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Stock Market Outlook for September 11, 2017

Stocks close at a neutral level going into another uncertain weekend.

 

Real Time Economic Calendar provided by Investing.com.

 

**NEW** As part of the ongoing process to offer new and up-to-date information regarding seasonal and technical investing, we are adding a section to the daily reports that details the stocks that are entering their period of seasonal strength, based on average historical start dates.   Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities.   As always, the use of technical and fundamental analysis is encouraged in order to fine tune entry and exit points to average seasonal trends.

Stocks Entering Period of Seasonal Strength Today:

Griffon Corp. (NYSE:GFF) Seasonal Chart

Griffon Corp. (NYSE:GFF) Seasonal Chart

Consumer Portfolio Services, Inc. (NASD:CPSS) Seasonal Chart

Consumer Portfolio Services, Inc. (NASD:CPSS) Seasonal Chart

Staples, Inc.  (NASDAQ:SPLS) Seasonal Chart

Staples, Inc. (NASDAQ:SPLS) Seasonal Chart

SeaChange Intl, Inc. (NASD:SEAC) Seasonal Chart

SeaChange Intl, Inc. (NASD:SEAC) Seasonal Chart

Mastercard (NYSE:MA) Seasonal Chart

Mastercard (NYSE:MA) Seasonal Chart

Blackrock, Inc. (NYSE:BLK) Seasonal Chart

Blackrock, Inc. (NYSE:BLK) Seasonal Chart

United Financial Bancorp Inc. (NASD:UBNK) Seasonal Chart

United Financial Bancorp Inc. (NASD:UBNK) Seasonal Chart

 

 

The Markets

Stocks closed slightly lower on Friday as investors remained somewhat cautious ahead of approaching Hurricane Irma and the risk that North Korea could take action to heighten tensions once again.  The S&P 500 Index shed just over one tenth of one percent, holding tight to its 50-day moving average, a level that we have indicated in the past as acting as a neutral level during times of intermediate uncertainty.  For the week, the large-cap benchmark was lower by 0.60%, remaining supported by the rising 20-week moving average, also equivalent to the 100-day average.  Momentum indicators on both the daily and weekly charts continue to negatively diverge from price, an indication of growing selling pressures.

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On the economic front, Statscan released its glimpse of the state of employment in Canada.  The headline print indicated that employment increased by 22,200 in August, better than the consensus estimate that called for an increase of 15,000.  The unemployment rate tickly mildly lower from 6.3% to 6.2%.  Stripping out the seasonal adjustments, employment actually declined by 23,600, or 0.1%, inline with the average change for the month of August.  The change in full and part-time employment diverged from one another with full-time subtracting 53,700 positions, or 0.3%, while part-time added 30,100 spots, or a change of 0.9%.  The average change for each for this last full month of summer is +0.3% and –1.7%, respectively.  Below the surface, it is difficult to peg the sluggish aggregate result on the strength in the Canadian dollar in recent months, which has taken a toll on manufacturing and export activity.  Manufacturing employment dipped slightly in August, but it remains firmly above average on the year.  Other categories that are trending above average on the year include retail trade, transportation, finance, and professional services, some of which are showing the best year-to-date performance in years.  The weakness in the report stems from  agriculture, utilities, construction, public administration, and other services, each of which have limited exposure to the negative influence that the rising dollar has on the economy.  This suggests that the areas of strength in the report are potentially vulnerable in future periods should the dollar rise continue.  Employment is typically a lagging indicator, moving following shifts in economic fundamentals, therefore the full impact of the recent Canadian dollar strength, assuming it is sustained, will not be felt for some time.  A complete breakdown of the report, from a seasonal perspective, can be accessed via our chart database at http://charts.equityclock.com/canada-labour-force-survey.

Canada Labour force Seasonal Chart

Monthly Canada Labour force Data

Canada Labour force Seasonal Chart

Canada Employment Seasonal Chart Canada Employment full-time Seasonal Chart Canada Employment part-time Seasonal Chart Canada Unemployment Seasonal Chart Canada Population Seasonal Chart

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Elsewhere in the economy, US Wholesale trade remains sluggish as weak commodity prices continue to weigh.  The headline print indicated that wholesale sales declined by 0.1% in August, while inventories grew by 0.6%, larger than forecasts that called for a 0.4% rise.  Stripping out the seasonal adjustments, sales actually declined by 8.9%, while inventories were higher by 0.6%; the average change for each in the month of August is –2.7% and +0.8%, respectively.  The year-to-date change for each (sales and inventories) is below seasonal average.  Looking at the details on the sales side for August, weakness was spread across both durable and non-durable goods with some of the largest declines recorded in motor vehicle and parts, electronic goods, metals/minerals, machinery, chemicals, and beer.  Each of these areas have fallen firmly below average trends on the year, joining petroleum sales, which have been below average for some time.  The only category to maintain its footing in an above average position is computer and computer equipment sales, perhaps a testament to the strength in the technology industry.  Despite the downfall in the US Dollar, activity in the commodity market has been mixed with varying factors putting this market in flux, thereby weighing on the report.  The US Dollar Index continues to push below support around 93, which should provide a catalyst to commodity prices, but the upside momentum remains absent on a broader scale, particularly with respect to the energy and agriculture market.  For a breakdown of the categories behind the report, the seasonal charts can be viewed via the chart database at http://charts.equityclock.com/u-s-wholesale-trade-sales-and-inventories

Wholesale Sales  Seasonal Chart

Monthly Wholesale Sales  Data

Wholesale Sales Seasonal Chart

Wholesale Inventories Seasonal Chart

Wholesale Inventories Seasonal Chart

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Sentiment on Friday, as gauged by the put-call ratio, ended bearish at 1.09.

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Seasonal charts of companies reporting earnings today:

Investors Real Estate Trust (IRET) Seasonal Chart Layne Christensen Company (LAYN) Seasonal Chart  Peregrine Pharmaceuticals Inc. (PPHM) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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