After an extended hiatus the Forcerank weekly review is back. This week featured several economic and political events that moved the market for better and worse. The Trump rally continued to push the Dow to new record highs through improvements in the materials and industrial sectors.
Outside of the United States, OPEC reached a deal to cut oil production for the first time in 8 years. Under the deal, they’ll bring production down to 32.5 million barrels per day from 33.7 million with the biggest cuts coming from Saudi Arabia, Iraq, UAE and Kuwait. Crude oil jumped about 9% immediately following the announcement, marking the biggest one day gain in 2016.
Today, the Labor Department released the first post-election jobs number headlined by 178k jobs created and 4.6% unemployment rate, the lowest rate in almost a decade. Markets are trading virtually sideways in reaction to the job figures but it’s becoming abundantly clear that the post election rally is starting to fizzle.
Above all else, the Forcerank consensus data accurately predicted a slew of winners and losers. Two of the biggest gainers were Chevron (CVX) and Wayfair (W), both benefiting for very different reasons. Chevron received a massive boost from soaring oil prices following the OPEC deal announced earlier this week. Oil prices will need to move significantly higher from here to reconcile the losses shareholders have absorbed in recent years. This is a good start though as the stock climbed nearly 2% this week and sits atop the Forcerank E&P contest. The oil major jumped three spots from the fourth position last week passing over many of its close peer including Exxonmobil (XOM).
Wayfair, on the other hand, made significant gains thanks to a successful Holiday shopping weekend that included Black Friday and Cyber Monday. Management reported a 52% increase in web sales over this time, marking the single highest grossing period in company history. Like Chevron, though, the stock lost a majority of its value in recent years and will need more days like this past weekend to retrace its losses. Astute Forcerank users saw the upside of the shopping weekend and pushed Wayfair from dead last of its respective contest to third place. Investors that followed this prescription on Monday morning are sitting with 6% returns heading into the weekend.
As you will see the list of losers considerably outnumber the handful of winners this week. Allegiant Airlines (ALGT), Groupon (GRPN), Red Hat (RHT) and Analog Devices (ADI) made some of the biggest declines and also ranked poorly in their respective contests. Each of these names were either last or in the bottom three, reflecting the downside risk predicted by Forcerank users. Groupon, in particular, has struggled since its weak third quarter report. The stock is down over 30% in the past 2 months after surging for the better part of 2016.
IPOs from 2015 round out the list of the remaining duds. Fitbit (FIT), GoPro (GRPO) and Box (BOX) all experienced declines this week, but for varying reasons. The former two companies are still stumbling after reporting abysmal third quarter results in November. Since then, the two have been amongst the worst positioned stocks in the Hardware contest, sporting an average rank around 7.5 (higher ranks are indicative of negative price movement). Box, however, reported better than expected third quarter results on Wednesday, but has simply fallen victim to the rotation out of tech caused by the Trump victory.
Each week, Forcerank runs a variety of games covering different industries. What we have found, is that the highest ranked companies in their respective games deliver the greatest positive price movement while the worst ranked companies post the biggest losses. To access this information earlier in the week, play next week’s contests and test your knowledge against hundreds of seasoned investment professionals.
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