Iller than Kim Jong Un

Good evening everyone. Today, stocks relented. The S&P 500 fell 3.07%, its worst day since April 1st. We’re now down 5% for the week and it’s only Tuesday.

Technology was the worst sector falling 4.1% and Financials were 2nd worst dropping 3.2%. No sectors closed higher. 

Big Cap Tech has been strong and so we definitely don’t want to see those guys rollover.

And with every day banks continue the underperformance it becomes easier to fathom that we are entering financial crisis part deux. 

Maybe it’s just an interest rate thing combined with a technology thing. Low rates are terrible for bank spreads while technology is commoditizing services like retirement planning and even lending – both taking the wind out of margins. Or maybe it is something more sinister. We’re just spitballing here…

We got some earnings this evening after the close and despite the impending apocalypse, the big name stocks all appear better in the after hours session. Netflix, Chipotle, Snapchat, and Texas instruments all green in the post-market noise festival. See more below.

S&P 5002,736-3.07%
Nasdaq8,263-3.48%
Russell 20001,185-2.33%
Dow Jones23,018-2.26%

Today’s Earnings

Netflix, Chipotle, and Snapchat reported earnings after the close. The stocks jumped higher following the release, here’s the numbers: 

$NFLX reported earnings of $1.57 per share falling short of $1.65 per share estimates.

Netflix blows away new subscriber expectations.

$CMG reported earnings of $3.08 per share beating estimates of $2.90 per share.

Same-store sales rose 3.3%, although overall transactions fell 1.4%.

$SNAP reported earnings of -$0.08 per share missing -$0.07 per share estimates.

Snap soars on strong growth in revenue, daily users.

Copper 🙈

Copper had a bad day. It fell 3% and out of a rising wedge which looks kinda ugly on the chart below if you draw the lines just right. It’s now down 19% YTD.

It’s not over here yet as we haven’t come close to taking out the March low but here’s the thing about Copper getting ugly. This is a commodity that does not have the geo-political or structural insanity crude has presently yet it is still tied to global economic conditions. 

Anyhow, keep an eye on the break here out of the wedge along with that March low around 2.09.

USO 🛢

US Oil Fund, $USO was halted twice today as the oil markets continue to be a nightmare. We can’t keep our eyes off it the same way people slow down on the highway as they pass an accident. 

It actually changed its structure in the middle of the trading day. Hilarious. We won’t even try to explain WTF but you can read CNBC’s attempt to explain right here.

And here’s the chart which looks iller than Kim Jong Un…

Large-Cap Growth FTW

Here is a great representation of the stock market. Large-Cap Growth is outperforming the market with ease. Sheesh. Is anyone surprised Small-Cap Value is the laggard here?

The Viz on a Narrowing S&P 500 

Speaking of large cap growth… 

Last week, we discussed how a small number of large tech stocks continue to provide the majority of gains as investors hide out in a smaller group of winners. This narrowing continues unabated and today Michael Batnick shared a great visualization of the phenomenon. 

He writes, “The five largest stocks have as big a weighting in the S&P 500 as the bottom 350 in the index.”

Crazy. Here’s Michael’s ridiculously cool graphic.

Check out Michael’s full excellent post here.

Volatility Lingers for Dessert

Here’s a great chart from Ned Davis Research showing the current spike in VIX relative to previous moves. This chart emphasises that when the VIX jumps above 30 it tends to stay high.

h/t Mark Minervini

Today on Stocktwits…

Earnings Tomorrow…

Be sure to know when your stocks are reporting. Here’s the full earnings calendar.

Links that Don’t Suck

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I Beat Coronavirus and Am Ready to Get Back on the NYSE Floor

Rob Gronkowski Returns From Retirement, Traded to The Buccaneers

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Appreciating Nature Through the Lens of Lockdown

Google is Rolling Out a “Hey Google” Sensitivity Feature