My Weekly Stock Debrief (May 6 - 13)
Dear subscribers,
Welcome to My Weekly Stock’s debrief for week #19 of 2022 (May 6 -13), our weekly newsletter reviewing the stock market performance.
Subscribe to receive this newsletter directly into your mailbox every week:
1. Market Performance
The equity markets were down for the week, with the SP500 losing 2.4%, the Dow Jones 2.1%, and the NASDAQ 2.8%, for a 6th consecutive weekly loss. The markets sold off notably after the CPI for April came higher than expected. On Thursday, the SP500 made a new low for the year but managed to finish on Friday back above the 4,000 mark.
2. SP500 Sector Performance
Only 1 of the 11 SP500 sectors closed the week higher. This week, Consumer Defensive led but was barely up 0.3%. Consumer cyclical and Real Estate lagged and declined by 3.7% and 3.9%, respectively.
Only 1 sector is positive year-to-date. Energy remains the indisputable winner of 2022 with a 46% gain. Communication Services and Consumer Cyclical are the worst performer in 2022 and are down more than 20%.
3. SP500 Top / Bottom Stock Performers
Viatris (VRTS), Electonic Arts (EA), and International Flavors & Fragrances (IFF) were the best performers of the SP500 this week. All 3 stocks rallied after releasing strong quarterly earnings and upbeat guidance.
Meanwhile, Twitter (TWTR) closed the week down 18% after Elon Musk mentioned his acquisition of the social network was on hold while he reviews the number of fake accounts on the platform. While Musk faces a $1bn penalty if he walks away from the deal, the market seems to doubt the sale will go to completion. The stock is now trading 25% below the price offered by Musk.
4. SP500 Breadth
Momentum remains poor, with 70% of the SP500 trading under their respective 200-day moving averages, declining 4 points vs. the previous week. 4 stocks out of 5 are still in correction territory vs. their 52-week highs.
5. SP500 Daily Chart
The SP500 technical indicators are overall bearish. The index is trading below its 20, 50, and 200-day moving averages. We cannot rule out another new low for the year until the index reclaims its key trend lines.
6. Market Sentiment
Fear & Greed Index
CNN's Fear & Greed Index tracks seven sentiment indicators and is published daily.
On Friday, the indicator closed at the “Extreme Fear” level (12), a 4-point decrease vs. the previous week, and the VIX traded most of the week above 30.
AAII Investor Sentiment Survey
The American Association of Individual Investors surveys each week its members on the direction of the stock market for the next six months. The results are published weekly on Wednesdays.
The last AAII survey reported that 49% of the respondents had a bearish market outlook, slightly decreasing in the past 5 days but remaining 20-points higher than the historical average.
7. Our Chart of the Week
The market sell-off has accelerated in the past few weeks, with 84% of the SP500 stocks declining in the last month. Almost three quarter of the index is also down in 2022.
8. Our Favorite Analysis of the Week
The SP500 just had its 6th consecutive weekly loss, its worst streak since 2011. We had similar series during the 2008 and 2000 bear markets, but it also generated excellent long-term performances. The index was up 1-year later in more than 70% of the case (although it is a small data set).
9. The Week Ahead
Next week, earnings releases are expected from major retailers, with Walmart (WMT), Home Depot (HD), and Target (TGT) reporting, among others.
Next week, more inflation reports are expected with CPI updates from Canada, the UK, and the Eurozone. In the US, the Retail Sales report is released on Tuesday and will provide insights on the strength of the consumer in the context of a 40-year high inflation.
10. My Weekly Stock Pick
This week, our stock pick was CVX (MRK), and the stock closed up 0.1% (Monday open to Friday close) in a highly volatile week for energy stocks. In 2022, My Weekly Stock’s picks are up 23% cumulatively (no leverage, buy and hold five days), and our options trading is up 161%.
Access our performance tracking here.
We will trade a stock in the health sector for the week ahead. Our stock pick will be released on Sunday, and in the meantime, you can learn more about our trading approach in the article below:
Read more about our trading approach here.
And remember to subscribe to My Weekly Stock to receive our stock picks, trading plan, and buy/sell alerts directly in your mailbox.
That’s all for My Weekly Stock’s debrief for week #19 of 2022 (May 6 -13).
If you enjoy reading our newsletter, please share it via the link below:
You can also follow us on Twitter where we post many more charts during the week.
Have a lovely trading week,
My Weekly Stock
Disclaimer
My Weekly Stock shares information and content on our websites, social networks, or newsletters only for educational purposes. The information contained in our publications has been prepared based on publicly available information and proprietary research. The author does not guarantee the correctness, accuracy, or completeness of the information provided.
All information provided by My Weekly Stock or its affiliates is impersonal and not tailored to your needs, your investment objectives, or your financial situation. Nothing contained in the report shall constitute financial advice or an investment recommendation.
You are solely responsible for your own investment decisions. We recommend consulting with a registered investment advisor, broker-dealer, or financial advisor. If you choose to invest, with or without seeking advice, then any consequences resulting from your investments are your sole responsibility. We are neither liable nor responsible for any profits or losses arising from any investment decision you have taken or made based on information we provide on our websites, social networks, or newsletters.
By using this site, newsletter, or any information provided herein, you indicate your consent and agreement to the terms of this disclaimer.