stocks are up 10.2%, and industrials are up 7%. The S&P technology sector is down 5.4% over the last month, and communications services, which includes internet names was up 0.8%.


Higher rates are a challenge for tech and other growth stocks because those shares are expensive and have high price-earnings ratios.


“When rates are very low, valuations don’t matter to people,” said Peter Boockvar, chief investment officer at Bleakley Global Advisors.


“If rates are low, there’s no penalty,” he said. “If rates start to go up, people become much more sensitive to valuations, and that’s what we’ve seen here.”


Scott Redler, partner with T3live.com, follows short-term stock market technicals and trades many of the growth stocks. Lately, however, he’s found himself sitting in many value names and cyclicals.


“The names that I’m in — Visa, GM, Ford, Macy’s, 3M. Those have been my biggest winners this week,” he said. “It’s been really hard to make money in Apple, Facebook and Tesla.”


The Nasdaq has been hardest hit by the rise in interest rates. Apple was down 0.3% in the past week but down 10.6% in the past month. The S&P 500 finished at a record 3,943 and was up 2.6% in the past week, but is flattish over the last month, up just 0.2%.


“Rate volatility could cause another inflection point in tech,” Redler said. “Last week, tech hit its reactionary low, and this [past] week it had an oversold bounce. The question is, ‘Was that it?’”


“Next Wednesday, Powell could be the determining factor,” he said. “Rates made higher highs and tech is way off last Friday’s lows so maybe the market is getting more comfortable.”


Apple’s stall out is unusual for the tech bellwether. It helped power the market’s gains last year.


“Watch Apple because it’s a little bit of everything. Apple is growth, tech, retail. If anything is doing well, it should be Apple,” Redler said.


Bond volatility

There is some important data in the coming week, including February’s retail sales and industrial production, both on Tuesday. There is also a $24 billion 20-year Treasury note auction on Tuesday.


The biggest catalyst for the bond market remains the Fed.


The bond market has been speculating about something the Fed may not discuss after its meeting Wednesday afternoon. In one of its moves to shore up the economy during the pandemic, the Fed allowed banks to hold Treasury bonds without counting them against the bank’s leverage ratio. This strategy allowed institutions to have more flexibility to use their balance sheet for activities like lending.


The program expires March 31.


“This is a huge issue basically because you have so much Treasury supply coming and reinstating [the rule] basically makes it highly punitive for banks to own Treasurys,” Peters of PGIM said.


“The markets are kind of divided on what’s going to happen,” he said. “I think most experts believe an extension is the appropriate path. You have not heard anything from the Fed on the matter.”


Peters expects the Treasury market to remain volatile.


“I think you’re going to see more volatility in a high pressure growth economy with extremely large deficits and an accommodative Fed,” he said. “I think you’re going to see these whippy moves.”


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

Read about:   Case Study | Mortgage Valuation Company

S&P Sectors for this past week:

Major Indices for this past week:

Major Futures Markets as of Friday’s close:

Economic Calendar for the Week Ahead:

Percentage Changes for the Major Indices, WTD, MTD, QTD, YTD as of Friday’s close:

S&P Sectors for the Past Week:

Major Indices Pullback/Correction Levels as of Friday’s close:

Major Indices Rally Levels as of Friday’s close:

Most Anticipated Earnings Releases for this week:

Here are the upcoming IPO’s for this week:

Friday’s Stock Analyst Upgrades & Downgrades:


March Quarterly Options Expiration Week Historically Bullish: DJIA, S&P 500 & NASDAQ Up 10 of Last 13

Stock options, index options, index futures, and single-stock/ETF futures all expire at the same time four times each year, March, June, September and December. This event is often referred to as Quadruple Witching or as we prefer to call it in the Stock Trader’s Almanac (2021 page 106), Triple Witching.

March’s option expiration week performance is second only to December’s and has a bullish bias. DJIA and S&P 500 have recorded weekly gains in about twice the number of weeks as declines. NASDAQ’s track record since 1983 is slightly softer with 23 advances and 15 declines, but all three indices have logged gains in options expiration week in ten of the last thirteen years. However, the week after is bearish for DJIA, S&P 500 and NASDAQ. S&P 500 is weakest, down eight of the last nine. Last year as covid-19 began spreading globally and economies began to shut down, DJIA and S&P 500 suffered their worst weekly declines during March’s quarterly options expiration.


Signs of Life in Europe?

Few equity sectors on earth have been as poor as European financials since the Global Financial Crisis. The sector still sits more than 50% below its 2007 all-time highs, hampered by regulations, low to negative interest rates, and all around slow growth in the Eurozone. However, despite those headwinds, the sector has benefitted from a recent rotation to value, and has certainly been assisted by rising interest rates, a phenomenon we discussed earlier this week.

Not only is performance for European financials improving in absolute terms, as global equities continue to recover from the worst of the ongoing COVID-19 pandemic, but since early October the sector has outperformed the S&P 500 by more than 20 percentage points. As shown in the LPL Chart of the Day, the pattern relative to the S&P 500 appears to be on the verge of breaking out of a nearly year-long technical base, similar to where US financials stood just two months ago.

While we don’t think European financials are going back to all-time highs anytime soon, remember, the sector still needs to gain 12% from current levels just to eclipse its 2020 pre-pandemic highs, a bar that certainly now seems attainable in 2021. “We remain broadly skeptical of foreign developed equities compared to their U.S. counterparts,” explained LPL Chief Market Strategist Ryan Detrick. “However, financials are the largest sector within Europe and improving performance and the continued rotation to cyclical value stocks make this a development to keep an eye on.”

For now, we recommend sticking with US financials, which we recently upgraded in our latest Global Portfolio Strategy report, and is now the second best performing sector year to date, trailing only energy.


NASDAQ Bounces Off Support As Dow, S&P 500 & Russell 2K Log Record Highs, But Beware the Ides of March

We’ve been tracking the NASDAQ 100 Index ($NDX) (represented by the ETF Invesco QQQ Trust ($QQQ) as a proxy for the market’s technical picture. It contains many of the tech stocks that have been driving the economy and market for the past year through these Covid times as well as for quite a while prior – and likely to do so for some time to come.

There has definitely been some rotation out of this sector of late as DJIA, S&P 500 and Russell 2000 logged new highs today. But we would like to see confirmation with new highs in NASDAQ and NDX.

The NAS and NDX are still lagging, but today’s stronger rally in the techs is encouraging. In this updated technical picture you can see that as the NDX logged a 10% correction from its February 12 closing high of 13807.70 to its closing low on Monday March 8 of 12299.08 it bounced off key support just above 12200 (intraday low on Friday March 5 was 12208.39). Check last week’s technical analysis post for reference to previous support levels that were broken.

This 12200-level lines up with the October high which is also the high of that W-123 swing bottom pattern we mentioned last week. Back then it was key resistance that we cleared in late-November and early December. It now forms key support and lines up with the uptrend line from the September and October lows we discussed in our Almanac Investor December eNewsletter Outlook just before Thanksgiving.

However, as the Ides of March are upon us, we must remind you that the end of March has a propensity to decline, sometimes rather precipitously as noted in the 2021 Stock Trader’s Almanac in the March Almanac and several places on pages 30-39. The Week After Triple Witching is often prone to weakness with DJIA down 22 of last 33 and the last few days often succumb to end-of-Q1 selling pressure. If any late-March weakness materializes it should be a solid buying opportunity for top-ranked April, the last month of the Best Six Months.


Versatile Outperformers

There’s still a lot of time left in the day, but the tone of the equity market has been much different today compared to Monday. Whereas Monday saw tech stocks get creamed while cyclical areas of the market rallied, today we’re seeing tech stocks rebound while cyclicals lag. To illustrate, within the entire S&P 500 there are just 14 stocks that have so far managed to outperform the index by at least one percentage point both yesterday and today. The table below lists each of those stocks, and looking through them, they aren’t the flashy, high-profile names that you always see discussed in the media. Who said boring is a bad thing? In terms of sector representation, there’s also no clear trend as eight of the eleven sectors are represented by the list of just fourteen names!

Below we show six-month price charts of each of the 14 names listed above from our Chart Scanner tool. Here again, no clear technical theme links the stocks together. While stocks like AES, Global Payments (GPN), McKesson (MCK), and Ross Stores (ROST) remain close to six-month highs, others like Ball (BLL), Domino’s (DPZ), and Market Axess (MKTX) aren’t far from six-month lows.


STOCK MARKET VIDEO: Stock Market Analysis Video for Week Ending March 12th, 2021

STOCK MARKET VIDEO: ShadowTrader Video Weekly 3.14.21

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


  • $FDX

  • $CRWD

  • $SNDL

  • $FCEL

  • $NKE

  • $GEVO

  • $DG

  • $VFF

  • $HQY

  • $VUZI

  • $PDD

  • $HEXO

  • $NFE

  • $RESN

  • $CRBP

  • $CSIQ

  • $NBEV

  • $DM

  • $WPRT

  • $OCGN

  • $LEN

  • $FIVE

  • $QFIN

  • $ACN

  • $AGEN

  • $ACRX

  • $COUP

  • $PD

  • $FLNT

  • $WSM

  • $AOUT

  • $FUTU

  • $CTAS

  • $BL

  • $FTEK

  • $ACEL

  • $SIC

  • $BEKE

  • $MP

  • $WB

  • $SIG

  • $RDHL



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:


Monday 3.15.21 Before Market Open:

Monday 3.15.21 After Market Close:


Tuesday 3.16.21 Before Market Open:

Tuesday 3.16.21 After Market Close:


Wednesday 3.17.21 Before Market Open:

Wednesday 3.17.21 After Market Close:


Thursday 3.18.21 Before Market Open:

Thursday 3.18.21 After Market Close:


Friday 3.19.21 Before Market Open:


Friday 3.19.21 After Market Close:

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

(NONE.)


FedEx Corp. $270.20

FedEx Corp. (FDX) is confirmed to report earnings at approximately 4:00 PM ET on Thursday, March 18, 2021. The consensus earnings estimate is $3.17 per share on revenue of $19.86 billion and the Earnings Whisper ® number is $4.12 per share. Investor sentiment going into the company’s earnings release has 79% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 124.82% with revenue increasing by 13.57%. Short interest has decreased by 10.4% since the company’s last earnings release while the stock has drifted lower by 4.7% from its open following the earnings release to be 17.9% above its 200 day moving average of $229.16. Overall earnings estimates have been revised higher since the company’s last earnings release. On Thursday, March 4, 2021 there was some notable buying of 1,400 contracts of the $115.00 call expiring on Friday, April 16, 2021. Option traders are pricing in a 7.1% move on earnings and the stock has averaged a 8.5% move in recent quarters.


CrowdStrike, Inc. $199.00

CrowdStrike, Inc. (CRWD) is confirmed to report earnings at approximately 4:05 PM ET on Tuesday, March 16, 2021. The consensus earnings estimate is $0.08 per share on revenue of $250.44 million and the Earnings Whisper ® number is $0.11 per share. Investor sentiment going into the company’s earnings release has 82% expecting an earnings beat The company’s guidance was for earnings of $0.08 to $0.09 per share on revenue of $245.50 million to $250.50 million. Consensus estimates are for year-over-year earnings growth of 300.00% with revenue increasing by 64.65%. Short interest has decreased by 27.0% since the company’s last earnings release while the stock has drifted higher by 24.7% from its open following the earnings release to be 32.3% above its 200 day moving average of $150.39. Overall earnings estimates have been revised higher since the company’s last earnings release. On Friday, March 5, 2021 there was some notable buying of 4,634 contracts of the $190.00 call expiring on Friday, March 19, 2021. Option traders are pricing in a 10.0% move on earnings and the stock has averaged a 10.5% move in recent quarters.


Sundial Growers Inc. $1.42

Sundial Growers Inc. (SNDL) is confirmed to report earnings at approximately 4:30 PM ET on Wednesday, March 17, 2021. Investor sentiment going into the company’s earnings release has 50% expecting an earnings beat. Short interest has increased by 2,440.8% since the company’s last earnings release while the stock has drifted higher by 311.6% from its open following the earnings release to be 120.0% above its 200 day moving average of $0.65. On Friday, March 5, 2021 there was some notable buying of 24,454 contracts of the $1.50 call expiring on Friday, January 20, 2023. The stock has averaged a 25.6% move on earnings in recent quarters.


FuelCell Energy, Inc. $18.16

FuelCell Energy, Inc. (FCEL) is confirmed to report earnings at approximately 7:30 AM ET on Tuesday, March 16, 2021. The consensus estimate is for a loss of $0.04 per share on revenue of $20.25 million and the Earnings Whisper ® number is ($0.02) per share. Investor sentiment going into the company’s earnings release has 56% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 33.33% with revenue increasing by 24.51%. Short interest has decreased by 39.0% since the company’s last earnings release while the stock has drifted higher by 14.7% from its open following the earnings release to be 146.4% above its 200 day moving average of $7.37. Overall earnings estimates have been revised lower since the company’s last earnings release. On Wednesday, March 10, 2021 there was some notable buying of 24,783 contracts of the $15.00 call expiring on Friday, March 19, 2021. Option traders are pricing in a 19.1% move on earnings and the stock has averaged a 18.6% move in recent quarters.


Nike Inc $140.45

Nike Inc (NKE) is confirmed to report earnings at approximately 4:15 PM ET on Thursday, March 18, 2021. The consensus earnings estimate is $0.75 per share on revenue of $11.05 billion and the Earnings Whisper ® number is $0.82 per share. Investor sentiment going into the company’s earnings release has 76% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 3.85% with revenue increasing by 9.36%. Short interest has decreased by 26.1% since the company’s last earnings release while the stock has drifted lower by 3.0% from its open following the earnings release to be 15.4% above its 200 day moving average of $121.72. Overall earnings estimates have been revised higher since the company’s last earnings release. On Tuesday, March 9, 2021 there was some notable buying of 10,985 contracts of the $140.00 call expiring on Friday, April 16, 2021. Option traders are pricing in a 5.9% move on earnings and the stock has averaged a 6.0% move in recent quarters.


Gevo Inc $10.10

Gevo Inc (GEVO) is confirmed to report earnings at approximately 4:00 PM ET on Wednesday, March 17, 2021. The consensus estimate is for a loss of $0.04 per share on revenue of $750.00 thousand. Investor sentiment going into the company’s earnings release has 66% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 92.00% with revenue decreasing by 89.11%. Short interest has increased by 57.3% since the company’s last earnings release while the stock has drifted higher by 900.0% from its open following the earnings release to be 196.3% above its 200 day moving average of $3.41. Overall earnings estimates have been revised higher since the company’s last earnings release. On Friday, March 5, 2021 there was some notable buying of 2,278 contracts of the $7.50 call expiring on Friday, March 19, 2021. Option traders are pricing in a 26.2% move on earnings and the stock has averaged a 8.4% move in recent quarters.


Dollar General Corporation $191.96

Dollar General Corporation (DG) is confirmed to report earnings at approximately 6:55 AM ET on Thursday, March 18, 2021. The consensus earnings estimate is $2.69 per share on revenue of $8.29 billion and the Earnings Whisper ® number is $2.72 per share. Investor sentiment going into the company’s earnings release has 70% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 28.10% with revenue increasing by 15.82%. Short interest has increased by 2.8% since the company’s last earnings release while the stock has drifted lower by 10.1% from its open following the earnings release to be 4.6% below its 200 day moving average of $201.20. Overall earnings estimates have been revised higher since the company’s last earnings release. On Tuesday, March 9, 2021 there was some notable buying of 3,169 contracts of the $190.00 call expiring on Friday, March 19, 2021. Option traders are pricing in a 5.4% move on earnings and the stock has averaged a 4.3% move in recent quarters.


Village Farms International $16.68

Village Farms International (VFF) is confirmed to report earnings at approximately 7:00 AM ET on Tuesday, March 16, 2021. The consensus earnings estimate is $0.05 per share on revenue of $41.63 million and the Earnings Whisper ® number is $0.09 per share. Investor sentiment going into the company’s earnings release has 64% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 135.71% with revenue increasing by 25.94%. Short interest has decreased by 36.1% since the company’s last earnings release while the stock has drifted higher by 163.1% from its open following the earnings release to be 93.1% above its 200 day moving average of $8.64. Overall earnings estimates have been revised lower since the company’s last earnings release. On Monday, February 8, 2021 there was some notable buying of 3,755 contracts of the $18.00 call expiring on Friday, March 19, 2021. Option traders are pricing in a 16.9% move on earnings and the stock has averaged a 5.4% move in recent quarters.


HealthEquity, Inc. $79.17

HealthEquity, Inc. (HQY) is confirmed to report earnings at approximately 4:00 PM ET on Monday, March 15, 2021. The consensus earnings estimate is $0.42 per share on revenue of $183.92 million and the Earnings Whisper ® number is $0.47 per share. Investor sentiment going into the company’s earnings release has 43% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 2.33% with revenue decreasing by 8.59%. Short interest has decreased by 44.8% since the company’s last earnings release while the stock has drifted higher by 15.6% from its open following the earnings release to be 23.8% above its 200 day moving average of $63.94. Overall earnings estimates have been revised higher since the company’s last earnings release. Option traders are pricing in a 10.4% move on earnings and the stock has averaged a 4.0% move in recent quarters.


Vuzix Corporation $22.12

Vuzix Corporation (VUZI) is confirmed to report earnings at approximately 4:00 PM ET on Monday, March 15, 2021. The consensus estimate is for a loss of $0.11 per share on revenue of $4.01 million and the Earnings Whisper ® number is ($0.11) per share. Investor sentiment going into the company’s earnings release has 81% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 64.52% with revenue increasing by 105.33%. Short interest has increased by 7.0% since the company’s last earnings release while the stock has drifted higher by 506.0% from its open following the earnings release to be 188.8% above its 200 day moving average of $7.66. Overall earnings estimates have been revised higher since the company’s last earnings release. On Monday, March 1, 2021 there was some notable buying of 2,681 contracts of the $25.00 call expiring on Friday, March 19, 2021. Option traders are pricing in a 22.0% move on earnings and the stock has averaged a 11.4% move in recent quarters.


DISCUSS!

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


I hope you all have a wonderful weekend and a great week and month ahead r/StockMarketChat.