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Stock Market Outlook for April 12, 2018

Price of oil breaking above an ascending triangle pattern, which suggests a target of $73.

 

Real Time Economic Calendar provided by Investing.com.

 

*** 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:

Astronics Corp. (NASD:ATRO) Seasonal Chart

Astronics Corp. (NASD:ATRO) Seasonal Chart

Energy Exploration Technologies (TSE:SFD) Seasonal Chart

Energy Exploration Technologies (TSE:SFD) Seasonal Chart

Stratasys, Inc. (NASD:SSYS) Seasonal Chart

Stratasys, Inc. (NASD:SSYS) Seasonal Chart

Integer Holdings Corp. (NYSE:ITGR) Seasonal Chart

Integer Holdings Corp. (NYSE:ITGR) Seasonal Chart

Johnson Outdoors, Inc. (NASD:JOUT) Seasonal Chart

Johnson Outdoors, Inc. (NASD:JOUT) Seasonal Chart

 

 

The Markets

Stocks closed mixed on Wednesday as Financial and Energy stocks bookended the days action.  The S&P 500 Index shed four-tenths of one percent, continuing to coil between the 20 and 200-day moving averages.  Investors continue to wait for that catalyst to fuel a break, one way or the other.

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On the economic front, a report on the Consumer Price Index (CPI) for March provided insight as to the state of inflation in the US, something that the Fed will be watching closely as they determine policy in the months ahead.  The headline print indicated that CPI declined last month by 0.1%, falling back from the 0.2% rise reported in the month prior.  The consensus estimate was for an unchanged result.  Stripping out the seasonal adjustments, the Consumer Price Index for All Urban Consumers actually increased by 0.2%, which is firmly below the 0.5% average increase for the month of March.  Following an above average pace through the first two months of the year, the 1.2% year-to-date change has fallen below the seasonal average trend by a tenth of one percent.  Less food and energy, however, CPI is running a tenth of a percent above average on the year.  While the prices of fuel borne by consumers did fluctuate in the month, moderating the pace of gains in the aggregate tally, the result certainly calms concerns that inflation is running too hot, requiring the Fed to act more expeditiously in normalizing rates.  Seasonally, the front half of the year tends to account for the vast majority of the gains in inflation for the year.

Consumer Price Index for All Urban Consumers: All Items Seasonal Chart

Monthly Consumer Price Index for All Urban Consumers: All Items Data

Consumer Price Index for All Urban Consumers: All Items Less Food and Energy Seasonal Chart

Turning to the petroleum status report from the Energy Information Administration (EIA), oil inventories increased by 3.3 million barrels last week, while gasoline stockpiles saw an increase of 500,000 barrels.  The result had no impact on the days of supply of oil, which sits at 25.4, now just a hair less than two days above normal.  Another pronounced increase in domestic production, a significant jump in imports, and a sizeable decline in exports contributed to the injection of the raw input to storage; stockpiles remain within a tight range, showing a year-to-date change that is well below the seasonal norm.  As for the product side, the days of supply of gasoline ticked marginally higher by a third of a day as production of the refined commodity continues a robust pace in 2018.  Product supplied, a gauge of demand, is similarly trending above seasonal norms, although the pace of gains has slowed in recent weeks.  Weather may be proving to be a factor in diminishing demand with colder than average temperatures overhanging the US North-east.  This could end up pressuring stockpiles higher in the weeks ahead should the weather pattern persist.  Seasonally, production of gasoline ramps up between March and June as producers prepare for the summer driving season, but, with demand showing signs of flat-lining, that excess production may make its way to inventories, contrary to seasonal norms.  One report does not make a trend, but it warrants close monitoring as we progress through the period of the year when driving activity typically increases.

Weekly U.S. Days of Supply of Crude Oil excluding SPR  (Number of Days) Seasonal Chart

Weekly U.S. Days of Supply of Crude Oil excluding SPR (Number of Days) Seasonal Chart

Weekly U.S. Ending Stocks excluding SPR of Crude Oil Seasonal ChartWeekly U.S. Field Production of Crude Oil Seasonal ChartWeekly U.S. Commercial Crude Oil Imports Excluding SPR Seasonal Chart

Weekly U.S. Days of Supply of Total Gasoline  (Number of Days) Seasonal Chart

Weekly U.S. Days of Supply of Total Gasoline (Number of Days) Seasonal Chart

Weekly U.S. Ending Stocks of Total Gasoline Seasonal Chart Weekly U.S. Refiner and Blender Adjusted Net Production of Finished Motor Gasoline Seasonal Chart Weekly U.S. Product Supplied of Finished Motor Gasoline Seasonal Chart

The price of oil was firmly higher following the report, not on the headlines pertaining to inventories, but rather on news of increasing tensions in Syria.  West Texas Intermediate jumped to another multi-year high, breaking resistance around $66.  The move above the upper limit of a short-term ascending triangle pattern suggests an upside target of $73.  Seasonally, the price of crude oil typically rises through the start of May, lifting energy stocks in the process.

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Crude Oil Futures (CL) Seasonal Chart

FUTURE_CL1 Relative to the S&P 500FUTURE_CL1 Relative to Gold

FUTURE_CL1 Monthly Averages

Sentiment on Wednesday, as gauged by the put-call ratio, ended bearish at 1.02.

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Seasonal charts of companies reporting earnings today:

Apogee Enterprises, Inc. (APOG) Seasonal Chart Bank of the Ozarks (OZRK) Seasonal Chart BlackRock, Inc. (BLK) Seasonal Chart Commerce Bancshares, Inc. (CBSH) Seasonal Chart Delta Air Lines, Inc. (DAL) Seasonal Chart Northern Technologies International Corporation (NTIC) Seasonal Chart Rite Aid Corporation (RAD) Seasonal Chart Shaw Communications Inc. (SJR) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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