Longest Government Shutdown Ever To Hurt Q1 GDP Growth

Longest Government Shutdown - Winning Streak Ends, But Stocks Had A Good Week

The S&P 500 was down 1 basis point on Friday, so it ended its 5-day winning streak. That's a great performance because the market rebounded from where it was earlier in the day and is overbought. Nasdaq fell 0.21% and the Russell 2000 was up 0.14%. VIX was down 6.72%. The S&P 500 increased 2.54% this week. Amazon and Facebook were up over 4%.

As you can see from the chart below, the percentage of oversold stocks in the S&P 500 has fallen dramatically. But the percentage of overbought stocks hasn’t increased much.

The market isn’t at the level seen in January 2018. To be clear, I don’t think stocks are as overbought as they were in January 2018. I’m modestly bearish and think stocks can correct about 3% because they have run too far too quickly.

Longest Government Shutdown - Netflix & Yeti Rally

Netflix was one of the biggest winners in the S&P 500 as it increased 4% on Friday. It was up 13.45% on the week. It is entering the week it reports earnings on a huge rampage. I don’t think it will sell off after it reports because of the huge momentum created by “Bird Box.”

It’s amazing to see such hype considering the mediocre 62% audience score on Rotten Tomatoes. If Netflix can parlay an unspectacular movie into a boost in subscribers, the business model is stronger than I thought.

Yeti stock rallied 10.83% after hours because the firm raised its Q1 guidance. I’m used to negative data dumps on Friday afternoon. That’s when investors aren’t paying attention.

Instead, we got very positive news as Yeti stated it expects $241.2 million in sales which beat estimates for $227.3 million. It raised its EPS guidance from 79-82 cents to 88-90 cents.

This beat estimates for 81 cents. I have been bearish on Yeti since its IPO. This doesn’t prove my thesis wrong because I believe the business model is weak which makes it a long term sell. It’s not shocking that the company had a good quarter as its products have a cult-like following. I would increase my short in the next few weeks as the stock rallies.

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