Stocks Rally Ahead of Long Weekend

Adam Sarhan |


stock, stock market, wall street, recap

Stocks edged higher last week as investors digested the latest round of mixed economic and earnings data. In the short term, the market looks a little extended and due for a little pullback to digest its recent gain. The big take-away is that the stock market remains strong as we have yet to see any conclusive "data" that suggests the Fed should raise rates anytime soon. In fact, most of the data continues to be lackluster at best which means the "data-dependent" Fed will likely not raise rates anytime soon (which, for now, is bullish for stocks). Looking at earnings, so far,approximately 481 companies in the S&P 500 (96%) have reported Q1 results and 63% have had a positive EPS surprise and 33% had a negative EPS surprise with the reminder meeting estimates. The fact that the market has edged higher since earnings season began bodes well for this aging bull market and suggests higher prices will likely follow, for now. History shows us that some of the market's strongest performers occur from big gaps up on earnings and some of the weakest stocks gap down after reporting numbers.

The big winners (so far) from earnings season include: (AMZN) , Netflix (NFLX) , Hasbro (HAS) , Domino’s Pizza (DPZ) , Skechers (SKX) , Dunkin (Donuts) Brands Group (DNKN) , Microsoft Corp (MSFT) , O’Reilly Automotive (ORLY) , and YUM Brands (YUM) , Skywest (SKYW) , (WWWW) , Equinix (EQIX) , Styngenta (SYT) , Nutri System (NTRI) , Brink's Co (BCO) , Teradyne Inc (TER) , Skyworks Solutions (SWKS) , GoPro (GPRO) , Estee Lauder (EL) , Abiomed Inc (ABMD) , Golar LNG ($GLNR), Energizer Holdings (ENR) , RetailMeNot, Inc (SALE) , Herbalife (HLF) , BlueBird Bio (BLUE) , HubSpot Inc ($HUBS), Alibaba Group (BABA) , Qorvo Inc ($QRVO), Visteon Copr (VC) , and Norwegian Cruise Line Holdings (NCLH) .

On the downside: Whole Foods Market (WFM) , Keurig Green Mountain (GMCR) , Kate Spade ($KATE), Lannett Co (LCI) , Nu Skin (NUS) , Terra Nitrogen (TNH) , Tumi Holdings (TUMI) , Noodles & Company (NDLS) , Qualys  (QLYS) , Groupon Inc (GRPN) , News Corporation (NWSA) , Vitamin Shoppe Inc, (VSI) , Fossil Inc (FOSL) , Frontier Communication (FTR) , TriNet Group ($TNET), Zulily Inc (ZU) , Weight Watchers (WTW) , Walter Energy Inc. (WLT) , Skullcandy (SKUL) Twitter (TWTR) , Yelp (YELP) , LinkedIn (LNKD) , Constant Contact (CTCT) , Accuray (ARAY) , Cooper Tire & Rubber (CTB) , Abaxis (ABAX) , Texas Instruments (TXN) , Buffalo Wild Wings (BWLD) , Baidu Inc. (BIDU) , Stratasys (SSYS) , Harman (HAR) , Nokia (NOK) , Travelers (TRV) , 3M (MMM) , Chipotle (CMG) , Pulte Group ($PHM), Biogen Inc (BIIB) , Generac Holdings (GNRC) , First Solar (FSLR) , and American Express (AXP) , just to name a few. 

Monday-Wednesday's Action: Economy Data Is Not Impressive

Stocks rallied on Monday helping the Dow Jones Industrial Average and the benchmark S&P 500 hit new record highs. Stocks rallied after the National Association of Home Builders' survey missed estimates and showed builder confidence fell two points in May. Separately, European stock markets and the Euro were under slight pressure after rumor spread that Greece was on the verge of bankruptcy. Greek bond yields soared, with the 10-year jumping a whopping 7%, after a leaked internal memo from the International Monetary Fund showed the country had little chance of making the June 5 payment. Spanish and Italian bond yields also jumped more than 7% on related fears. 

Stocks ended mixed on Tuesday as the U.S. dollar soared and a slew of commodities fell. Overseas, the euro tanked (greenback surged) after Benoit Coeure, an executive member of the European Central Bank, said the central bank plans to "front load" its QE (bond buying) program in the early part of the summer. This basically means they are pumping even more money into the system to help boost asset prices and, in turn, send their equity markets higher and the euro lower.  In the U.S., housing starts jumped +20.2% in April to 1.135 million, beating estimates for 1.019M. 
Stocks were quiet on Wednesday as the greenback edged higher as a slew of currencies and commodities fell. The Dow transports fell 1.5% and remained under serious pressure. A slew of airline stocks were hammered and Southwest (SAVE) plunged over 8.5% at one point in the day. At 2pm EST, the Federal Reserve released the minutes of their latest Fed meeting which reiterated their recent data-dependent stance. Chicago Fed President Charles Evans said in Munich that a rate hike is not likely to be appropriate until early 2016.

Thursday-Friday’s Action: Stocks Flirt With New Highs

On Thursday, stocks were quiet as investors digested the latest round of mixed economic data. Existing home sales fell 3.3% in April, missing estimates for a gain of 1% to 5.24 million units. A separate report showed that manufacturing PMI came in at 53.8 in May, missing estimates for a gain of 54.5. The May U.S. Philadelphia Fed Index rose to 6.7, missing estimates for 8.0. The Conference Board said its leading indicator index, which forecasts future economic activity, rose by 0.7%, beating estimates for a 0.3% gain.  Weekly jobless claims fell to  274k, slightly above the 271k forecast. The 4-week moving average remains the lowest since April 2000. Stocks drifted lower on Friday as the transports continue to drag stocks lower. The consumer price index (CPI) rose by 0.1%, matching estimates. Core prices (which strip out food and energy) rose by 0.3%, the fastest gain since January 2013.

Market Outlook: The Central Bank Put Is Alive And Well

Remember, in bull markets surprises happen to the upside. This has been our primary thesis since the end of 2012. We would be remiss not to note that this very strong bull market is aging (celebrated its 6th anniversary in March 2015) and the last two major bull markets ended shortly after their 5th anniversary; 1994-2000 & 2002-Oct 2007). To be clear, the central bank put is very strong and until material damage occurs, the stock market deserves the longer-term bullish benefit of the doubt. As always, keep your losses small and never argue with the tape. Join our free mailing list on and get free professional watchlist in your inbox each week.


DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


Symbol Name Price Change % Volume
ABAX ABAXIS Inc. 47.40 0.27 0.58 12,519
ABMD ABIOMED Inc. 102.99 -0.33 -0.32 192,887
AMZN Inc. 780.82 -37.54 -4.59 3,894,534
ARAY Accuray Incorporated 5.20 -0.20 -3.70 345,357
AXP American Express Company 66.72 -0.22 -0.32 604,608
BABA Alibaba Group Holding Limited American Depositary 102.20 -0.18 -0.18 1,926,784
BIDU Baidu Inc. 182.56 7.46 4.26 2,551,738
BIIB Biogen Inc. 285.61 -5.28 -1.82 485,835
BLUE bluebird bio Inc. 49.20 0.10 0.20 210,002
BWLD Buffalo Wild Wings Inc. 144.25 1.05 0.73 88,363
CMG Chipotle Mexican Grill Inc. 371.99 3.40 0.92 193,881
CTB Cooper Tire & Rubber Company 34.38 -0.95 -2.69 190,620
CTCT Constant Contact Inc. n/a n/a n/a 0
DPZ Domino\'s Pizza Inc 167.14 1.20 0.72 120,731
EL Estee Lauder Companies Inc. (The) 86.27 0.35 0.41 315,857
ENR Energizer Holdings Inc. 47.20 0.14 0.30 60,731
FOSL Fossil Group Inc. 26.72 0.14 0.51 70,876
FSLR First Solar Inc. 40.76 -0.30 -0.73 252,985
FTR Frontier Communications Corporation 4.14 -0.03 -0.64 2,141,092
GMCR Keurig Green Mountain Inc n/a n/a n/a 0
GNRC Generac Holdlings Inc. 38.69 0.39 1.02 40,467
GPRO GoPro Inc. 13.93 0.20 1.46 613,792
GRPN Groupon Inc. 4.13 0.03 0.61 4,826,813
HAR Harman International Industries Incorporated 78.01 0.43 0.55 52,144
HAS Hasbro Inc. 82.86 0.56 0.68 212,176
HLF Herbalife Ltd. 60.10 0.16 0.27 63,738
HUBS HubSpot Inc. 53.50 1.20 2.29 22,969
KATE Kate Spade & Company 16.37 0.00 0.00 199,537
LCI Lannett Co Inc 20.60 -0.55 -2.60 273,650
LNKD LinkedIn Corporation Class A 189.20 0.57 0.30 208,059
MMM 3M Company 166.37 0.61 0.37 220,072
NCLH Norwegian Cruise Line Holdings Ltd. 36.81 1.10 3.07 381,610
NDLS Noodles & Company 4.40 -0.05 -1.12 4,733
NFLX Netflix Inc. 126.94 0.47 0.37 871,588
NOK Nokia Corporation Sponsored American Depositary Sh 4.59 -0.15 -3.07 7,598,618
NUS Nu Skin Enterprises Inc. 62.23 0.37 0.60 16,182
NWSA News Corporation 12.33 0.11 0.90 317,921
PHM PulteGroup Inc. 18.47 0.28 1.51 875,654
QLYS Qualys Inc. 37.00 0.80 2.21 13,812
QRVO Qorvo Inc. 55.90 0.31 0.56 144,133
SALE RetailMeNot Inc. 9.35 0.50 5.65 25,272
SKUL Skullcandy Inc. n/a n/a n/a 0
SKX Skechers U.S.A. Inc. 20.73 0.40 1.98 561,674
SSYS Stratasys Ltd. 19.43 -0.02 -0.10 78,215
SWKS Skyworks Solutions Inc. 77.42 0.16 0.21 294,649
TER Teradyne Inc. 23.48 0.66 2.88 672,396
TNET TriNet Group Inc. 18.75 0.06 0.32 35,371
TNH Terra Nitrogen Company L.P. 103.30 -0.18 -0.17 4,970
TRV The Travelers Companies Inc. 108.80 0.78 0.72 264,743
TUMI Tumi Holdings Inc. n/a n/a n/a 0
TWTR Twitter Inc. 17.90 0.50 2.87 7,858,985
TXN Texas Instruments Incorporated 71.20 0.47 0.66 924,214
VC Visteon Corporation 69.69 0.74 1.07 53,703
VSI Vitamin Shoppe Inc 24.55 -0.35 -1.41 20,974
WFM Whole Foods Market Inc. 28.52 0.23 0.81 416,732
WTW Weight Watchers International Inc 10.18 0.16 1.60 202,307
YELP Yelp Inc. Class A 32.96 0.22 0.67 158,063


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