Weekly Roundup March 2-6

Mar 11, 2015   //   by Profitly   //   Profitly, Profitly Weekly  //  Comments Off on Weekly Roundup March 2-6

It was a full week of trading and Wall Street ended lower.

The Dow was off -1.52%, S&P -1.58%, Nasdaq -0.73%, and Russell 2000 -1.29%.

Here is an overview of the week via FactSet:

US equities finished lower, with a big chunk of the pullback coming on Friday, when a larger-than-expected increase in February payrolls underpinned expectations for a mid-2015 liftoff. In terms of perceived overhangs outside of the policy dynamic, there continued to be some focus on stretched valuations in combination with negative earnings revisions. While the global policy divergence theme remained in the headlines throughout the week, it continued to have a much bigger impact on Europe. In addition there was little overall direction for stocks from a fairly busy week of macro and geopolitical newsflow. There did not seem to be anything particularly incremental in this week’s corporate newsflow. The pharma/biotech M&A theme continued, retail takeaways were fairly company specific, commodity exposure remained a big headwind, all firms passed the Fed’s stress tests as expected and both aggressive buyback activity and better capex trends received some attention in the press. Sector performance for the week was largely driven by the policy influences (rates and FX) in play on Friday. Defensive sectors like utilities, telecom and consumer staples underperformed. Financials held up the best, but still finished lower.

Payrolls underpin mid-2015 liftoff expectations:

The most widely anticipated event of the week, the February employment report, was the big headwind for stocks (and bonds). Nonfarm payrolls rose 295K last month, ahead of consensus expectations of 235-240K. This put the three-month average at 288K. Gains were broad-based and there were no signs of a weather-related drag as both construction and leisure and hospitality posted solid gains and the workweek was unchanged for a fifth straight month. In addition, the unemployment rate fell to 5.5% from 5.7%, below the 5.6% consensus. While lower participation played a role, JPMorgan noted that broader measures of labor underutilization showed even greater improvement. The big disappointment from the report was the 0.1% m/m increase in average hourly earnings that left the y/y rate up just 2.0%. The Street was looking for a 0.2% gain after an outsized 0.5% increase in January. While earnings were widely expected to be the more important input for the liftoff timing debate, the overall momentum in the labor market recovery reinforced the likelihood that the Fed will change its forward guidance next month and provided further support for a mid-2015 tightening (and continued to leave the door open for a move in June).

Sector Performance (vs S&P 500):

Outperformers: Financials -0.55%, Consumer Disc. -0.79%, Healthcare -1.15%, Tech -1.43%.

Underperformers: Utilities -4.16%, Energy -2.92%, Telecom -2.80%, Consumer Spls. -2.61%, Materials -2.02%, Industrials -1.85%.
So let’s talk about Superman first. He didn’t have very many trades but here is a notable one:

Now we’ll take a look at some notable trades from Tim (who had a lot of smaller trades but we’re only going to recap the larger ones):

And lastly, take a look at some of our previous roundups, we hope you guys enjoy these!

January 5-January 9

January 12-January 16

January 19-January 23

January 26-January 30

February 2-February 6

February 9-February 13

February 16-February 20

February 23-February 27