Category Archives: Daily Top Ten

Topley’s Top Ten – November 19, 20185

1.Thanksgiving Market Returns

Thanksgiving week has historically been a positive time for the equity market.  Since WWII, the S&P 500 has averaged a gain of 0.64% during Thanksgiving week with gains three-quarters of the time.  Market trends heading into this Thanksgiving aren’t as positive for the bulls, though.  As shown in the table below, during years where the S&P 500 was positive but up less than 5% YTD heading into Thanksgiving week, the index’s average change during the week has been 0.00% with gains less than half of the time.

On a day to day basis, for both all years since WWII and in years where the S&P 500 was up less than 5% heading into Thanksgiving week, Monday has been the worst trading day as it is the only day of the week with negative average returns and positive returns less than half of the time.  Tuesdays and Friday, however, have been positive days, though, with average gains of 0.10% and 0.29%, respectively.  Additionally, for those years where the S&P 500 was up YTD but up less than 5%, Tuesdays and Fridays have been even stronger with average gains of 0.26% and 0.35%, respectively.

As we move past Thanksgiving, though, seasonal trends for the market based on this year’s performance so far improve.  In those years where the S&P 500 was up less than 5% YTD heading into Thanksgiving week, the average gains the week after Thanksgiving was 0.41% with positive returns 55% of the time.  For the remainder of the year, average returns were even stronger at +2.83%.  Not bad for a period of just over five weeks!

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Topley’s Top Ten – November 15, 2018

1.Earnings…Positive Sales Surprise Slow Down.

Jefferies

3Q earnings did not materialize as the positive catalyst investors were hoping for following Powell PBS, Pence China speech & US-China sentiment deterioration, PPG pre-announcement, IMF global growth downgrade, etc – all in early October.

The qualitative commentary from Q3 included slowing demand in China/EM/Europe (particularly auto), margin pressure, and trade war impact.

The average sales surprise was the lowest going back to 1Q17 – breaking a largely positive surprise trend over the prior 6 quarters.

Source: Jefferies Trading Desk

Through and following Q3 earnings, 2019 consensus EPS has been revised lower.

Again, the trend is more worrisome than the dollar amount – thus far – reduced.

Source: Jefferies Trading Desk
Percy Allison vix
Equity Trading, Desk Strategist
Jefferies LLC

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