Forcerank Top Pick Weekly 5/1
Hello Estimize community,
Now that we have 2 solid months of Forcerank contests logged, we’ll be publishing weekly notes highlighting interesting insights from the data set, standout performances from Forcerank competitors, new Forcerank features, special contests, and more every Sunday morning.
This marks the 5th week of the 2nd quarter.
Last week was chock full of earnings, which showed a wide dispersion in outcomes. Specifically within tech, Microsoft (MSFT) and Alphabet (GOOGL) came up well short while Facebook (FB) and Amazon (AMZN) blew expectations out of the water.
While the broader market rally has certainly stalled out for now, underneath the surface some significant rotation is taking place. The chart below shows the consensus Forcerank from all competitors in the US Sector ETF contest last week versus the actual rank from those sectors at the close on Friday.
While the Utilities and Consumer Staples sectors led the pack in a poor week for the market, which is to be expected as they are lower beta sectors, the more interesting thing is seeing Energy and Materials take 3rd and 4th, respectively. Rotation is certainly taking place, the question is, how long will the short squeeze last?
The sector this week that outperformed its consensus Forcerank by the largest margin was Materials, continuing to fuel the belief that the sector still has room to run given the continued low sentiment. The US Dollar index continues to fall as the Yen surges and Gold broke out to new highs this week.
That should help corporate earnings, but as you can see from the chart below, forward 4-quarter expectations of S&P 500 earnings versus where the market is trading right now are widely diverging. Based on the very strong historical correlation here, there are only two things that can happen. The market comes down, or earnings expectations begin to improve.
Utilities was the largest out-performer versus expectations this week as competitors were not fully placing their expectations on a risk off week.
The chart below shows the consensus Forcerank of each sector by week, giving us a good understanding of how sentiment is changing. The important thing to note here is that the Energy sector finally made its way to the #1 ranked spot this past week after a huge rally and being relegated to the bottom half (top half of the chart) of rankings for the majority of the past 7 weeks. Again, we see a significant turn in the sentiment here, have the shorts capitulated? Was this a short covering rally in energy, or is the turn here a bigger deal?
A big shout out to Forcerank competitor Parmigianino who put up the highest score this week with 667 points and took 1st place in the Social Media $25 entry 50/50 contest. Well done sir/ma'am! See if you can dethrone them in this week’s contest.
We have another special Technology Earnings $25 entry 50/50 contest this week which features stocks like FitBit (FIT), GoPro (GPRO) and Alibaba (BABA). Last week’s round of earnings was wild, and overall the consensus ranks from Forcerank competitors were incredibly accurate!
Two announcements you may have seen earlier in the week. We’ve changed the way that bonus and referral credit work on the app after your great feedback. You can now use your credit immediately! So check your accounts as you may have extra credit for use in contests this week.
Some Forcerank competitors have expressed some confusion over contest start times. All contests start at 9:30AM Monday morning, but you can enter any contest up to a week in advance, and edit your rankings as many times as you’d like before the contest starts. So grab your spot early each week and edit on Sunday evening during Game of Thrones (that won’t effect your mood at all LOL).
And finally, if you have yet to grab a bunch of free contest credit by inviting your friends and colleagues through our Refer A Friend page of the app, go grab some! It only takes two clicks, Forcerank is a lot more fun when you can trash talk the guy sitting in the cubicle next to you. Just imagine what the rest of the Forcerank team has to put up with each week when they play in the free contests against me!
Disclosure: There can be no assurance that the information we considered is accurate or complete, nor can there be any assurance that our assumptions are correct.